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Global Consumers Seeking Medical Tourism Experience
A Unique Segment To Catch
Ms. Candice Ng-Chee
Managing Partner, MetaCore Asia
G-CEM International Partner (Singapore)
www.mcore-asia.com
This article is exclusively written for G-CEM.
The concept of relationship marketing has been around for more than a decade in Asia but it is only in recent years that we see the healthcare industry coming onboard. Increased consumer awareness, knowledge and empowerment had wrestled much control from the supply side. To respond to formidable consumer power, international marketers have been scrambling to update their Marketing Mix Strategies (consisting Product, Price, Promotion and Place - a concept said to be introduced by E. Jerome McCarthy in 1960 ), to encompass a broader perspective.
My earlier whitepapers have discussed some of these broader perspectives to include Plan (such as customer development, differentiation and treatment); People (such as capabilities building and change management); Process (such as touch point management and customer valuation); and Programs (such as experience marketing and social network marketing). This reflection paper hopes to put some of these new age concepts into the context of 'Medical Tourism' in Asia. Consumers' travel across borders for healthcare services has fast became a lifestyle in the recent five years. To respond to this changing landscape, the health care industry has been transforming some of their conventional business practices.
The Rise of Medical Tourism
Estimated at US$40 billion (Peacock 2008), government research had shown that a medical tourist spends an average of US$362 a day, compared with an average traveler's spend of US$144 (April 10, 2006). With notable quality of care, conversant use of English language among citizenry, geographic proximity, accreditation, western-trained physicians, and cost savings - the lure of low-cost, high-quality healthcare in Asia has been attracting more than 1.3 million tourists yearly to key locations like Thailand, Singapore, India and South Korea (April 10, 2006). With a global market of this stature, these nations are pursuing the concept of medical tourism as an economic development strategy. To get a bigger slice of this pie, they have been embracing new concepts and practices, in addition to their state-of-the-art technologies and best-of-breed specialists, to add value to the experience of their globally savvy customers.
The New Global Consumer
Driving the trend of the new global consumer is the emergence of new technologies that has hastened the transformation of the global economy. Real time information unleashed by the Internet; the digital revolution, communications and information technologies; and human impetus such as international mobility, have all contributed to the change in the competitive structure of markets, companies and suppliers, as well as the consumers' attitudes and behaviors. Global awareness and orientation have empowered the well-connected consumers in all facets of their lives - cultural, economic, political, technological, and environmental' (Lodge 1995) - and altered the rules of the game:
Attitudinally, the increased awareness has made an average consumer more discerning (and skeptical) towards the proliferation of sales propositions and marketing communications messages.
Behaviorally, more informed and motivated consumers had also made their impact felt both across the borders and verticals. Empowered consumers are now taking a more active role in their own health management where it used to be moderated by healthcare institutions, pharmaceutical companies and the governments. Access to healthcare information via the internet, growth of self-help groups and expenditure on alternative treatments had ushered the healthcare industry into an age of consumerism (Ouschan, Sweeney et al. 2006). Fueled by cost savings from employers and consumers seeking medical care abroad (Shah, Xirasagar et al. 2008), medical tourism had seen consumers demanding for higher quality services at reasonable prices and at their convenience in the entire healthcare system since (Scandlen 2005).
Emotionally, consumers are continuing to make their sentiments known in self-generated content and social networking sites as these surpassed the mass media as their trusted resource for social shopping. I do not foresee that the heath care industry will be spared from these expressions. In my earlier article on 'CEM, WOM & Buying Behavior' , I have shown you research findings that found how a customer's experience can generate good or bad word-of mouth which in turn affect the buying behavior of other prospective customers. As social network users were three times more likely to trust their peers? opinions over advertising when making purchase decisions' JupiterResearch ; reading product reviews written by other consumers "like themselves" when researching product purchases before deciding to buy the product www.eMarketer.com will be a common practice.
To capitalize on these characteristics, experts believed that management should respond to market opportunities with the right strategies and capabilities; manage the complexity with flexibility (Bartlett and Ghoshal 1998); embrace new technologies and techniques; build long trusting relationships with their customers (Palmatier, Dant et al. 2005); and reconsider community-based health promotion for its promise, performance and potential (Merzel and D'Afflitti 2003).
According to (Epstein Oct 2007) , the growth of the Asian healthcare market has triggered a global era of new priorities and new business model which is focused on speed, specialization and suppleness. For these reasons, organizations that are more agile will naturally be more successful in maneuvering themselves among the more sophisticated consumers.
To facilitate understanding, the figure below had pieced together a picture summarizing the key drivers of globalization; the impact they are making on consumers; key initiatives that organizations in general are taking in adapting to changing consumers' profiles and needs (such as from local to global outlook); and how performance measurements may have to change going forward. Hopefully, you will be able to see the gaps between your current practices and what the consumers really want these days, and consider adopting some of these strategies to help you become more customer-sensitive.
Implications of Global Consumers on Business Practices
Finding your strategic fit ~
Studies had reported that in finding the right concoctions for the increasingly complex international marketing activities, companies often have to trade-off between Standardization (Levitt 1983; Ohmae 1985) and Adaptation (Onkvisit and Shaw 1990; Rosen 1990; Whitelocl and Pimblett 1997; Terpstra and Sarathy 2000) strategies. This is because in reality, groups of customers do have both common and differentiated needs. Thus, as much as you would like to standardize and mass-produce for reasons of economies of scale, bear in mind that it is only by continuously adapting to changing market conditions that you can stay relevant in business.
Enhancing and tailoring your solutions ~
Following more distinctive differences in the cultural backgrounds are expectations of more differentiated experiences. In the healthcare industry where the kinds of medical attention required can be very precise, this is especially so. For instance, consumers have been seeking less emergent and more specific medical services like elective hip and knee replacements, cardiac procedures, heart/organ transplants, cancer treatments, and cosmetic elective procedures (Shah, Xirasagar et al. 2008), just to name a few. To meet expectations for a one-stop medical centre and even more personalized services, private hospitals have been tying up with travel and tourism industry to deliver a total experience. With time and money on the demand side, even doctors - who are the flagship 'products' of the healthcare institutions, are enhancing themselves with US Board certification and domain specialization.
Having a differentiated pricing strategy ~
One of the main reasons why UK patients are going overseas for surgery and medical treatment is that they can save up to 80%, so it was reported in an independent survey of medical tourism prices by European Research Specialists . To strike a balance between low-cost and high-quality medical performance, private hospitals have been responding with a variety of health packages. By outsourcing more routine tasks such as clinical tests and X-rays to more cost-efficient vendors, private hospitals have enabled their medical practitioners to focus their efforts on higher value-added activities (such as diagnosis, consultation, surgery and treatment), and the demands of more discerning customers. In a way, they have been able to circumvent the complex market by exercising flexibility without compromising quality of the delivery.
Leveraging on your customer for promotion ~
The proliferation of media and messages against a plethora of products and services has made the consumers more skeptical. This adds on to the real and present challenge in a managed health care and cost cutting climate where trust and commitment linkages between the provider (physicians, pharmacists, pharmaceutical companies and politicians) and the consumer in attaining satisfaction and loyalty has always been an issue (Epstein Oct 2007).
To overcome this challenge, medical tourism has been turning to a multimodal approach consisting transactional and relational models of communication such as Word-of-Mouth (and ?Mouse?), Customer Advocacy, Consumer On-line Communities, and On-Demand 'one-click' access to information 'anytime anywhere anyhow' - to market themselves. Better known as Relationship Marketing, the concept is well supported by empirical research spanning 1983 - 2006 (Berry 2002; Palmatier 2008; Das 2009) to positively affect performance across a broad range of linkages tested (Palmatier 2008), and in producing long-term relational outcomes (Hennig-Thurau, Gwinner et al. 2002). It is about time for healthcare firms to learn to direct marketing activities 'towards establishing, developing, and maintaining successful relational exchanges' (Morgan and Hunt July 1994). As 'health' is a highly sensitive and personal subject, it is therefore pivotal for health institutions to find the right channels to disseminate their efficacy messages.
Bangkok's Bumrungrad International Hospital is one healthcare institution that has let its satisfied customers 'walk the talk'. A leader of the pack, Bumrungrad has received 435,000 patients from over 150 countries in 2006, and won international acclaim for its best known facility for health tourism (Peacock 2008). To provide a seamless experience for its increasingly global customers, the hospital has been working alongside alliance partners (such as hotels and tourism board) to develop specialized packages and a broader spectrum of rehabilitation and leisure activities.
Just as an article in HBR noted, 'Customers who spend the most money aren't necessarily your most valuable... Customers that spread the word about your product or service, and in doing so bring in loads of new customers, are bigger boosts to your organization's pocketbook'. The renowned healthcare institution has been successful in leveraging word-of-mouth from both its customers and alliance partners in its international marketing strategy. Today, Bumrungrad is one of the most sought after hospitals in Asia.
The Future of Medical Tourism ~
At a projected population of 7 billion in 2011, of which about 60% of the people are living in Asia, and mostly graying, the need for medical care could only spiral upwards. As it is, tourist dollar for medical services in Singapore and Asia has been increasing exponentially. It will not be long before cross borders' search of health care services overtake the bulk of sales turnover from domestic business for most of these nations. A case in point, healthcare groups in Singapore in the likes of Raffles Medical Group and the Pacific Healthcare Group are already capitalizing on their brand values and captive customer base to set up subsidiaries in Hong Kong, China and India to serve the lucrative markets.
Taking a leaf from the book 'Return on Customer - Creating Maximum Value from Your Scarcest Resource' (Peppers and Rogers 2005) - customers as a finite number, nevertheless are also getting scarcer than capital. Hence, keeping them for as long as you can (loyalty), growing them as big as you can (life time value), and serving them as cost-effectively as you can (profitability), will be the mantle of management today.
Medical care is perhaps one of the most highly skilled and personal, high-risk yet high-reward, high-tech yet high-touch industry. Organizations that can harness the consumer's perspective in the development and execution of their plans, processes and programs are most likely to benefit from the relational capital and equity streams with customers and channel partners (Webster 1992; Sarkar, Cavusgil et al. 2001). The global consumers may have driven medical tourism in the early stages, but the future now lies in the hands of the organizations that will be setting new standards for their competition.
Candice conducts executive workshops on 'Conceptualizing Effective Relationship Marketing Strategies' that builds customer's trust and advocacy.... Overview
References:
(April 10, 2006). Medical Tourism, Asia's Growth Industry. Monitoring Online Travel, Hospitality Industry and Internet Marketing News. Singapore.
Bartlett, C. A. and S. Ghoshal (1998). Managing Across Borders - The Transnational Solution, Harvard Business School Press.
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Das, K. (2009). "Relationship Marketing Research (1994-2006)." Marketing Intelligence & Planning 27(3): 326-363.
Epstein, R. J. (Oct 2007). "Growth of the Asian Healthcare Market: Global Implications for the Pharmaceutical Industry." Nature Reviews - Drug Discovery 6.
Hennig-Thurau, T., K. P. Gwinner, et al. (2002). "Understanding Relationship Marketing Outcomes: An Integration of Relational Benefits and Relationship Quality." Journal of Service Research 4(3): 230.
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Morgan, R. M. and S. D. Hunt (July 1994). "The Commitment-Trust Theory of Relationship Marketing." Journal of Marketing 58: 20-38.
Ohmae, K. (1985). Triad power: the coming shape of global competition. New York: The Free Press.
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Peacock, L. (2008). Medical Tourism in Asia. SmartTravel Asia.
Peppers, D. and M. Rogers (2005). Return on Customer - Creating Maximum Value from Your Scarcest Resource, Marshall Cavendish.
Rosen, B. N. (1990). Global products: when do they make strategic sense? Advances in International Marketing.
Sarkar, M. B., S. T. Cavusgil, et al. (2001). "The influence of Complementaty, Compatibility, andRelational Capital on Alliance Performance." Journal of the Academy of Marketing Sciences 29(4): 358-73.
Scandlen, G. (2005). "Consumer-driven health care: Just a tweak or a revolution?" Health Affairs 24(6).
Shah, K. Y., S. Xirasagar, et al. (2008). A Qualitative Study of Current Status and Emerging Trends of Medical Care Outsourcing. Public Health Without Borders APHA 136th Annual Meeting and Expo. San Diego, California.
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Webster, F. (1992). "The Changing Role of Marketing in the Corporation." Journal of Marketing 11(1): 18-23.
Whitelocl, J. M. and C. Pimblett (1997). "The standardization debate in international marketing." Journal of Global Marketing 10(3): 45-66.
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About the Author
A specialist in Customer-based strategies, Candice?s domain expertise includes Customer-centric Strategy and Roadmap Development; Voice of Customer Research; Customer Segmentation; Needs Differentiation; Customer Experience Design; Customer Development; Relationship Management, Social Marketing and Advocacy Marketing. Known for her passion and professionalism in these areas, Candice is a much sought-after consultant and coach by top MNCs in the region.
Dedicated to promoting best-in-class Customer-based Strategies for companies in Asia, Candice also contributes her expertise regularly to the CRM Communities in China and Asia through whitepapers, workshops and speeches. With a strong belief that Customer-centricity is one of the ways to value creation and a virtuous business cycle, Candice focuses most of her works on the building of core competencies that strengthen company-customer relationships. By pursuing a Doctorate Degree with special interests in Relationship and Social Marketing, she hopes to enhance the wellbeing of both the business and social communities. |
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