MARKETING MANAGEMENT - II

POST GRADUATE PROGRAM IN MANAGEMENT

INDIAN INSTITUTE OF MANAGEMENT INDORE

ASSIGNMENT
(CASE ANALYSIS FOR MEDNET.COM CONFRONTS CLICK-THROUGH
COMPETITION)

Submitted by
Group 16, Section B

Aakriti Rawat 2023PGP002

Ghanshyam Dethe 2023PGP115
Nidhi Kadian 2023PGP225
Shubh Garg 2020IPM131
Srinidhi U S 2023PGP360

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IDENTIFICATION OF THE PROBLEM
MedNet, launched in 2002 to offer free, science-based medical information, relies on
pharmaceutical ads for revenue. Windham Pharmaceuticals, its major advertiser since 2003,
threatens to switch unless business rules change. In Q1 2007, MedNet must prove its platform's
value for Windham's new drug and justify the advertising cost per customer. The challenge is
to retain Windham's partnership by showcasing MedNet's unique advantages and cost-
effectiveness.

ANALYSIS OF THE SITUATION

MedNet is grappling with intensified competition from both visitor and advertiser perspectives.
Users are now directed to non-profit and government websites like the US National Library of
Medicine and the World Health Organization, which offer information on alternative therapies
alongside scientifically backed solutions. Meanwhile, for advertising revenue, profit-oriented
health websites such as Cholesterol.com, ClinicalTrials.com, Alternativehealth.com, and the
formidable competitor Marvel are posing a significant challenge to MedNet.
Parameters MedNet Marvel
Total impressions 17.2 million 57 million
Monthly Visitors 4.3 million 19 million
Impression per visitor 4 3
CPM 100 7.56
CTR 3% 1.40%
Total click throughs 516,000 798,000
Cost per click $3.33 $0.54
Conversion rate 6% 2%
No. of conversions 30960 15960
Cost per conversion 55.56 27
Estimated contribution per sale 150 45
Total Revenue $4.64 million $0.718 million
Proft $2.924 million $0.287 million

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Marvel Search boasts a substantial monthly visitor reach of 19 million, nearly 4.4 times
greater than MedNet.com. Unlike MedNet's cost-per-thousand impressions model, Marvel
operates on a Pay-per-click basis, meaning advertisers pay only when visitors click on the
ads.
OPTIONS AVAILABLE FOR NETMED.COM
1. The company could adopt a more prescriptive role, treating consumers like patients
and charging for content. However, this might adversely affect existing customers.
2. Exploring the role of managing employer websites could provide a competitive
advantage leveraging the company's integrity. Yet, it may come at the cost of reduced
autonomy, with a shift towards prioritizing healthcare expense reduction.
3. To expand the consumer base, positioning the company as a trustworthy source for
diverse medical procedures is essential. This approach could attract a new audience
without compromising initial ownership.

EVALUATION
Option 1: While this choice offers higher revenue potential from direct pay customers and
the chance to engage a more dedicated audience, it comes with notable risks. Losing users
accustomed to free content could lead to a decline in traffic. Moreover, advertising efforts
may be required to attract new customers and boost subscriptions.
Option 2: This option demands substantial investment in resources and personnel, potentially
sparking competition with web development companies. Despite the challenges, it presents
an opportunity to secure stable revenue by leveraging the company's expertise in healthcare
and information management.
Option 3: Emphasizing customer base expansion, this option aims to attract new users,
increase web traffic, and reinforce MedNet's position as a healthcare resource. It focuses on
strengthening the company's presence and appealing to potential customers.

RECOMMENDATION
The most favorable course of action for MedNet involves expanding its customer base by
establishing itself as a trustworthy authority on various medical procedures. This option holds
the potential to address the current challenges by attracting increased traffic to the company
and solidifying its reputation as a dependable hub for all things related to healthcare.
However, in executing this strategy, meticulous planning is imperative to ensure that the
brand image remains intact and is not compromised during the implementation process.
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