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“Start-Up of Blissful Gardens” Please respond to the following
- Review the Case Study: Start-Up of Blissful Gardens, located on page 510 of your text. Next, suggest two (2) marketing goals for the facility that Ms. Remedios could implement.
- Take a position on which of the three (3) types of market targeting strategies (single-offer, mass-market coverage, single-segment concentration, or selective specialization) would work best for this start-up. Provide a rationale for your position.
Blissful Gardens is a new long-term care (LTC) and independent living facility set to open its doors to the first residents in approximately a year. The facility is located in the outskirts of St. Louis, Missouri, a major metropolitan area. In the state of Missouri, an LTC facility could not be licensed without certificate of need (CON) approval. Necessary permissions have been obtained, and construction has begun.
Building and Facility Plans
Blissful Gardens will have two separate buildings that will be joined by a central atrium and a section that will house administrative offices, a dining room, a piano lounge adjoining the dining room, and an arts and crafts room. One of the buildings will have three stories with 12 one-bedroom apartments for independent living. Each apartment will have its own private bathroom and a kitchenette. The building will be constructed as a “green facility,” making use of many recycled materials for construction and also many energy conservation and efficiency devices. At least some of the trash will be recycled. Each apartment will have security features, including pull cords to summon help when needed. At an additional fee, the residents will have the choice of having two or three daily meals in the main dining room. Residents will need to furnish the apartments with their own furniture, linens, and other furnishings. High-speed Internet connections and TV cable will be available for an additional fee in the individual apartments. There will also be a lounge area with a big-screen TV with full cable access and comfortable seating for group TV viewings. A separate common room will have four computers with printers provided by the facility for the residents’ use. Once-a-week housekeeping services will be included in the monthly rent. Laundry service will be available for an added fee, or the residents will have the option to do their own washing and drying in an on-premise laundry.
Blissful Gardens will have a 20-seat bus to provide shuttle service once a week to the grocery store, Wal-Mart or Target, the movie theatre, and some local restaurants. Other local entertainment outings at various local attractions will also be scheduled. Residents will reserve their seats for these outings in advance.
The second building will be singlestory with the capability to house 24 residents who require substantial assistance with ADLs and clinical interventions. The facility has a nested single-room design with four “neighborhoods.” Two of these neighborhoods will be used for Alzheimer’s care. In the Alzheimer’s unit, the decorations will be brightly colored and cheery. The rooms will all be painted a light tan with white ceilings and baseboards. The curtains will be either bright blue or green, and the tiled floor will be tan and blue. The residents and their families will be encouraged to hang pictures on the walls and bring other artwork of their choice. Each room will be furnished with a bed, a lift chair, a small table, and two straight-back chairs. The hallways will be decorated with black and white pictures of many historical places and events in the St. Louis area.
Current Operations and Plans
Ms. Remedios has been recently hired as the executive director (ED) of the entire facility. The board of directors had established a strict set of minimum requirements when they began their search for an ED:
• A master’s degree in gerontology or related discipline
• Current nursing home administrator’s license
• A minimum of 10 years’ experience in the long-term care field, with a progression of management responsibilities
• Criminal background clearance
Construction of the facility is about one-third complete. Ms. Remedios and a secretary currently occupy a temporary office space in a strip mall approximately 1 mile from the construction site.
The board has been meeting twice a month. Board members have been mainly focused on timely progress of the facility’s construction. Ms. Remedios visits the construction site once or twice a week, meets with the contractor, and discusses progress with the board. The board has asked her to begin marketing and staff recruitment efforts. The goal is to recruit an experienced director of nursing within the next 5 to 6 months so the facility can begin planning for Medicare and Medicaid certification. In addition, all department head positions should be filled 2 months before the facility opens. The department heads will be heavily involved in recruiting and training qualified associates. The goal is to have adequate staffing in all areas to serve the facility’s residents at 25% capacity when it opens its doors.
An entrepreneur is the primary contributor for the start-up of the facility, which will be operated as a for-profit venture. The entrepreneur chose the name, Blissful Gardens, in honor of her late mother, Mrs. Hatbliss, who was an avid gardener and left behind a fairly substantial estate. Part of the proceeds from the estate was designated to fill some need in the local community. Before she passed away, Mrs. Hatbliss was in a local nursing home, and the family did not have good experiences with the care she had received. Hence, the daughter decided to dedicate the funds to develop a resident-friendly, yet sophisticated and top-notch facility where people would not only feel comfortable and valued, but they would also receive the best services and care available in the community. According to the philosophy expressed by the board of directors, “resident-friendly” means that the facility will provide the comforts of one’s own home and the associates will help nurture the residents so that each individual could continue to enjoy his or her golden years and realize self-fulfillment. To maintain high standards, the independent living section will be 100% private pay, and the goal is to have 75% private-pay residents in the nursing center.
Board Composition and Funding
The eight-member board has the following composition:
• Chairman of the board: a local board-certified internist with experience in geriatrics. Mrs. Hatbliss was his patient for many years.
• Financial adviser: the president of a local bank.
• The chief executive officer of a local manufacturing business.
• The chief operating officer of a managed care organization.
• Legal counsel: an attorney with a prestigious local law firm.
• Two local well-known small-business owners.
• A retired school superintendent.
The estate of Mrs. Hatbliss provided $2 million. Total start-up costs have been estimated to be between $3.2 and $3.5 million. The board has secured a loan of $1 million from a local bank, with a line of credit approved for another $500,000. Local businesses will be solicited for donations for some of the equipment. Plaques will be displayed on the walls to recognize such donations.
Market Area and Competition
There are four medical systems located within 15 miles of Blissful Gardens. Two of the hospitals have their own LTC facilities. These hospital-operated facilities, with a total of 22 beds, present the only competition in the immediate area. One of these facilities, located 5 miles away, recently came under scrutiny for alleged health and safety violations. The media aired some unfavorable stories. The other hospital facility is 12 miles away and is running at full capacity with a waiting list.
The local community is ethnically diverse and has a stable economy because of its proximity to St. Louis. Most of the people settled in this area are either retired or are middle-aged, the median age of the population being 52. The average household income in the area is $100,000. New businesses have been steadily opening up in the area. A new shopping mall is being built approximately 8 miles from Blissful Gardens. A new condominium community, about 7 miles away, opened 6 months ago.
The facility’s utilization is projected to be at 50% capacity 6 months after opening and at 75% by the end of its first year of operation. To achieve this goal, a relationship must be established with the two hospitals that do not have their own LTC facilities. The board anticipates that the facility will start turning a profit by the end of its second year of operation. One of the board members is a good friend of the owner of a local talk radio station, who could be tapped to help promote the facility.
The board assigned Ms. Remedios several tasks to complete and report back.