A RESEARCH PROJECT REPORT ON Marketing Strategy Of Hospital SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE REQUIREMEN OF PAPER CP-402

FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) (SESSION 2010-2012) UNDER THE SUPERVISION OF:

Prof. Sandeep Narula

MMIM, MM UNIVERSITY, MULLANA, AMBALA

SUBMITTED BY: Tabasum Rehman ROLLNO:1210705

SUBMITTED TO:

MAHARISHI MARKANDESHWAR INSTITUTE OF MANAGEMENT MAHARISHI MARKANDESHWAR UNIVERSITY, MULLANA, AMBALA HARYANA, 133203

DECLARATION
I hereby declare that the dissertation entitled Marketing Strategy Of Hospitals submitted for the Degree of Master of Business Administration is my original work and the dissertation has not formed the basis for the award of any degree, diploma, associate ship, fellowship or similar other titles. It has not been submitted to any other University or Institution for the award of any degree or diploma. Date: . Place: Name Tabasum Rehman Roll No 1210705

CERTIFICATE
Certified that the research project entitled xxxxxxx NAMExxxxxx Marketing Strategy Of HospitalsxxxxDONE BY MSxxxxx: Tabasum Rehman,xxxxxxROLL NOxxxxxx.:1210705, During the period of his study under my guidance. Date: Name of Research Guide Designation

ACKNOWLEDGEMENT
I would like to thank Prof.Sandeep Narula for supporting me during this research report and providing me an opportunity to learn outside the class room. It was a truly wonderful learning experience. I would like to dedicate this project to my colleagues and all those who help me to complete this research. Without their help and constant support this research would not have been possible. Lastly I would like to thank all the respondents who offered their opinions and suggestions through the survey that was conducted by me.

TABASUM REHMAN

INTRODUCTION According to the World Health Organization Health care system is one, that encompasses all the activities whose primary purpose is to promote, restore, or maintain health and includes patients and their families, health care workers and caregivers within organizations and in the community, and the health policy environment in which all health related activities occur. The way in which a nation defines its health system has significant implications for such marketing tasks as customer research, pricing, sales, advertising, and coordination of channels of distribution. Strategic Marketing for Health Care Organizations: 1. Social/Cultural. The social/cultural, characteristics of a country determines the mechanism and source of payment. It is noteworthy that although many countries have crafted such statements, the United States government has not done so. For example, contrast two publicly funded programs. U.K.s National Health Service is funded from general taxation with a set budget, whereas the Medicare program in the United States is largely financed from employer and employee salary-based contributions and does not have an explicit cap on spending.
2. Technological. Technology incorporates drugs, devices, and

procedures that are used in health care settings. The key question we must ask is, How closely are safety and efficacy evaluations combined with cost considerations in determining whether a technology is approved and used? For example, in the United States, the Food and Drug Administration (FDA) will determine that a pharmaceutical is safe and efficacious. This decision is totally independent of whether or not there are many similar pharmaceuticals in the same class already available in the marketplace; if the newly approved drug is much more costly than its competitors, given equivalent benefits; or both. Contrast the FDA approval process with Englands National Institute for Clinical Excellence (NICE). NICE approves

pharmaceuticals based not only on safety and efficacy but also on cost-effectiveness. This disparity exists principally because, in the former case, the United States federal government does not directly pay for most pharmaceuticals, whereas the British government does have such fiscal responsibility. Even more recently, with Medicares new system of payment for drugs, the federal government decided not to bargain directly with pharmaceutical companies.
3. Demographic. Demographic characteristics of the population

determines, who pays for products and services. For example, one of the key questions facing many countries is how they will care for their growing elderly populations. Who will pay for their care? How much will the elderly expect to contribute themselves and how much will the public sector finance? How Much Is Paid? 4. Political/Regulatory/Judicial. In most countries, the political process is the origin of public health care budgets and fee schedules. Even in the United States, where most care is provided by the private sector, government-set global fees for hospitals (diagnosis related groups or DRUGs) and per-service fees for physicians (resource based relative value scale) have been adopted by the private sector as benchmarks for paying those providers. An example of judicial influence on costs comes from the debate on so-called grey markets for pharmaceuticalsthe practice of importing drugs from lower-cost countries into highercost countries. This issue continues to be a contentious one in the United States (particularly with respect to reimportation of drugs from Canada) but has also been addressed by the courts in the European Union, where such practices were found to be legal.

Healthcare Marketing Strategies

The healthcare industry is a confluence of pharmaceutical manufacturers, physicians, hospitals and insurers. All of these sectors rely on marketing to keep their names in front of the public, but they usually use different types of strategies. The prevalence of advertising directed to consumers exploded

once the Food and Drug Administration allowed drug manufacturers an alternative to marketing only to physicians, as had been the case for decades. The aggregate marketing by all the healthcare industry players has empowered patients to have a say-so in their own health and well-being by creating awareness of disease states and the drugs and care providers available to treat them.

Big Pharma and Big Insurer Strategies:

Mass advertising is still the most effective and efficient way to get a message out to the largest number of people. Both big pharmaceutical and big insurance companies use mass advertising as a primary marketing channel. Pharmaceutical companies primarily utilize television and magazine media while insurers tend to use primarily direct mail and TV to a lesser extent. One requirement of drug advertising is the disclosure of potential adverse effects from use of the drug product in the ad. In print, marketers are required to provide very detailed information on their product including chemical makeup, usage, and adverse side effects, right alongside the positive benefits of using the drug. In broadcast media, because of time limitations, manufacturers only need to verbalize adverse side effects. Too long a list of negative side effects can dissuade a consumer from using a drug. In such a situation, marketers have to weigh whether they should advertise directly to consumers or only to physicians.

Physician and Hospital Strategies:

Local physicians and hospitals use media like community newspapers or regional magazines to make

consumers aware of their health specialty and location. Some doctors' practices and hospitals rely on public relations initiatives like local charitable golfing or running events to create awareness. Local health fairs are also usually staffed by local healthcare marketers, even though they're often funded by large pharmaceutical or insurance providers. The goal is to get directly in front of a patient population, conducting simple health indicator screenings such as cholesterol and blood pressure measurements and suggesting follow up at their local facility as needed. Health fairs are often planned to coincide with other local events like parades or street fairs that attract a significant amount of foot traffic.

Online Marketing:
The Internet has proven itself an invaluable tool for all healthcare marketers. Local physicians use online advertising or submissions to search engines and directories to ensure they will be found during a local web search. Hospitals, too, have online presences in websites that act as digital brochures. Drug companies and insurers establish websites both for physicians and for patients to visit. The Internet allows drug makers to explain a disease condition thoroughly, using renderings and real-life patient cases, to provide answers to frequently asked questions and to offer a m.eans to contact the maker, an insurer or a local physician. Insurers' websites give detailed descriptions of plans, coverage and benefits.

Effective Marketing Strategies for Healthcare:

The marketing of health care services requires savvy marketing strategies.

As the health care needs of the population grow, so do the opportunities for health care organizations and providers to meet these needs. Competition is growing, however, requiring health care providers to become increasingly savvy about marketing strategies. They need to effectively target potential clients with messages designed to increase awareness of their services.

Target the Decision Makers:

The decision makers in health care are not always immediately apparent. Some providers wrongly focus on the consumer market, when other drivers of health care decisions may be overlooked. For most high-end surgical services--cardiac, neuro, orthopedics--primary care physicians are relied on by patients for making recommendations on which specialist to see, says Lin Grensing-Pophal, author of "Marketing With the End in Mind." That means that specialists in these areas would be wise to develop strong relationships with these referring providers, and direct their marketing dollars at them, rather than attempting to influence consumers through mass media efforts.
o

Understand the Competition:

Effective marketing strategies require that health care organizations and providers understand the competition--including indirect competitors, says Grensing-Pophal. Indirect competition represents any

alternative choice to a product or service, she says, and in health care that means "psychic" competitors. Psychic competition refers to the mindsets of potential customers and their decisions to avoid care altogether. They do so out of fears or concerns about procedures, diagnoses or lifestyle impacts. By addressing these "psychic" issues in their communications, says Grensing-Pophal, health care providers can help to allay some of these fears and build trusting relationships with potential patients.

Objectives Of Marketing Strategy Of Hospitals:

To determine the underlying perception of people towards health care organisation. To identify the factors influencing health seeking behaviour of the target customers. To determine the impact of various promotional activities. To propose marketing strategies for hospitals

Review of literature:

Hospital administrators are being pressured to improve the quality of services and to curb costs - two primary themes within the field of operations management. This leads to what extent operations are considered within the strategic planning process and what impact it may have, this article address the operations capabilities of quality, flexibility, delivery and cost control. This article can serve as a springboard for research in hospital operations strategy, an

area that is largely neglected in the literature (Butler et. al., 1996).

Abstract Janelle Heine (Journal

of Operations

Management)Volume 13, Issue 4

According to the author, Professional service organizations are becoming an increasingly important segment of the service sector in the India,but little attention has been paid to the management of these organizations, particularly in relation to technical performance. This paper reports the findings of a survey of managers of Health Maintenance Organizations (HMOs) which related operations management decisions about organization, workforce management, quality management and planning and control, to clinical process and outcome performance. This research demonstrates that managerial decisions do affect clinical performance in HMOs. These findings have implications for both researchers and practitioners. For researchers, the study provides a framework for future research on the important link between management decisions and technical performance in professional service organizations. For practitioners, this study suggests that technical performance will be enhanced when professional work is appropriately managed.

Pure Versus Hybrid: Performance Implications of Porter's Generic Strategies

Kumar, Kamalesh; Subramanian, Ram; Yauger, Charles (Health Care Management Review: Fall 1997 - Volume 22 - Issue 4 - pp 47-60 Article) Abstract

This article identifies the strategic types in the hospital industry based on the hospital's use of Porter's generic strategies in their pure and hybrid forms. The article also examines differences in performance of hospitals across strategic types. Results indicate that hospitals that follow a focussed cost leadership strategy, in general, have superior performance on a variety of performance measures, while hospitals that use a combination of cost leadership and differentiation perform the poorest. Health Care Management Review: Fall 1997 - Volume 22 - Issue 4 - pp 47-60 Article

...

Abstract Kumar, Kamalesh; Subramanian, Ram; Strandholm, Karen (Market and Efficiency-Based
Strategic Responses to Environmental Changes In the Health Care Industry) July 2002 - Volume 27 - Issue 3 pp 21-31)This study examined the linkages between perceived environmental changes in the

health care industry, corresponding strategic adaptations, and their impact on select performance measures as reported by managers. Results from a sample of 187 hospitals indicate that efficiency-oriented strategy is chosen more often by organizations that perceive their industry environment to be relatively stable and certain while market-focused strategies are chosen more often by organizations that perceive greater environmental instability and uncertainty.

URN Author

etd-0606107-224650 Nan-Han Lu

Keyword

Service marketing hospital management non-profit organization military hospital

Abstract

The main responsibility of the medical institution is to provide medical services that meet patients needs as well as create health value in a patients life. Hospital marketing, a type of service marketing promoting intangible products, is a way of utilizing medical service marketing to provide patients with more efficient medical service. Since the implementation of National Health Insurance, Taiwans medical system has experienced an increased of enterprization in hospital management, the implementation of a global budget payment system, the financial crisis and the impact of rising medical right demanded by the Taiwanese . The discussion focuses on the changes in current medical ecology and the competitive advantages of the subject hospital. Diamond Theory by Michael Porter and SWOT analysis are used to evaluate the strengths and weakness in and outside of the hospital, determine the trend choice for the hospitals new positioning, and define the right strategy to target to its market segment. All of these are based on the concept of national defense. The paper will also take into consideration the subject hospitals special features and competitive advantages, and build an 8P marketing model centering on patients in order to formulate the best combination of marketing strategies for the subject hospital. The paper has three conclusions, first of all, recognize the competitive advantages and the opportunities of the subject hospital; second, assert the new positioning of the transformed medical service; finally, establish a patient-oriented marketing strategy. In addition, this paper also suggests the best marketing strategy combination by applying innovative and pragmatic managerial thinking in order to give the military hospital a brand new image.

Bibliography
Butler et. al. (1996)

Journal of Operations Management,

Volume 14, Issue 2, June 1996, Pages 137156

Janelle Heineke (December 1995,)Journal

of
Volume 13, Issue 4,( Pages 255

Operations Management
272

)Strategic operations management decisions and professional performance in U.S. HMOs.

Pure Versus Hybrid: Performance Implications of Porter's Generic Strategies

Kumar, Kamalesh; Subramanian, Ram; Yauger, Charles (Health Care Management Review: Fall 1997 - Volume 22 - Issue 4 - pp 47-60 Article)
Health Care Management Review: July 2002 - Volume 27 - Issue 3 - pp 21-31 Article

Market and Efficiency-Based Strategic Responses to Environmental Changes In the Health Care Industry
Kumar, Kamalesh; Subramanian, Ram; Strandholm, Karen