Marketing Manager Discussion

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Main Question:

A Managed Care Organization marketing manager reduced the MCO’s premium by 10 percent and saw a 20 percent increase in the number of subscribers. He then thought that if the premium was reduced by another 20 percent, he would see a 40 percent increase. What is your analysis of this reasoning?

A reply of 450 words required for below student post. students must support their assertions with at least 2 peer reviewed citation. one course text citation, and one biblical principle. Should be in APA format.

Student Response:

In the scenario given, as the premium is lowered by 10 percent, the company sees an additional 20 percent increase in the number of subscribers. As a result of this occurring, the marketing manager decides to lower the premium by another 20 percent and hopes the total number of subscribers will jump to 40 percent. This is an interesting tactic displayed by the manager and is sometimes an enticing strategy if the customer base acts as expected. The manager is essentially trying to test the price point and how much it can fluctuate while benefiting the company on the receiving end. With this factor, the company will try to reduce the price that is associated with a product or service offered, so the demand will increase as customers are encouraged to buy the product. More customers are attracted to the product due to the attractive price point created by the marketing manager (Berkowitz, 2017). A significant price change is usually followed by a significant change in demand for the product. This can either benefit companies and provide more revenue or hurt them if customers do not pursue the product (Mishra et al., 2017). This is due to an inverse relation of the price and product relationship, proving that if the price of a product/service changes, the demand will do the same. Consumers of a product are always seeking discounts or more or less money which gives businesses a great opportunity to generate revenue. The same concept applies in this scenario and is a smart move by the marketing manager. Price elasticity is a crucial indicator of what marketing tactics can benefit the company, toying with the price will show analysts if the demand rises. The same can be applied to raising the price of a service/product, which is usually within the health care system (Mishra et al., 2017). This can cause patients to seek health care from other facilities or possibly not seek help at all due to rising costs. Marketing managers must assess these factors when raising/lowering the price of any health services and carefully observe how the selected population reacts. Pricing standards are a growing concern within health care and facilities should continue to monitor how expensive their services are compared to the local population’s median salary. Facilities can also apply discounts for select services and experience a higher volume of patients, due to the lower price presented.

Biblical Integration

As health professionals, we should always be seeking alternative ways for patients to save money. Medical expenses can be burdensome and in some scenarios ruin peoples’ lives. Insurance companies should continue to lower premiums and give all citizens a fair chance at affordable health coverage. Equality is imperative for a better nationwide health system. The book of Proverbs states, “The rich and the poor meet together; the Lord is the maker of them all” (New King James version, 2006, Proverbs 22:2).


Berkowitz, E. (2017). Essentials of health care marketing (4th ed.). Jones & Bartlett Learning.

Mishra, B. K., Prasad, A., Srinivasan, D., & ElHafsi, M. (2017). Pricing and capacity planning for product-line expansion and reduction. International Journal of Production Research, 55(18), 5502-5519.

New King James Bible. (2006). Thomas Nelson, Inc. (Original work published 1982) 

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