Executive Summary
This marketing plan illustrates the various activities that Al Okhdood Hospital will undertake in the course of introducing a new line of service, the cardiology department. The new department will contribute towards improvement in the firm’s ability to meet its clients’ health needs and expectations. The new line of service is also aimed at improving the firm’s competitiveness and hence its success in an industry that is increasingly becoming competitive. A comprehensive analysis of the hospital’s current situation is conducted by outlining the relevant background information such as its vision and mission statements. The objectives for establishing the new line of service are clearly outlined. A comprehensive evaluation of the prevailing market situation is also conducted. This has been achieved by incorporating two main models which include the PESTEL and SWOT model. A detailed marketing strategy that the firm will adopt in the course of launching the new line of service is illustrated. Additionally, a financial projection detailing the costs to be incurred and the projected gains by launching the new line of service is illustrated. Finally, the various actions, that will be undertaken to ensure that the project is completed, are outlined.
Background information about Al Okhdood Hospital
Al Okhdood is a private hospital that operates in Saudi Arabia. The hospital has established several outlets in the country. However, its headquarters are located in Riyadh. The firm has been in operation for 15 years and has been very successful. Over the years it has been in operation, the hospital has managed to position itself optimally in the Saudi Arabian health care industry. One of the factors that have contributed to the hospital’s success is its commitment to providing unique healthcare services. In the course of its operation, the hospital offers a wide range of inpatient and outpatient services, ambulatory services, and special care services. Some of the inpatient services offered include general surgery, urology, gynecology, ENT, internal medicine, ophthalmology, pediatrics, and orthopedics. On the other hand, ambulatory services include radiology, laboratory services, and pharmacy.
The hospital is equipped with state-of-art health care technologies to develop the level of satisfaction received by its clients. Some of the facilities that the firm has incorporated include modern theaters, intensive care units, a laboratory, and a radiology unit. With a bed capacity of 200 individuals, Al Okhdood Hospital has been able to satisfy its clients’ needs. In addition to health care facilities, the hospital has also incorporated a hotel segment that offers outstanding hotel accommodation to clients. This has significantly enhanced the hospital’s ability to meet its customers’ needs and expectations.
Despite the hospital’s commitment to providing a wide range of inpatient services, the firm has not managed to achieve this goal. One of the inpatient services that are currently lacking amongst its inpatient services in cardiology.
Vision and mission statement
Al Okhdood Hospital intends to position itself as a health care facility that is committed to providing its clients with high-quality, affordable, and holistic health care services. Additionally, Al Okdhood hospital intends to position itself as an organization that provides health care services to both local and international customers. The hospital’s operation is guided by several values which include transparency, equality, patient focus, teamwork, compassion, and quality.
Objectives
To improve its competitiveness, Al Okhdood Hospital intends to establish cardiology departments that will enable the firm to achieve the following objectives.
- To position the hospital as the preferred health care institution in Saudi Arabia.
- To develop a high level of customer satisfaction by providing diverse inpatient services. Incorporating cardiology services will enable the hospital to meet the customers’ expectations. Failure to meet customers’ expectations results in a high level of customer dissatisfaction.
- To increase the hospital’s level of profitability with a margin of 20% within one year of its establishment.
Current market situation
In the course of their operation, firms in different economic sectors are affected by changes that emanate from the external business environment. Thus, organizations’ management teams need to develop a comprehensive understanding of their firm’s external environment (Stahl, 2004). Understanding the prevailing market situation is significant in Al Okhdood’s Hospital’s effort to develop its competitive advantage. This arises from the fact that it will be able to formulate effective hospital strategies and policies that will enhance its ability to survive in an environment that is increasingly becoming unpredictable and dynamic.
Some of the main sources of changes in the business environment include the political, economic, social, technological, and legal environments. To effectively understand these environments, one of the models that firms’ management teams should consider is the PESTLE model. The analysis below illustrates a summary of the political, economic, social, technological, and legal environments with specific reference to the Saudi Arabian health care industry.
Political environment
Saudi Arabia is characterized by a relatively high level of political stability. The stability has emanated from the adoption of the monarchy system of governance. The political stability enjoyed in Saudi Arabia has led to a decline in the level of political risk. Therefore, both domestic and foreign investors can undertake their investment within the country.
To promote economic growth, Saudi Arabian government is increasingly incorporating the concept of liberalization. As a result, intense government regulations on various sectors will be eliminated. This presents an opportunity for hospitals to incorporate policies that will enhance their operational efficiency. The Saudi Arabian government has also incorporated a policy aimed at promoting investment in the sector. The policy entails providing potential investors with the necessary funds (US-Saudi Arabian Business Council, 2009).
Economic environment
Radomski and Trombly (2008) think that a country’s economic environment affects the performance of hospitals. This arises from the fact that it impacts the level of demand, profitability, and the cost and price structures adopted. Over the past decades, Saudi Arabia’s economic growth has been on an upward trajectory. One of the factors that have contributed to the country’s economic growth is its dependence on oil. The country is ranked as the largest oil producer amongst the OPEC countries. The high rate of economic growth in Saudi Arabia’s oil and non-oil sectors has led to increased job opportunities. Currently, most consumers can afford premium health care services. Therefore, there is a high probability of the new line of service succeeding.
Socio-cultural environment
Currently, patients are increasingly becoming more concerned with the quality of health care they receive. According to US-Saudi Arabian Business Council (2009), most citizens in Saudi Arabia increasingly prefer to pay more to receive professional health care. This presents a unique opportunity for Al Okhdood Hospital to increase its profitability. To successfully exploit the socio-cultural changes in Saudi Arabia, Al Okhdood needs to ensure that it develops its competitiveness about capability and competence. One of the ways through which the firm can achieve this is by hiring qualified personnel to work within the cardiology department.
Technological environment
Hospitals are increasingly integrating new technologies to develop their competitiveness. This trend has emanated from the fact that the nature of technology in a hospital has an impact on the quality of services offered (Srinivasan, 2013). Firms dealing with the development of various hospital technologies are increasingly investing in research and development. According to US-Saudi Arabian Business Council (2009), leading information technology companies are shifting their focus to Saudi Arabia in the process of testing new devices developed. An example of such companies includes General Electric which has ventured into the Saudi medical industry (US-Saudi Arabian Business Council, 2009). The objective of such investments is to enhance the effectiveness with which health care providers meet their clients’ needs and expectations.
To improve its competitive advantage in the provision of outpatient services, Al Okdhood Hospital will be required to invest in emerging technologies. Incorporating such technologies will significantly contribute towards improvement in Al Okdhood Hospital’s ability to meet the patients’ expectations. The hospital will be able to offer personalized cardiology services.
Legal environment
All activities within the Saudi Arabian health care industry are regulated by the government through the Ministry of Health. The Ministry requires all firms operating within the industry to be fully registered. New establishments within health care facilities must gain approval from the government. The approval is necessary to ensure that all firms within the industry comply with the laid down rules and regulations.
Competitive environment
The Saudi Arabian health care industry has undergone significant growth over the past few decades. The growth has emanated from an increment in the number of investors venturing into the industry. From 1979 to 2006, the number of private hospitals increased from 28 to 123 hospitals (US-Saudi Arabian Business Council, 2009). Currently, the Saudi Arabian health care industry is ranked as the largest market within the Gulf Cooperation Council. According to Kotler, Shalowitz, and Stevens (2008), there is a high probability of the Saudi Arabian health care market undergoing significant growth in the future. The growth will emanate from an increment in health care needs within the country. Increment in health care needs in Saudi Arabia is an indicator that there is a high probability of new investors entering the market. Consequently, the intensity of competition will increase. An increment in the number of health care providers in Saudi Arabia is a threat to Al Okhdood Hospital’s success.
SWOT analysis
The chart below illustrates Al Okhdood Hospital’s strengths, weaknesses, opportunities, and threats.
Marketing strategy
Considering the dynamic nature of the Saudi Arabian health care industry, it is fundamental for industry players to ensure that they incorporate effective marketing strategies (Kotler, Shalowitz & Stevens, 2008). To successfully introduce the new line of service, Al Okhdood Hospital has incorporated a comprehensive marketing strategy. The strategy is comprised of various marketing mix elements which include product, place, pricing, promotion, place, physical evidence, people, and process. These elements are described below.
Product strategy
According to Fortenerry (2010), health care service providers need to ensure that they offer satisfactory services. In the course of introducing the new cardiology service, Al Okhdood Hospital will ensure that the cardiology department is equipped with modern facilities. Additionally, the hospital will also ensure that the personnel working within the new department are highly qualified and experienced. This will enable the hospital to be effective in offering high-quality and personalized health care services. Considering the dynamic nature of the health care industry, Al Okhdood will institute a comprehensive employee training program. The program will be aimed at developing the nurse’s and doctors’ skills and knowledge.
Pricing
In its pricing strategy, Al Okhdood will incorporate a comprehensive pricing strategy. The pricing strategy will be comprised of several strategies which include penetration and psychological pricing strategies. The firm will conduct competitor market research to understand its pricing strategy. This will boost the firms’ effectiveness in setting its pricing points.
Promotion strategy
To ensure that the new service gains sufficient market awareness, Al Okhdood will incorporate a comprehensive promotion strategy. The strategy will entail both push and pull strategies. One of the push strategies that Al Okhdood Hospital will employ entails entering into a contract with renowned health care insurance companies in Saudi Arabia. The insurance companies will be required to promote the new service line. On the other hand, the pull strategies that the firm will employ include the use of traditional and emerging market communication strategies. The main traditional marketing communication methods that the firm will use include advertising, sales promotion, and public relations. Different advertising mediums which include print media, television, billboards, radio and the internet will be used. About public relations, the hospital will organize health care events to inform the public on the importance of staying healthy and factors that can lead to heart complications.
Place
Accessibility is one of the major issues that a firm’s management teams should consider in their operation (Kotler, Shalowitz & Stevens, 2008). The firm will establish several outlets in different parts of Saudi Arabia to improve accessibility.
Process
In the process of incorporating the new inpatient service, Al Okhdood Hospital will ensure that a high level of accuracy is integrated. This will contribute towards the development of a high level of satisfaction amongst the firm’s clients.
People
Al Okhdood Hospital appreciates the fact that its success is dependent on the loyalty developed by its clients. To develop a high level of customer loyalty, Al Okhdood Hospital will ensure that its workforce depicts a high level of professionalism in the course of executing their duties. The firm will achieve this by ensuring that only qualified and experienced candidates are hired to work in the new department.
Physical evidence
The hospital will ensure that the new cardiology wing is effectively maintained to promote client satisfaction. One of the ways through which the firm will achieve this is by maintaining the department clean.
Financial projections
By establishing the new service, Al Okhdood’s Hospital management team projects that the firm’s profitability will increase significantly. It is expected that the firm’s profitability will increase with a margin of 20% within one year after the establishment of the new line of service. To achieve this, the hospital’s management team has identified several cost items associated with the establishment of the new line of service. Consequently, the hospital’s management team has allocated $ 5million in its annual budget to cater for the introduction of the new line of service. The chart below illustrates the various cost items associated with the establishment of the cardiology department.
Action program
Upon establishing the new line of service, Al Okhdood’s hospital management team will ensure that it is effectively implemented. Consequently, a comprehensive action program has been developed. The action program details the various activities that the firm will undertake to ensure that the new line of service is successfully established. One of the elements that will have been included in the program entails the appointment of a project manager. The project manager will be charged with the responsibility of ensuring that all the activities involved in the establishment of the cardiology department are effectively undertaken.
To increase the probability of the new project succeeding, the project manager will incorporate the concept of benchmarking. This will be attained by setting several milestones that should be accomplished within a specific timeframe. Moreover, a continuous review of the project’s progress will be undertaken to enhance the project’s success. Through the reviews undertaken, the project manager will be able to undertake the necessary adjustments hence increasing the probability of the new line of service succeeding.
References
Fortenberry, J. (2010). Healthcare marketing: tools and techniques. Sudbury, MA: Jones and Bartlett Publishers.
Kotler, P., Shalowitz, J., & Stevens, R. (2008). Strategic marketing for health care organizations; building a customer-driven healthcare system. New York: Jossey Bass.
Radomski, M., & Trombly, C. (2008). Occupational therapy for physical dysfunction. Baltimore, MD: Wolters.
Stahl, M. (2004). Encyclopedia of health care management. New York: Sage Publications.
Srinivasan, D. (2013). Impact of health care informatics on quality of patient care and health services. New Delhi: CRC Press.
US-Saudi Arabian Business Council: The medical sector in the Kingdom of Saudi Arabia. (2009). Web.