Rethinking Marketing Strategies in the Indian Healthcare Sector


By

Mrs. Reeti Debnath
Asst. Professor
NSHM College of Management and Technology
NSHM Knowledge Campus
Kolkata
 


Introduction

The Indian healthcare sector has emerged as one of the largest service sectors in India in terms of revenue and employment, and the sector is expanding rapidly. The sector has registered a growth of 9.3 percent between 2000-2009, comparable to the sectoral growth rate of other emerging economies such as China, Brazil and Mexico. At the current growth rate, the healthcare industry in India will touch US$ 275 billion by 2020, according to a recent press release by the Confederation of Indian Industry (CII). The high growth of the industry is primarily driven because of domestic reasons and some of these are:-

  • India's growing population and the increase in the number of affordable middle class people in the country.
  • India is seeing a shift in disease pattern from communicable diseases to the high incidence of non-communicable and lifestyle-related diseases which has triggered a demand for specialized treatment.
  • In-patient revenues of hospitals have increased since expenditure on lifestyle-related diseases has risen substantially.
  • Rise in insured population and widening demand supply gap.
  • A growing elderly population is also pushing for better facilities in the country. Others like wellness programmes, fitness programmes, health management, and preventive medicine- synonyms of healthcare are also growing more and more familiar.

Marketing of healthcare services

Healthcare services have certain characteristics that differentiate them from products.  Services are perishable, intangible and variable. According to Ashok Anantram, president, business development, Apollo Hospitals, Chennai, "Marketing as a concept is the same in product and service industry. There is a product or service - one section produces it and the other consumes it. Marketing is interplay between producers and consumers." However, the difference comes in marketing tangible and intangible products. While products that can be seen, felt, touched and tasted are tangible, the products that are based on post-sale experience are intangible. Consumers can come up with desirable parameters for a tangible product in terms of productivity, efficiency, etc. It is very difficult to rate an intangible product, he explains.

Marketing of healthcare services encompasses the analysis and management of four factors (also called the four P's) essential to the delivery of health care:-

  • Product i.e. the type of health care service to be offered
  • Place i.e. how the service will be delivered to the patient, location and mode of access.
  • Price, often much bigger than the money price- which the patients pays in terms of pain, sufferings and rude treatment at the hands of hospital personnel and
  • Promotion i.e. how and what the prospective patient learns about the organization and the services it offers.
  • Some marketing experts however feel that a fifth P for successful marketing is public relations. Good public relations build up goodwill and an image to influence opinions, which ultimately lead consumers to choose the hospital and its services. According to Dr Saumitra Bharadwaj, marketing manager at Fortis hospital, NOIDA, "hospitals should create goodwill for themselves and should not completely rely on advertisements".

Until recently, marketing was considered by many as an unorthodox way of promoting healthcare. As a matter of fact, hospital being a service industry with a noble cause cannot utilize advertising techniques in the way other industries can.  The new view of marketing is that it is the science and art of finding, retaining and growing profitable customers. Marketing strategies in the hospital industry would include the various aspects of retaining and growing profitable external direct customer clientele. The various factors that advocate the need for an in depth understanding of why marketing strategies are important in the hospital industry is broadly classified under the following heads:-

  • customer based factors
  • environment based factors

Today the customer is far more knowledgeable about the diseases and their choices of treatment, cost conscious, demanding more value addition and wants to reduce his/her risk by dealing with trustworthy companies, services and products. In the past customers would chiefly rate a hospital based upon the quality of medical services provided. Studies have shown that consumers today have a host of factors based on which they rate the hospital. These include clean environment, availability of latest technology, hospital staff personnel mannerisms while providing service, time spent and methodology of imparting information, clarity and transparency of work and systematic nature of work, etc. There exists perhaps the need for greater transparency, honesty and better healthcare delivery with quality of service. Delighted customers are more likely to be loyal customers and loyal customers are more likely to give the company a larger share of their business. "As patients are the best ambassadors, it is important to take care of their needs and provide them with best possible care. Their apprehensions should be addressed so that they have the courage to come back to the same facility," agrees Ashok Anantram, president-business development, Apollo Hospitals, Chennai.

The competitive scenario has made it difficult for most hospitals and hence they need to continuously look out for new markets in order to generate a new clientele. The competition is not only rife but growing more intense every year. Many new hospitals are encroaching on the same market. It is becoming difficult for hospitals these days to depend on mere word of mouth promotion and advertisements to attract patients. We can no longer rely on word of mouth for getting patients. Hospitals, mainly the corporates ones, would definitely get more aggressive to survive the intense competition," avers Juhi Bhandari, marketing manager, Hinduja Hospital. Competition allows more alternatives to choose from and hence customers need not depend on a single service provider for meeting their needs. Hospitals must pay keen attention to their competitors. It has been very well said by Kotler that "poor firms ignore their competitors, average firms copy their competitors and winning firms lead their competitors". Successful companies design and operate systems for continuously gathering intelligence about their competitors. Since markets have become competitive, mere understanding of the customers is no longer enough. Hospital managements are putting extra effort in carving a brand image of the hospital and improving hospital's visibility. Hospitals also need to keep them abreast of the latest developments in the field, so that the distinction created by firm cannot be easily adopted by its competitor. It is very easy to replicate the medical services, technological advances and infrastructure in the hospital industry but a culture radiating positive influence on its customers is not always possible to replicate, as it requires a conscientious, systematic and planned approach by the organization.

Marketing strategies of hospitals

In the future more and more corporate healthcare institutions would approach the market aggressively to survive the intense competition. Even though some experts' feel that aggressive market is required to sustain today's competitive environment, others disagree saying that aggressive marketing is not necessary in healthcare sector as it would not fetch more patients. Patient's decision to choose a hospital is based on factors like facilities available in the hospital, expertise of doctors and the staff and vicinity. Hence all the professionally managed healthcare institutions should evolve a systematic approach for marketing with specific strategies and action plan. The up-gradation of standard service delivery, up-to-date infrastructure and facility development and research based innovative technique incorporated performance will equip the present institutions to withstand the tsunami of latest trends. In this multi crore business, the unforgettable mantra sustains: every satisfied consumer brings thousands of new consumers.

Tom Duncan and Sandra Moriarty presents a five-level 'customer bonding' framework that can be useful in conceptualizing a hospital's relationship with current and potential customers. These five levels are identified as:-

  • Awareness: - where the hospital's brand is included on the customer's menu of options.
  • Identity:- where the customers identify with, and proudly display the brand.
  • Connected: -where the customers communicate with the company between purchases.
  • Community: -  where the customers recognize each other as a community of users, and communicate with each other
  • Advocacy: - where customers recommend the brand to others in order to include them in the community.

They underline the importance of developing a better understanding of the customer base through tracking data on transaction and communications interactions. In fact, it costs five times more to acquire a new customer than to retain an existing one. Some areas which need to be dealt seriously are the patient relationship management (PRM) and patient experience management (PEM). Another key recommendation they make is to periodically remind customers of the benefits that they are getting through the relationship. This will help in not only acquiring new customers but also in retaining the old ones. The hospital must incorporate the strategy of slowly and steadily trying to move the customers upward in the pyramid as shown in figure 1. The shape of the pyramid indicates that fewer customers are at the highest level.


With the realisation of the importance of hospital marketing, many experts support the presence of a marketing department in the hospitals. Nowadays, we can find a functional marketing department in almost all private hospitals. The marketing department is said to be the voice of hospital where the brand is fashioned and communicated, internally as well as to the community at large. Liaison between in-house departments, organisational management, out-door agencies, medical management fraternity is the strength of the marketing department of a modern healthcare institution. The marketing department also helps in building liaisons with the medical officers of the foreign consulates to bring patients from abroad, opine Colonel B S Khimani, Director, and Administration of Jaslok Hospital. Some other strategies for hospital marketing that has evolved over the past few years are as follows: -
  • Mergers and Acquisitions allows healthcare providers with immediate brand recognition and an aggressive scale up in new geographies. With M&A, new standards in healthcare services have been ushered in by large corporate hospitals. Merger of smaller hospitals and nursing homes with larger healthcare entities has led to better healthcare service delivery.
  • International Accreditation: With the rising popularity of traveling to foreign countries for medical care, many in the US are raising concerns about the quality of healthcare that can be obtained abroad and how medical travelers can ensure the provider(s) they've chosen overseas are reputable. The largest and most widely recognized of the many accreditation providers in the US is the Joint Commission. The Joint Commission International (JCI) also offers accreditation to medical providers internationally. It is one of t he most stringent hospital accreditation processes where evaluation is done under 1033 measurable parameters. Hospitals can work towards obtaining the JCI seal which will help them garner international accreditation and thus get patients from abroad.
  • Full- fledged international patient services wing in the hospitals will help boost medical tourism. Some facilities which can be made available are airport transfers, language translators, dedicated International patient rooms, cuisine choice subject to medical clearance and partnership with hospitality majors for recuperative holidays.
  • Strategic alliances with global insurance majors' travel and charter operators, medical tourism organisations and corporates like International SOS, Blue Cross Blue Shield.
  • Organizing events, both indoor and out-reach programmes, play a significant role in marketing of healthcare institutions. CME, awareness sessions for general public, free check-up camps, organizing events on health days, conducting interviews of specialists on visual media, printing and making readily available various emergency or appointment numbers are the commonest marketing tools.
  • Traditional marketing, in or outside of the healthcare industry, must adapt for the new eHealth era. Hospitals should capitalize on the advent of the internet and develop new media forms to promote the services offered by them. E-detailing such as video- conferencing and the use of email and related technologies to promote two way communications are very useful. The hospital website too can serve as a source of information gathering and interaction for outstation patients. 

Conclusion

It is very important that healthcare establishments adopt healthy practices to market themselves. Hospitals should work towards becoming the most trusted brands and this is achieved when they deliver services which give their customers the utmost satisfaction. The good news is that the Indian market for the hospital industry is yet to reach the saturation stage, and still has ample scope for development. International quality and accreditation standards will enhance the image of the Indian hospitals and put them on the world map. Service delivery, clinical expertise, and medical technology will also help the hospitals to create a good image about them. Soft skills to all, including the doctors are a pre-requisite for marketing/branding exercises. Besides, there should be consistency in the process of delivering healthcare in a hospital. Any negligent act of a doctor, a nurse or a technician or a wrong surgery can put the health, happiness, even the life of the patient in jeopardy. Hence, it is important that all healthcare institutions start identifying their quality needs and implement processes which create transparency in consumer experience.

References

  • "Hospital marketing comes of age," Express Health Care Management, January 15-31st, 2005.
  • "Indians don't like hospitals hard-selling themselves," Express Health Care Management, January 15-31st, 2005.
  • Bhardwaj, V. & Singh, K. TPG's Parkway Health to set up hospitals, The Economic Times, December 6th, 2008.
  • Duncan, T. and Moriarty, S. (1997). Driving Brand Value: Using Integrated Marketing to Drive Stakeholders Relationships, McGraw-Hill, New York.
  • Kotler, P. and Armstrong, G. (2007). Principles of Marketing, 12th International edition, Prentice-Hall, USA.
  • Srinivasan, A. V. (2008). Managing a Modern Hospital, 2nd edition, Sage Publications Pvt. Ltd. New Delhi.
  • Venkataramana, V and Somayajulu G. (2003). 'Customer Relationship Management - A Key to corporate Success, Excel Books, New Delhi.
     


Mrs. Reeti Debnath
Asst. Professor
NSHM College of Management and Technology
NSHM Knowledge Campus
Kolkata
 

Source: E-mail April 5, 2012

          

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