GENERAL INFORMATION
VCH Introduction
In this final thesis, I want to introduce you the marketing plan of VCH’s hospital to develop its new Consultation Center in period 2011-2015; especially in the launching year
Established in 2001, VCH is a Vietnam’s only internationally accredited healthcare facility
This fully foreign-owned general hospital provides comprehensive medical and surgical services all in one location, ensuring complete care from initial consultation and diagnosis to the successful conclusion of your treatment.
In 2007, VCH became the first healthcare institution in Vietnam to receive accreditation from the French Haute Autorité de Santé Currently, they are striving to attain recognition from the Joint Commission International (JCI), a global leader in healthcare accreditation, by 2010.
We provide superior quality and comprehensive patient care, in a continuous effort to gain your complete trust
Our patients are at the heart of the hospital
We are highly skilled and ethical professionals
We follow established quality processes and international standards
We blend the best of Vietnamese and French medical cultures
We are respectful, dedicated, caring and compassionate
We consider excellent Customer Service as essential
We have a high sense of team spirit
We are ever-striving to improve
We are reliable and accountable
We provide an enthusiastic working environment
The renovation and preliminary design
Comprising 28 new consultation rooms, the new Consultation Centre will allow VCH to see 500 more patients per day in addition to the 800 outpatients currently received at the main building – essentially increasing the hospital’s capacity by 60 per cent In addition, the construction of the new Consultation Centre not only allows VCH to see a greater volume of patients, but also gives the hospital a completely new look and feel The new Centre is linked to the Main Building by the Indochine Walkway, which is made of transparent glass and creates an additional 580 square metres of space The waiting lounges in this walkway are all elegantly upholstered and richly carpeted
The new Consultation Centers are designed to cater to high-income professionals seeking reliable, safe, and trusted healthcare services that align with their lifestyle needs.
The emergency center provides specialized services, including an ambulance service that functions as a mobile Intensive Care Unit (ICU) This service is equipped to transport critically ill patients from remote areas to Ho Chi Minh City, ensuring timely and effective medical care.
The VCH operates the Consultation Centre in Ho Chi Minh City, offering affordable primary healthcare and consultation services that meet international standards for both the local Vietnamese community and expatriates Key healthcare services provided at the Centre include comprehensive medical consultations and essential health services tailored to the needs of residents and workers in the city.
VCH’s Lifestyle Clinic introduces a new standard of comprehensive health and beauty care in Vietnam, offering skincare, anti-aging, plastic surgery, and dietitian services The clinic enhances the procedure process for greater efficiency and patient convenience, ensuring personalized consultations to help clients choose the services that best meet their needs While waiting for their appointments, customers can enjoy complimentary coffee, cake, refreshments, and free Wi-Fi.
VCH's Asian Clinic features consultation rooms for Korean, Japanese, and Khmer doctors, offering tailored medical services for patients seeking care in their native language This multi-national approach allows VCH to effectively cater to the diverse needs of international patients.
The Surgical Centre, part of the Orthopaedics Department, specializes in hand surgery and is equipped with anaesthetists to prepare patients for procedures With an increased number of consultation rooms, VCH is poised to accommodate more associate doctors and meet the rising demand for medical examinations and treatments Additionally, the centre features micro-surgery rooms, providing facilities for stitch removals, bandage replacements, and efficient on-site micro-operation procedures, all conducted in a safe and custom-designed environment.
• The spacious blood collection area will also help to support the surgical services being provided here
VCH is excited to announce that its new Consultation Centre is now fully operational, offering patients an expanded selection of world-class healthcare services The ongoing renovation projects at VCH are designed to enhance patient comfort and convenience, ensuring a premium healthcare experience for all visitors.
The VCH Consultation Center aims to implement policies and procedures that adhere to international standards, ensuring high-quality care The clinic is equipped with brand-new medical equipment, primarily imported from the USA, Japan, and Singapore, which constitutes over 98% of the total value of the equipment.
- Endoscopy: with the most high-tech endoscopy equipment and GI specialist trained in
The clinic in the US and Singapore offers comprehensive diagnostic and therapeutic endoscopy services for both upper and lower gastrointestinal issues Procedures are performed on an outpatient basis, utilizing sedation to enhance patient comfort Various therapeutic endoscopic treatments, including polypectomy, variceal band ligation, and stent placement, are available as outpatient procedures.
GYN Care offers comprehensive women's health services, featuring advanced mammography for early breast cancer detection, complete with an integrated biopsy needle for precise sampling Our colposcopy services enable early cervical cancer screening and cone biopsies, while our state-of-the-art ultrasound machines, equipped with specialized probes, facilitate accurate breast and pelvic examinations for timely diagnoses.
With the rapid advancements in informatics, the field of medicine has become increasingly borderless This progress allows for the digital storage of medical records, complete with active imaging, facilitating seamless connections with regional university hospitals, such as the National University Hospital of Singapore.
US hospitals for consultation A software will reduce less paper work for doctors and analyze patients' data for further development of the clinic
Besides, the Hospital will hire some other equipment and component from time to time for implementing the projects for meeting the business effectiveness.
In the multi-specialized department hospital sector, VCH achieved a market share of over 33.2% in 2009 and increased it to 37% in 2010 Benefiting from indirect competition with predominantly specialized private hospitals in Ho Chi Minh City, VCH has maintained its leadership position, leveraging significant competitive advantages The following data outlines VCH's inpatient and outpatient market share percentages for 2010.
According to VCH’s 2010 annual report, the revenue mainly comes from 2 sectors: medical specialties and surgical specialties
Figure 1.1: Number of inpatients in average per day in 2006-2010
LITERATURE REVIEW
Marketing Strategy
The traditional Marketing Mix model has accounted for a balance of the “Four Ps” in the manner an organization approaches business practices:
1 Product: The service or product provided by the organization
2 Place: The distribution of the product/service to the consumer
3 Price: The cost of the product/service
4 Promotion: The communication of the product/service and its benefits to the consumer
The traditional business model often falls short in health care organizations due to the industry's service-oriented nature and limited distribution Prices are typically fixed, linked to national fee schedules, and promotion efforts have been minimal until recently Moreover, this model fails to directly engage with the ultimate consumer: the patient.
Research conducted by the Institute of Medicine (IOM) highlights a new model focused on the needs, wants, expectations, and desires of consumers, specifically patients This model introduces the concept of the "Four Cs" of health care, which encapsulates these essential consumer-driven elements.
1 Competence: The perceived quality of care received and qualifications of the health care provider
2 Convenience: Location, availability of services; timeliness
3 Communication: Ability of provider to communicate effectively with the consumers; effective listening
4 Compassion: Friendliness, concern, and dedication of providers and staff
The model overlooks the critical factor of healthcare costs, particularly affecting those enrolled in the civilian network, who are largely unconcerned about financial implications due to minimal enrollment fees and copayments In contrast, individuals relying on employer-based health insurance are significantly impacted by rising healthcare costs, making affordability a crucial issue for them.
Table 2.1 : IOM’s standard of healthcare services
Aims of the Institute of Medicine (IOM)
Safe Avoiding injuries to patients from the care that is intended to help them
Effective Providing Services based on scientific knowledge to all who could benefit and refraining from providing services to those not likely to benefit
Patient-centered Providing care that is respectful of and responsive to individual patient preferences, needs, and values and ensuring that patient values guide all clinical decisions
Timely Reducing waits and sometimes harmful delays for both those who receive and those who give care
Efficient Avoiding waste, in particular waste of equipment, supplies, ideas and energy
Equitable Providing care that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location and socioeconomic status
(source: http://www.iom.edu/Reports.aspx)
Hospitals faced the challenge of integrating three models into a cohesive framework that aligns marketing theory, healthcare expectations, and organizational objectives The initial step involved reconciling the Four Ps of marketing with the Four Cs of healthcare By incorporating the previously overlooked factors—Patient from the Four Ps and Cost from the Four Cs—these models evolved into the Five Ps and Five Cs, creating a more comprehensive approach to healthcare marketing.
When placed in a matrix, along with the IOM model, it became obvious that they were readily interconnected:
Criterion "Four Ps" "Four Cs" Aims
Criterion 1 relates the product to competence and safety issues, as well as effectiveness The product must be of high quality, defined as a service performed by qualified personnel, in a safe and effective environment of care
Criterion 2 relates place (distribution) to convenience and timeliness Obviously, for a service to be convenient, it must be available in a timely manner in an efficient distribution area
Criterion 3 relates price to cost to efficiency By definition, these three items are interchangeable, and almost synonymous
Criterion 4 relates promotion to communication and equitable practices including the Navy's Core Values In order to promote any service, effective communications must exist, in a variety of media, and it must be universal, i.e., and not segmenting markets by ethnographies
Criterion 5 relates the patient to compassion and being patient-centered This is the crux of the model: everything that is said, done, or thought must be oriented about the consumer All of the other four criteria are process-oriented This criterion is results-oriented Unless the patient is satisfied, nothing else will matter
(source: http://www.iom.edu/Reports.aspx)
2.1.2 Market Segmentation, Targeting, Positioning, and Competition
The theory of Strategic Marketing for Health Care Organizations, as presented by Philip Kotler, Joel Shalowitz, and Robert J Stevens, emphasizes that market segments consist of customers with similar needs and wants Marketers play a crucial role in identifying these benefit segments rather than creating them, and their focus is on selecting which segments to target Consequently, an effective marketing strategy is grounded in the principles of segmentation, targeting, and positioning (STP), where organizations first uncover the diverse needs and groups present in the marketplace.
The strategy focuses on identifying and addressing specific needs and groups that can be served more effectively It then strategically positions its offerings to ensure that the target market clearly recognizes the organization’s unique value and brand identity.
To create a profitable marketing program, it is essential to recognize the differences among customers by segmenting them based on key characteristics Researchers analyze geographic, demographic, psychographic, and behavioral factors to identify distinct customer segments and their varying needs or responses to products The primary segmentation variables are outlined in Table 2.3.
Table 2.3 Major Segmentation Variables for Consumer Markets
Psychographic Life style: activities, interests, opinions
Attitude (Source: Philip Kotler, Joel Shalowitz and Robert J.Stevens, Strategic Marketing for Health Care Organizations, p.223)
After identifying potential market segment opportunities, an organization must determine the number and selection of segments to target This evaluation involves assessing two key factors: the overall attractiveness of each segment and the alignment with the company's objectives and available resources.
Table 2.4 Steps in the Segmentation Process
1 Needs-Based Segmentation Group customers into segments based on similar needs and benefits sought by customer in solving particular consumption problem
2 Segment Identification For each needs-based segment, determine which demographics, lifestyle, and usage behavior make the segment distinct and identifiable (actionable)
3 Segment Attractiveness Using predetermined segment attractiveness criteria (such as market growth, competitive intensity, and market access), determine the overall attractiveness of each segment
4 Segment Profitability Determine segment profitability
5 Segment Positioning For each segment, create a value proposition and the product-price positioning strategy based on that segment’s unique customer need and characteristics
6 Segment “Acid-Test” Create segment storyboards to test the attractiveness of each segment’s positioning strategy
7 Marketing –Mix Strategy Expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion and place
(Source: Richard K Thomas –“Marketing Health Services”, 2 nd edition, 2010)
Positioning involves crafting an organization’s offerings and image to establish a unique presence in the minds of the target market The primary aim is to embed the brand in consumers' perceptions to enhance organizational benefits Effective brand positioning informs marketing strategies by defining the brand’s core essence, the goals it fulfills for consumers, and its distinctive approach Ultimately, successful positioning leads to the development of a customer-centric value proposition, providing compelling reasons for the target market to choose the product.
Services Differentiation Strategy: When the physical product cannot easily be differentiated the key to competitive success may lie in adding valued services and improving quality:
Ordering ease: This benefit refers to how easy it is for the customers to place an order with the hospital
Delivery: Attributes of how well the offering is delivered include speed, accuracy, and care
Installation is the process of preparing a product for use in its designated location, which is crucial for organizations dealing with complex products This step in the consumption chain plays a vital role in ensuring that the product operates effectively and meets user expectations.
Customer training: Training customer’s employees to use products properly and efficiently is a key differentiator
Effective customer consulting extends beyond the initial product purchase, addressing a broader range of customer needs To fully satisfy these requirements, sellers should provide additional products or services and assist customers in identifying optimal solutions to their challenges Many customers are willing to invest more for these enhancements, as they foresee increased profitability from tailored support.
Maintenance and repair: When something does go wrong, the customer wants to be able to fix it quickly to restore full functioning
(Source: Richard K Thomas – “Marketing Health Services”, 2 nd edition, 2010)
Healthcare service offerings is changed to be effectively differentiated This approach used by innovative hospitals has been to differentiate as well as improve their product
Blue oceans represent unexplored market spaces that foster demand creation and the potential for significant profit growth The concept of blue ocean strategy is built on value innovation, a strategic approach that prioritizes creating substantial value for both buyers and organizations Rather than competing directly with rivals, this strategy aims to render competition irrelevant by unlocking new, uncontested markets.
Understanding consumer behavior
Consumers is the primary concern of almost every industry as well as key element to a successful business, without their purchasing business cannot exist and survive Therefore,
Reduce Which factors should be reduced well below the industry's standard
Create Which factors should be created that the industry has never offered?
Raise Which factors should be raised well above the industry's standard?
Healthcare marketers should identify and eliminate industry assumptions to enhance their strategies A deep understanding of both consumer and organizational buying behaviors is essential By analyzing potential consumers, marketers can uncover insights that inform product development, pricing strategies, distribution channels, and overall marketing efforts Additionally, studying the purchasing dynamics of organizational consumers reveals key factors influencing their decisions to use specific products or services.
2.2.1 Healthcare consumers – who are they?
How healthcare consumers are different from other consumers?
Healthcare consumers are distinct from those in other markets due to the non-discretionary nature of their purchases, where failing to take action can lead to serious consequences Unlike other industries, healthcare professionals prescribe services specifically for the patient's benefit, often creating pressure on consumers to adhere to these recommendations.
Healthcare consumers frequently lack awareness of service prices, highlighting the unique financing structure of the healthcare system and the limited access to pricing information for patients.
Healthcare consumers often lack a clear understanding of how the healthcare system operates and may have limited direct experience with it, making it difficult for them to assess the quality of the services they receive Additionally, healthcare transactions typically involve emotional aspects and can create anxiety for both patients and their loved ones Table 2.5 outlines the distinctions between healthcare consumers and other types of consumers.
Table 2.5: Healthcare Consumers Versus Other Consumers
Consumers of Health Services Consumers of other Services
Seldom determine their own need for service
Seldom are the ultimate decision maker
Seldom have knowledge of the price
Usually determine their own need for services
Usually are the ultimate decision maker
Always have knowledge of the price
Seldom make decisions based on price
Are reimbursed by third party for most costs
Have limited knowledge of service attributes
Have limited ability to judge quality of service
Have limited ability to evaluate outcome
Have little recourses for unfavorable outcome
Seldom are the ultimate targets for marketing
Are not susceptible to standard marketing techniques
Always make decisions based on price
Are rarely reimbursed by third party for most costs
Have significant knowledge of service attributes
Are usually able to judge quality of service
Are usually able to evaluate outcome
Have ample recourses for unfavorable outcome
Always are the ultimate targets for marketing
Are susceptible to standard marketing techniques (Source: Richard K Thomas –“Marketing Health Services”, 2 nd edition, 2010, p.157)
Healthcare customers are categorized into various groups, each with unique needs While the general public often views patients as individuals seeking life-saving services, many healthcare encounters involve consumers seeking routine health services at clinics or therapy centers Additionally, there are those who pursue elective health services, which are not deemed medically necessary As noted by Richard K Thomas in "Marketing Health Service," the term "patient" is evolving, with new terminology emerging to better represent the current healthcare landscape A summary of these key terms can be found in Appendix 1.
In the healthcare industry, the end user of services often does not make purchasing decisions; instead, physicians typically dictate the type, location, timing, and extent of care provided Additionally, decision-makers may include health plans, employers, or family members Understanding the consumer decision-making process in this context is crucial for effectively targeting promotional efforts and informing marketing strategies.
The steps in Consumer decision making are described in the following list It is based on the theory of Berkowitz and Hillestad 2004 and is mentioned in Chapter 6, Healthcare
Consumers and Consumers Behavior This approach marketers take depends on the consumer’s stage in the decision process
The initial stage in the purchase decision process involves consumers recognizing a problem or need Marketers must pinpoint the specific circumstances or stimuli that prompted this recognition and leverage this insight to formulate effective marketing strategies.
During the information search phase of the decision-making process, consumers show increased interest in a recognized issue and actively seek additional information This stage is characterized by heightened attention as individuals delve deeper into understanding their needs and options.
Initial awareness is crucial as it signifies the target audience's first encounter with the marketed goods or services During the information search phase, healthcare consumers discover the various options available to address their needs.
As healthcare consumers gain a deeper understanding of the available options, their knowledge about the relevant goods or services becomes clearer, allowing them to recognize how these solutions can effectively address their specific problems.
During the alternative evaluation stage, consumers assess the information they have gathered to compare available options and make informed purchasing decisions, often eliminating certain choices from consideration.
Contract assessment in healthcare is crucial, as many goods and services may be deemed ineligible for purchase if they are not covered by the consumer's insurance plan or if the chosen provider does not accept that specific type of insurance.
Preference assignment: Preferences develop at the point the consumer expressed a tendency for one good or service or decides between different providers of the same service
The healthcare consumer's purchase decision involves selecting a specific good or service, which is distinct from other consumer contexts due to the involvement of various stakeholders in the decision-making process.
In the product usage phase, healthcare consumers engage with services or products, ranging from straightforward purchases like adhesive bandages at a local pharmacy to intricate procedures such as heart transplants.
Post-purchase behavior is the final stage in the consumer decision-making process, where individuals evaluate their satisfaction with a purchase Feedback from family members and others can influence this assessment When consumers are pleased with their purchase, they often become advocates for the product or service; conversely, dissatisfaction can lead to negative opinions and detractors.
(Source: Richard K Thomas –“Marketing Health Services”, 2 nd edition, 2010, p176-177)
Healthcare consumers generally follow the same steps as other consumers when making decisions; they begin by recognizing a need and end with an assessment of their purchase.
HEALTHCARE MARKET AND VCH ’S CONSULTATION CENTER
Healthcare market’s analysis
The World Health Organization (WHO) defines health as a state of complete physical, mental, and social well-being, rather than just the absence of disease Additionally, WHO describes a healthcare system as encompassing all activities aimed at promoting, restoring, or maintaining health This includes the involvement of patients, families, healthcare workers, caregivers, and the broader health policy environment that supports these health-related activities.
Vietnam has a predominantly young population, with nearly two-thirds of its 86 million residents under 35 years old The healthcare system includes 1,030 public hospitals and 62 private hospitals, providing over 128,000 beds Health stations are present in 95% of communes, and skilled birth attendance is also above 95% However, the country's human resources for health (HRH) remain limited and uneven, with only 34.7 health workers per 10,000 people, which includes 6.5 medical doctors, 1.2 pharmacists, and 8 nurses.
2010.According to a 2010 WHO report, HRH in Vietnam is about half the number in other countries in the region
1 Life expectancy at birth (years) 73.0 74.0
2 Size of population (million inhabitants) 86,920