Stealing Market Share A Must in Today's Medical Tourism World
The art of healing is as dated as any in the world. Also, the art of healing as a business has been around long enough to determine that the healthcare industry has passed the new product growth stage a long time ago. Similarly, the travel industry has also passed the new product growth stage and is well into the mature stage of that life cycle. Combining the healthcare and travel industry as medical tourism does, suggests also that the medical tourism industry also has surpassed the growth stage of its life cycle.
This is indeed the case; travel for the purposes of healthcare, whether discretionary or mandatory, has been in existence for ages. Stealing market share amongst competitors is a very effective growth and maintenance strategy for the businesses that compete in this industry.
The concept of stealing market share is a sound, proven marketing strategy in the business world. Stealing market share is common in mature markets where the product and/or service being considered has passed the growth stage of a new product and has reached the flat sales stage of a mature product/service.
By the time it has reached this stage, the profit potential has attracted competitors, and the market space is full. Competitors have arranged themselves along and across the price, service and quality spectrum.
They have established or have assigned considerable resources to establishing themselves as the leaders or serious players in the price, service and quality niches. Of course, healthcare and travel industries are no exception.
As the term indicates; stealing market share means that an organization will do the two following things. First, it will attract and retain customers from a competitor. Second, it will attract and retain more customers than it loses to competitors. If, as the marketing strategy suggests, market share theft is occurring, then we can safely assume that the industry is sufficiently mature to warrant and support such strategies.
In medical tourism, the spectrum is similarly occupied and determined by price, service and quality players. The United States represents the only new market growth opportunity, and that itself is fast disappearing as hungry destinations pick up the U.S. market travelers very quickly, thus establishing a stronghold of their own and making it more difficult for competitors.
As previously discussed, on a global scale, travel for healthcare purposes is a steady state industry. The practice has been occurring for so long that the healthcare travel destinations and sources are well established. Rarely does a destination cease to be a viable alternative for healthcare seekers, although it does happen.
For instance, a destination may cease to allocate resources to its medical facilities, and they may deteriorate to an unacceptable level compared to other locations. Or, a destination may experience some civil or other unrest that renders it unpopular for healthcare seekers.
In such rare instances, another destination usually takes the place of the unfortunate destination. Such a destination may be spending money to develop its healthcare and may cease the opportunity presented by the departing destination.
Or, similarly, the new destination may be experiencing particularly prolonged civil calm and stability that render it appealing to healthcare seekers. The long and short of it is that the overall number of travelers seeking healthcare does not change appreciably enough to change the market landscape.
Therefore, stealing market share represents the only growth opportunity for medical tourism destinations. This has created a fierce landscape where countries that dedicate resources to their healthcare industry and to medical tourism marketing are winning and widening the gap between themselves and the other countries.
How does market share theft occur and what are some successful strategies?
The three axes of opportunity are price, service and quality and the way a country or healthcare provider markets its excellence in the chosen area(s). I have been often quoted saying that price is by far the most important product attribute in the medical tourism industry.
However, let’s not confuse what the most important product attribute to consumers is, with what the most important axis of opportunity is in reference to a market theft strategy. Price is the driver that makes medical tourism viable and, therefore, is the most important product attribute.
Without considerable price differential between a destination country’s healthcare and the domestic country’s healthcare, medical tourism is not a viable alternative. However, if a particular destination country has positioned itself as a quality provider, then quality is the most important axis of opportunity for that particular country.
It also goes to say that a market theft strategy will be most successful against competitors who have also positioned themselves as quality providers.
In addition, let’s clarify that the adoption of one of these areas of opportunity by utilizing a positioning strategy does not in and of itself guarantee success. It is the marketing of the provider’s position that is the key to success. Let’s look at the marketing strategies that work in the three areas of opportunity.
For price, the obvious business strategy is to be the “low price” provider. In the event that this is indeed the case, a low price provider must communicate this position to potential customers. The critical success factor in marketing a lowest price strategy is to utilize direct comparison.
Well-designed graphic pieces that demonstrate the price comparison of the strongest competitors in the price market versus the lowest price provider’s price are very powerful. In order to drive home the marketing effectiveness, the advertising is always most effective if the total price is communicated.
This will ensure that word-of-mouth customers pass on the good experience to other consumers. If there are hidden costs due to a lack of transparency in pricing, the word-of-mouth will render this marketing strategy ineffective.
For service, the obvious marketing strategy is to communicate customer service in an innovative way. The outcomes of poor customer service usually manifest themselves as frustration for the customers. Therefore, a marketing strategy that positions a provider as one whose products and services eliminate or avoid frustration to customers will work.
Insurance providers and other providers of mass market products/services are very skilled in the techniques of customer service marketing. However, the marketing of this strategy in order to steal market share can be very expensive.
It takes knowledge of the market and a carefully planned niche strategy to keep costs down. Introducing a TV commercial in a limited market can be very effective if executed well. Similarly, use of a phone campaign can also be very successful.
For quality, the obvious business strategies are to use outcomes to demonstrate quality. For example, a hospital could use the fact that a certain procedure has a high success rate when compared to that of other hospitals. Use of increasing number of procedures is also very effective.
The thinking is that if more and more people are undergoing a certain procedure at a certain hospital, the outcomes must be favorable. Providers should be careful to avoid technical, cumbersome advertising such as that which uses quality certification as its main message.
Whereas the possession of certification is of paramount importance, customers tend to have a difficult time translating a provider’s attainment of a particular certification to their quality of healthcare.
Direct comparison is essential
The common item that ties price, service and quality together is direct comparison. In a mature market where stealing market share is a common business practice, the marketing strategies that utilize direct comparisons most effectively will be the most successful.
Direct comparisons can be accomplished either by directly disclosing the competitor against which the comparison is being made or by concealing the identity of the competitor(s). Both methods have their advantages and disadvantages.
Each method is more effective if the parameters of the competition warrant its use. So, a provider has to be very aware of the market forces that are in effect and should select its method of strategy execution very carefully.
I can’t recall one successful medical tourism campaign that I’ve supervised that has not included direct comparisons either in the advertising or in the communication. Without doubt, a client or customer will ask what the competitors are doing before making a final decision.
Destination countries, domestic countries, hospitals, clinics, spas, dental clinics and other health and wellness related entities who want to occupy competitive space in the medical tourism industry will all have to become adept at stealing market share in order to survive.
Their ability to gain positive ground when directly compared to their competitors in the areas of price, service and quality can result in added revenue and profits. It can also mean the difference between business survival and business failure in medical tourism.
About the Author:
Alex Piper is the President of OneWorld Global Healthcare Solutions, a consulting company committed to creating a worldwide healthcare solution.
With over 17 years experience in Insurance, Marketing and Employee Benefits Management, Alex Piper possesses extensive knowledge of the U.S. Healthcare Market and the influence that Insurance Carriers, U.S. Employers, Hospitals, Physicians, Physician Groups, Healthcare Professional Organizations and Government will have on the next generation of global healthcare.
As an insurance executive at a top Fortune 50 U.S. company, he spent eight years designing employee and customer benefits programs including healthcare programs for the large supplier and distribution partner companies of his employer. He was responsible for creating a benefits program that had over U.S.$140 million in assets and had over 1300 companies enrolled. His latest program grew from zero to $40 million in insurance premiums in less than two years!