Competitive Advantage through Marketing - Andersen Holdings Private Healthcare - Essay Example

? Competitive advantage Through Marketing: The Key to Maximising long term profitability’ Contents Contents Introduction 4 Concept of Marketing forAndersen Holdings Private Healthcare 4 Marketing as a function 5 Segmentation 5 Target markets 5 Market Segments 5 Product and innovation strategies for Anderson 6 Product Mix 6 Pricing strategy 7 Channel of Distribution and Logistics 7 Intermediaries 8 Communications 9 Environmental Analysis 9 Strength 10 Weaknesses 10 Opportunities 10 Threats 10 Marketing Planning 11 Situation analysis 11 Statement of marketing objectives 11 Summary of the Strategy and actions 11 Evaluating and controlling strategic marketing 12 Strategic Marketing Planning 12 Porter’s Stages of evolution 12 Porter’s five forces 12 Porter’s Generic Strategies 14 Conclusion 14 References 15 Introduction Andersen Holdings Private Healthcare is a company that focuses on the healthcare service business. The company has a wide international presence and has adopted several strategies that would put the company at a position of competitive advantage compared to the other companies operating in the same sector. The healthcare services that the company provides are delivered in an integrated framework which in instrumental in reaching the company to various market segments. Concept of Marketing for Andersen Holdings Private Healthcare Prior to the analysis of the options available for Anderson Healthcare as well as the possible marketing strategies it is important to review the basic concepts of marketing and selling in brief. The marketing for the company would mean a focus towards the target customers that the company caters to (Peppers and Rogers, 2004, pp. 78-84). The business processes are structured in such a way that the benefits of the patients would be the main focus for the business managers. Since the company operates in the healthcare sector, the specific groups of patients with different problems would be the target market for the Anderson. Hence for achieving customer satisfaction, Anderson would try to meet their specific needs. This marketing strategy would help Anderson in the achievement of the desired goals and would provide a competitive advantage amidst a very intense competition. This concept of marketing is different from that of the selling concept, which is more inclined towards the mass market and aims at the profitability through increases in the sales volume. Customer satisfaction and brand loyalty is a less important part of selling as distinguished from marketing concept. Marketing as a function In order to develop a sustainable brand the companies need to nurture the marketing function from the inception of the company. A serious marketing function in a company would engage into thorough market research and develop the product as per the needs of the potential customers. The company also needs to spend enough on the marketing communications to make an awareness of the brand to the customers. Thus the seven P’s of services marketing like Product, Place, Promotion, Price, Physical Evidence, People and Process are the areas where the companies should work on. For Anderson, it is also important to spend enough on the marketing aspect to ensure the strengthening of the brand equity of this healthcare service provider. Segmentation Target markets Anderson reaches to each of the target customer groups mainly based on the geographical segmentation strategy. The major markets where the brand has noticeable presence are Europe and Asia. The countries at where the company has medical centres include UK, Austria, Germany and Switzerland. United Arab Emirates is also one of the major target markets of the healthcare company. In the eastern part of the globe the company has presence in China, Indonesia, Philippines, Sri Lanka, India, Pakistan, Myanmar, Singapore as well as Australia. The recent venture of the company has been the Baltic countries and the Russian markets (Boone and Kurtz, 2010, p. 453). Market Segments The company focuses on the different specialised streams of healthcare and thus can cater to the specific needs of the patients with different ailments. The company has set up the various centres based on the different fields. Thus the Anderson’s segmentation is not only based on the geographical locations but also on the need based areas of the patients where treatments can be extended. The introduction of the cosmetic surgery and dermatology clinics put the company a step forward in getting an access to even those customers who may not be suffering from a chronic disease but has minor problems. In this way Anderson ensures that it has something to offer to all the customers of every market segment irrespective of age, gender or treatment needs. Thus Anderson looks into a differentiated marketing strategy to cater to the heterogeneous needs of the customers. Product and innovation strategies for Anderson Product Mix Product Mix is the portfolio of the product lines that a company has to offer to the consumers. Each product line again includes a variety of products. Thus the product mix comprises of all the products that are produced by the same company (Kotler and Keller, 2006, p. 257). Anderson provides healthcare services specialises in the different fields like neuroscience, transplant and cellular therapy, cardiology, oncology as well as paediatrics. Along with the treatments in these major disciplines the company has speciality centres in the fields of genetic medicine, diagnostic radiology, tropical disease treatments, gastroenterology and dermatology. The newly introduced product lines of the company include the cosmetic surgeries, plastic surgeries, dental care as well as the treatment packages for diabetes. The mode of delivery of these services is either through the clinics or the hospitals set up at various locations across the globe. Along with this Anderson also provides post surgery care services and arranges for medical tourism. The company has added these services one by one in a planned manner in order to fulfil the specific needs of the customers. Since there is no end to the types of human maladies the company has been able to focus on each types with specialised facilities and the skilled doctors to provide the services (Proctor, 2013, pp. 34-41). Pricing strategy Price is the value that the customers pay to the service providers against the services. Anderson caters to the different economies that have the different purchasing power. Therefore the pricing of the services have to be done keeping in mind the price sensitivity of the customers. Since Anderson is a private healthcare service provider, the company has to investigate the various cases of the different countries where there might be availability of government hospitals and clinics. In such countries the patients would prefer to go avail the free hospital and care services provided by the government or at a subsidised price. This is a very common phenomenon in case of the Chinese economy. If the number of private players in a particular market is more, then the competitive forces would be predominant. In such cases the company has to make the competitive pricing. Since the company had been operating on quite a large scale, the company is expected to achieve economies of scale. Thus low cost pricing at special cases would help the company to acquire a large amount of the market share. The cost plus pricing method would be an appropriate way for Anderson to set its price in which the profit would be a percentage mark up on the cost incurred in service. Channel of Distribution and Logistics In case of a services organisation like Anderson, the distribution of the services would be through the hospital and the clinics. The delivery of services would take place at the time of contact with the doctors and the physicians with the patients. The service providers are mainly the doctors and the nurses who would work under the brand Anderson. The delivery channels for the different kinds of treatments would be done through the different speciality clinics under the same brand name (Wiliam, 2005, pp. 45-64). Intermediaries Anderson healthcare would actually act as the intermediary in the delivery of services. From the beginning of the diagnosis to the end of the treatment the healthcare service provider would take part in the management of the entire process of treatment. For example, a person who is approaching Anderson for cardiac service would at the initial stage undergo a diagnostic process with the doctors and the technical laboratories. Then the surgery would take place in the hospital with the various medical facilities. In course of the surgery not only the doctors but also the anaesthetists, the nurses and the other technical people would be involved (Lovelock and Wirtz, 2011, pp. 123-139). Finally in the post surgery period the patients would remain in the hospital for a few more days under the care of the nurses and regular medication. This entire chain of processes would be administered and coordinated by the hospital with the help of the doctors and the support staff. The hospital has a separate nurses training centre that trains the nurse and thus making the delivery channels of the care services more efficient. The company coordinates well with the pharmaceutical companies that manufacture the drugs which are essential in the process of treatment. Unless the drugs are available at the right time the treatment cannot be complete. Anderson gets the highest quality of drugs from across the world to the different clinics and hospitals where they might be required. Safe and proper logistics of the drugs are required because the drugs need to be preserved at the right temperatures during the shipping and the storage. For minimising any problems related to the carriage of the medicines the company has to ensure speedy transportation and proper management of the suppliers. Most of the drugs of the present day are quite expensive. Thus Anderson has to deal with a huge amount of money in the buying of the drugs from the various pharmaceutical companies and distributing them to the different locations. Communications For any organisation that is offering a product or a service it is important to communicate with the target market. To make the customers aware about the brand as well as the services that a company provides it is extremely essential to have a good mix of marketing communications. The marketing communication mix consists of advertisement, sales promotion, brand management, direct marketing, personal selling as well as public relations. In case of Anderson the method that has to be taken is of mainly Advertisement, brand management and direct marketing. This is because healthcare services are something that would be required only when a person suffers from any kind of illness. Sales promotion strategies may not work for the company as no one can be forced to undergo cardiac surgeries unless required or go for transplantation. However, the company may arrange for regular check up camps for the common ailments like diabetes or cardiac problems. These would act as sales promotion tactics that would make the consumers aware of the brand. When in need these customers would then turn up to Anderson. The company may also take the help of advertising on different media to make the people aware of the brand (Schmidt and Ludlow, 2002, p. 12). The brand can also get a different edge if it gets involved in the sponsorship of the health events organised by popular organisations like the WHO. Environmental Analysis The foremost step for a successful marketing plan is to analyse the present situation that the company is operating in and the existing competition in the markets. The most commonly used tool for conducting an environmental scanning is the SWOT analysis. While the strengths and weaknesses are internal to this specific organisation, the opportunities and threats relate to the environment outside the scope of the company. Strength The company has every type of healthcare facilities for the specific problems of the people. This would meet the individual needs of the customers. The availability of the drugs directly from the pharmacists’ channels and the training of the nurses and the assistants in the schools would add to the credibility of the company to the patients (Luther, 2011, pp. 112-119). Weaknesses The company is exposed to a lot of risks in terms of the services. Any kind of situation of casualty has to be dealt with care in such circumstances. The senior management of Anderson is mainly comprised of the doctors who may be lacking the organisation management skills. Opportunities Anderson has considerable brand presence in various countries of Europe and Asia. Thus the customers in these places are already aware of the high quality of the services. Thus the risk of opening new speciality clinics and the introduction of new services are much less. Since the company has knowledge about these markets the needs of the customers can be understood very easily. The company can venture into the untapped markets of US, Africa and other South American nations where there is a growing need for healthcare. Threats Since there have been various diversifications in the company it may be difficult for the management to keep a tab on all the functions in every location. The quality of services provided may be hampered in that case. Along with this the increasing number of private healthcare providers has made the healthcare services market extremely competitive. The new competitors may enter the market with a new set of technology and at lower cost. This may take away the market share of Anderson. Marketing Planning Situation analysis At the present situation the company is at a stable position in the market. However the rise of the other players is posing threat to Anderson which needs to be addressed. Along with that the company might be facing a lot of challenges in the long run due to the lack of managerial and marketing skills among the management comprising of the doctors. Statement of marketing objectives From the present situation the company intends to move to the other markets in Americas as well as Africa with the quality of services remaining unchanged. The various tactics for getting the market share like the introduction of medical tourism has to be conducted in these countries as well. The incorporation of the most modern techniques of treatment would ensure that the company gets adequate customers in the long run compared to its competitors. Anderson has to judge the success or failure of a facility from the feedback in the countries where it has already operated. The services therefore have to be remodelled according to the needs of the customers of the new geographical segment. A thorough market research is necessary for this and enough should be spent on advertisement and creating awareness about the brand in the new market. Summary of the Strategy and actions The entry into the new markets with proper market research is in the agenda of Anderson (Proctor, 2013, pp. 23-34). Anderson intends to increase the turnover to $ 2 billion by venturing into the other markets and taking various strategic options. The company also needs to ensure that at each step of the service, the needs of the customers are met. Evaluating and controlling strategic marketing 1. The sales objective of the company would be to increase the turnover by $1 billion 2. The financial objectives would be to make the dealings with the suppliers sound so that there is no cash management problem. Along with that there should be parity in the pricing in the different countries in which the company has operations. 3. The marketing objective would include more expenditure on advertisement and promotion of the brand. 4. The strategic objective of the company is to enter into the untapped markets of the Americas to get major market in those areas. Strategic Marketing Planning Porter’s Stages of evolution The company is in the maturity stage of its company life cycle. The company experiences stagnation in the level of profits. The turnover for the company is $1 billion which is a considerably low amount caused due to the pressure from the private and the public sector players in the market. Thus the strategies for Anderson would be to enter into the new markets and bring about innovation and technological advancement in the process of surgery. Porter’s five forces The competitive forces are explained with the help of this model. (Source: Porter, 2008, p.64) The present intensity of competition is high in the healthcare industry as it has been explained before. The other private and public sector players pose a threat to Anderson (Hill and Jones, 2010, p. 43). The threat for substitute for some services is high while for other it is low. In case of the chronic diseases this threat is low. But the alternative forms of treatment like herbal therapies may replace the existing ones. Though a number of new entrants may enter the industry the threat is low because Anderson is a dominant player in the market. The bargaining powers of both the buyers and the suppliers are low. Porter’s Generic Strategies Since the company has been in the market it has been able to achieve economies of scale. Therefore the company would have a low cost position and would pursue an overall cost leadership strategy. However, Anderson has also adopted the differentiation strategy whereby the company would make expertise in the various specialised streams of treatments. Conclusion Thus from the above analysis it is clear that the company has to take the various agenda as has been listed above. The execution of the marketing plan would be possible only when the entire strategic objectives are well understood by the top management and the plan is communicated to the employees, nurses etc who work at the lower tiers so that the plan in properly implemented. References Porter, M. E., 2008. Competitive Advantage: Creating and Sustaining Superior Performance. London: Simon and Schuster. Boone, L. E., and Kurtz, D. L., 2010. Contemporary Marketing. Mason, OH: South-Western Cengage Learning. Peppers, D. and Rogers, M., 2004. Managing Customer Relationship: A Strategic Framework. New Jersey: John Wiley & Sons. Hill, C. and Jones, G. R., 2010. Strategic Management - Theory: An Integrated Approach. Mason, OH: South-Western Cengage Learning. Wiliam, C. A. 2005. The Marketing Plan. New Jersey: John Wiley & Sons Inc. Schmidt, K. and Ludlow, C., 2002. Inclusive Branding: The Why and How of a Holistic approach to Brands. Basingstoke: Palgrave Macmillan. Proctor, T., 2013. Strategic Marketing. London: Routledge. Luther, W., 2011. The Marketing Plan. New York: AMACOM. Lovelock, C. and Wirtz, J., 2011. Services Marketing – People, Technology, Strategy. New Jersey: Prentice Hall. Kotler, P. and Keller, K.L., 2006. Marketing Management. Englewood Cliffs, NJ: Prentice Hall. Read More