January 2003

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Table Of Contents
1.0

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0

Situation Analysis . . . . . . . . . . .
2.1
Market Summary . . . . . . .
2.1.1 Market Demographics
2.1.2 Market Needs . . . .
2.1.3 Market Trends . . .
2.1.4 Market Growth . . .
2.2
SWOT Analysis . . . . . . . .
2.2.1 Strengths . . . . .
2.2.2 Weaknesses . . . .
2.2.3 Opportunities . . . .
2.2.4 Threats . . . . . . .
2.3
Competition . . . . . . . . .
2.4
Services . . . . . . . . . . .
2.5
Keys to Success . . . . . . . .
2.6
Critical Issues . . . . . . . . .

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.2
.2
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.4
.5
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.6
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.7
.7

3.0

Marketing Strategy . . . . .
3.1
Mission . . . . . . .
3.2
Marketing Objectives
3.3
Financial Objectives .
3.4
Target Marketing . .
3.5
Positioning . . . . .
3.6
Strategy Pyramids .
3.7
Marketing Mix . . . .
3.8
Marketing Research .

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.7
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4.0

Financials, Budgets, and Forecasts

4.1
Break-even Analysis . . . .
4.2
Sales Forecast . . . . . . .
4.3
Expense Forecast . . . . .

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. 10
. 10
. 11
. 12

5.0

Controls
5.1
5.2
5.3

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. 13
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. 14

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. . . . . . . . . . . . .
Implementation Milestones
Marketing Organization . .
Contingency Planning . .

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Elite Medical Transcription

1.0 Executive Summary
The challenge of reading a physician's handwritting--it is an urban legend. There is a need for
medical transcriptionists, this is due to insurance company regulations requiring legibility for
documents doctors create.
Elite Medical Transcription's mission is to provide the finest medical transcription service available.
We exist to attract and maintain customers. When we adhere to this maxim, everything else will
fall into place. Our services will exceed the expectations of our customers.
Elite Medical Transcription offers high quality, low error rate, medical transcriptions. Elite Medical
Transcription will concentrate on two market segments, physicians practicing alone or with a
colleague or two, and small practices of psychologists. These two market segments are the most
reliable consumers of outside transcription services. Elite Medical Transcription will also serve other
parts of the market, which offer more sporadic service requests.
Through the use of sophisticated software, Elite Medical Transcription will offer accuracy and
convenience not yet offered to the medical community in its area. Additionally, Elite Medical
Transcription will have extensive training requirements for their staff, insuring highly qualified
transcribers.
These competitive advantages, coupled with a growing market will allow EMT to quickly gain
market penetration. Elite Medical Transcription will be profitable by month eight and have a net
profit of $35,000 by year three.

Annual Sales Forecast

$180,000
$160,000
$140,000
$120,000
$100,000

Physicians
Psychologists

$80,000
$60,000
$40,000
$20,000
$0
2003

2004

2005

Page 1

Elite Medical Transcription

2.0 Situation Analysis
Elite Medical Transcription is entering its first year of operation. A comprehensive marketing plan
will be an integral part in the push to profitability and sustainable success. Elite offers a highquality medical transcription service. The basic market need is an experienced, medical-specific
transcription service for physicians with one to two partners. Elite has decided to offer its
transcription services to the medical market and the employees will have taken numerous medical
courses allowing them to be accurate with even the most unusual medical terms.

2.1 Market Summary

Elite has captured valuable information about the local market. This information will be leveraged
to better understand the targeted customers, their specific needs, and how Elite can better
communicate with them.

Target Markets

Physicians
Psychologists

Table 2.1: Target Market Forecast

Target Market Forecast
Potential Customers
Physicians
Psychologists
Total

Growth
9%
8%
8.52%

2003
215
165
380

2004
234
178
412

2005
255
192
447

2006
278
207
485

2007
303
224
527

CAGR
8.96%
7.94%
8.52%

Page 2

Elite Medical Transcription

2.1.1 Market Demographics
The profile for the typical Elite customer consists of the following geographic, demographic, and
behavior factors.
Geographics
Our immediate geographic target is the city of Jeffet, ID with a population of 132,000.
A 55 mile radius is in need of the provided services.
The total targeted population is 380.
Demographics

Male and female practitioners.

69% physicians, and 31% psychologists.
The age of the practice ranges from two to fifteen years.
The size of the practice has only a couple of practitioners.

Behavior Factors
Prefer to remain in a small private practice.
Have poor handwriting, or are responding to insurance company's requirements for
legibility.
Appreciate the convenience to be able to perform their dictations when it is most
convenient for them.
Have no desire to have the overhead of a full-time transcription person on staff, value the
ability to keep overhead low.

2.1.2 Market Needs

Elite is providing its customers with a reliable, flexible, medically-trained transcription service. The
following benefits are important to Elite's customers:
Medical Background: This is important due to the specialized language within the medical
profession.
Convenience: The ability to offer the service at the doctor's convenience is a significant
advantage.
Accuracy: Documents need to be accurate to guard against malpractice threats.

2.1.3 Market Trends

The market trend for industries that utilize transcription services is decreasing overhead through
the outsourcing of non-essential activities. For transcription services this means a recent surge in
demand for transcription services from customers that are now relying on outsourced service
providers.

Page 3

Elite Medical Transcription

Market Forecast
600
500
400

Physicians

300

Psychologists
200
100
0
2003

2004

2005

2006

2007

2.1.4 Market Growth

In 2000, the non-industry specific transcription market had $654 million in revenues. The last four
years has seen a 4% growth rate. With the recent trend of outsourcing transcription services, the
next three years are expected to achieve a 5% growth rate.
As physician's practices are under increasing pressure to develop efficiencies (this pressure is
primarily coming from the insurance companies which have significantly reduced their allowable
reimbursement amounts), practices will be shedding non-essential employees and replacing them
with outsourced service providers.

Page 4

Elite Medical Transcription

Target Market Growth

9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Physicians

Psychologists

2.2 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company and
describes the opportunities and threats facing Elite.

2.2.1 Strengths
Medical specific training.
Sophisticated software significantly increasing the convenience and accuracy of the offered
service.
Comprehensive training program for employees.

2.2.2 Weaknesses
The inability to rapidly scale.
A limited marketing budget.
The difficulty of establishing brand equity as a start-up.

Page 5

Elite Medical Transcription

2.2.3 Opportunities
Participation within a growing market.
The ability to grow the practice with increased amounts of experience and industry
knowledge.
Decent margins.

2.2.4 Threats
Potential competition from existing transcription services that decide to focus on the
medical niche.
Huge technological gains in speech recognition software for individual consumers.
The outsourcing of transcription services to national companies through increased
technological gains of Internet technology.

2.3 Competition
The competition takes two general forms:
1.

General Transcription Service: These are transcription services that offer medical
services in addition to general service offerings. These firms typically have someone who
has been trained in medical transcription, but does not do medical exclusively.

2.

Specialized Medical Transcription: There is currently one company that is a true direct
competitor with EMT, serving only the medical community. The market looks promising as
this firm does not have enough staff to meet demand. Additionally, this firm does not
provide specialized service to psychologists.

The buying patterns for medical transcription services are typically based on the type of
relationship the physician has with the transcriber. If the physician does not have an in-house
solution then they ideally will have a long-term relationship with a service provider. If the physician
or hospital has in-house transcribers, then their relationships with the transcriber services are
based on sporadic service calls, filling a need when their service provider is unable.

2.4 Services
EMT will provide high-level medical transcription services to the Jeffet medical community. EMT
typically transcribes office visits, surgery notes, lab results, admissions, assessment, and discharge
summaries.
EMT will offer digital transcription services that allow the physician to call into EMT's office and
record the dictation over the phone while EMT's computer records. This will allow the physician to
submit the dictation at any time during the day, without having to schedule the transcriber to
come in or to have to forward a cassette to the dictation service. There are still some physicians
who will only use their micro cassette recorder, EMT is set up to service those customers as well.
EMT will also offer a rush service that promises transcriptions in 24 hours. It costs more but cuts
the turnaround time in half.

Page 6

Elite Medical Transcription

2.5 Keys to Success
The following are Elite's keys to success.
Establish repeat customers.
Ensure complete customer satisfaction.
Address customer needs.

2.6 Critical Issues

Elite Medical Transcription is in its first year of operation. The critical issues that it faces are the
following:
Ensure that it has ample support staff to meet the customer's needs.
Provide proper medical training for all employees.
Establish Elite Medical Transcription as the premier medical transcription service in the area.

3.0 Marketing Strategy

Elite Medical Transcription will take a multi-pronged approach to its marketing strategy. The first
activity that Elite will undertake is advertisements. Two sources for the advertisements will be
employed. The first will be Yellow Page advertisements. Although the Yellow Pages are a fairly
general source of information, they are widely used to locate service providers.
Advertisements will be also displayed in two different newsletter/journals. Both doctors and
psychologists have a local/regional newsletter that is dedicated to serving the specific practitioners.
These newsletters are sent out by the different licensing boards so all practitioners receive them.
The last marketing effort will be a website. This will be a comprehensive source of information
about the company and the services offered. The website is likely to be used by people that have a
knowledge of Elite but would like more information regarding the services offered. However, some
people will view the site with no prior knowledge of Elite. They will be able to access the site by
using a search engine such as Google to find Elite's website.

3.1 Mission
Elite Medical Transcription's mission is to provide the finest medical transcription service available.
We exist to attract and maintain customers. When we adhere to this maxim, everything else will
fall into place. Our services will exceed the expectations of our customers.

Page 7

Elite Medical Transcription

3.2 Marketing Objectives
Increase repeat customers by 4% per quarter.
Decrease customer acquisition costs by 7% every two quarters.
Achieve the status as the #1 medical transcription service in Jeffet.

3.3 Financial Objectives

Strong, steady growth in sales.
Achieve a double-digit growth rate for the first three years.
Profitability by the end of year one.

3.4 Target Marketing

EMT will focus on two distinct groups that use medical transcription services:
1.

Doctors: These physicians typically practice solo or are with one or two other physicians.
Because of the small office, they often do not have an in-house transcriber. The advantages
of not having an in-house person are reduced labor costs and overhead.

2.

Psychologists: These doctors are very similar to the above market segment. They
practice alone or in a small group and typically do not have an in-house transcriber.
Although psychologists are medical doctors, their vocabulary of terms requires expertise in
the field of psychology to be able to offer transcription services to them.

3.5 Positioning
Elite will position itself as the premier medical transcription service in town. Through the use of
medical training, unparalleled convenience, and sophisticated software, Elite will quickly gain
market share. The desired positioning will be achieved by leveraging its two competitive
advantages:
The first is the use of advanced digital equipment. EMT has invested in the newest
technology that serves two purposes. The first purpose is gains in efficiency for EMT.
Through the use of the digital equipment, EMT can process the dictations quickly and more
accurately. This benefits the clients, as it allows them the opportunity to make a dictation
over the phone at any time during the day. In the age of the cellular phone, this is quite a
convenience allowing the doctor to no longer be tied down when making the transcription.
EMT's second competitive edge is its commitment to training. In addition to requiring
classes in medical transcription to familiarize transcribers with the medicalease, EMT has a
sophisticated suite of software manufactured specifically for medical transcriptions. EMT's
staff are all trained to utilize this software to its greatest advantage, developing the most
error-free document as possible.

Page 8

Elite Medical Transcription

3.6 Strategy Pyramids
The single objective for Elite is to gain market share for the medical transcription service. While
there are many transcription services, there is only one other service that specializes on the
medical community. Specializing on this specific niche reduces the size of the market, but it allows
Elite to compete more effectively and efficiently because of its in-depth medical knowledge.
The message that Elite seeks to communicate is that it offers the best trained, most convenient
transcription service for the medical community. This message will be communicated in different
ways. The first method will be the use of advertisements in the Yellow Pages. This method will be
particularly useful for people that turn to the Yellow Pages for company/market information.
The second method will be advertisements in the two local newsletters for physicians and
psychologists/psychiatrists. These newsletters are produced by the licensing boards for the
respective practitioners and have a well-targeted, well read population of readers.

3.7 Marketing Mix

Elite's marketing mix is comprised of the following approaches to pricing, distribution, advertising
and promotion, and customer service.
Pricing: The pricing scheme is flexible to meet the needs of the customers. Typically it will
be based on a per document charge and a per word fee.
Distribution: Services are offered at the customer's place of business or over the phone.
Advertising and Promotion: Advertising in the Yellow Pages as well as in industry
journals/newsletters will be used. Additionally, Elite will have a comprehensive website used
for marketing purposes.
Customer Service: Gaining repeat customers will be one of the business objectives. With
this recognized, premium customer service will be ensured to guarantee repeat business.

3.8 Marketing Research

Recognizing that market research would be necessary to gain sufficient insight into the market and
its customers. Elite held two focus groups to gather marketing research. The groups consisted of
seven physicians per group. The groups were structured by using a set of questions asked to each
group.
In addition to the structured questions, each focus group had a free flowing question/discussion
forum. The free flowing section was particularly useful as many ideas and questions arose that
were not contemplated earlier. Having gained so much valuable information from the initial focus
groups, Elite plans to have another in a years time.

Page 9

Elite Medical Transcription

4.0 Financials, Budgets, and Forecasts
This section will offer a financial overview of Elite as it relates to the marketing activities. Elite will
address break-even analysis, sales forecasts, expense forecasts, and how those activities link to
the marketing strategy.

4.1 Break-even Analysis

The break-even analysis indicates that $8,586 will be needed in monthly revenue to achieve the
break-even point.

Break-even Analysis
$10,000

$5,000

$0

($5,000)

($10,000)
$0

$2,960

$5,920

$8,880

$11,840

$14,800

Monthly break-even point

Break-even point = where line intersects with 0

Table 4.1: Break-even Analysis

Break-even Analysis:
Monthly Units Break-even
Monthly Sales Break-even
Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost

46
$8,586
$185.00
$1.85
$8,500

Page 10

Elite Medical Transcription

4.2 Sales Forecast
The first month will be used to set up the home office. During this period the owner will be
advertising in local industry specific journals and association newsletters. At the beginning of
month two, EMT will begin servicing clients. The first several months are expected to be slow. The
company expects it to take a bit of time before business really ramps. By month 11 business will
be doing well and EMT will hire an additional employee.

Monthly Sales Forecast

$14,000
$12,000
$10,000
$8,000

Physicians
$6,000

Psychologists

$4,000
$2,000
$0
Jan Feb Mar

Apr May Jun

Jul

Aug Sep Oct Nov Dec

2003
$42,706
$36,269
$78,975

2004
$82,458
$62,545
$145,003

2005
$93,542
$71,254
$164,796

2003
$4,271
$3,627
$7,898

2004
$8,246
$6,255
$14,500

2005
$9,354
$7,125
$16,480

Table 4.2: Sales Forecast

Sales Forecast
Sales
Physicians
Psychologists
Total Sales
Direct Cost of Sales
Physicians
Psychologists
Subtotal Cost of Sales

Page 11

Elite Medical Transcription

4.3 Expense Forecast
The marketing expenses will be budgeted for each month. The first quarter will have increased
expenses in an effort to develop visibility for Elite as a start-up organization. After the first quarter,
expenses will settle down until the last quarter when expenses will increase again.

Monthly Expense Budget

$1,600
$1,400
$1,200
$1,000

Advertisements

$800

Website

$600
$400
$200
$0
Jan Feb Mar Apr May Jun

Jul

Aug Sep Oct Nov Dec

Table 4.3: Marketing Expense Budget

Marketing Expense Budget
Advertisements
Website
Total Sales and Marketing Expenses
Percent of Sales
Contribution Margin
Contribution Margin / Sales

2003
$4,950
$2,500
-----------$7,450
9.43%
$63,628
80.57%

2004
$5,500
$2,000
-----------$7,500
5.17%
$123,003
84.83%

2005
$6,000
$2,000
-----------$8,000
4.85%
$140,316
85.15%

5.0 Controls
The purpose of Elite's marketing plan is to serve as a guide for the organization. The following
areas will be monitored to track performance.
Repeat customers.
Customer satisfaction.
Transcription efficiency: individual and organization.

Page 12

Elite Medical Transcription

5.1 Implementation Milestones
The following milestones identify the key marketing programs. It is important to accomplish each
one on time and on budget.

Milestones

Marketing plan completion

Advertising campaign #1

Advertising campaign #2

First large contract

Second large contract

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Table 5.1: Milestones

Milestones
Milestone
Marketing plan completion
Advertising campaign #1
Advertising campaign #2
First large contract
Second large contract
Totals

Plan
Start Date
1/1/03
3/1/03
7/1/03
4/1/03
8/1/03

End Date
2/1/03
6/30/03
10/31/03
8/30/03
12/30/03

Budget
$0
$2,450
$2,550
$4,300
$1,375
$10,675

Manager
Dawn
Dawn
Dawn
Dawn
Dawn

Department

5.2 Marketing Organization

The owner will be primarily responsible for the marketing activities at Elite, but will work with
outside companies to develop both the website as well as the advertising campaign.

Page 13

Elite Medical Transcription

5.3 Contingency Planning
Difficulties and Risks Include
Problems gaining sufficient visibility in the community.
Overly aggressive and debilitating actions by competitors.
Securing sufficiently trained employees.
Worst Case Scenarios Include
Determining that the business cannot support itself on an ongoing basis.
Having to liquidate equipment to cover liabilities.

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Appendix: Elite Medical Transcription

Table 4.2 Sales Forecast
Sales Forecast
Sales
Physicians
Psychologists
Total Sales
Direct Cost of Sales
Physicians
Psychologists
Subtotal Cost of Sales

Plan
Jan
$0
$0
$0

Feb
$1,245
$1,001
$2,246

Mar
$1,354
$1,245
$2,599

Apr
$1,654
$1,458
$3,112

May
$2,474
$1,874
$4,348

Jun
$3,254
$2,754
$6,008

Jul
$3,354
$3,021
$6,375

Aug
$4,125
$3,254
$7,379

Sep
$5,358
$4,685
$10,043

Oct
$5,987
$5,055
$11,042

Nov
$6,547
$5,687
$12,234

Dec
$7,354
$6,235
$13,589

Jan
$0
$0
$0

Feb
$125
$100
$225

Mar
$135
$125
$260

Apr
$165
$146
$311

May
$247
$187
$435

Jun
$325
$275
$601

Jul
$335
$302
$638

Aug
$413
$325
$738

Sep
$536
$469
$1,004

Oct
$599
$506
$1,104

Nov
$655
$569
$1,223

Dec
$735
$624
$1,359

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Appendix: Elite Medical Transcription

Table 4.3 Marketing Expense Budget
Marketing Expense Budget
Advertisements
Website
Total Sales and Marketing Expenses
Percent of Sales
Contribution Margin
Contribution Margin / Sales

Jan
$500
$1,000
-----------$1,500
0.00%
($1,500)
0.00%

Feb
$550
$100
-----------$650
28.94%
$1,371
61.06%

Mar
$625
$100
-----------$725
27.90%
$1,614
62.10%

Apr
$200
$100
-----------$300
9.64%
$2,501
80.36%

May
$225
$100
-----------$325
7.47%
$3,588
82.53%

Jun
$300
$500
-----------$800
13.32%
$4,607
76.68%

Jul
$350
$100
-----------$450
7.06%
$5,288
82.94%

Aug
$325
$100
-----------$425
5.76%
$6,216
84.24%

Sep
$400
$100
-----------$500
4.98%
$8,539
85.02%

Oct
$450
$100
-----------$550
4.98%
$9,388
85.02%

Nov
$475
$100
-----------$575
4.70%
$10,436
85.30%

Dec
$550
$100
-----------$650
4.78%
$11,580
85.22%

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