The target market for the proposed cardiac center is Dammam city in Saudi Arabia. This is given the fact that there is lack of a cardiac center in the region. The proposed cardiac center will offer services addressing cardiac problems and complications, advice to patients and simple surgical procedures to people of all ages. Even if the new cardiac center will be located at Dammam city, it is noted that it may attract patients and professionals from other parts of the country.
This report is going to address issues surrounding the establishment of the proposed cardiac center in the city. The report will cover several aspects of this new venture.
Dammam is a small city in Saudi Arabia. It is the capital city of Eastern Province in this country. According to Armstrong et al. (2009), the town is the economic hub of the world’s most oil-rich region. As far as size is concerned, Dammam is third after Riyadh and Jeddah.
Historians are of the view that the city was initially inhabited by an Al Dossary clan as far back as the early 1920s. The inhabitants were immigrants from neighboring Bahrain. The developments in this region are attributed to the huge oil deposits that were discovered there in the 1940s and 1950s. The oil deposits account for about 25 percent of the total oil deposits in the world.
There is no specialized cardiac center in Dammam city. People are forced to travel for long distances to find such services. The purpose of this marketing plan is to address issues revolving around the setting up of a new cardiac center in Dammam city. It is noted that it is not fair to have patients travel very far in search of healthcare. This is the idea behind this proposal. It is aimed at addressing or alleviating the problems that people in this and surrounding regions face trying to access quality health care.
The proposed cardiac center is named Tabibu Hospital. Tabibu hospital is a small hospital located at the center of Dammam city. Although it is a small facility, it is noted that Tabibu Cardiac Center will have the facilities that are needed to cater for the health needs of the population in the city and surrounding areas. The hospital will have 50 beds which even though not sufficient for the large population of the city, will help in providing the much needed treatment for cardiac conditions.
The hospital is expected to serve the whole of Dammam city as far as cardiac cases are concerned. So far, the premises are ready. This means that the investors already have the physical facilities needed to establish the hospital. The organization has received funding from two donors who are willing to support the establishment of the facility. Additionally, the government has agreed to provide a loan through the Saudi Arabian National Bank.
The mission statement of this cardiac center is: Provide quality and affordable services to the residents of Dammam and surrounding areas with the aim of reducing the number of cardiac complications and mortality rates.
The cardiac center intends to offer a myriad of services both to the patient and to the community in Dammam and Saudi Arabia as a whole. Tabibu hospital intends to offer services touching on cardiac consultations and advice, Electro- Cardio Graph examination (ECG), diagnosis of cardiac problems, cardiac catheterization, pacemaker insertion and other basic surgery services.
It is noted that consultation and offering advice to the patients and to the members of the community as a whole are the major services that will be provided by expert cardiologists. The cardiac center has five of them already engaged (Hiam, 2009). Advice will be given by the doctors and the nurses during patient visits.
Diagnosis will only be done by a cardiologist after thorough examination. The thorough examination will include an ECG and consultations with other doctors. The organization already has an ECG machine which is operated by an expert in this field. This means that operating the machine is not a problem. It is however noted that there is a pressing need for a sophisticated and ultra- modern machine for the hospital. There is need for another person or another specialist to assist the current machine operator.
Catheterization, insertion of pacemakers and other minor surgeries will be done by the team of cardiologists, anesthetists and surgical nurses. It is noted that the cancer center can use specialists from other hospitals. Anesthetists from other hospitals will be used in case the three employed by the organization are occupied or unavailable. There is also the need to have a day bed facility in the cardiac center.
The center will have a day bed for the less serious patients who need supervision for a day or a few hours. However, there will also be facilities for those patients needing closer attention for a prolonged period of time. The 50 beds will be used for patients who need supervision for a longer period of time. The cardiac center will also work together with other hospitals in dealing with very serious cases. The very serious cases will be referred to larger hospitals with better facilities.
There is need to transfer patients from this hospital to another and to bring the patient to the hospital in case of medical emergencies. For the purposes of emergency and transfer of critical patients, the cardiac center is planning to buy an ambulance soon after opening. Plans are also underway to acquire land where the cardiac center can construct a bigger hospital.
The number of beds will need to be increased to about 100 in 3 months. Another service that will be offered by the proposed Tabibu cardiac center will be open heart surgery. This is another service that the center would like to offer at least a year after obtaining land.
The services are to be charged as follows:
Consultation and advice – $90
ECG – $100
Cardiac catheterization – $200
Pacemaker insertion – $300
Basic surgery – between $ 900- $ 2000
These charges are inclusive of bed where applicable. The drug charges will be determined separately after prescription. The prices are however subject to review after more research is carried out after Tabibu begins offering services. This means that the prices can be reviewed either upwards or downwards depending on the findings of the assessments carried out. The charges may vary depending on the prevailing market conditions that will determine the cost of inputs such as drugs used during operation.
According to recent census records, 30% of Dammam population is composed of two major groups. The first group is the very old who are aged 70 years and above and the second group is the very young aged 10 years and below. 5% of the population is made up of obese people and most men are smokers. All these are factors that predispose the population to a myriad of cardiac problems (Gilligan & Wilson, 2009).
All of these people are vulnerable to cardiac conditions such as heart failure as a result of their age and their lifestyle. There is evidently the need for a cardiac center to cater for the populations’ cardiac needs.
This is through the provision of advice, treatment and early diagnosis of cardiac conditions so that prompt treatment can be provided. The most vulnerable members of the population need periodic screening to ensure that cardiac conditions are detected early enough. This is the only way that the conditions can be dealt with effectively.
Since most of the inhabitants of Dammam city are middle working class, it is noted that they will be able to pay for the services offered by the cardiac center. This is keeping in mind the fact that the cardiac center will save them the trouble and inconveniences of traveling to other places to search for medical care. However, just like any other society, Dammam city has a number of people who are poor.
For the minority poor population, the cardiac center has liaised with various government agencies so that they can be offered quality services at subsidized prices. This collaboration with government agencies and other stakeholders will also go a long way in offering emergency services due to the close location of our services to the consumer. For instance, if a person falls sick at night, it will be easier to bring them to the hospital which is closer than flying them all the way to other facilities across or outside town.
In terms of quality of service, the hospital has qualified members of staff in all the fields. There are also a few positions open for the people in Dammam city as a token of appreciation after they accepted to host the cardiac center. Currently there are no direct competitors in this city apart from a small training center which occasionally offers such services.
Advertisement will be done to sensitize the people on the availability of services. This is especially so considering that many people are unaware of the availability of services in the hospitals. This is despite of the critical role that the cardiac center will play in their lives. Factors that usually affect the market of other services will not apply in the case of this hospital.
For example, factors like seasons will not affect the market as it does not determine in any way when and where people get sick. There is no correlation between falling sick and season. This is unlike other services such as tourism which are dependent on weather patterns in European and American nations.
However, the poor people and those in the rural areas may find it difficult to reach the hospital. To address this problem and avail the services conveniently, the hospital plans to offer mobile clinics where basic services like advice and consultations can be provided.
With time the hospital will seek for funding from some of the stakeholders so as to open branches in nearby towns. The management has also consulted one of the hospitals in the region which offers mobile clinics. This is to enable Tabibu cardiac center to join them on their excursions. This will definitely help in reaching the market (Kotler et al., 2008).
As mentioned earlier in this report, there is no cardiac center in Dammam and thus competition will be from other cardiac centers located far from Dammam city. Location is thus an advantage on the part of the cardiac center. It is noted that in cases of emergencies, the first choice for the residents will be Tabibu Hospital.
From the local authorities, the management got information that people are not happy with the services offered by the hospital near this city. As a result, the people are forced to travel very far in search of medical services. The opening of a cardiac center near them will be welcomed.
It is also noted that culture or the people’s way of life can be a source of competition. However in this case, culture as indirect competition will not be there. But several legal requirements are yet to be met (Godin, 2009). That is being taken care of by the insurance company.
The Environmental Impact Assessment that has been done in the area showed that expansion will be problematic. The report does not provide for the expansion of the hospital as it will increase the amount of waste emitted into the environment.
As a result, the cardiac center plans to use the local council in finding a bio- digester so the waste problem can be addressed once and for all. The hospital could face socio- economic competition from a small percentage of the population and the significance of this is possible decline of profits (Gilligan & Wilson, 2009).
As already indicated in the paper, there is a training college within the area that should be taken into consideration when analyzing competition. The training college in the area may be an indirect source of competition. The college trains cardiologists and sometimes holds mobile clinics where they look at some of the cardiac cases before transferring them to their main hospital in a nearby city.
The training college offers transport to the patient but they do not pay for the treatment. This is the major weakness that Tabibu hospital will capitalize on probably through subsidized fees. After carrying out independent research, Tabibu hospital has realized that most cardiac cases are serious. To this end, the hospital has a location advantage over the competitors (Hiam, 2009).
The new cardiac center project is likely to succeed because its strengths surpass its weaknesses. It involves the introduction of services that are not currently available and hence acceptable to the community. The project brings with it accessible services.
The hospital has a strong and positive relationship with the relevant authorities that deals with the poor members of the society. This will help in off- setting the medical bills of such patients. The hospital also offers high quality services with the help of highly qualified personnel. The hospital has technologically advanced equipments (Kotler et al., 2008).
The management however foresees a few difficulties in some areas. This is for example difficulties in reaching people in the rural areas, access to capital, pricing and space. The latter is to allow for the expansion of the facility. The hospital has about 30% of the current budget and needs a lot of money to be able to offer good services. The rest of the budget (70 percent) is yet to be financed.
Price is influenced by both internal and external factors. Internal pricing variables are expenses involving capital, research, labor, distribution, utilities and all other costs (Armstrong et al., 2009). According to Godin (2009), capital is the amount of money invested in the business and all assets that the hospital owns. This is for example all the machines that the hospital will buy. Labor in this case will include the total amount of time that staff members spend in the hospital including overtime.
Kotler et al. (2008) says that distribution is the ways through which the services will reach the consumer. This is for instance hiring people to disseminate information about the services offered through word of mouth, media advertising among others. Utilities in this case are bills that are incurred through mandatory expenses like water, electricity, transport, advertising for business promotion, purchase of daily supplies like syringes, bandages and telephone bills among others (Phillip, 2009).
External variables to be considered during pricing include prices of the competitors in the market. With time, prices are bound to be revised depending on the market’s growth rate. However, customer needs will be put in mind so that the hospital does not push customers away due to overpriced services (Godin, 2009).
The hospital is not intending to incur losses. There are deliberate efforts to price services in a way that will make the consumers comfortable while at the same time making it possible to smoothly run the hospital and offer quality services.
It is for this reason that the hospital has proposed strategies to price products (Kotler et al., 2008). In the process, it will be able to know whether it is making a profit or incurring losses and take necessary actions. This is a process that will take some time and needs a lot of research and careful planning which will be done by qualified marketers.
For the sake of simplicity, the management could trust the leader and price products in the same way. In such a case, it will find out how much the best and most popular hospital charges for similar services and use the same criteria. They probably followed the same procedure during pricing of their products. Tabibu could also price the products higher than the competitors in order to understand how much the customers are willing and able to pay.
It should however be noted that pricing services higher or lower than the competitors will be for a short period as a way of testing the market. There will be review of prices after we have properly assessed the market. Basically, the above are just pricing processes but after sometime, the prices will be calculated by multiplying total cost with the mark- up percentage to get the retail price (Armstrong et al., 2008).
This is the way through which the available services reach the consumer or the market (Kotler et al., 2008). In our case, we intend to use various methods ranging from advertising to creating a good image. Advertising will be done by our public relations’ officer through the local media channels, the internet and the local newspaper.
Since our services are to be provided to a wide range of customers, media advertising will be done through television and radio. We are to publish a website containing all the information like the services offered and how to contact us (Gilligan & Wilson, 2009). The prices will however not be stated in the website to avoid being taken advantage of by our customers.
The very first thing that attracts anyone to a product is the image (Hiam, 2009). We are aiming at creating a beautiful logo that will attract our customers especially when doing internet marketing. The same logo will appear on the business cards. The most effective method in our case is to hire marketers who will then spread information about the services offered by word of mouth.
For the purposes of saving on expenses, we will buy supplies in bulk (Godin, 2009). We have located a nearby warehouse where we can store supplies of non-perishables goods like disinfectants, soaps, brooms, bandages and syringes among others. This will help in saving space in the already crammed hospital. The warehouse is in a clean, secure and accessible location.
We intend to use local television networks, local newspapers, leaflets, radio and internet to market our products. Having a healthy nation is the mission of our hospital. The hospital will be located in a quiet suburb in Dammam city. A hotline will be provided so that our staff can go and provide the necessary services or give advice on what to do through the hotline. We need about $ 100,000 for the first year for advertisement.
There will be production of leaflets with information about our services, contacts and location. The leaflets’ and posters’ production will cost about $10,000, newspaper adverts will cost $50000 and the rest will cost approximately $39000 for a whole year. There will be an opening party for the hospital where we will invite the businessmen and offer free cardiac services during the day including the use of public address.
Our market covers the people in the middle and higher classes. About 90% of the population is literate and thus able to understand what we will be offering. We aim at providing quality services at reasonable rates. For the small percentage that is poor, we have a special way of dealing with their payments through the social worker at the hospital. We have spoken to the relevant government authorities and they are willing to help foot the hospital bill of the people who need the service but are unable to pay for it.
It difficult to forecast sales in this case (Hiam, 2009) but it is important so as to know how many employees are required and when. It is also important to determine the combination of promotional mix to be used and supplies to buy. Kotler et al. (2008) suggests micro and macro forecasting as the suitable methods for doing this. Macro- forecasting involves making deductions on what will happen in the market depending on total market price. Micro- forecasting is done on specific services offered.
The above however depends on the availability of information, timing, position of service at the life cycle and accuracy. The more accurate the forecast is the higher the costs. It is hard to make a forecast when a product is on its introductory phase than when it is in its maturity phase (Gilligan & Wilson, 2009).
Precise forecasts can be made when the business has being operating for a long time. A more precise method would be to conduct this at least a year after the commencement of services in order to improve accuracy. We have also planned to make this a requirement at the end of every year to know how far we have gone.
According to Armstrong et al. (2009), there are various marketing strategies. In this case, market dominance is the most appropriate considering our target market of Dammam city population. We can use the 3Cs model developed by Kenich Ohmae (Gilligan & Wilson, 2009) where we focus on the corporation, customer and competitors.
For the corporation (hospital in this case), we strategize with an aim of maximizing our strengths against our competitors. This should be done is such a way that we also consider the cost effectiveness of what our suppliers offer and the customer paying a minimal fee for the services offered.
The next C is for customer who is a very important person to the business. We thus have the responsibility of ensuring that the customer is satisfied in all ways and has a reason to use our services again. The prices of our services will be minimal and the quality of the services high. We will continue to ensure this happens through occasional in- service training of our staff especially those who come into contact with the customers. We will also keep advertising and employ extra members of staff who are skilled.
The next C is for competitors who are the greatest threat to any business. We have done a thorough research on what our competitors offer, how they do it, their strengths and weaknesses. With this knowledge, we can avoid making the same mistakes and capitalize on their weaknesses.
One of the advantages we have over them is that we have concentrated on cardiac services making us able to provide better services. Location is another advantage we have over our competitors. Being in a position to offer services to a customer when needed will go a long way as a market strategy.
After implementing the 3P’s we will then use the 4C’s proposed by Jerome McCarthy in our marketing strategy (Kotler et al., 2008). The first P is for product or in this case, our services. Apparently, products go through a cycle of growth and every marketer should be aware of this. In our case, I would say after intensive treatment and information, cases of cardiac conditions may reduce and we may have to do a service mix to cater for the income.
The next P is for pricing which should be adapted to cater for all areas of the business. Promotion is what is denoted by the next P and this involves advertising, personal selling and other ways of promoting the business. The means of doing promotions should be appropriate depending on the market. The last P is for place meaning that services should be provided when required and where required. The ambulance and hospital van will be used for this purpose. Either one of the two strategies will be used but the first one is more preferable.
Fluctuations are bound to occur due to the nature of our services. From the research carried out, we have concluded that demand is almost impossible to predict. Production will be leveled by volume. This is where we make a record based on which days are busiest and how many patients we expect to serve.
On such a day, we make sure that we have enough staff and perishable and non- perishable supplies. This will ensure smooth operation and provision of services and also reduce wastage in terms of man power and perishable supplies.
We plan to use demand leveling. Here, we can manipulate demand. In some cases, treatment is not an emergency. For instance, a customer who needs the insertion of a pacemaker can take some time. We can ask the patients with certain conditions to be seeing the doctors on certain days.
This way, we save on salaries paid to part time staff members hired only on demand. As discussed above, we will at times use local people in the hospital. Using local labor is cheaper than imported labor. This is given that no costs are incurred in importing it.
Table 1: Simple Budget for Tabibu Hospital for the Year 2011
Doctors’ salary- $195000
Nurses’ salaries- $82500
Other personnel- $95000