Augustine Medical, Inc.

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Augustine Medical, Inc.

Introduction ( Background and Situation)

Augustine Medical, Inc. was founded by Dr. Scott Augustine, an anesthesiologist from Minnesota, in 1987. The company was created to develop and market products for hospital operating rooms and postoperative recovery rooms. The company provides innovative solutions to combat postoperative conditions such as hypothermia. Medical research indicates that 60 to 80 percent of all postoperative recovery room patients are clinically hypothermic. Hypothermia is caused by a patient’s exposure to cold operating room temperatures that are required by surgeons to control infection, and for the personal comfort of the surgeon. Hypothermia can also be a result of heat loss due to evaporation of the fluids used to scrub patients, evaporation from exposed bowel, and breathing of dry anesthetic gases. Dr. Augustine’s personal experience in the operating room convinced him that there was a need for a new system to warming patients after surgery. Dr. Augustine also realized that the market for this new product would be enormous! Statistics indicate that approximately 21 million surgical operations are performed annually in the United States, and that approximately 5,500 hospitals have operating rooms and postoperative recovery rooms that include 31,365 postoperative recovery beds and 28,514 operating rooms. Upon the realization of this need and existence of the market, Dr. Augustine went on to develop The Bair Hugger Patient Warming System then he acquired a patent. The Bair Hugger Patient Warming System consists of a heat source and a separate disposable warming cover that directs a gentle flow of warm air across the body. The Bair Hugger heat source uses a reliable high efficiency blower, a sealed 400W heating element, and a microprocessor based temperature control to create a continuous flow of warm air. The heat source complies with all safety requirements for hospital equipment. Augustine Medical, Inc. was able to find investors that contributed to the initial capitalization of $500,000. These initial funds that were collected were used for staff support, facilities, and marketing. The funds were also used to cover the fixed costs of the company while in its first year. The company subcontracted the production of the heater/blower unit and manufactured the warming covers in-house. The company only par...

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.../blower unit so buyers will be forced to purchase the blanket at a marked up price.


Augustine Medical, Inc. should decide on the price of their product then make all the information available to hospitals and distributor organizations. The company should then attend as many medical trade shows as possible to increase the visibility of their product by providing demonstrations to prospective buyers. To obtain first mover advantage it is important that Augustine Medical, Inc. puts together a sales force to prospect and qualify potential buyers. The sales force should proceed by using direct selling tactics as well as guerilla marketing tactics to effectively penetrate the market. Because the Bair Hugger will be priced lower than our direct competitor’s products it is important that Augustine Medical, Inc. stays focused on it objective to increase sales volume and capture large portion of the market share in the early stages. Building a portfolio of current buyers, and potential buyers will secure the company’s profitability in the long run because of brand loyalty and brand recognition. The implementation process should be completed within a 3-4 month period.

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