International heads of hospitals explain the strategy they opted for: source, geography or cluster approach
Healthcare groups have adopted varied approaches to tap the burgeoning medical tourism market. The groups have opted for geographic approach, cluster approach or source approach or a melange of all. We spoke to various international marketing heads to understand the rationale behind the approach they adopted:
Benny Charles Daniel
Head, International Business
Manipal Health Enterprises
The approach that most growing hospitals in India adopt are geography based approach, whereby the individuals in team are lined up to select geographies to market and generate sales. This, in concept, does offer a better hold in the market, but the shortfall in this approach is the ability of individuals to handle multiple partners who require multiple deliverables to build on the relationships
The next approach that is being tested is individuals aligned to certain hospitals of the group and will be responsible to bring in sales for those units. Though this gives a better accountability, there will be a lot of duplication and competition among the group and this limits the scope of promoting the brand as an entity. This is called the cluster approach
There are a select hospitals that follow what I call as a source approach. This will be an approach where individual team members are aligned to a particular source or stream of revenue, thus helping us focus on specific deliverable for each source and to maximise sales and conversions. While each approach has its own merits and demerits, hospitals are trying their way that matches their business goals
We discontinued the cluster approach. Duplication was a key reason in efforts to adopt to the source approach. There are several verticals in MVT like government, institutional, direct, partner based and office driven. The main reason to adopt this approach is that each vertical demands a set of expectation and deliverables from the hospital and having a person slightly helps us address this better. In addition, when a person is aligned to a vertical their thought process also goes in terms of streamlining the system, developing sales models to enter similar systems, evolving service delivery to meet their vertical expectations- all these in my opinion are the base for a sustainable and scalable business model
This approach helps us build sustainable and scalable business model in each vertical. Having a person focus on a vertical also helps us outweigh the latest developments in the industry on that particular vertical. In addition, this helps team members develop into account managers handling viable business portfolios. The negatives are that the sale generation will happen over a sustained period and won’t be immediate
Gokul Prem Kumar
General Manager – International Marketing
At Continental, we follow a mix of cluster and source approach. Cluster is bigger than source approach. The advantage of cluster approach is having better hold on the market, as we engage the primary clinician through the person handling the market. It also ensures better brand building exercise for long-term-sustainability. The disadvantage emerges when the person handling a cluster moves out- there is a large amount of potential risk of losing business. Source approach is basically for local facilitators and direct patients.
For cluster, we have people assigned for East and West Africa, Middle East and SAARC. At the same time, we have in-house staff who handles facilitators and direct patients. But the bucket of cluster is bigger than source. Around 60% of our business comes from Africa, 25% from SAARC and 15% from the Middle East.
After identifying the potential markets, we have deployed people with experience in those markets. We have been acquiring talent from the industry and have been continuously engaging with key opinion leaders and primary clinicians from these markets as we adopt cluster approach.
As Continental is part of Parkway Pantai group, we are trying to build on brand image of Singapore and Gleneagles legacy and credibility in SAARC countries, where the traction is very high.
CEO, Aster Hospitals, GCC region
Head, MVT, Aster DM Healthcare
It is a combination of all the three since all of them are not mutually exclusive. However, the broad international geography is divided under two zonal heads: one handles the Middle East and South Asia and the other handles Africa. Under each of these, zonal heads are personnel who have the specific responsibility for handling a country or a combination of them. Each team lead under the zonal heads handling all the segments including the government, corporates and insurance, referral clinicians, facilitators and rest of the channels.
The biggest advantage of the hybrid approach that we follow is the coverage and the continuity that we get across the geographies that we operate in. MVT is typically a relationship business and, therefore, it is important we have someone stationed locally in order to ensure that they are touching distance and always available to the stakeholders including the patients. Also, each market has its own nuances and somebody stationed locally is able to understand those nuances and then develop the strategy.
The biggest risk factor would be the movement of personnel to competition, post having developed a market. It is similar to competition buying out clinician practices. Since this is a relationship-led vertical, the business to a large extent tends to follow the individual. While we talk of brand experiences, some side of the MVT business is still vulnerable to personnel movement.
Aster traditionally gets a large base from the GCC funneling into its flagship facility in Kochi- Aster Medcity. However, it is pretty early days as yet for Aster in the MVT vertical since we are just seeing both scale and supply of quaternary beds emerge in India. Now with the launch of the Aster CMI Hospital in Bengaluru and the makeover of the Aster Prime Hospital in Hyderabad, we should see more patient inflows.
Associate Vice President- International Business
Global Hospitals Group
We follow the geographic approach and have done region-wise territory distribution. We have territory or country managers who are supposed to get into the markets for business development. We have mainly divided the whole globe into three parts: Asia, Africa and ROW. Asia is further divided into Middle East, CIS, SAARC and SE Asia and Africa into West and North, East and Central and South Africa. ROW is the rest of the world and digital marketing.
Selling is not about what we want to sell, it’s about the need of the buyer. So, the pros of geographic approach is the deeper penetration into the market that enables you to understand specific needs of that country and you can customise the strategies, accordingly. Since our business is all relationship and trust driven, geographic approach helps you strengthen relationship with all the overseas partners.
The more people know you and your brand, the better becomes its presence. Treatment outcomes and services, of course, play an important role. If that remains constant, there is definite increase by stronger engagement in a particular geography. It helps you master knowledge about a country, know the culture, people, behaviour, tastes and expectations.
Pros are more than the cons but the biggest one is unpredictability. Terrorism, bomb blasts, wars, government change, policy change, economic crises like in the GCC countries where they are going through oil crises. Nigeria is going economic crises, so it has affected the inflow of patients. So, depending on any one particular market or country is very risky.
Sr General Manager
We have adopted a mix of cluster and source approach. Our approach is guided by factors such as the location of a hospital in India, flight connectivity to that location and historical preferences for that geography. Hospital business will also depend on the geographical approach, although there are few geographies which feed all most of the geographies in India.
For cluster approach, at HCG, we have divided globe into five verticals at HCG East Africa, West Africa, Southern Africa, MINA and Asia- which is further divided as per the geography wise requirement. Each region at HCG has a regional head
or a zonal head, followed with a team under him.
Building a team on the ground helps in deeper penetration of your brand and helps in building your corporate, insurance and MOH business. This also helps in HCG reaching interiors of the countries and meet key opinion leaders, which matter a lot in those geographies. At HCG, we also explore new markets as well as develop them to a sustainable level where team can be built.