Sunday, February 25, 2007
Value marketing in healthcare and pharma
Peter Drucker the father of modern management science, always exhorted management professionals to ask oneselves the ‘fundamental questions’:
1) What is our business?
2) Who is the customer?
3) What is of value to the customer?
4) What will our business be?
5) What should our business be?
It is all interconnected!
Today in the ‘global village’, where the information float is collapsing and connectivity is changing the way we gain access to healthcare; its about time to revisit the above fundamental questions. In India institutions like Narayana Hrudayalaya are redefining healthcare: they have adopted telemedicine in a big way to deliver fine diagnosis to far off states like Assam. Hospitals like Wockhardt and Manipal are cashing on the medical tourism boom with fantastic patient centric experiences. Trends like ‘hospotels’ are happening – where hospitals offer fine cuisine cum wellness experiences for patients and care takers. Forget sickness management; there is a momentum towards hospitals becoming wellness centers. The movers and shakers of the Indian healthcare world like Ms. Sangeeta Reddy ED of Apollo Hospitals are talking about re-engineering the healthcare system to move from an illness-based model to a wellness-based model.
The services sector is vibrant
Another major trend in the global society is the emergence of the services economy in contrast to the product led economy. The services economy is the most vibrant part of the economy and one cannot just afford to overlook it. We should remember that every product driven company is realizing that the economy is increasingly becoming a services led economy. For instance, companies like IBM have mapped and are appreciating that corporate strategy should take in to account the major global shift from products driven to a services driven strategy. Hence to draw more value, mingling services with a product driven strategy for companies is inevitable. After all it is clear that ultimately a consumer is looking for value and the best of value can be delivered through a blend of products and services.
So how can typical pharma companies exploit and offer better value to doctors and patients in the above scene?
To further examine the possibility of blending products with services for a better value offering to prospects and customers, let us examine the healthcare continuum: on one end we have R & D – research focused on NDDS (Novel Drug Delivery Systems) and NCEs (New Chemical Entities). Then we have companies that are in to manufacture and /or marketing of generics. These pharma manufacturing firms may be in to manufacturing of bulk drugs or formulations or both. In the services side we have wellness centers, ayurvedic holistic healing centers, clinics, nursing homes, diagnostic centers, hospitals, insurance services and specialty centers.
Today most typical pharma firms operate in certain segments of the healthcare continuum described above. Merck excels in R & D plus marketing. Merck may outsource much of its manufacturing too. Similar is the Pfizer business model. Many typical Indian companies excel in offering generics of high quality at an economical price. In terms of research they are in the back streets. Now are pharma companies versatile enough to expand their presence to other segments of the healthcare continuum? If they are, then they are in a better position to offer augmented value to prospects and customers. Such pharma companies also have the potential to CREATE AN ECOSYSTEM of healthcare where in they can offer value added services and products for better quality revenues and stronger brand equity. Yes, there are atleast two such strategically positioned superior value pharma companies in the Indian milieu: WOCKHARDT & HIMALAYA.
Let us take up the interesting case of Wockhardt (www.wockhardt.com)– a pharma major ranked in the top 20 firms of Indian pharma industries. This company markets antihypertensives, antidiabetics including insulin, antibiotics and nutritional supplements. Wockhardt is regarded as a high quality manufacturer and an innovative and aggressive pharma biogenerics marketing company. Interestingly, along with substantial exports & domestic business, Wockhardt, has a string of high quality corporate hospitals. This company excels in healthcare manufacturing and marketing of products and services. This is where some corporate planning can consciously create a blend of products and services; thereby create a WOCKHARDT HEALTHCARE ECOSYSTEM and thus add value to prospects and customers (both doctors and patients).
Here are some approaches to this winning combination of products and services from the WOCKHARDT HEALTHCARE ECOSYSTEM:
1) Develop and expand in to a chain of Wockhardt retail stores offering pharma-healthcare goods-sport & fitness equipment-wellness products
2) These stores should also have an association with the Wockhardt corporate hospitals
3) Wockhardt corporate hospitals currently have a sickness focused business model – move to the preventive and wellness concept
4) Develop Wockhardt spas, massage wellness centers and other wellness concepts
5) Expand in to top class diagnostic and clinical facilities – Wockhardt diagnostic labs
6) Setup special paediatric centers of Wockhardt for vaccination and other value added services
7) Encourage doctors and patients to patronize the Wockhardt retail, diagnostic, hospital – wellness centers as part of the Wockhardt’s extended augmented healthcare delivery system – the Wockhardt healthcare ecosystem
8) Offer interesting schemes like the ‘antibiotic assurance scheme’ (detailed as follows) -
a) Analyse how many times a year a person may want an antibiotic course per year (may be 6 times a year in the worst cases?) to compute the nominal premium
b) Corporates and other individuals can register to this scheme
c) Thus, if an employee of a corporate or a registered member (who has a card) gets a prescription for a Wockhardt antibiotic brand the member can get a course of the antibiotic for free (since he has paid the nominal annual premium upfront or the cardholder’s employer company has paid the antibiotic assurance premium). Of course, this scheme is open to the prescriptions generated from Wockhardt hospital doctors and may be the prescriptions be filled only at predesignated hospitals/pharmacies.
d) Alternatively, the member can enjoy massive discounts on purchase of the antibiotic
e) The major benefit for Wockhardt is that it can avoid brand substitution, which is a major problem in the antibiotic segment as there is cut throat competition in this market. Further, this will foster full compliance to an antibiotic prescription and this will result in better purchases. Moreover the ripple effect in strengthening of the corporate and brand equity of Wockhardt is invaluable.
9) Develop branded (using umbrella branding concept) ‘Wellness products’ from Wockhardt that can be taken up for exclusive OTX promotion (ie promotion to doctors, chemists, and end users). This will enhance the value of purchases in the Wockhardt healthcare ecosystem.
All in all, the above WOCKHARDT HEALTHCARE ECOSYSTEM will help develop greater value for the company WOCKHARDT and the consumer.
Thus, in the hectic Indian pharma scene, one more front opens up: A HYBRID OFFERING OF PRODUCTS AND SERVICES for better value delivery to the customer.
(- Sunil S Chiplunkar, Marketing Manager, Himalaya Zindel division, Bangalore. Mob. 9980800023) (this post is dedicated to VINT CERF, VP of Google and one of the founders of the Internet. VINT has said that information sharing is important ie the open source concept. This (WOCKHARDT) HEALTHCARE ECOSYSTEM concept is my open source concept dedicated to Vint Cerf). www.pharmaceuticalshealthcare.blogspot.com