A Business Plan of Medical Services Marketing Essay

A Business Plan of Medical Services Marketing Essay The medical tourism industry is in a rapid state of growth, both in Singapore and globally. Growth in consumer demand for health services delivered by foreign medical professionals continues to grow for a variety of reasons, including insufficient regional health care systems and the growing expense of performing domestic procedures in their countries of origin. Sometimes, booking a medical tourism package is simply an excuse to visit a foreign land whilst also to consolidate their travel interests and save costs. This growth in medical tourism provides enormous opportunities for launching Singapore MedTours and ensuring it can grow and be sustained. Medical Services Tourism is not without many business risks, including high levels of competition from intermediary companies designed to help consumers plan itineraries for medical services. There are also risks to the client that must be considered, including ensuring that they fully understand their own health risks so as to secure liability factors for the business itself. In terms of strategic objectives, a comprehensive risk management system must be developed. However, outside of these risks, profit potential is quite considerable due to the large customer demand that exists in many different foreign countries. Singapore was chosen as the country to launch the new Medical Services Tourism Company because of its award-winning infrastructure, the ability to raise new capital through a variety of means and even for the education system that can provide quality employment for the business by skilled professionals. Singapore is ideal for Medical Services Tourism and this business plan provides a comprehensive plan for the launch of the company. 2.0 Business description Medical tourism involves availing medical procedure in a foreign country. Westerners form a large segment of medical tourists who are attracted to quality healthcare and large savings as compared to the medical costs in their own countries. The patients then can take a vacation in the host country after receiving their medical treatments. Often patients can cover their surgery expense, flight and hotel accommodation charges for quarter of the operation cost they would have paid in their country (Puah, 2008). The Company would be named Singapore MedTours and it will be a Private Limited Company (See Appendix 1). The firm will act as an agent that facilitates tourism of international citizens looking for quality and affordable health care that they might not be able to achieve in their home country. It will be a start-up company with an onsite facility for receipt of travellers and to satisfy their inquiries on medical tourism. The agency will make profit by charging commission on these transfers and any additional profitability received from supplementary, non-medical tourism that might be booked through the agents or its online website. Mission Our mission  is to provide Safe, Affordable and Quality health care options to our customers through world class health care system of Singapore. Source: Author 2.2 Industry background The medical tourism market has nearly doubled in recent years, and is currently valued at over $20 billion every year (Gaddum, 2010). This makes medical tourism ideal as a profit-generating business with huge growth potential. Medical tourism fills a valuable niche that is desperately needed in countries with bureaucratically flawed or unaffordable healthcare (discovermedicaltourism.com, 2008, p.2). One of the reasons that make foreign travel so appealing to a variety of international tourists is in areas of cost. For example, in the United States, it might cost approximately $30,000 for a knee replacement surgery, where in Singapore these costs will be much less at only $18,000 (placidway.com, 2010). It is largely this cost difference, for the same medical expertise, that is making medical tourism such a booming business not just in Singapore. Some of the major countries that are offering Medical Tourism in the world are: Countries Medical Inbound Tourists 2002 2004 2005 2006 Thailand 390,000 520,000 Malaysia 210,000 320,000 374,000 410,000 Singapore 117,000 179,000 India 100,000 150,000 Source: http://www.ihf-fih.org/pdf/25-28.pdf Singapore is among the most attractive destinations for health care travelling. The country has been awarded as the Best Medical/Wellness Tourism Destinationin 2007 and will be the Leading Destination for Health Care Service in Southeast Asia (MedTourismReview, n.d). 2.3 Goals and Potential of the Business According to Singapores minister of trade and industry; Singapore is a good place to raise funds, both equity and loans, including venture capital. (Satapathy, 2003, p.1745). Singapore was chosen as the start up location because of the ease of access for funds related to the launch as well as securing future loans or capital for improvement and expansion of the business. Because of the quality availability to investment funds and other loan-generating entities in Singapore, the business has several goals for short term gain: Source: Author A long term goal of Singapore MedTours is to create an internationally-recognised name in medical tourism that outperforms competition. There is massive potential for creating a strong marketing presence internationally based not only on growing consumer demand, but because of the systems already in place in Singapore to assist in developing a sound advertising programme with higher global exposure. 2.4 Uniqueness of service Singapore MedTours will have several unique features designed to make it outperform competitive entities in this industry. Singapore MedTours would offer a low-risk guarantee to enable the customers in moving forward with their medical tour with strong faith. In any case if after arriving at the destination, the conditions of treatment seem unacceptable to the client, we will give the liberty to cancel the surgery. The only charge the client will be responsible of is the air fare and accommodation. To our knowledge, were the only medical tourism company  that  offers this type of protection in Singapore. Also MedTours would be unique in supplementary services related to medical tourism that will improve profitability and improve the word of mouth reputation for the business. Offers the founder of Scotland-based Company Globe Health Tours; This is a huge word of mouth business (Crawford, 2006, p.1). Therefore, Singapore MedTours will be equipped with high quality service dimensions that please the travelling tourist and also improve customer relationships using advanced CRM systems (Customer Relationship Management software). 3.0 Marketing Marketing will be crucial to the success of this new business launch because of the importance of word of mouth to the company. With high levels of competition in this industry, an improved and superior marketing presence must be available and the funds needed to make this a reality will be allocated to this effort. 3.1 Target market identified There is no one, singular market available to this business because of the ability to capture the attention of many different consumers hailing from many international locations. No two patients are the same, either in their needs or the type of journey they either want or require (newsweekshowcase.com, 2010, p.1). This means that it would be quite difficult for the business to isolate a single target market strategy that would fit the needs of the majority of travellers who look toward our services. However, despite these unique consumer needs, medical tourism industry is dominated by patients from United States. In 2008 alone estimates put that more than 1.3 Americans travelled abroad for the exclusive purpose of seeking medical care (Health-Tourism.com, 2008). The marketing strategy should take into consideration the high volume of customers that will come from this region and use communications strategies that fit the needs of this high profit-generating customer client. Other international customers will be measured using software and database tools to determine which international location brings the highest volume of customers, and ongoing, future research methods will be used to determine their needs as they arise. Market Survey Research Objectives To analyze the growth potential for the business. To analyze the consumer needs according to their relative priority. To analyze the level of favourable consumer expenditure. Customer Profiling and Characteristics Customer profiling is important as it aids in identifying and catering to customers in every possible way (Anderson, 1997, pg 71). Based on the market survey conducted, most of the respondents show favourable response for medical tourism. A majority of respondents with negative response towards medical tourism shifted to need more information aspect when medical tourism benefits were mentioned. However the two main factors motivating respondents to be favourable to medical tourism are cost savings and high quality healthcare from internationally accredited hospitals. The most preferred service attribute is high standards of service with considerable savings indicating that not all consumers bargain hunters. It also indicates that respondents are not willing to compromise on quality for cost reduction. Determining the critical factors for success majority of respondents preferred English speaking population and highly accredited hospitals. The most influential means of promotion is word of mouth followed by hospital referrals and company website. In addition, with the various competitors positioning and competitive comparisons, most consumers decisions are influenced by Brand equity and awareness play an important role. Target market Based on the Market Survey conducted, Singapore MedTours will focus on target markets which are of high growth potential. The market is divided into the following segments which in turn will provide the company with clear focus to direct its marketing strategies Geographic segmentation: North American Citizens. Demographic segmentation: Age: 45-65 Income: U.S $24000- $70000 Psychographic segmentation: Customers keen on quality of service and interested in good savings while not in favour to comprise on safety. US Medical Tourism Market According to the Market indicators United States medical tourism has got good prospects in coming decade and beyond. In the United States, medical surgeries are very expensive, and every year millions of Americans default to pay for the health care expenses they require they are either uninsured, uninsurable or underinsured. According to a study in 2007 50% of personal bankruptcies are related to medical crises (Star Health Vacations, 2010). 3.2 Market size and trends In 2006, Singapore drew 410,000 international customers that received medical services primarily in form of Liver Transplants, Cardiac Surgery, and Joint Replacement (Hadi, 2009). And this number of inbound patients will exceed 1 million by 2012, with forecasted value of 3 Billion USD (The Internet Journal of healthcare Administration, 2010). Scotland-based Globe Health Tours experienced a 600 percent increase in business only after six months of operations (Crawford, 2006). In all, Singapore Medical Tourism is aiming to become a leading health care destination in all Asia and it witnessed a steady growth of 11.9% per year from 2004 to 2008 (prlog.org, 2009). 3.3 Competition Intensive competition exists in medical tourism, both internationally and in Singapore itself. Therefore, the company must create strong marketing presence and advertising know-how to make the business outperform competition step by step or service by service. Within the country, there are currently 29 hospitals that already provide health services to foreign travellers, with services being performed by over 7,000 physicians and 15,000 registered nurses (health-tourism.com, 2010). Because these hospitals already have contracts and/or relationships with other health tourism agents, there is a great deal of marketing work that needs to be performed by the business to make it stand out and be the preferred agency for these profitable customer groups. This well-developed network of physicians and agencies can be quite risky to the business model and require competitive focus to ensure improved customer preferences for the company. U.S agencies operating in Singapore: There are several U.S based medical tourism agencies, like Health Base Medical Tourism Agency, Planet Hospital, which are providing health tourism services in Singapore to patients of America. The companies are similar to each other only differing in the fact that they are tied up with different hospitals in different locations. U.S Agencies operating in other medical tourism countries: These agencies are tied up with budding medical tourism countries such as India, Thailand, etc. Key players include World Med Assist, Indus health, Quest Tourism, Med Journeys, Med Retreat SWOT Analysis of Singapore MedTours Strength Well trained staff with heavy focus on building customer relationship before and after their stay in Singapore. Creating an easy to use Website and employing advance Customer Relationship Software to attract and retain clients interested in Medical Tourism. Singapore is ranked 6th in world for the quality of health care provided by the World Health Organization (WHO). Medical tourists should not be able to witness chaotic events during their stay in comparison to the other Asian countries as Singapore is urbanized and clean country. JCI-certified hospitals and healthcare facilities are found in abundance throughout Singapore. English is one of Singapores official dialects. Though the cost of healthcare in Singapore is not as low as India or Thailand but they are still lower in comparison to Western Europe and the USA. Weakness The cost expenses in medical processes and treatments in Singapore are relatively high when compared to other Asian medical tourism countries like Thailand, Malaysia and India. The geographical location of Singapore is such that the climate is rather hot and humid which maybe a hindrance to the westerners especially during the post procedure and recovery stages. Accommodation, transportation and the cost of goods in Singapore is more expensive as compared to other Asian countries The travel times to Singapore are considerably very lengthy for the US medical patients. Opportunities World-class tourism service industry present in Singapore can help in recruiting best talent for the Medical Tourism. High market Growth Healthcare services from countries with aging population increasingly seek medical tourism. U.S. workforce is seen to be increasing more in context to globalization Low-cost global air travel had made Singapore all the more accessible for inbound patients. Employers and health plans targeting commercial populations have become accepting of the various benefit of medical tourism. Threats There is seen to be fierce competition posed by other Asian medical tourism countries like Malaysia, India and Thailand. Popularity of Medical Tourism may encourage more competition to open business in Singapore. New technological breakthroughs can make previously very expensive healthcare affordable in the clients home country. Global endemic outbreaks like H1N1, SARS, and Bird-flu etc in western countries can inhibit travel of foreign travellers to Singapore as government may impose restrictions. Source: Author 3.4 Estimated Market Share In order to estimate the market share few of the assumptions has been taken into account: That the rate of people seeking foreign medical services continues to grow at the same pace, with 1 million people entering Singapore in 2012 for this purpose. Very High volume of competition present in the country. Based on the above two considerations the firm is taking the minimum target of just 0.1% Market share, i.e., 1000 customers for the 1st year which it plans to grow to 1,500 in 2nd year and by 2013 the target is to reach 2,000 customers. The firm believes that this extremely low market share can be easily achievable by utilizing good marketing and promotion strategy and following best practices in the business. 3.5 Market strategy Positioning MedTours intends to work on a clear positioning statement of Quality, You can be Assured off which encourages customers to have complete faith in the company. The company will position itself as a reliable and friendly agency with utmost importance given to customer safety. The point of difference which separates the company from its competitors is the Quality Guarantee what the company provides and the idea of personalization of medical tours. This will help the company stay competitive while being positioned as a differentiated medical tourism agency. To be able to live up to the positioning the company will tie up with best in class hospitals and service providers with highest priority given to details of service dimensions. The company will purchase advanced CRM systems to improve overall delivery of customer services. The business will use, as one, marketing strategy, advanced training for its employees related to customer service to make the short encounter with the company one that is remembered and would help in creating good word-of-mouth publicity. Product Singapore MedTours will offer best of the medical services present in the Singapore by getting tie-ups with world-class hospitals of Singapore. Specific focus will be made on JCI-Accredited (Joint Commission International) hospitals like Alexandra Hospital, Changi General Hospital, Raffles Hospital, Parkway Group etc; so that inbound patients from US and other countries are assured that they are getting best quality service in a very safe environment. Services Offered By Singapore MedTours The following are the exact nature of services being offered by Singapore MedTours. Personal  preferences of patients would be given priority to select best hospitals and doctors. Source: Author Place Singapore MedTours will have a dedicated well-furnished office from where its entire staff can operate. Also in this office the customers would be received first and will be given initial briefing about the Medical Services they would be going through as well as general information about Singapore, its culture, famous tourist attraction etc. The main purpose of the office would be to make sure customers have one single easily identifiable and approachable location from where they could satisfy all their queries and solve their problems during their stay in Singapore. Promotion Approximately 78 percent of all medical travellers use the World Wide Web as their first choice for booking medical tourism (medicaltourism.com, 2010). Because of this high volume, market strategy will include a strong Internet presence that will require the expertise of information technology specialists to give the business a colourful, interactive and engaging online booking experience. The majority of the business will likely come from Internet exploration, therefore the budget must be allocated to a web design that outperforms competition and has the necessary information to make Singapore MedTours their first choice in booking their travel needs. The first publication of choice to improve visibility and awareness in customer groups will be the Medical Tourism Magazine, a bi-monthly publication that is distributed in a variety of international countries. Costs for these ads are $4000 for a full page ad and $2000 for a half page ad (medicaltourismassociation.com, 2010). This is a respected and well established advertising publication that will give Singapore MedTours better marketing presence. The company will purchase half page ads several times yearly to update its literature based on consumer research and success with other marketing formats. Additionally, web-based advertising will be part of the ad strategy that includes links to visit our business website on partnership or contract agreements with different hospitals, travel agencies, and physician websites. The goal of this rather inexpensive advertising method is to simply give the company more ad presence and ensure budget needs are met. Since most customers will not visit the business location prior to making their travel needs, web presence is vital to building higher profit and consumer demand. 3.6 Pricing Cost of Medical Treatment in Singapore If the procedure would cost $6000 in the U.S. financial savings might not be realized by the patients even if the same surgery costs $1500 in other country. By the time the airfare, accommodation and stay charges are covered patients may only realize a break-even scenario (Med Retreat, 2010). Hence with careful consideration the following procedures would be offered by Singapore MedTours. Comparison of cost between Medical procedures in USA and Singapore Source: http://www.health-tourism.com/singapore-medical-tourism/ Although the industry standard is 15% (See Appendix X) for each referral to the hospital by an agency but the firm would initially keep the commission fee at minimum 12% in order to gain competitive edge while start-up. This also aligns with our market survey where cost saving has been attributed as most important consideration for the customers. People Since this is highly service-oriented industry and the mission of Singapore MedTours is to have best customer experience as possible, so Singapore MedTours will make sure that it will hire competitive employees. Furthermore sufficient training would be given so as and when needed in order to cope up with market demands and competition. Lastly special packages and policies will be design to reward and retain the best employees of the firm. Process Process is extremely important part of any Service-oriented industry. Hence Singapore MedTours will make sure that its process is as efficient and as customer-friendly possible. Quality Control would be done regularly to identify and improve any bottlenecks and promote the best practices. Reviewing and Approving Online Membership Forms: Once an application is filled, detailed information based on the customer requirement will be provided allowing customers to make an informed decision. Assignment of an U.S Consultant to the patient: The consultant would cater to patients medical needs by designing a health tour plan. Informing the Medical Doctor: By sending digital copies of clients medical transcripts to the affiliated doctors for their approval to receive patient. Arranging for a Facilitating interaction between the Client and Surgeon: The process will be coordinated via email, teleconference etc. in this stage. Collection of Expectations Form and Desired `Travel Dates: To plan for exact tour plan. Checking Hotel Reservation at desired dates: The information will be obtained in this stage in order to be able to provide price quotations to the clients. Submitting the final price quotation for the health tour to the client: This is to avoid any further confusion and also to provide relevant information to the client. Deposit of necessary funds for health tour by client into Singapore MedTours bank account. These next few processes occur simultaneously: Finalize Clients medical consultation and surgery dates with the preferred doctor and hospital. Assisting clients in acquisition Passport/Visa Book clients Air Travel Itinerary which best suits their preferences. Reservation of accommodation for client Sending the booked travel and hospital information back to client: Now the client will make the trip from his or her own country to host country (Singapore). Assigning Destination Program Manager (DPM) to the client: Upon arrival of client in Singapore a DPM will be assigned permanently to client and the person will be their Personal assistant throughout the visit. This person will accompany the client to all their doctors appointments and medical treatments. Arranging for Pre-Surgery consultation with the surgeon: This process would be completed within 24 hours of clients arrival. The surgeon would review medical transcripts and tests to ensure that procedure can be performed on the specified dates. Assistance to client during surgical procedure and post surgery recuperation: After the client would be discharged from the hospital they would be accommodated in resort or hotel to begin recuperation process. Arranging for Post treatment vacation: After obtaining an authorization letter from surgeon, an enjoying vacation would be arranged for in Singapore. Assisting for Safe Return home of the clients: At the end of the tour the client will be send back to home country and the assigned US consultant would assist in any post-medical needs. 4.0 Operations Operational aspects of how the business is managed and structured will be key to its success. 4.1 Identify location The main requirements of indentifying the location for our business are: Low cost per square feet, large pedestrian volume and easy access to transportation (Abrams Kleiner 2003, pp67-68). Thus, after searching on the internet and checking the reality of the information with the agent, following address can be an alternative to the location of our business. Source:http://www.singaporeexpats.com/housing-in-singapore/singapore-property/code4349017-commercial-industrial-buy-FRONTIER.htm This location, compared with other places, satisfies the above requirements. The charge for buying this office is expected at around 570,000 SGD, and by using the yellow line MRT routine, the dense population of UBI become bigger and bigger. Also two MRT stations (Tai Seng and Macpherson) are very near to the location (gothere.com). The business prefers to buy the office instead of renting because in 3-4 years time the amount of rent paid would be equal to the total value of the office and since Singapore MedTours is looking for long term viability of the business hence it is buying the office. Source: http://www.gothere.sg/maps#q:52%20ubi%20avenue%203 4.3 Zoning Various Districts of Singapore: Source: http://www.propertyhub.com.sg/images/M_images/singapore_district_map.jpg The Zoning of the office was carefully selected while keeping the following considerations: The office should have as low as possible per square feet cost. It should be present in or near the heart of the city. Also the office should be near the Changi International Airport. The current identified location of the office is in district 14 which is quite near the Central Districts 6 12 of the Singapore. Simultaneously the location is near the District 17 in which the Changi Airport is located. It is very important for the office to be near airport as majority of its firms clients would be international medical tourists who would be arriving via air-travel. 4.4 Taxes The low tax rates and positive and encouraging business policies give Singapore a reputation of attracting FDI. The taxes in Singapore are much lower than most others developed countries and regions (Asia Biz). Whats more, the tax rates have continued to decline significantly over the years (Appendix 2). Therefore, from the tax perspective, Singapore is an attractive nation to do the business. Overall, to our service business, the following kinds of taxes are needed to be considered before starting the business: Income Tax: The amount of Income Tax is based on the income of our companies, and according to Appendix 1, the income tax rate is 17% and as a new start business, some partial tax exemption will be applicable to us. Goods Services Tax GST, also known as VAT, is a broad-based consumption tax levied on the  import of goods, as well as nearly all supplies of goods and services in Singapore. And the rate of GST is 7% (IRAS 2008). Only the sales and leases of properties and financial services need not to pay GST. Therefore, our company needs to pay 7% GST. Stamp Duties Stamp duty is a tax on executed documents relating to properties or interest in properties and shares or interest in shares. Documents such as a lease, sale and purchase, or mortgage of property need to pay stamp duties (Appendix 3). Thus, our company needs to pay this kind of tax. 4.5 Proximity to supplies There will be little concern over supply chain issues because of the quality distribution system that exists in Singapore. But also, the business will only need access to marketing literature and internal office/software support systems that can be easily procured with its renowned infrastructure for these tools. If the need arises for additional supplies, there are 3,000 logistics and supply chain companies operating in Singapore to assist with these needs at no risk to the business (worldcustomsjournal.org, 2007). All supplies needs can be easily satisfied. 4.6 Access of transportation Singapore has a well developed transportation network consisting of Metro Rail Transport (MRT) systems, Bus systems and Taxi Services that are all air conditioned. As it can be found in the location map, the location of our company near to two MRT stations, which provides convenience to our customers to reach our company. The mass rapid transit system in place is comprehensive and connects to almost all parts of the country (Lim, 2008). It is also considered among the best in the world (app.www.sg, 2009). Also with one of the world best airports, Changi International, the access of transportation to other nations is unobstructed (Changi). Transport is no risk to the business and can sustain all traveller needs. 5.0 Management 5.1 Management Team and Key Personnel Singapore MedTours being a private business therefore Management team would initially be comprises of the primary investors of the organization. The following will be the structure of the Management Team: Source: Author Deep Kamal Agarwal (CEO / Financial Director): Deep Kamal Agarwal is successful Information Engineer from an Internationally Accredited College in India. His both parents are respected doctor with over 25 years of experience and hence he has natural affinity and knowledge about the Medical Service Industry. He posses 2 years industry experience as an operational manager in Sunrise Naturopathy Health Resort in India. His forte lies in encountering any business problem and working out prompt solution for it. He believes in holistic business approach and is critical person for the firm to provide vision