1. You've probably heard of some specific heart procedures, such as angioplasty and stents that are routinely performed on adults. But such heart procedures, devices, and related medications are not available for infants and children, despite the fact that almost 40,000 children are born in the United States each year with heart defects that often require repair. This is a life or death situation for many young patients, yet doctors must improvise by using devices designed and tested on adults. For instance, doctors use an adult kidney balloon in an infant's heart because it is the appropriate size for a newborn's aortic valve. However, this device is not approved for the procedure. Why are specific devices and medicines developed for the multibillion-dollar cardiovascular market not also designed for children's health care? It's a matter of economics; this segment of young consumers is just too small. One leading cardiologist attributed the discrepancy to a "profitability gap" between the children's market and the much more profitable adult market for treating heart disease. Although this might make good economic sense for companies, it is little comfort to the parents of these. Little patients.

(a) Discuss the environmental forces acting on medical device and pharmaceutical companies that are preventing them from meeting the needs of the infant and child market segment. Is it wrong for these companies to not address the needs of this segment?

(b) Suggest some solutions to this problem.

2. Many marketing decisions boil down to numbers. An important question is this: What is the market sale potential in a given segment? If the sales potential in a market is not large enough to warrant pursuing that market, then companies will not offer products and services to that market, even though a need may exist. Consider the market segment of infants and children discussed above in question 2. Certainly there is a need for medical products to save children's lives. Still, companies are not pursuing this market.

Using any back-of-the-envelope method of your choice, estimate the market sales potential for heart catheterization products to meet the needs of the infant and child segment. Assume that of the 40,000 children with heart defects each year, 60 percent will benefit from these types of products and only 50 percent of their families have the financial resources to obtain such treatment. Also assume the average price for a device is $1,000.