Marketing plan for Van An private general clinic in 2013

The marketing mix – The 7Ps...12 CHAPTER 3: THE OVERVIEW OF THE HEALTHCARE SERVICES MARKET IN LONG AN PROVINCE AND THE VAN AN MEDICAL CLINIC...24 3.1.. People need to know exactly about

(PART – TIME)

HO CHI MINH CITY

2012

I would like to express my deep gratitude to the following persons:

My supervisor, Professor Hoang Thi Phuong Thao, for her value time, her clear guidance, and patience She has kept me carrying out my final project and doing till the end Without her helps, I could not have finished my final project on time The Van an staffs who helped me in collecting information for my market survey

Mr Tran Luat, Van An General manager, my mentor in this project He helps me

to understand the operation, working processes of the Van An clinic

I would like to send many thanks to all professors of Solvay Business school, our program coordinator, my classmates for useful knowledge and happy time during the MBA course

I would link to thank to my colleagues, my boss for supporting me the time to do this project

Finally, I want to show my grateful to my family who always encourage and support me to complete this project

November, 2012 HỒ PHƯƠNG THẢO

I hereby declare that this study project is my own original work and this is my first marketing plan for the private healthcare sector which has not been submitted to any university for any degree All sources and helps that I used in this topic have been reported and acknowledged in my study project

November, 2012 HỒ PHƯƠNG THẢO

The final project Marketing plan for the Van An private healthcare clinic in 2013 –

2014 conducted by student Ho Phuong Thao meets the requirements of MBA program in terms of content, format as well as research survey

During the time of doing this project, the student showed her hard working attitude and seriously followed the tutor’s guidance

For the said above reasons, I introduce student Ho Phuong Thao to the jury to defend her project

CONTENT

CHAPTER 1: INTRODUCTION 1

1.1 Back ground of research 1

1.2 Research problems, and research objective: 2

1.3 Scope of the study 2

1.4 Research metholodogy 2

1.5 Structure of the study 3

CHAPTER 2: LITERATURE REVIEW 5

2.1 Strategic plan and Marketing plan 5

2.2 The marketing mix – The 7Ps 12

CHAPTER 3: THE OVERVIEW OF THE HEALTHCARE SERVICES MARKET IN LONG AN PROVINCE AND THE VAN AN MEDICAL CLINIC 24

3.1 The Van An medical centre 24

3.2 The internal activites analysis 24

3.3 The external activities 24

3.4 The SWOT analysis 38

CHAPTER 4: THE MARKET SURVEY – CUSTOMER ANALYSIS 41

4.1 Target customer 41

4.2 Customer demographic 41

4.3 Brand name recognization 43

4.4 Customer’s habit 43

4.5 Customer assessment on Van An clinic 45

4.6 Customer satisfaction 54

CHAPTER 5: PROPOSE THE MARKETING PLAN 58

5.1 Marketing objectives 58

5.2 The marketing plan 58

CHAPTER 6: CONCLUSION 69

Figure 2.2: the Porter’s Five forces 20

Figure 3.1: Long An map 26

Figure 3.2: The structure of Van An clinic 33

Figure 3.3: The Van An revenue in 2010, 2011, 2012 34

Figure 3.4: The Porter’s Five Force that effect on Van An private medical clinic .35

Figure 4.1: the ratio of Male and Female 42

Figure 4.2: Information sources to recognize the Van An clinic 43

Figure 4.3: Customer’s assessments on the time for documentary procedure at Van An clinic 45

Figure 4.4: Customer’s assessments on the time for the check up process 46

Figure4.5: Attitude of doctor 47

Figure 4.6: Customer’s appraisement on staff’s enthusiasm and politeness 49

Figure 4.7: Customer’s appraisement on staff’s solution for their requirements49 Figure 4.8: Customer budget for a healthcare examination 51

Figure 4.9: Van An price and the customer’s acceptance 53

Figure 4.10: The price in comparison with the quality 53

Figure 4.11: Customers assess on Van An service 54

Figure 4.12: Customer assessments after using Van An service 55

Figure 4.13: Customer loyalty 56

Table 3.1: Statistic of Long An Healthcare system 27

Table 4.1: The ages range of Van An current customers 42

Table 4.2: Time to go for check-up 43

Table 4.3: Customer’s choices for personal check up demand 44

Table 4.4: Summary the customers opinions about the time 46

Table 4.5: Van An space and facility 50

Table 5.1: The revenue of from August 2011 to August 2012 and the marketing budget in 2013 64

Table 5.2: Trade promotion gifts and time line 64

Table 5.3: Cost of the trade promotion plan 65

Table 5.4: Expense and time line for each type 66

Table 5.5: total cost for marketing plan in 2013 68

APPENDIX

Appendix 1: The market survey form

Appendix 2: The results of the market survey

Private medical clinics are established more and more each day Inspire of receiving the one way offers for so long, patients becomes customers, they have more choices and they are treated more fairly Both patients and private medical units are happy because one has more options, one has its business going on well and public hospitals are not affected, they are still overloaded

As usual, private medical centers will satisfy their customer demands by doing their best and doing what they think the best to their customers

The purpose of this research is to define customer expectations, to understand more about the object served by medical service supplier named Van An by a market survey The survey was conducted by both quantitative and qualitative methods Quantitative research is to find out the customer concerns, design the questionnaire for the main part Qualitative research was conducted by issuing questionnaire forms to customers who go to Van An clinic have their health checked up to get their responses From 200 results collected, we analyze and the results show that all factors as professional skill, attitude, working processes, price, material facility all affect to customers choice and the power of customers

in advertising a service Using the analyzed information, propose a suitable marketing plan for Van An Clinic business to obtain its future targets

CHAPTER 1 INTRODUCTION

1.1 Back ground of research

It is the legitimate aspirations of everyone to take good care of their health People need to know exactly about their health conditions, how to protect themselves from implicit factors, how to deal with their diseases… The medical system in Vietnam embraces public sector: state’s hospitals, local medical stations, public medical centre and private medical sector: private clinics, private hospitals

While the Public health care sector is waiting for breakthrough policies to solve its problems on overloaded condition in public hospitals, human resource distribution

at local level hospitals, to control the quality of healthcare centers and control the professional ability of medical officers… The demand on medical services still imperative, increase rapidly and needs to be solved effectively Along with the demand of a huge amount of patients, a significant number of private medical clinics and hospitals are born From Minister of Health‘s data, there are 65,000 private medical clinics and private hospitals are established till end of 2011

Like any others in private medical system, the Van An clinic was established as a response to the patients demands In some aspects, this kind of business also help to share the burden of the public healthcare sector which is overload severely for years, and satisfy its customers’ demands Patients don’t waste too much time, patients give money to get what they need with pleasures…

In this research, we are working on the business situation of the Van An general clinic in 2007 – 2011 to find out the advantages, disadvantages, strong and weak points that this company face off as well as the competitive abilities with other units

in Long An province, along with the research on customer behaviors in the medical service area Base on the result and the company strategy in 2012 – 2015, building a suitable marketing plan to achieve the company goals

1.2 Research questions and objectives

Unlike other fields, the healthcare sector operates like a one way structure and suppliers do not have any tools or policies to inspire their customers due to the heavily overloaded situation at almost public healthcare centers Huge demands with limited suppliers and customers are acquainted to accept what are offered without any further requirements In the private healthcare sector, customer is one

of the key factors that decide the existence of an organization Therefore, this survey is made to help a private medical clinic like Van An medical clinic to have a fully recognition on customer demand and have suitable solutions to develop its business

1.2.1 Research questions

This research is following some questions as:

Q1: Why do patient go to the private clinic?

Q2: How can a private medical clinic exist in this fiercely environment?

Q3: What do patients expect from private medical center?

1.2.2 Research objectives:

- To measure the patients demand on the private medical sector

- To analyze and assess the business activities of Van An Clinic in Long An province

- To orient the marketing strategy for the Van An Clinic in 2013

1.3 Scope and limitation of the study

This study is about elements that related to the marketing activities in a private medical clinic – Van An clinic – in Long An province

1.4 Research methodology

This study was carried out by collecting data from the issued questionnaire and using the secondary data of Van An clinic

a Qualitative research

Interview the 3 managers of the Van An clinic to know what they had offered to customers, why they did it, what they will do to develop their business in the future

In-depth interview 10 random patients to explore their inquiries when using a private general clinic for their healthcare demands, take notes, collect and

analysis these data, design the questionnaire for the next step

b Quantitative research was conducted by issuing 250 copies of questionnaire

to customers of Van An The interviewees are selected by convenience Interviewers are Van An staffs Interviewees are people who come to Van

An for medical service purposes Interviewers read the questionnaire for interviewees to hear and answer, interviewers wrote down all answers from interviewees in the questionnaire The survey was implemented in 04 days and at the afternoon of each day 250 copies of questionnaire were offered,

200 useful results were collected, the rate of response is about 80%

We use SPSS software for statistics The statistics consist of frequency statistic, mean … We believe that this is a scientific process and the result can be used as a basic ground for analysis and propositions

c Secondary data

Use the yearly revenue report of Van An in 2010 and 2011 with the acceptance from the Accountant Dept and Operation Manager

1.5 Structure of the study

Chapter 1: Introduction This chapter provides the research background, research objectives, research methodology, and structure of the study

Chapter 2: Literature review This chapter includes concepts, theoretical framework and guideline for this study

Chapter 3: The Van An medical clinic overview and its market segmentation The general information of Van An medical clinic, formation and development of Van

An clinic, current position and current marketing activities

Chapter 4: Data analysis This chapter is about the patient attitude base on the data collected from issued questionnaires

Chapter 5: Proposed marketing plan in 2013 for Van An clinic

Base on the data analysis from chapter 4, propose the marketing plan for Van An clinic and the implementation of it

Chapter 6: Conclusion This chapter provides the conclusion from the findings from the research

CHAPTER 2 LITERATURE REVIEW

2.1 Strategic plan and Marketing plan

Planning is essentially a process directed toward making today’s decisions with tomorrow in mind and means of preparing for future decisions so that they may

be made rapidly, economically and with as little disruption to the business as possible

The role of planning

Planning leads to a better position, or standing for the organization

Planning helps the organization progress in ways that its management considers most suitable

Planning helps every manager think, decide, and act more effectively and progress in a desired direction

Planning helps keep the organization flexible

Planning stimulates a cooperative, enthusiastic approach to organization problems

Planning indicates to managers how to evaluate and check up on progress toward planned objectives

Planning leads to socially and economically useful results

Strategy is the pattern of major objectives, purposes, or goals and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or it

to be

Strategy specifies the direction

Any organization needs strategy when:

• Resources are finite

• There is uncertainty about competitive strengths and behaviors

• Commitment of resources is irreversible

• Decisions must be co-ordinate between far-flung places and over time

• There is uncertainty about control of initiative

An explicit statement of strategy is the key to success in a changing business environment Strategy provides a unified sense of direction to which all members

of organization can relate Where there is no clear concept of strategy, decisions rest on either subjective or intuitive assessment and are made without regard to other decisions Such decision become increasingly unreliable as the pace of change accelerates or decelerates rapidly Without a strategy, an organization is like a ship without a rudder going around the circle

Strategic plan is specifies the sequence and timing of step that will alter competitive relationship

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objective

The strategy and the strategic plan are quite different things The strategy may

be brilliant in content and logic but the sequence and timing of the plan inadequate The plan may be the laudable implementation of a worthless strategy Put together, the strategic plan concerns the relationship of an organization to its environment

The strategic planning process in Healthcare sector

May variation of strategic planning model have emerged in both business and healthcare sectors, but the basic model has remained relatively unchanged since its inception In common way, it can be synthesizes into 4 stages as:

The first stage is the environmental assessment that focuses on the question of where we are now, it includes 4 activities:

• organizational review, include mission, philosophy and culture

• external assessment of the market structure and dynamics

• internal assessment of distinctive characteristics

• evaluation of competitive position, including advantages and disadvantages

The goals of environmental assessment is to determine which factors are subject

to the organization’s control and how external forces will affect to the organization

The second stage is organizational direction The main activities of this stage is

to develop a future strategic profile of the organization by examining alternative future, mission, vision, value and key strategy

The third stage is strategy formulation This stage establishes goals and objective for the organization

Stage 2 and 3 address the question where should we be going? And the purpose

of these two stages is to determine what broad, future direction is possible and desirable and what, generally, the organization is going to target as its future scope of services and position

The fourth stage is action planning, determining how we get there This stage involves identifying the actions needed to implement the plan Key activities include setting schedules, determine priorities, and allocating resources to ensure the implementation

Why strategic planning is needed in healthcare sector?

With the chaos pervading the healthcare field, many executives and profit board may wonder if it is possible to plan effectively or to plan at all given the uncertainty ahead Why not rely on ad hoc planning based on educated guesses and intuition? Healthcare organizations may have historically survived using less formalized approached to make policy decisions, but today, providers must be more thoughtful about their choices Mistakes will result not only in lost revenue but also closure Fog (1994) suggests the following benefits of strategic planning:

not-for-• Secures the future for the organization and the individual by crafting a viable future business

• Provides a road map, direction and focus for the organization’s future – where it wants to go and the routes to get there

• Set priorities for the really important strategic tasks that absolutely must

be accomplish, including those hairy, burning issues such as lack of direction and growth, lack of profitability and organization ineffectiveness, that everybody talks and knows about this while wondering why they are not being addressed

• Allocates resources available for growth and change to the programs and activities with the highest potential payoff

• Establishes measures of success so that the progress of the organization and individual can be measured It is a fundamental business and human need to know where you stand

• Set inputs and ideas from all parts of the organization on what can be done

to ensure future success and eliminate barriers to that success in

accordance with the old adage that ten or one hundred or one thousand heads are better than one

• Gain commitment to implement to plan by involving the organization in its development

• Coordinates the actions of diverse and separated parts of the organization into unified programs to accomplish objectives

Marketing:

We can distinguish between a social and a managerial definition for marketing

According to a social definition, marketing is a societal process by which

individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others As a managerial definition, marketing has been described as “the art of selling products” But Peter Drucker, a leading management theorist, says that “the aim

of marketing is to make selling superfluous The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself Ideally, marketing should result in a customer who is ready to buy.”7

The American Marketing Association offers this managerial definition:

Marketing (management) is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals

Coping with exchange processes—part of this definition—calls for a considerable amount of work and skill We see marketing management as the art and science of applying core marketing concepts to choose target markets and get, keep, and grow customers through creating, delivering, and communicating superior customer value

Marketing planning is simply a logical sequence and a series of activities leading to the setting of marketing objective and the formulation of plans for achieving them It is a management process

The marketing planning process: (Kotler, 2002)

Executive summary and table of contents: this brief summary outlines the plan’s main goals and recommendations It is followed by a table of content It helps top manager to find the plan’s central point quickly and a table of contents should follow the executive summary

Current marketing analysis: this section presents relevant background on sales, costs, profits, the market, competitors, distribution and the macro environment, drawn from a fact book maintained by the product manager

The first major section of the plan describes the target market and the company position in it In the market description, the planner provides information about the market, product performance, competition and distribution

Markets are group of people or organizations with general needs to be meet so it must define the major market segments Therefore market relate directly to the demand for products and services It may be made up of different customer segments And customer segment is a group of customers which have the exhibit similar needs and wants When choosing a market target, those items should be scanned as: size and growth of segments, competitive advantage, coherence with mission and strategy of the company

After that, the planner reviews the product plan or brand It shows sales, prices and gross margins of the principal products in the product line In section of competition, this section identifies big competitors and their individual strategies for product quality, pricing, distribution and promotion It is also show the market shares held by company and each competitor Last section is distribution This

section describes recent sales trends and developments in the primary distribution channels

Opportunities and issue analysis: this section identifies the major opportunities and threats, strengths and weaknesses, and issues facing the product line or brand

Objectives: this section spells out the financial and marketing objectives to be achieved

Having studied the product’s threats and opportunities, the manager can set objectives and consider issues that will effective them It defines the company’s objectives in the areas of sales, market share and profits, and the issues that affect these objectives And the objectives should be sated as goals the company would like to attain during the plan’s term

Marketing strategy: this section explains the broad marketing strategy that will

be implemented to accomplish the plan’s objectives

in this section of marketing plan, manage presents the broad marketing approach that will be used to achieve the plan’s objectives First marketing strategy is the marketing logic by which the business unit hopes to achieve its marketing objective Second it consists of specific strategies for target markets, positioning, market mix It should details the market segment which the product or brand will focus And the manager should also outline specific strategies for such marketing mix elements as new products, field sales, advertising, sale promotion, price and distribution

Action programs: this section outlines the broad marketing programs for achieving the business objectives Each marketing strategy element must be elaborated to answer these questions what will be done? When will it be done? Who will do it? How much will it cost?

Projected profit and loss statement: action plans allow the product manager to build a supporting budget with forecast sales volume (unit and average price), costs (production, physical distribution and marketing), and projected profit Once approved, the budget is the basis for developing plans and schedules for material procurement, production scheduling, recruitment and marketing operations

Control: this last section outlines the control for monitoring the plans Typically, the goals and budget are spelled for each month or quarter so senior manager can review the results each period Sometimes, contingency plans for handling specific adverse developments are included

2.2 The marketing mix – The 7Ps:

Traditionally, the marketing mix has included four broad categories of variables known as the 4P’s: Product, Price, Place, Promotion (McCarthy 1960)

Booms and Bitner (1981) proposed and expanded marketing mix for service consisting of the four traditional elements (Product, Price, Place, Promotion) and three new ones : Physical evidence (the physical surroundings and tangible cues), Participants (all human actors in the service encounter including firm personnel and other customers) and Process (procedures, mechanisms, and flow

of activities)

Product Price Place Promotion Participants Physical evidence Process

Brand name Discounts and Accessibility Personal selling Training Furnishings Procedures

Service line Allowances Distribution Sales promotion Discretion Colour Mechandization

Capabilities Customer’s own Distribution Personnel Incentives Noise level Discretion

Tangible clues Quality/ price Facilitating Behaviour Tangible clues Customer

Figure 2.1: The 7Ps - Adapted from: Booms and Bitner (1981)

Product

As the product is the item being sold to the customer, the thing that will bring in money, its features and design need careful consideration Whether the firm is manufacturing the product or purchasing the product for resale, they need to determine what product features will appeal to their target market A successful company will find out what customers need or want and then develop the right product with the right level of quality to meetthose needs now and in the future When an organization is considering introducing a product into a market, they should ask themselves the following questions:

1 Who is the product aimed at

2 What benefit will customers expect from it

3 What will be its advantage over competitor products? Or its unique selling point?

4 How does the firm plan to position the product within the market? The answers to these questions will help a firm design, package and add value to its products

The perfect product must provide value for the customer This value is in the eye

of the beholder — we must give our customers what they want, not what we think they want

Price

A product is only worth what customers are prepared to pay for it The price also needs to be competitive, but this does not necessarily mean the cheapest; the small business may be able to compete with larger rivals by adding extra services or details that will offer customers better value for money Your pricing must also provide a profit It is the only element of the marketing mix that generates revenue

— everything else represents a cost

Thinking of price as ‘cost’ to the customer helps to underscore why it is so important

Price

Price positions you in the marketplace — the more you charge, the more value or quality your customers will expect for their money

Existing customers are generally less sensitive about price than new customers —

a good reason for looking after them well

If you decide in favor of a higher priced added-value approach, remember that price ‘positions’ you in the marketplace This means it gives an indication to potential and existing customers of where to place you in relation to your competitors Expectations will generally be higher; customers will assume a higher quality product or service Everything about your dealings with customers must live up to the expectations of this positioning Anything that can be seen by the customer must be consistent with these higher quality expectations — packaging, environment, promotional materials, letterheads, invoices, etc

Place

The place where customers buy a product, and the means of distributing your product to that place, must be appropriate and convenient for the customer The product must beavailable in the right place, at the right time and in the right quantity, while keeping storage, inventory anddistribution costs to an acceptable level

Customer surveys have shown that delivery performance is one of the most important criteria when choosing a supplier

Place also mean ways of displaying your product to customer groups This could be

in a shop window, but it could also be via the internet

The ideal place will be:

• Convenient for the customer and the business

• Accessible for the customer if it is the place where the product is sold

• Low cost or free for the customer if it is the place where the product is sold

• Reasonable cost to the business

Promotion

Promotion is the way a company communicates what it does and what it can offer customers It includes activities such as branding, advertising, PR, corporate identity, sales management, special offers and exhibitions Promotion must gain attention, be appealing, tell a consistent message and above all else give the customer a reason to choose your product rather than someone else’s.Good promotion is not one-way communication — it paves the way for a dialogue with customers

Promotion should communicate the benefits that a customer obtains from a product, and not just the features of that product

Whether your promotional material is a single sheet or a complex brochure, folder

or catalogue, it must grab the attention of your customers It should be easy to read and enable the customer to identify why they should buy your product

A brochure isn’t necessarily the best way of promoting your business, the problem being that once a brochure has been printed, the information is fixed You can’t change or remove anything should the need arise A more cost effective and flexible option might be a folder with a professionally designed sheet inside, over aseries of your own information sheets produced in-house These sheets can be customized by varying them to suit the target customers and/or changing them as required

Promotion does not just mean communicating to your customers It is just as important to ensure yourinternal stakeholders are aware of the value and attributes

of your products This means communicating effectively to your staff/fellow employees so that they can be knowledgeable and share expertise with their

Customers

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market Promotion is any activity to raise awareness of a product or to encourage customers to purchase a product Advertising is a form of promotion but not all promotions are advertisements

Promotional activities for consumer sales will be different to promotional activities for business to business sales

The following things will influence how a firm chooses to promote its product: Promotional campaign purpose

The budget for the promotional campaign

Legal rules about what you can promote and how

The target market for the product

The marketing environment in which the firm operate

People

Anyone who comes into contact with your customers will make an impression, and that can have a profound effect — positive or negative — on customer satisfaction The reputation of your brand rests in your people’s hands They must, therefore, be appropriately trained, well motivated and have the right attitude

It is essential to ensure that all employees who have contact with customers are not only properly trained, but also the right kind of people for the job

Many customers cannot separate the product or service from the staff member who provides it This shows the importance of your people

The level of after sales support and advice provided by a business is one way of adding value to what you offer, and can give you an important edge over your

competitors This will probably become more important than price for many customers once they start to use you

Look regularly at the products that account for the highest percentage of your sales Do these products have adequate after sales support, or are you being complacent with them? Could you enhance your support without too much additional cost?

Traditionally, adding the sixth and seventh Ps would be for service industries However, they are worth considering for products too, especially in B2B

An essential ingredient to any service provision is the use of appropriate staff and people Recruiting the right staff and training them appropriately in the delivery

of their service is essential if the organization wants to obtain a form of competitive advantage Consumers make judgments and deliver perceptions of the service based on the employees they interact with Staff should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service that consumers are paying for Many British organizations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards

Process

The process of giving a service, and the behavior of those who deliver are crucial

to customer satisfaction Issues such as waiting times, the information given to customers and the helpfulness of staff are all vital to keep customers happy

Customers are not interested in the detail of how your business runs What matters

to them is that the system works

Do customers have to wait? Are they kept informed? Are your people helpful? Is your service efficiently carried out? Do your people interact in a manner appropriate to your service?

Process is one of the 'P's that is frequently overlooked A customer trying to reach your company by phone is a vital source of income and returning value; but so often customers have to stay on hold for several minutes listening to a recorded message before they are able to get through Many of these customers will give

up, go elsewhere and tell their friends not to use your company - just because of the poor process that is in place Even if they do get through, they will go away with a negative impression of the company

The reason for this is that the systems are not usually designed by marketers- they are designed for the company's benefit, not the customer's

This part of the process is the first experience of a company that many customers have There's no value in making the rest of the company run perfectly if this part

is faulty As a consequence, this 'P' could be a great source of competitive advantage ifused wisely

Physical evidence

A service can’t be experienced before it is delivered This means that choosing to use a service can be perceived as a risky business because you are buying something intangible This uncertainty can be reduced by helping to understand what they are buying Case studies and testimonials can provide evidence that an organization keeps its promises Facilities such as a clean, tidy and well-decorated reception area can also help to reassure If your premises aren’t up to scratch, why would the customer think your service is?

The physical evidence demonstrated by an organization must confirm the assumptions of the customer — a financial services product will need to be delivered in a formal setting, while a children’s birthday entertainment company should adopt a more relaxed approach

Although the customer cannot experience the service before purchase, he or she can talk to other people with experiences of the service Their testimony is credible, because their views do not come from the company Some companies engage these customers and ask for their feedback, so that they can develop reference materials New customers can then see these testimonials and are more likely to purchase with confidence.

Each of the ‘ingredients’ of the marketing mix is a key to success This process is called marketing planning

2.4 The Porter’s Five forces that shape the Healthcare industry

Figure 2.2: the Porter’s Five forces

Adapted from Michael Porter

Entrants:

This is a particular industry There are moderately high barriers for new entrants

to entry in this area as

- Complicated paper work procedures

- Must be authorized by Local Department of Health

- Requires professional and specify work – forces ( doctors – nurses)

- High capital cost of investment (long terms investment)

It can be said that for Van An clinic, the threat of new entrants on this industry players is at medium to low range

Substitutes:

Substitutes, or alternative health services, include:

Public hospitals: Medium to High threat depending on patient condition, service, and location

Private Hospitals: Medium threat depending upon service, customer demands Technology as a Substitute to private hospital care: low threat

Reduction in need/demand for private health services: Low threat

Following this rationale it can be summarized that the combined threat of substitutes impacting

on industry players in a negative or damaging way to shareholder interests or assets, and returns is low

supplier components are summarized as follows:

fundamental prerequisite to viability and success Case histories show that non support of doctor groups can lead to serious underperformance of both individual hospitals and company groups in this industry

Nursing Staff are well organized in terms of union representation and enjoy a strong positive image with the press and the public Nurses therefore have strong collective bargaining power with private hospital groups Hence they are in a strong position to negotiate conditions and pay structures

supplied by industries that are oligopolies in structure Hence, individual supplying companies can usually exercise some control over price and supply conditions They are a costly component of some medical treatments and are supplied by a limited number of suitable manufacturers

Over time, the private health industry has become increasingly dependent on advancing technology by way of high capital cost equipment which is used for diagnostics and treatment of medical conditions, with limited suppliers, creating limited opportunity for competitive buying

In summarizing the impact of the suppliers, it can be said that they have the potential to impact on industry players in a negative or damaging way Even if this influence is not activated, they hold a latent power which can be used in negotiating conditions of supply to industry members

Buyers

In summarizing, the role of patients in isolation to other influencing factors, it can be said that their ability to impact on healthcare industry players in a

negative or damaging way to shareholder interests or assets and returns is low Hence, this element is favorable to industry members

Rivalry among the exist competitors

In the case of the Healthcare service industry, each company and hospital has its unique positioning market and referring doctor networks, limiting the competitive rivalry between the companies in the industry The negative effect

of limited competitive rivalry also means that it would be more difficult for an individual company to build market share through aggressive marketing similar

to what could happen in most other industries when markets are not as protected

Chapter summary:

The main purpose of this chapter is to point out the research objectives and provide the theory framework for all analysis, recommendations in the following chapters

CHAPTER 3 THE OVERVIEW OF THE HEALTHCARE SERVICES MARKET IN LONG AN PROVINCE

AND THE VAN AN MEDICAL CLINIC

3.1 The Van An medical centre

Vision: Work honesty to get satisfaction and to be recognized as a partner of patients we serve We supply service and we sympathy with customers

Mission: Bring standard of healthcare services with acceptable price and security

to customers

Value: The value of Van An clinic base on:

Always keep in mind the Hippocratic Oath,

Team – spirit,

True to ourselves, customers

Respect customers, competitors, ethical values

Learning from failures, competitors and former experiences

3.2 The business environment

3.2.1 The overview of the Healthcare services market in Viet Nam

To protect and improve the healthcare services for Vietnamese, the government has issued some of important policies as a legal framework for the health care sector These policies are presented in the financial policies related to three main financial sources for the medical activities such as the state budget, hospital

fees and medical insurance; and other investment policies such as policy on equipment and upgrading medical facilities, training of human resources

The State plays a key role in health investment

The Health sector reforms the finance situations by mobilizing people's contributions to increase financial income The hospital fee policies at all state’s hospitals have contributed revenues for the Health sector, reduce the burden on the state budget, and give benefit for all patients Hospital fees help to decrease the government’s budget concurrently increase the financial burden on the poor

To solve this problem, government implements the medical insurances system which is expected to help the poor to have ability to pay for their examination and treatment In fact, the policies for healthcare insurance just satisfy a limited demand of patients Because of the limited fund, the insurance office can only use the average standard for all

The policy on the hospital fees and health care insurance do not catch up with the social motivation Hospital fees just enough to maintain the hospital activities, it

is not enough for the hospital to reinvest machines and human resources From 1 Sept 2012, the new hospital tariff are applied, the Minister of Health and Minister of Finance believe that the new hospital fees will help to improve the services quality at public hospitals

The ratio of beds/people in Vietnam is 20.5 beds/10,000 people It is rather low to compare to 86 in the Republic of Korea and 140 in Japan

Currently Vietnam has 7 doctors per 10,000 people, becoming one of the lowest ratios of doctor, patients in the world

Besides increasing sickbeds and improved treatment, the number of doctors in a hospital also matter in reducing the overload in hospitals HCMC University of Medicine and Pharmacy has training capacity for 6,000 medical students

However, most of the trained doctors prefer to work in big cities than to work in small towns Many doctors in local hospitals lack the knowledge and experience

to handle complicated procedures, never having had the training The shortage could be partially relieved if local health clinics and hospitals were empowered

to receive and treat patients who do not necessarily need to move to city hospitals

Target for medical resources by 2020:

8 doctors for every 10,000 people by 2015 and 12 for every 10,000 by 2020

1.5 pharmacists for every 10,000 people by 2015 and 2 for every 10,000 by 2020

20 nurses for every 10,000 people by 2015 and 25 for every 10,000 by 2020

3.2.2 The overview of the Healthcare services market in Long An province

a Natural conditions and social – economical situation

Figure 3.1: Long An map

Source Long An province official website

Area: 4,493.8 sq km

Capital: Tan An Town

Districts: Ben Luc, Can Duoc, Can Giuoc, Chau Thanh, Duc Hoa, Duc Hue, Moc Hoa, Tan Thanh, Tan Tru, Thanh Hoa, Thu Thua, Vinh Hung, Tan Hung

Geography

Located on the Mekong Delta, Long An is surrounded by Tay Ninh Province and Cambodia on the north, Ho Chi Minh City on east, Tien Giang Province on the south and Dong Thap Province on the west

Long An is divided into smaller areas by a complex network of rives and canals Silt from Vam Co Dong and Vam Co Tay rives has raised the level of the field of Long An This silt makes a good condition for agriculture The terrain is quite flat except some hills and mounds on the north The western area belongs to the Plain of Reeds

Climate: Long An is on tropical monsoon climate The rain season lasts from May to October and the dry season lasts from November to April next year Annual average temperature is 27.4ºC Annual average rainfall is 1,620mm

Economics: agriculture

b Healthcare service market in Long an

05 provincial level hospitals: Long An Hospital, Traditional Medicine Hospital, Tuberculosis and lung diseases Hospital, Mộc Hóa Hospital, Đức Hòa Hospital Distric – level hospital: 11 (Châu Thành, Tân Trụ, Bến Lức, Thủ Thừa, Cần Đước, Cần Giuộc, Đức Huệ, Thạnh Hóa, Tân Thạnh, Vĩnh Hưng, Tân Hưng)

08 medical public centre: Gò đen, Rạch Kiến, Rạch Núi- Cần Đước district; Bình Phong Thạnh - Mộc Hóa district; Đức Hòa medical centre - Đức Hòa district; Hậu Thạnh Đông - Tân Thạnh district; Tan An medical center

Medical station: 183/188 ward(town)

Table 3.1: Statistic of Long An Healthcare system

2005 2006 2007 2008 2009 2010 pharmacist 326 148 171 203 302 291 Medical officers 2310 2291 2472 2403 2573 2796 Doctor 567 552 617 578 611 667 Bed 2074 2324 2705 2807 2807 3332 Pharmacist/10.000

habitants 2.3 1.1 1.2 1.4 2.1 2.0 Nurse/10.000

habitants 16.6 16.3 17.4 16.8 17.9 19.3 Doctor/10.000

habitants 4.1 3.9 4.4 4.0 4.3 4.6 Bed/10.000 habitants 14.9 16.5 19.1 19.7 19.5 23.0

Resource: General Statistics Office

Analysis the determining factors of Long An public healthcare sector

• The facilities and financial resources:

There are 211 medical public centers totally in Long An province with 3332 beds for 1.5 million of population Approximately 23 beds/10.000 people, lower than the average rate of the country 25.5 beds /10.000 people

The low hospital fees cause low income, and non profit for re – investment, buying the new equipments to replace the old or damaged machines/ tools Everything has to rely on the province’s budget and it takes times for the local Health department to approve any request

• The human resources:

4.6 doctors/ 10,000 people

0.2 doctors/ bed

• The local policy:

The local authority has a special policy for graduate doctor is to reward 170mil VND if he/she agrees to serve in local hospitals After 03 years of serving in local hospital, our doctors will have chance to upgrade their certificate, they will

be introduced and sponsored by their organization to learn at postgraduate programs It seems not an attractive policy Graduate doctors will rather to work with no benefit at public hospital in big city than go back to their hometown or provincial hospitals The human resource shortages still a difficult math for the local government to solve Besides salaries, other factors such as poor working environment and inconvenient living conditions in outlying areas have also discouraged doctors from seeking employment far from big cities

While the public hospitals are always crowded, in Long An Hospital, a doctor examines at least 150 - 200 case/ shift in average, with the huge numbers of patient waiting for their turn, doctors really don’t have enough time for each

patient to tell about their situation fully, just look, touch, ask 1 – 2 questions then issue the prescription Each patient has to wait 40 – 60 minutes just to see doctor for just 1 minute In case of they have blood testing, they continue to wait because it is crowded everywhere, from cashier to the laboratory… When overloaded, mistake will happen

Patients with normal symptoms avoid the crowded of hospital by coming to the doctor’s clinic at home at 5.00-6.30 am and 5.00 – 8.00 pm each day for their check up It will be faster, doctors have enough time to ask, to understand fully about the patient situation, but in doctor house, he does not have enough tools that support for his diagnosis such as ultrasound machines, testing machine, X-ray machine or have just 1 machine among these necessary tools Doctors will nominate patient to another places where supply these, and after going somewhere, patient back to the doctor house with the result, then they got the prescription

Some patient look for high quality services, they come to HCMC for skilled doctor, they will have a day off to go to HCMC to examine at some Private medical clinics or well-known hospitals With this kind of patient, money is not their concerns, they looking for high quality services and skillful doctor to ease them

So we can see, Long An province is a potential market with 1.4 million of potential customers, convenient transportations, the public healthcare system is overloaded and lack of skilled staff, the private medical healthcare sector still at personal business level and it is not exploited effectively and professionally…

It is totally a big advantage for Van An to set up its business on Healthcare service in Long An

3.3 The internal activities analysis

3.3.1 Main function: provide services of healthcare as health check – up, examination, treatment, medical tests, image diagnosis supporter as CT scanner,

X ray machine, ultrasound machine; minor surgery for children, adults and the old

3.3.2 Organization structure:

Van An clinic has 07 departments:

Medical examination department Perform medical examinations and therapy process for outpatients

Image diagnosis department

Currently, this department is equipped with modern equipment such as: computerized tomography (CT Scanner), Ultrasound 2D, 3D, 4D, cerebral Doppler ultrasound, color Doppler heart it support for doctors on diagnosis, provide the images as evidence for doctors on cardiology, respiratory, digestive, urinary, neurological, surgical, pediatrics, obstetrics and gynecology, eye, teeth-jaw-face, ear-nose-throat, to ensure for an accurately diagnosis results

Laboratory: Perform technical tests for hematology, biochemistry, microbiology, parasites, molecular biology, immunology for the diagnosis, determine the cause of the disease, monitoring progress in the treatment process

Pharmacy department: provides qualified medicine, chemical and biological, supplies medical consumed materials for outpatient together with information on drugs, appropriate advice to users and monitor the use of their drugs

Marketing department:

Develop the strategic business plan of the company in each stage and implementation of investment projects, planning short-term, medium-term and long-term business plan of the company