Marketing plan for lauching Abbott HBSAG Quantitative and HCV Core AG Assays in Vietnam

Figures and Tables PageFigure 2.1: Performance graph of Abbott Laboratories in 2004-2009 Figure 2.2: Sales growth of ADD Vietnam in 2005-2010 Figure 3.1: Worldwide Hepatitis B prevalence

MBAVB4

PH M M NH TU N

MARKETING PLAN FOR LAUNCHING

MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION

Tutor’s Name: PGS.TS LÊ NGUY N H U

Ho Chi Minh City

(2012)

Commitment

This marketing plan is created based on my knowledge from marketing subjects in the Master Business Administration 2010-2011 course of Solvay Brussels School and HCM city Open University I commit that the contents of this plan are completed with my high honesty I will take responsibility for any mistakes or incorrect information given in this

marketing plan

of Abbott Laboratories and useful information to set up the marketing plan

I also want to say thank you very much to all professors of the Master Business Administration 2010-2011 course I have already received a lot of information and

knowledges from these professors

CONTENT

Page

1 Executive Summary 7

2 General Introduction 11

2.1 Vision and Objectives of the project 11

2.2 Company 173

2.3 Product 118

3 Situation analysis 19

3.1 External analysis 19

3.1.1 The Vietnamese IVD market overview 20

3.1.2 Environment (SLEPT) analysis 21

3.1.3 Competition analysis 30

3.1.4 Target market analysis 31

3.2 Internal analysis 327

3.2.1 Profitability 32

3.2.2 Product analysis 33

3.2.3 SWOT analysis 35

3.2.4 Key success factors of Abbott HBsAg quantitative and HCV core Ag 35

4 Marketing strategy 35

4.1 Targeting 36

4.1.1 Segmenting criteria 33

4.1.2 Choosing the target 36

4.1.3 Target customers 37

4.2 Re-Positioning strategy in VN market 40

4.3 Objectives of the marketing plan 43

5 Marketing planning

445 5.1 Marketing program 445

5.1.1 Product 45

5.1.2 Price 49

5.1.3 Communication (Branding) 50

5.1.4 Distribution 52

5.1.5 Convincing target customers 53

5.1.6 Customer relationship management 53

5.2 Budgeting 55

5.3 Implementation and control 55

6 Conclution……… 61

7 Bibliography……… 62

Abbreviations

ADD Abbott Diagnostics Division

IVD In vitro diagnostic

ID Infectious Diseases

IA Immunology Assays

HEMA Hematology

CC Clinical Chemistry

KOL Key opinion leader

SWOT Strength, Weaknesses, Opportunities, Threats

SLEPT Social, Legal, Economic, Political, Technical

HBV Hepatitis B Virus

HCV Hepatitis C Virus

Ag Antigen

Ab Antibody

TAM Total Available Market

CRM Customer Relationship Management

Figures and Tables

PageFigure 2.1: Performance graph of Abbott Laboratories in 2004-2009

Figure 2.2: Sales growth of ADD Vietnam in 2005-2010

Figure 3.1: Worldwide Hepatitis B prevalence map

Figure 3.2: Worldwide Hepatitis C prevalence map

Figure 3.3: Vietnam real GDP growth rate and Inflation rate in 2007-2023

Figure 3.4: National Medical budget in 2000-2008

Figure 3.5: International aid in 2000-2008

Figure 3.6: BMI short-term political stability rating – Asia Pacific 2010

Figure 3.7: Clinical review of a Hepatitis B patient

Figure 3.8: Clinical review of a Hepatitis C patient

Figure 4.1: The segmentation criteria based on potential customer’s characteristics

Figure 4.2: Value curve of Abbott hepatitis diagnostic vs competitor (Roche)

Figure 4.3: Re-positioning strategy

Figure 4.4: Objectives of the marketing plan

Figure 5.1: Abbott HBsAg quantitative and HCV core Ag assays’ major

characteristics

Figure 5.2: The comparison of Abbott HCV core Ag assay with PCR – HCV

RNA method

Table 1: The target of this marketing plan

Table 4.1: The list of current high potential target customers in Vietnam

Table 5.1: The comparison of Abbott HBsAg quantitative with competitors

Table 5.2: Abbott HBsAg quantitative product generation

Table 5.3: Product comparison

Table 5.4: Budget for the communication campaign

Table 5.5: The implementation of Abbott HBsAg quantitative and HCV core Ag

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45

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1 Exe utive Summary

This part provides a brief summary about company overview, product and the

vision & objectives of the project

VISION & OBJECTIVES OF THE PROJECT: The project is set up a

marketing plan to launch Abbott HBsAg quantitative and HCV core Ag in Vietnam

in 3 years (2012-2014) By launching Abbott HbsAg quantitative and HCV core Ag

assays, Abbott Laboratories has ambitions to be recognized as a leader and pioneer

in immunology field, especially in infectious disease diagnostic with a lot of

advantages in hepatitis assays

SCOPE / PRESUMTION: This marketing plan will be performed in the scope of

Vietnam and followed up with three years (2012 – 2014) The expected outcome

for the project will be as below:

Table 1: The target of this marketing plan

Awareness - Top professors of

hepatitis in Vietnam

- 100% sub-clinical doctors of Abbott accounts in target customers list

- 100% hepatitis doctors in Abbott accounts in customers list

- 100% clinical doctors of Non- Abbott customers in target customer list

sub 50% hepatitis doctors in non Abbott accounts in customers list

- 100% hepatitis doctors of target customers

Sale

volume

Increase 12% reagent sale in Abbott

immunology field

Increase 13%

reagent sale in Abbott immunology field

Increase 14%

reagent sale in Abbott

immunology field Target customer is the big general hospitals of Vietnam, including about 40

hospitals in North (especially in Hanoi), South (especially in Ho Chi Minh City) and 3 hospitals in Central

METHOD / PROCEDURE:

Situation analysis: will be performed with external analysis and internal analysis

- External analysis: is the general information about the Vietnamese (IVD) market, environment and competition, especially for hepatitis diagnostic The market analysis will perform the information about Vietnamese IVD market size, growth, profitability and trend The environment is analyzed by 5 aspects, including social, legal, and economic and technical (SLEPT) In addition, the competitor analysis is also perform in this part with the information about key competitors’ profile; current and potential; direct and indirect competitors in hepatitis field The questionnaire can be used in this part to explore and assess customer expectation and decision making influencing factors The purpose of this analysis is to see the

market opportunities for HbsAg quantitative and HBV core Ag

- Internal analysis: is the information about Vietnam Abbott Diagnostic Division, including profitability (especially hepatitis B and hepatitis C assays), brand awareness, brand image, coverage and key success factors of ADD Vietnam Product analysis is performed to show the benefit, advantages and disadvantages of these products SWOT analysis is used to summary

Marketing strategy:

- Segmenting - Targeting: indentify the segmenting criteria, including the main segments; the number of hepatitis patient…The analysis of choosing the target market with attractiveness (segment size and growth), competitive advantages (competition, clients, substitutes, barriers to entry) and degree of risk are performed

to find the target customers

- Positioning strategy in Vietnamese hepatitis market: the Blue Ocean marketing model is use to draw the value curve (eliminate, reduce, rise and creation) of Abbott hepatitis with the new products (HBsAg quantitative and HCV core Ag) The curve will show the sustainable competitive advantages and Abbott core

- Objectives of marketing plan: regarding to the positioning strategy, the objectives

to achieve in the first 3 years (2012, 2013, 2014) when launching HBsAg Quantitative and HCv core Ag assays is showed with the time to the market (months), brand awareness (% of target customers know the brand), brand image (% of target customers know HBsAg Quantitative and HBC core Ag assay), market penetration (% usage by target customers), profitability (% total revenue) and target market share (% market share)

Marketing Planning:

- Marketing program:

- Product: includes marketing notion (using Levitt‘s Total Product concept) contains

Generic (core benefits: good performance, good quality, installation, training, guarantee…), augmented (innovative technology, novel markers, after sales service, scientific seminars to introduce new applications ), expected and potential aspect and product portfolio management with attractiveness of the market and competitive advantage

- Price: will be set up a high but reasonable price based on 2 elements, including

Abbott Diagnostics leader position in the market and the general Abbott Diagnostics Brand image perceived by customers during the past years Abbott wants to strengthen the pioneer position in hepatitis diagnostic segment

- Communication (Branding strategy): with communication message is “the new

option for physician in hepatitis treatment and the better care for hepatitis patients” The communication tools will be advertising materials (brochures, handbooks ),

PR (group table discussion, Symposia & Seminars, Sponsoring…) The strategy will focus on brand awareness(launching events like Focus group table discussion, Symposium), exam plus (hold scientific seminars to introduce new applications, clinical guidance…; Sponsor international & national scientific events about Hepatitis diagnosis) and beliefs (high quality & innovative product with planning to launch these products to strengthen the power of hepatitis diagnosis, good QA management system according to FDA requirements to improve the manufacturing process as well as the stability of product and controlling the product quality after

selling to customers

- Distribution: Mutual support with current distributors by training their sales staff

about new product information, engage with them by a bilateral marketing action plan to ensure the coherence; control the execution by monthly meeting…Prepare

an as much as accurate forecast about sales to ensure good stock for selling

- Convincing target customers: Sales force will be set up target sales and customers

based on regions (North, Central, and South) and number and size of hospitals They are training on selling skills, product information, motivation and control (incentive and bonus based on performance evaluation)

- Budgeting: It is depending on the increase of revenue year after year The first year

is strongly focused with 10% target of revenue increase for marketing The next year is 4% and the last year is 2%

- Implementation (who, what, where, when, how and why) with phases and milestones; action plan

- Tracking (based on SMART objectives) with monthly review (including evaluate and correction) and yearly business review (in kick-off meeting) to identify the gaps and update the plan

DATA SOURCE:

Primary data: Use a questionnaire to explore & assess Customer Expectations,

Decision making influencing factors and figure out the market opportunities for Abbott HBsAg Quantitative and HBC core Ag assay

Secondary data:

- External: internet website of Abbott, Roche (main competitor), Espicom Business

Intelligence the Department of Diagnosis and Treatment Administration, The Department of Health, Vietnam Business news, WHO, National Action Plan to improve managerial competence for medical testing laboratories from now until

2020, Business Monitor International Ltd, Euromonitor International

Internal: Abbott Diagnostics Division (ADD) sale report 2010 – 2011

2 Gene al Introduction

2.1 Vision and Objectives of the project

Abbott Diagnostics is a global leader in in vitro diagnostics (IVD) and offers a

broad range of innovative instrument systems and tests in Immunology field, hematology (HEMA) filed and clinical chemistry (CC) field At Abbott, leading science and innovation are the key words to develop new products The reputation

of Abbott Diagnostics started by their strong position in immunology assays (IA), especially infectious diseases (ID) assays such as AIDS, Hepatitis Not like the pharmaceutical or nutrition division, the business of Abbott Diagnostics division is B2B with target customers are hospitals, reference labs, blood banks, physician offices and clinics Moreover, as a kind of healthcare products, the IVD product is regulated by the Ministry of Health in most of countries in the world Therefore, the marketing of the IVD product is limited to scientific activities like symposia, seminars, sponsoring for scientific studies…

The new scientific application and innovative technology is the most important core differentiation of an IVD product An IVD product can be “alive” in the market until a new scientific application/ technology is discovered to improve health care, and it can be several years to several decades

In the beginning of 2012, and Abbott Diagnostics is developing a new strategy to maintain our leading position This strategy is “protecting ID” to “grow IA” and then “leverage HEMA and CC” One of important action to perform the first part of this strategy (protecting ID) is launching new assays of hepatitis diagnostic which are Hepatitis B surface antigen (HbsAg) quantitative assay and Hepatitis C virus core antigen (HCV core Ag) assay In the past, these assays were performed with another method with high cost and long time (1 – 2 days) to get the result With the new method of Abbott, the price is decreased 30%, the time to get the result is just

45 minutes and the quality is nearly the same comparing with old method With these advantages, the physicians can perform these assays frequently to see the changing of the patient closer than old method with high price and long time In addition, the patient will be treated better with these new assays However, Vietnam Abbott Diagnostics is sale oriented division Therefore, all of new

products come to the customer by sale activities (B to B) The salesman comes to the customer to introduce about the new products by their own ways There are some events performed to follow the direction of global marketing but they are not effective Sometimes the users do not understand clearly about the benefit and value gained when they have the products To be more effective in launching a new product, a standard marketing plan is needed for HbsAg quantitative and HCV core

Ag assays With a lot of advantages, these products will come to the physicians to support their treatment and the patient will be cared better

The marketing plan for Abbott Diagnostics’ new IVD products is usually set up for

3 - 5 years which will cover whole growth stage of the product life cycle before declining in the market (there will be a substitution then) Moreover, the first year – the launching year always plays a decisive role to the success of the marketing plan

The project is set up a marketing plan to launch HbsAg quantitative and HCV core

Ag assays in Vietnam in 3 years (2012-2014) By launching these innovative assays, Abbott Laboratories has ambitions to be recognized as a leader and pioneer

in immunology field, especially in infectious disease diagnostic with a lot of advantages in hepatitis assays

Abbott Diagnostics is a global leader in in vitro diagnostics (IVD) and offers a

broad range of innovative instrument systems and tests for hospitals, reference labs, blood banks, physician offices and clinics With more than 69,000 institutional

automation, convenience, cost effectiveness and flexibility Abbott has helped transform the practice of medical diagnosis from an art to a science, helping to create the modern diagnostics industry through the company's commitment to improving patient care and lowering overall costs

The resident representative office in Vietnam of Abbott Laboratories was established

in 1995 Operating for more than 15 years, Abbott Diagnostics Division (ADD) has still maintained the leading position in The Vietnamese IVD market, especially in immunological segment and kept growing strongly The Representative Offices in Hanoi and Ho Chi Minh City cover the IVD market throughout the country from North to South

Company reputation & values

Company branding

Abbott Diagnostics brand is one of 19 business lines of Abbott Corporation and it follows the Abbott Corporation Branding system Abbott Corporation Branding identity has a unique “A” logo with the signature "A Promise for Life"

• Brand promise: "A Promise for Life - Turning Science into Caring "

Caring is central to the work we do and defines our responsibility to those we serve:

- We advance leading-edge science and technologies that hold the potential

for significant improvements to health and to the practice of health care

- We value our diversity – that of our products, technologies, markets and

people – and believe that diverse perspectives combined with shared goals inspire new ideas and better ways of addressing changing health needs

- We focus on exceptional performance – a hallmark of Abbott people

worldwide – demanding of ourselves and each other because our work impacts people’s lives

- We strive to earn the trust of those we serve by committing to the highest

standards of quality, excellence in personal relationships, and behavior characterized by honesty, fairness and integrity

- We sustain success – for our business and the people we serve – by staying

true to key tenets upon which our company was founded over a century ago: innovative care and a desire to make a meaningful difference in all that we

do

The promise of our company is in the promise that our work holds for health and life

• Brand values:

“Pioneering” - Leading-edge science and commercialization

“Achieving” - Customer-focused outcomes and world-class execution

“Caring” - Making a difference in people’s lives

“Enduring” - Commitment and purpose

Business Week Named one of the “Best Places to Launch a Career.”

DiversityInc Named one of the “Top 10 Companies for Diversity.”

Forbes Ranked 118th on the Forbes Global 2000 list (ranked by

2008 sales, profits, assets and market value)

Fortune Ranked 1st among the “Most Admired Companies” in the

pharmaceutical sector

Ranked 80th on the Fortune 500 list of the largest based corporations (ranked by 2008 revenue)

U.S.-The Scientist Named one of the “Best Places to Work in Industry.”

Working Named one of the “Top 10 Best Employers Mother for

Working Mothers.”

Source: Abbott Fact Book 2010 – www.abbott.com

Company Mission

Abbott Diagnostics’ mission is to be the leading in vitro diagnostic company as

measured by customer satisfaction and economic profit We must behave with our

clinical laboratories, administrators of hospitals, physicians ordering tests, technicians at the bench – our brand and message will portray Abbott Diagnostics

as their dedicated laboratory partner who offers innovative science, diagnostic solutions and services For laboratory professionals and clinicians, they will see that ADD provides the tools necessary for them to excel as scientists in their field Our offerings ultimately help our customers provide better patient management

Business figures

Product portfolio

Our broad range of diagnostic instruments and tests are used

worldwide in hospitals, reference labs, small size laboratories

and clinics to aid in the diagnosis of a range of serious health

issues such as infectious diseases, cancer, and diabetes, as well

as monitor other important indicators of health

Source: Abbott Laboratories – www.abbott.com

Automation: ACCELERATOR Automatic Processing System (APS)

Software: Instrument Manager, Informatics Services

Transfusion: ABBOTT PRISM, Commander, Quantum II

Hematology: CELL-DYN Family instruments have provided efficient, flexible and dependable hematology products and solutions to laboratorians world wide for over

25 years

Immunochemistry: The ARCHITECT family of analyzers magnifies the impact of sophisticated technologies by delivering the first truly integrated portfolio of immunoassay and chemistry instruments Featuring unique technologies like the Robotic Sample Handler, FlexRate and CHEMIFLEX, ARCHITECT systems make it easier to get to the science that really matters Ask your Abbott representative about our growing portfolio

Abbott Diagnostics offers comprehensive assay menus:

Cancer Cardiac Drugs of Abuse/Toxicology

Retrovirus Metabolic Renal

Fertility/Pregnancy General Chemistry Infectious Disease Congenitals Hepatitis

Special Chemistry Specific Proteins Therapeutic Drug Monitoring Thyroid

Source: Abbott Financial Report 2009 – www.abbott.com

Figure 2.1: Performance graph of Abbott Laboratories in 2004-2009

Assuming $100 invested on 12/31/04 with dividends reinvested

Abbott’s revenues are derived primarily from the sale of a broad line of health care products under short-term receivable arrangements Sales in international markets are approximately 50 percent of consolidated net sales

ADD Vietnam sales figures

Being a leader in Vietnam IVD immunological market for over 10 years, since the market was immature, ADD Vietnam has been being kept growing strongly along with the market growth During the past 5 years, ADD Vietnam’s sales growth has been achieved double digits of percentage per year

Figure 2.2: Sales growth of ADD Vietnam in 2005-2010

0 2 4 6 8 10 12 14

2005 2006 2007 2008 2009 2010

ADD Vietnam

Source: ADD Vietnam Sales Report 2005-2010

2.3 Product

Abbott HBsAg Quantitative:

The ARCHITECT HBsAg assay is a chemiluminescent microparticle immunoassay

(CMIA) on the ARCHITECT i System* for the quantitative determination of

hepatitis B surface antigen (HBsAg) in human serum and plasma

HBsAg assays are routinely used to aid in the diagnosis of suspected hepatitis B viral (HBV) infection and to monitor the status of infected individuals, i.e., whether the patient’s infection has resolved or the patient has become a chronic carrier of the virus

Abbott HCV Core Ag:

The ARCHITECT HCV Ag assay is a Chemiluminescent Microparticle

Immunoassay (CMIA) on the ARCHITECT i System* for the quantitative determination of core antigen to Hepatitis C virus in human serum and plasma

HCV Ag assays are used as an aid in the diagnosis of suspected Hepatitis C viral (HCV) infection and to monitor the status of infected individuals, i.e.,whether the patient’s infection has resolved or the patient has become a chronic carrier of the

Sales ($M in USD)

Year

virus

General characteristics:

Each assay will be offered to the customers as a

whole reagent set, including Reagent kit, Calibrator

and Control The Reagent kit will have 2-3

packaging sizes based on the demand of target

customers: 100 tests/kit, 500 tests/kit and 2000

tests/kit

Source: Abbott Laboratories – www.abbott.com

*These assays are offered to run on Innovative and Quality Abbott integrated systems

Source: Abbott Laboratories – www.abbott.com

IA CC Integration High

3 Situation analysis

3.1 External analysis

3.1.1 The Vietnamese IVD market overview

Market size & growth

In 2010, the Vietnamese market for medical equipment and supplies is estimated at US$515 million, or US$6 per capita It is expected that the device market will continue to expand strongly at 15.3% per annum This will take the Vietnamese market to over US$1 billion in 2015, although the per capita rate will remain low

An estimated 86.5% of the medical device market is supplied by imports, and the sector is growing rapidly Singapore, China and Japan are the leading suppliers, accounting for 43.1% of imports in 2008 å The Vietnamese IVD market is small

in Asia, but fast-growing with double digit growth (Source: Espicom Business Intelligence (www.espicom.com) - The Medical Device Market: Vietnam - June 13th 2011)

According to statistics data provided by the department of Diagnosis and Treatment Administration - Vietnam Ministry of Health, in 2009 we have totally 1063 governmental hospitals, 94 private hospitals, and all hospitals have set up the medical testing laboratories; and thousands of medical testing clinics & centers in Vietnam’s diagnosis and treatment system The number of Immunochemistry tests

in 2008 were 98,006,230 and in 2009 were 124,228,570 which make 2009/2008 Immunochemistry tests’ growth of 126,8% (Source: The Department of Diagnosis and Treatment Administration – www.kcb.vn)

Market trend

Improving healthcare system is the government focus in the coming years, so there would be a lot of demand for equipments used in medical imaging, intensive care, patient-monitoring, operating theaters, cardiac treatment, laboratory and diagnostics and consumables Improved living standards and income will lead to improved healthcare expenditure, especially increasing the number of Vietnamese people taking regular health-checking courses.

(Source: Vietnam Business news - www.vietnambusiness.asia)

3.1.2 Environment (SLEPT) analysis

(Source: www.asiabiotech.com - Vietnam Healthcare - The Next Growth Frontier?by V.K Sanjeed - Volume 13 > Number 10 > 2009; www.gso.gov.vn – National Statistics Department – Population per age 2000-2010)

̇ Demand for testing and treating Hepatitis B,C diseases

Hepatitis types B and C lead to chronic disease in hundreds of millions of people and, together, are the most common cause of liver disease and cancer And Vietnam is in the group of countries having Intermediate-High prevalence in the world

Hepatitis B: About 2 billion people worldwide have been infected with the virus

and about 350 million live with chronic infection An estimated 600,000 persons die each year due to the acute or chronic consequences of hepatitis B

In Vietnam hepatitis B infection is present in 10% to 20% of the general population and is the cause of up to more than 80% of liver disease and cancers in the country Co-infection rates amongst people living with HIV are also around 10%

(Source: http://www.who.int/countries/vnm/en )

Figure 3.1: Worldwide Hepatitis B prevalence map

(Source: CDC Travelers’ Health - Yellow Book 2012)

Hepatitis C is also a contagious viral infection of the liver, but for which no

vaccine has yet been developed Hepatitis C infections are found worldwide with some 130-170 million people chronically infected, and more than 350,000 people die from hepatitis C-related liver diseases each year

Hepatitis C in Vietnam is a growing concern People who inject drugs have especially high prevalence of hepatitis C infection, with up to 98.5% of them infected with the virus in Vietnam

(Source: http://www.who.int/countries/vnm/en )

Figure 3.2: Worldwide Hepatitis C prevalence map

(Source: CDC Travelers’ Health - Yellow Book 2012)

As the growing prevalence of hepatitis B & C in Vietnam shown above, the demand of testing these assays in screening of blood & transplant donors and monitoring the treatment of patients are significantly high

Legal environment

The governmental management units of the Ministry of Health are currently including the department of Diagnosis and Treatment Administration, Medical Preventive department, the department of Medical Environment Administration, the department of Food Safety and Hygiene, HIV/AIDS preventive department These departments manage the medical testing laboratories based on professional vertical axis, there has not been any department of the Ministry of Health to be in charge of the management of medical testing laboratories as well as no quality control center, reference laboratories, legal system and documents, standardized testing procedures…

The improvement of medical testing services as well as other healthcare services have not been got the equal & proper care Moreover, there has not been any

integration between medical testing professional majors about management and differentiation in their services at different levels

(Source: National Action Plan to improve managerial competence for medical testing laboratories from now until 2020 – Chapter 3)

(Source: CIA – The World Fact Book – Vietnam 27 Sep 2011).

In the coming years, Vietnam can keep this GDP growth rate The Economist estimates that GDP growth rate will stably increase until 2023 as shown in the figure below:

GDP (purchasing power parity):

$276.6 billion USD (2010 est.)

country comparison to the world: 42

GDP (official exchange rate):

$103.6 billion USD (2010 est.)

GDP - real growth rate:

Figure 3.3: Vietnam real GDP growth rate and Inflation rate in 2007-2023

̇ Healthcare expenditure & investment

According to WHO Statistics Full report on Health Expenditure, Vietnam has rapidly increased Total expenditure on health as a percentage of gross domestic product (GDP) (> 7%) in the region; in which the General government expenditure

on health as a percentage of total expenditure on health lower than private source

Figure 3.4: National Medical budget in 2000-2008

Vietnam has received a large amount of international aid in the form of loans and donated medical equipment A number of small projects are currently taking place

in Vietnam, including those funded by the World Bank and the EU

Figure 3.5: International aid in 2000-2010

(Source: The Department of Health of HCM city www.medinet.hochiminhcity.gov.vn)

The government has pledged 45.2 trillion (US$2.5 billion) to build or upgrade specialty hospitals and some provincial-level general hospitals in mountainous and other disadvantaged areas in the 2009-2013 period

The private healthcare sector in Vietnam has expanded since the lifting of the ban

on private practice in 1989 People often choose to use private facilities, if they can afford to do so, as the quality of state healthcare provision is very poor

Therefore, they said Vietnam’s healthcare sector has great potential to develop

(Source: Espicom Business Intelligence (www.espicom.com) - The Medical Device Market: Vietnam

Figure 3.6: BMI short-term political stability rating – Asia Pacific 2010

(Source: Business Monitor International Ltd (www.businessmonitor.com) – Vietnam Vietnam

Business Forecast Report Q3-2010 - Chapter 1: Political Outlook)

Corruption among government officials poses a major threat to the legitimacy of the ruling Communist Party There is increasing (albeit still limited) public dissatisfaction with the leadership’s tight control over political dissent

Vietnam has allowed legislators to become more vocal in criticizing government policies

The Ministry of Health of Vietnam issued the Directive No 06/2007/CT-BYT on

7th December 2007 about “Improve the quality of diagnosis and treatment for Vietnamese people” The content of this Directive includes “Reduce the overload

of hospitals; Improve competence for local medical system; Force socialization of the diagnosis and treatment; Strengthen medical ethics at medical facilities; Change and modify some legal documents related to diagnosis and treatment activities” Recently, the ministry of Health of Vietnam issued the Decision No 3701/QD-BYT on 5th October 2010 about “Approval of National Action Plan to improve managerial competence for medical testing laboratories from now until 2020”

It shows that the improvement of medical systems is the government focus in the coming time and the managerial competence for medical testing laboratories is also

an important part of this plan

Technical environment

̇ Current status of medical testing laboratories in Vietnam

In Vietnam, medical testing laboratories at district level often meet the demand on routine diagnostic assays; medical testing laboratories at province level can carry out most of specific diagnostic assays; medical testing laboratories at national level can carry out all routine & specific diagnostic assays but overloaded

Almost medical testing laboratories are poor quality of management of testing quality and lack of resources to meet the demands on the required quality of a diagnostic testing laboratory

Currently, the issues on management of laboratories operation and testing quality are the Ministry of Health’s concern and it is put on the first priority to improve The Ministry of Health has been building the National Action Plan to improve managerial competence for medical testing laboratories by Establishing governmental management units of management of laboratories operation, quality control center, reference laboratories, legal system and documents, technical specifications and national standards, standardized testing procedures

(Source: National Action Plan to improve managerial competence for medical testing laboratories from now until 2020 – Chapter 3)

As a result of this National program, the equipment status at medical testing laboratories in medium and big hospitals has been being improved, especially with the increased installation of automatic testing systems and the high installation rate

of Abbott automatic in vitro immunochemistry systems which are considered as the

top quality brand in the market

At the same time, with the global non-stop scientific development in in vitro

diagnostics, the assay menu range has been broadened with new and unique markers to support new diagnosis & clinical treatment algorithm

More and more international in vitro diagnostic companies entering the market like

Abbott has provided the professional training and services along with their modern instruments to laboratory technicians that can meet the requirements on quality testing of the National program

3.1.3 Competition analysis

IVD market in Vietnam includes 3 main segments which are based on type of specialized diagnostic service: Immunology, Clinical chemistry and Hematology There are several key players in this market like Abbott Diagnostics, Roche Diagnostics, Olympus, Sysmex…as follows:

1 Abbott Diagnostics is the leader in the IVD Immunological segment, especially dominating in the South

2 Roche Diagnostics and Olympus is still dominating in the North

3 Sysmex and Coulter is sharing hematology business with Abbott in North

4 Sysmex, ABx and Mindray are penetrating market with positioning their brand

at lowest price

With launching Abbott HBsAg Quantitative & HCV Ag assays, we focus on the IVD Immunological segment in which Roche Diagnostics is our main competitor

Roche Diagnostics profile

Roche Diagnostics, a division of F Hoffmann-La Roche Ltd, is the world’s leading provider of diagnostic systems and decision-oriented health information Roche Diagnostics supplies a wide array of innovative testing products and services to researchers, physicians, patients, hospitals and laboratories worldwide Roche Diagnostics country organizations have established in 14 Asia Pacific countries, with the regional headquarter located in Singapore Present in Vietnam since 1994 as Representative offices of former Boehringer Mannheim and AVL, Roche Diagnostics is well known to the local end users as one of the leading suppliers for diagnostic products Its representative offices in Hanoi and Ho Chi Minh City cover the diagnostics market throughout the country from North to South The local presence indicates its commitment to provide professional technical and training supports to end users

Roche’s huge penetration with heavy investment to differentiate in cardiac, fertility and endocrine These are the main product portfolio of Roche Diagnostics in Vietnam:

Cobas® 4000 analyser series

The cobas® 4000 analyser series include the cobas c 311 module for clinical chemistry and the cobas e 411 module for immunoassays The combination of the two analysers with cobas IT 3000 solution provides true operational integration for small laboratories

E 170 module for MODULAR ANALYTICS EVO analyser

The E 170 module is an integral component of the MODULAR ANALYTICS EVO platform and offers a tailor-made Heterogeneous Immunochemistry solution for medium to very high workload volume laboratories

(Source: http://sg.roche-diagnostics.com/RocheDiagnostics_vietnam.htm)

3.1.4 Target market analysis

Target market of Abbott Abbott HBsAg Quantitative & HCV Ag assays is the IVD immunological segment It is a B2B business with the customers are hospitals, laboratories and clinics

The secondary data from Abbott Diagnostics and other official sources has already built up for 10 years It is update every years by Abbott Sale and Marketing team through internal database system It is contain all information about total available market (TAM) of the products, customer insights, cometitors landscape, Abbott market share, Abbott opportunities in Vietnam IVD market, especially in hepatitis diagnostic market Therefore, the list of target customers is also built up by this database and there are no more market research required for this information

å Conclusions from the database:

Hepatitis types B and C lead to chronic disease in hundreds of millions of people and, together, are the most common cause of liver disease and cancer worldwide And Vietnam is in the group of countries having Intermediate-High prevalence in the world The number of HBV & HCV patients in Vietnam is a growing concern Therefore, the demand of testing these assays in screening of blood & transplant donors and monitoring the treatment of patients are significantly high