MKT 438
Instructor: Kelly Wood
July 19, 2000
Lung cancer affects more than 170,000 men and women each year. Currently, there isn’t a practical or definitive screening method for detecting this disease. Historically, chest x-rays were used to detect cancer when patients presented symptoms. Though chest x-rays can pick up cancerous lesions, it has not been recommended as a routine annual screening tool because it often detects the disease too late when cure is difficult.

By the time lung cancer is large enough to be visible on chest x-rays, it is often advanced and may have already metastasized to other parts of the body. For this reason, it was very important to find new methods of early detection and diagnosis. The answer was the Spiral CT (Computed Tomography, “Cat Scan”) Lung Screening now being offered at Desert Radiologists.

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Desert Radiologists is Nevada’s oldest and most sophisticated outpatient radiology center. All diagnostic modalities are performed under one roof. In each of our facilities, patients are able to have imaging studies that are traditionally performed in hospitals only.

Desert Radiologists is committed to state-of-the-art comprehensive diagnostic care for the people of Nevada. We supply our patients with prompt quality health care while keeping in mind their rights to compassion, dignity, and personal regard. Many believe that the success of Desert Radiologists is due in part to the very strategic and innovative marketing/public relations techniques utilized to convey the message of our incredible abilities in providing cost-efficient, high-quality radiology. We are on the cutting edge of new technology that enables Desert Radiologists to provide the best radiology care to our patients.

Established in 1966 by Drs. Robert Taylor, Harris Knudson and James Lum, Desert Radiologists diagnostic radiology practice has grown with the Las Vegas community to become the areas chief resource for the highest quality, comprehensive medical care in the field of radiology.

The firm’s staff of over 25 Radiologists and 185 technical and support personnel promotes a reassuring environment that helps allay patients’ concerns and results in the best possible experience for those entering an unfamiliar world of CT scans, MR imaging, interventional radiology, and nuclear medicine.

Desert Radiologists is a private corporation owned by physicians. Its success in providing radiology services to Southern Nevada for more than 30 years has given the organization a positive image within the community. Desert Radiologists is always searching for new procedures and ways to enhance the practice.

Desert Radiologists gathered research data from a firm that provided the Spiral CT lung screening to their patients and extensive data from the Internet to study the effectiveness of this new procedure. With positive results, the physicians made a commitment to offer this new screening procedure that can detect lung cancer at an early stage to the Las Vegas community. This newly developed screening test will improve the odds of defeating lung cancer. The Spiral CT lung screening is based on United States and Japanese studies that indicate CT screening is able to diagnose tumors early enough to greatly improve survival rates.

An estimated 157,000 people will die this year of lung cancer, the leading cause of cancer death of both men and women in the United States, according to the American Cancer Society. Virtually all the “cures” in treating lung cancer occur in those patients where the cancer is detected early before there is any distant spread or metastasis beyond the “local” tumor or “local” lymph nodes. Lung cancer tumors found by a chest x-ray are typically large when patients present with symptoms. In contrast, when detected on a Spiral CT, the tumor may be no bigger than a grain of rice.

A study from Early Lung Cancer Action Program (ELCAP) included 1,000 volunteers with an average age of 67 years. The volunteers historically smoked an average of one pack of cigarettes a day for ten years. These volunteers never showed signs of cancer or exhibited symptoms of cancer. The participants were given both traditional chest x-rays and CT scans. The chest x-rays detected tumors in 68 of the 1,000 participants while CT scans detected tumors in 233 participants–more than three times as many as x-rays had diagnosed.

Lung cancer is deadly. Until recently, there has not been a successful process to detect the tumors early enough before a patient has symptoms. However, the new process can increase the five-year survival rate from 14 percent to 80 percent if all smokers and ex-smokers receive an annual CT exam and early treatment.

In order to make the Spiral CT Lung screening a success it is necessary to educate the importance of the screening to the primary care physicians, patients, and insurance companies. Specific patients to be targeted are the smokers, ex-smokers, and persons surrounded by secondary smoke, i.e., casino waitresses, waiters, bartenders, etc.?even children.

Currently, this screening is not covered by insurance. Therefore, the managed care organizations must be educated to the effectiveness of the screening. It has the potential to save lives and expenses in the long run. If the cancer is caught at an early stage, the patient will require minor surgery and/or treatment. If the cancer is not detected early and has already spread throughout the body, it could require advanced, more expensive treatment or surgery.

The company’s primary goal is to raise awareness of the Spiral CT screening. The importance of having this screening done is to increase a patient’s survival rate. We plan to perform at least 200 screenings per month at each of our locations. The screening is not covered by insurance; therefore, we are charging $250 per screening. The fee is competitive throughout the United States.

We feel the Spiral CT screening will increase a person’s survival rate and decrease surgery/treatment expenses. Our objective is to convince insurance companies to begin covering this screening in their plans. We feel that awareness and education will be effective in implementing the necessary changes.

The following points will focus on results sought by the company through our public relations campaign. Also, the primary publics and secondary publics, both internal and external will be identified. The corresponding issues of importance and how they relate to the campaign will also address some of the reasons we have adopted our campaign focus.

Desert Radiologists desires to be at the forefront of medical imaging and technological advances as they are discovered in the industry. Their goal is to communicate to the public and the competitors that they are progressive and up-to-date in their technique and approach. The patient, physician, and referring health agency can feel confident that only trained expertise in all aspects are projected as a common thread within Desert Radiologists. External or secondary publics such as subcontractors or equipment manufacturers will also experience a reciprocal exchange of professionalism as an edge is gained in the market by utilizing business savvy and sound public relations practices.

Primary and other external publics will comprise much of our public relations advertising. Pharmacies, doctors, health and smoking clinics, medical centers, hospitals and any other referring health agencies as well as the media make up secondary external publics. Desert Radiologists provide a service, the publics who are focused on are mostly external because it is a way to get revenue to the company for the benefit of the internal primary publics who make up the composition of the business itself, such as owners, doctors, administrators and board members.

In the future, insurance companies are another primary internal public who has the potential to benefit from the screening by providing the service as a preventative maintenance measure. This could prove to be an attractive avenue for obtaining revenue. The primary targeted publics are smokers, non-smokers, and ex- smokers. Because they are a target group outside of the company and therefore external, the shift of the public relations effort must lean toward promoting extensive efforts at a large audience rather that concentrating efforts on a limited number of candidates who fit a composite profile and would be identified as primary internal publics. Of course because all employees and staff can be members of the target group and therefore not excluded, they don’t make up the majority of the customer base desired.

The potential for forming lasting and productive relationships with both internal and external publics make issues important due to the fact that these particular services are limited in utilization and application to a small group of professionals which make the competition more fierce in nature. In the health profession, this type of competition takes away from the sensitive nature of this service that could hinder our campaign if it were communicated to the public that we want everyone’s business at any cost. The following aspects of our campaign will focus on our plan to mitigate this and will describe the strategies and tactics we are contemplating as we proceed.

Results sought through the campaign are to ultimately improve the odds of defeating lung cancer and generate consistent revenue by using the newest technology to do it. Research and studies show that preventative health care can be painless and low cost compared to the alternative. The low dose radiation scans are expected to save more than 100,000 lives annually in the United States alone. “People die who don’t need to. CT scanning has the ability to change this tragedy'” states Dr. Gerald L. Warnock, medical director at Epic Imaging in Portland where this process is used. The hope is that this test will do for lung cancer what the mammogram did for breast cancer and the Pap test did for cervical cancer. Because lung cancer is difficult to detect in the early stages and spreads quickly, early detection can save lives by removing a small segment of the lung and curing a patient.

Overcoming test data will be a difficult objective. At this time, the expense of the tests have not shown numbers that make it worth the insurance companies picking up the cost. Also, for those who cannot afford the test, diagnosis may be unavailable.

Desert Radiologists wants to inform everyone by flooding the market with mass publicity and awareness. Information on the disease, procedure, costs and benefits of early detection make the testing appear necessary and desirable. Advertising at various locations hope to produce results which will contribute to the success of testing being requested on a regular basis just like Pap tests and mammograms. By being the first imaging center in Las Vegas to offer this service, Desert Radiologist hopes to capitalize on an untapped market and retain a steady customer base.

Desert Radiologists will meet their customer needs by providing state-of-the-art testing with reference information available to answer all questions during the process. The scope of the testing in terms of growth and profitability can be defined broadly. This technology is an emerging market. To date very little of this markets potential has been tapped and the potential for growth is great. Our goal is to discount all referrals from family, friends, co-worker etc. Every customer that requires this testing will become part of the overall public relations campaign by word-of-mouth customer satisfaction. This referral process will increase sales by customer satisfaction.

The first step in our strategy will be to get the message out to the public. How we plan to do this will be integrated with our marketing plan. The campaign will consist of two phases. During the initial phase, we plan to have local spots on television, radio, and newspaper. The campaign message will depict the importance of testing for cancer and success rate of surviving cancer by early detection. We plan to achieve the competitive edge on our competition and follow up with phase two of the campaign by pointing out that Desert Radiologists is the leader in this new state-of-the-art testing.

The public relations department is authorized 1% ($200,000) of total revenues ($20,000,000) to conduct an extensive campaign for the three-year contract. The additional funding will come from 10% ($96,000) of annual sales ($960,000). Desert Radiologists will have a combined annual budget for marketing ($300,000) and public relations campaign budget ($296,000), totaling a combined budget of ($596,000) for one fiscal year. This budget will be reviewed on an annual basis.

We expect to obtain 50% of sales from local health clinics for smokers and doctors that treat for cancer. The additional 50% of sales will come from the marketing and referral process. The first two months have netted daily sales of $4,000.00. This is based on the average of 16 tests each day on the four machines at a cost of $250.00 per test. On a yearly basis the first year will net $960,000 at a sustained rate of 16 tests a day between the four machines. If all goes well, we will double these figures after the first six months of getting the word out. With the cost of software for all four machine’s totaling ($80,000), employee’s annual salary ($128,000) and public relations campaign ($296,000) per machine, the annual profits from all four locations will total $456,000.

(See Exhibit “A” for Income Statement).

Exhibit “A”
Income Statement ? Desert Radiologists for the Year Ending June 30, 2001
Sales $960,000
Cost of goods sold 80,000
Gross profit on sales 880,000
Operating expense
Selling expense 296,000
Operating expense 128,000
Total operating expense 424,000
Operating income 456,000
Interest expense 5,600
Earnings before taxes 450,400
Income tax 90,080
Net income 360,320
Public relations is one of the most powerful weapons in the marketing warfare. It is also an extremely cost effective marketing discipline. Public relations generated sales ultimately result in an increased overall awareness and enhanced reputation of the organization and its services, which will prompt people to respond to its advertising approach. Modern public relations is a sophisticated management training which crosses the boundaries of all corporate functions. The results of media coverage can provide a powerful sales tool. There are multitudes of avenues that can be explored to provide media coverage. Advertising, word-of-mouth, established clients, but none so far-reaching as the Internet and the organization’s web page. Desert Radiologists has its domain in the World Wide Web as desertrad.com.

However, public relations is not just about media relations but it is about an organization’s reputation, communication of corporate values, thoughts and deeds, assessing audiences responses, and taking positive action. If an organization can develop a positive reputation and is successful in its particular industry, then potential and existing clients will look more favorably upon the organization. Desert Radiologist is continually building its client base by keeping old customers happy; attracting new customers through information, pricing, and the quality of service; educating the public on state-of-the-art equipment and research developments; and innovative new programs and screening processes such as the new CT lung screening test.

To be competitive, an organization must know its competitors. Desert Radiologists’ primary competitors are Insight Diagnostics, Steinberg Diagnostics, and West Valley Imaging. Constantly monitoring the competitor’s advertising, web site, and market share enables Desert Radiologist to stay focused. While Desert Radiologists must know their competitors, they must also know the target market. A market strategy specifies a target market and a related marketing mix. Desert Radiologists has a marketing plan consisting of objectives, opportunities, and strategies; an effective means to implement their marketing plan; and control of the marketing plan and program to evaluate its progress and adjust the plan as needed. Desert Radiologists uses the four P’s in their marketing strategy of Product, Place, Promotion, and Price to reach their clients?C. Each of the four P’s contributes to the whole success of Desert Radiologists. Marketing is an integral part of any organization’s success and should provide the guidelines for satisfying clients’ needs using the “four P’s” for continuous innovation and improvement.

As the economy and competition grows, advertising becomes more important?because more consumers have income and advertising can get results. Just as access to the Internet becomes more universal, the strategy for Desert Radiologists is to utilize the World Wide Web’s vast audience to educate and inform the public about the CT lung screening. Steinberg Diagnostics Medical Imaging Centers (sdmi-lv.com) also has its web site and is matching Desert Radiologists’ page item for item complete with a question-and-answer section?even online appointment scheduling. The competition also has placed advertising in the local Las Vegas Business Press.

Desert Radiologists has used different types of advertising to help solicit new clients. Utilizing institutional advertising promoting Desert Radiologists image via the ?awareness’ or ?announcement’ campaigns; the ?informative, descriptive ads to create interest in the new screening; competitive ads with persuasive copy; competitive pricing and full disclosure about non-insurance pay; and informative “why you need to have the screening done” ads. Steinberg Diagnostic has also placed pioneering advertising in the media with the use of competitive advertising. The direct and indirect approach is being used by both organizations. Both competitors are targeting “smokers” and warning them of the potential dangers of not having the screening done. Desert Radiologists’ marketing and public relations managers are always looking for cost-effective media that will get the message to the target market?the smokers?by matching the market with the media.

Desert Radiologists has identified and listed the organization’s Strengths, Weaknesses and its Opportunities and Threats. The S.W.O.T. analysis helped Desert Radiologists focus on a strategy that took advantage of the organization’s opportunities and strengths while avoiding its weaknesses and threats to its success. The competitive advantage was the innovative new screening test for cancer. The competition was not far behind.

It is not easy to measure the results of advertising or introducing a new product. Some breakthrough, innovative campaigns do have a very direct effect on increased client volume that can be measured by before and after?or during?the new screening campaign. Yet, we usually cannot measure the effectiveness or success just by looking at numbers or revenue. The total marketing mix of reputation and stability in the community is also responsible for the result of the new marketing plan. Also, new client and referrals are also affected by what competitors do and by other changes in the external marketing environment, i.e. cancer awareness and public awareness of smoking hazards and litigation.

Using client questionnaires and surveys will also help measure the effectiveness of the new CT lung screening. Through defined specific advertising objectives, choosing media and messages to accomplish the objectives, testing plans, and then evaluating the results of the new campaign will result in good measurement tools.

Robert’s additions will have to go here!
“Test can detect lung cancer at early stage.” The Oregonian 14 Feb. 2000: A1
Seitel, F.P. (1998). The practice of public relations (UOP Special Edition Series). Upper Saddle River, NJ: Prentice Hall.

American Cancer Society. (2000). “Cancer Facts and Figures 2000.” National Media Office, New York, NY.

Lerner, Maura. (2000, February). One More Gift, Maybe a CT Scan. Minneapolis Star Tribune, ppg. A4, A6.

“Test can detect lung cancer at early stage.” The Oregonian 14 Feb. 2000: A1
Seitel, F.P. (1998). The practice of public relations (UOP Special Edition Series). Upper Saddle River, NJ: Prentice Hall.

American Cancer Society. (2000). “Cancer Facts and Figures 2000.” National Media Office, New York, NY.

Lerner, Maura. (2000, February). One More Gift, Maybe a CT Scan. Minneapolis Star Tribune, ppg. A4, A6.



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