Project of:Marketing of Services In Health-care Industry

Submitted to: Mr. Rohit Singh Tomar ABS-AUMP

submitted by: Arpit Singh Negi MBA (iv sem)

Contents 1) Over view: Indian Healthcare Industry 2)

Indian Health-care and Hospital Industry

Healthcare industry is a wide and intensive form of services which are related to well being of human beings. Health care is the social sector and it is provided at State level with the help of Central Government. Health care industry covers hospitals, health insurances, medical software, health equipments and pharmacy in it.

Right from the time of Ramayana and Mahabharata, health care was there but with time, Health care sector has changed substantially. With improvement in Medical Science and technology it has gone through considerable change and improved a lot.

The major inputs of health care industries are as listed below: I. II III. IV. Hospitals Medical insurance Medical software Health equipment

Health care service is the combination of tangible and intangible aspect with the intangible aspect dominating the intangible aspect. In fact it can be said to be completely intangible, in that, the services (consultancy) offered by the doctor are completely intangible. The tangible things could include the bed, the dcor, etc. Efforts are made by hospitals to tangiblize the service offering.

Different types of health care services available in India

Hospitals Pathology Clinics Blood Banks Meditation Centre Emergency services like Ambulances, etc. Online Medical Services Telemedicine Naturopathy Yoga Centre Fitness Centre Laughter Clubs Health Spas

In

the Constitution of India, health is a state subject. Central govt.s intervention to assist the

state govt. is needed in the areas of control and eradication of major communicable & non communicable diseases, policy formulation, international health, medical & para-medical education along with regulatory measures, drug control and prevention of food adulteration, besides activities concerning the containment of population growth including safe motherhood, child survival and immunization Program.

"The Healthcare Industry in India is projected to witness an annual growth rate of 13 per cent and touch US$ 65 billion by 2013 from US$ 35 billion." As per the Department of Industrial Policy and Promotion (DIPP), the hospitals and diagnostic centers witnessed FDI worth US$ 786.14 million between April 2000 and April 2010.

Healthcare Sector is one of the largest and rapidly-growing sectors in India, in terms of revenue and employment. It registered a growth rate of 9.3 per cent between 2000-2009 and the growth rate would further be accelerated by healthcare facilities, medical diagnostic and medical insurance sector. Despite the global financial crisis, healthcare industry in India witnessed a growth rate of 43 per cent in net profit during the first quarter (April-June '09). And this is what makes numerous domestic and international players to leverage on this huge business potential and start aggressive expansion in the country.

In a bid to promote healthcare facilities in the country, the Government of India launched the National Rural Health Mission (NRHM) in the year 2005.

Presenting his eighth Union Budget, Finance Minister P Chidambaram in his budget 2013 speech gave emphasis to the healthcare sector. Increasing expenditure on healthcare and healthcare infrastructure will boost the industry and help it grow. Here are the key takeaways from the healthcare sector: National Health Mission. inclusive of national flagship programme National Rural Health Mission(NRHM) and National Urban Health Mission allocated Rs 21,229 crore in the 20132014 budget, a 24% increase over the allocation to NRHM in 2012-2013 budget. A national programme for the elderly launched under which 8 geriatric centres would be set up with an allocation of Rs 150 crore.

The department for alternative system of medicine or the AYUSH has been allocated Rs 1061 crore. The six AIIMS like institute, to be commissioned by 2014 have been granted Rs 1650 crore.

The hospital Industry in India

The Indian healthcare sector is estimated to reach US$ 100 billion by 2015, growing 20 per cent year-on-year (y-o-y), as per rating agency Fitch. The industry is expected to touch US$ 280 billion by 2020, on the back of increasing demand for specialised and quality healthcare facilities. India is the most competitive destination with advantages of lower cost and sophisticated treatments, highlighted the RNCOS report titled 'Indian Healthcare - New Avenues for Growth'. The report further elaborates that several key trends are backing the growth of India's healthcare sector. "India is a very important market for many reasons. The government continues to invest in healthcare. We see that healthcare is expanding across the country. There is a growth opportunity and we continue to invest very much in India. There is so much innovation in India," highlighted Mr Adam H Schechter, Executive Vice President and President, Global Human Health Division, Merck.

Some of the major investments in the sector include:

Temasek Holdings, Singapore's state-owned investment company, has invested Rs 140 crore (US$ 25.92 million) in the cancer care provider HealthCare Global Enterprises (HCG)

LifeCell International Pvt Ltd has won funding of Rs 35 crore (US$ 6.48 million) from Helion Venture Partners. The investment will be used to increase LifeCell's market awareness and penetration in the country, said Mr Mayur Abhaya, CEO and MD, LifeCell

Spice Global has made an investment of Rs 400 crore (US$ 74.07 million) in a new healthcare foray to launch multi-speciality Saket City Hospital in the New Delhi. The hospital will have 1000 bed capacity by the end of its third and final phase, expected by mid-2016

International Finance Corporation (IFC) is planning to invest around US$ 25 million in the India 2020 Fund II, a successor fund to India 2020 Fund I. The new fund has a target size of US$ 125 million and will focus on investing in Indian small and medium enterprises (SME) in healthcare, education, rural consumption and agribusiness

Sri City, an integrated business city near Chennai, has signed a memorandum of understanding (MoU) with Medical Research Foundation of Sankara Nethralaya to establish an eye care hospital and research facility inside the industrial complex

Apollo Group of Hospitals has launched its telemedicine service in Yangoon, Myanmar. The facility will allow Myanmar to consult Indian doctors and have accessibility to quality treatment and latest medical technology. As per company's press statement, the network will primarily provide infrastructure supports like Tele-Education, TeleMedicine, Internet, videoconferencing and voice over internet protocol (VoIP) services via satellite and fibre optic network

Dubai-based health care major, DM Healthcare plans to invest Rs 2,300 crore (US$ healthcare to people across geographies. The firm has close to 1,000 beds in India and is looking to take this up to 4,000 in two years' time by establishing clusters of 'Hub and Spoke Hospitals' in the Tier II and III cities

425.92 million) in Kerala over a period of three years. The Group aims to provide quality

Fortis Healthcare International plans to sell its 64 per cent stake in Dental Corporation Holdings Ltd, Australia, to UK-based Bupa for A$ 270 million (US$ 284.62 million). The firm's businesses span diagnostics, primary care, day-care specialty centres, and hospitals

THE SERVICE MARKETING TRIANGLE:

HOSPITAL

DOCTOR

PATIENT

Company: Here, the hospital is the company that dreams up an idea of service offering (treatment), which will satisfy the customers (patients) expectations (of getting cured).

Customer: The patient who seeks to get cured is the customer for the hospital as he is the one who avails the service and pays for it.

Provider: Doctor, the inseparable part of the hospital is the provider, as he is the one who comes in direct contact with the patient. The reputation of the hospital is directly in

the hands of the doctor. A satisfied patient is a very important source of word of mouth promotion for the organization.

7 Ps of marketing for hospitals

Product: The service product is an offering of commercial intent having features of both intangible and tangible, seeking to satisfy the new wants and demands of the consumer. Hospital industry is action oriented and there is a lot of interaction with the customers (patients). The service product of the hospitals normally have the following features: o Quality Level: When we talk about marketing hospitals, it is natural that we are very particular about managing our services in the right fashion. Supportive services play an important role in improving the quality of medicare. These services which include laboratory, blood-banks, catering, radiology and laundry, in a true sense determine the quality of services made available by medical and para-medical personnel. They get a strong base for treatment since the diagnostic aspect determines a direction. To get the best result from OT, it is natural that equipments are properly sterlised. In addition, the dresses and clothes are also required to be made bacteria free. The patients are required to wear disinfected linen which should be made available. The radiology department should have hitech facilities keeping in view the pressure of work. Of late, we find sophisticated equipments and unless hospitals make the same services available the same, the quality of services cannot be improved. o Accessories: This is a very good way of segmenting customers. Many hospitals provide additional services such as catering, laundry, yoga sessions, cafeterias, etc. for the customers (patients)who are willing to pay extra. Hospitals have different wards - General and Special. Certain hospitals provide services for the

family members of the patients (when they are not from the same city) accommodation and catering.

o Packaging: It is the bundling of many services into the core service. Eg: Apollo hospital offers a full health check-up to the patients. Similarly other hospitals also offer package deals for health check-ups. For example if a person has to undergo a bypass surgery, he can pay a lump sum amount during admission, say rupees 1 lakh for all procedures, tests, stay, etc, at once. o Product line: hospitals through their services offer many choices to the patients and cover a wide range of customer needs. For example: Apollo hospital has dental department, cardiology department, etc. and within the dental department it has dental surgery, root canal, etc. o Brand name: The hospitals, to differentiate themselves, and their services from others use a brand name. The intangibility factor of the service makes it all the more important for the hospitals to do so.

Place Under hospital marketing, distribution of Medicare services plays a crucial role. This focuses on the instrumentality of almost all who are found involved in making services available to the ultimate users. In case of hospitals the location of hospital plays a very important role. The kind of services a hospital is rendering is also very important for determining the location of the hospital. Eg. Tata memorial hospital specializes in cancer treatment and is located at a centre place unlike other normal hospitals, which you can find all over other places. It can be unambiguously accepted that the medical personnel need a fair blending of two important properties i.e. they should be professionally sound and should have in-depth knowledge at psychology. A particular doctor might be famous for his case handling records but

he may not be made available for all the patients because of the place factor. Now in this case the service provided, that is the doctor may be a visiting doctor for different hospitals at different locations to beat the place factors. Unlike other service industries, under hospital marketing all efforts should be for making available to the society the best possible medical aid. In a country like India, which is geographically vast and where majority of the population lives in the rural areas, place factor for the hospitals play a very crucial role. A typical small village / town may be having small dispensaries but they will not have super speciality hospitals. For that they will have to be dependent on the hospitals in the urban areas.

People Under hospital marketing the marketing mix variable people includes all the different people involved in the service providing process (internal customers of the hospitals) which includes doctors, nurses, supporting staff etc. The earliest and the best way of having control on the quality of people will be by approving professionally sound doctors and other staff. Hospital is a place where small activity undertaken can be a matter of life and death, so the people factor is very important. One of the major classifications of hospitals is private and government. In the government hospital the people factor has to be specially taken care of. In Indian government hospitals except a few almost all the hospitals and their personnel hardly find the behavioural dimensions significant. It is against this background that even if the users get the quality medical aid they are found dissatisfied with the rough and indecent behaviour of the doctors. Under hospital marketing a right person for the right job has to be appointed and they should be adaptable and possess versatility. The patients in the hospitals are already suffering from trauma,

which has to be understood by the doctors and other staff. The people of the hospital should be constantly motivated to give the best of their effort.

Process Process generally forms the different tasks that are performed by the hospital. The process factor is mainly dependent on the size of the hospital and kind of service it is offering. A typical process involved in a medium sized hospital can be as follows.

Apart from this flow there are other allied activities like record keeping administration at services etc which fall under the process factor. These stages do not exist separately but are interlinked. The most important elements are lines of communication within the setup. The experience of the patient depends on the final interplay of all these factors.

 price A particular product or service is acceptable to the customer at a particular price and if the price increases then the same product or service might become less acceptable to the customer. Pricing prices may be profit oriented, government controlled, competitive or customer oriented

Service pricing follows the principles and practices of pricing of goods and therefore they are either cost based or market based. 1. Demand fluctuations should be successfully handled 2. Service pricing should be such as to provide value addition and quality indication 3. The pricing strategy should cope up with the degree of competition

Physical evidence It does play an important role in health care services, as the core benefit a customer seeks is proper diagnosis and cure of the problem. For a local small time dispensary or hospital physical evidence may not be of much help. In recent days some major super speciality hospitals are using physical evidence for distinguishing itself as something unique.

Physical evidence can be in the form of smart buildings, logos, mascots etc. a smart building infrastructure indicates that the hospital can take care of all the needs of the patient. Examples 1. Lilavati hospital has got a smart building, which helps, in developing in the minds of the people, the impression that it is the safest option among the different hospitals available to the people. 2. Fortis and Apollo hospitals have a unique logo, which can be easily identified.

Physical evidence also helps in beating the intangibility factor.

Promotion: Hospitals for promotion use either advertisement or PR or both after taking into

consideration the target customers, media type, budget and the sales promotion. Since a few years the prime times in T.V. are reserved for advertising social issues like family planning, use of different types of contraceptives, care for the girl child and so on. These commercials use the common man approach for reference group appeal. In case of health care products and services use for common man appeal is widely prevalent. The use of celebrities is not as effective as that of a common man. An ordinary person thinks that if it works well for people like him, it will also work equally well for him. The identification with the common man is easy and quick. Besides TV, other media of promotion are to be used innovatively. Unlike the urban area, in rural areas newspapers and magazines do not have the same impact in conveying messages. In villages, hoardings and wall writings near the markets and recreation centers attract the

attention of villagers. This market consists of 180 million strong middle income group and a small income group. This group has a large discretionary income. These discerning consumers are very careful in choosing health care services. The last decade has witnessed a health, appearance and nutrition conscious population. The health care field has become very competitive. Although around one-fourth of our population stays in urban India, three fourths of the total doctors have engaged themselves in this part. Many of these doctors visit the contiguous rural areas, but they may operate from the urban area. The patients of upper middle and upper income group have a wide choice to make from a number of clinics and hospitals. Therefore, many hospitals have abandoned traditions and adopted marketing strategies to woo more and more patients to their clinics. Word-of-mouth plays a very important role in promotion of hospitals. A person in need of a health care service does not know for sure where to search for relevant information. He consults his family members, relations and friends first. The patients who come to a hospital generally have the old patients of that hospital as referrals. Word-of-mouth plays an important role during information acquisition stage of the customers as there are no objective performance measures to judge the various alternatives available to them. Therefore, satisfied past patients of a hospital can bring more number of patients to that hospital than a number of advertisements. In a competitive market place, the images of the firms swill affect their competitive standing. One factor that is likely to have a significant impact on the health care scene is the growth of hospital chains such as Apollo Hospitals, Birla Health Centres ,etc. Artificial heart transplants and other complex operations although are few in number and generate a small portion of the total revenue, they help in generating word-of-mouth which health care providers are actually interested. Many of these companies are spending a lot in corporate advertising for Image building.