Indian Healthcare industry is one of the largest industries large customer base. According to the rating agency, Fitch, the Indian healthcare sector will to double its size to USD 100 billion by 2015 from the present size of USD 50 billion. There are a lot of factors responsible for the growth of this sector – lifestyle related health issues, improving healthcare insurance penetration, government initiatives and increasing disposable income. The Indian industry has witnessed tremendous entrepreneurial activity over the last few decades across the entire value chain as demonstrated by strong growth in its various sub-segments.
In the future, demand for Healthcare services is expected to grow exponentially to aid the growing old age Indian population, with rising incidence of lifestyles diseases, rising incomes and affordability, and increased penetration of health insurance. A global survey on healthcare costs suggests that India spends only 4.2% of its GDP on healthcare, compared to an average of 8.5% globally, and lower than other emerging countries such as Brazil (9.0%), China (4.6%), and Russia (5.4%). In general government-run facilities have inadequate equipment and poor quality, and as a result private players can capitalize on this opportunity.
In the last decade, health awareness and increasing healthcare costs have increased the demand for health insurance in the country, especially from the younger population who are more aware and demand better quality care. An important aspect that has improved the performance of the private hospitals is the branding and the business model with chain of hospitals that has rendered a standard healthcare system across the Indian states. The strong brand sensibility and sensitivity has made the healthcare insurance a burgeoning and potential future market for India. Healthcare education and awareness have led people in the country to take precautionary steps to fight lifestyle and other diseases.
Management of Corporate brand and the increasing demand of the customers has become a priority for the healthcare industry in India. The direct effect of the corporate brand is expected to be on the customer base, talented employee base and the medical traffic (Medical Tourism) in the country.
For medical professionals, a branded hospital becomes the first choice to work in and be associated with. Branding is an experience. It is more than just providing the best-in-class technologies and treatments. Much research has been conducted on the importance of corporate branding and how to brand strategically. However, the importance of corporate branding is still considered as perception of the corporate. The relevance and expectation from the strategic corporate branding is still unanswered. The objective of the project was to understand the role of branding in healthcare industry in India.
The composition of the Healthcare industry in India consists of hospitals, pharmaceuticals, diagnostics, medical equipments and medical insurance. Hospitals and Pharmaceuticals are the top revenue generating subsectors in the Indian Healthcare industry, accounting for 71% and 13% of industry revenues respectively.
The hospital segment holds a major share of the healthcare industry and is outpacing the overall industry growth. The size of the private hospital industry in India is estimated to be around US$25billion as per Assocham and growing at a CAGR of 20%. The demand for hospital services has been consistently increasing in the country, with every class of the society demanding better quality and standards of healthcare.
PORTER’S 5 FORCE MODEL: INDIAN HOSPITAL SEGMENT
The Pharmaceuticals industry in India is also growing due to sustainable growth of Indian economy, healthcare reforms and patent-related legislation. The Indian Pharmaceutical industry is valued at ~US$20billion growing at a CAGR of 15.37% in past 3 year.
SWOT: INDIAN PHARMACEUTICAL INDUSTRY
The Indian Health Insurance industry is valued at US$3billion, growing at a CAGR of ~20% that is expected to reach around US$13billion by 2020. The driving factors for the health insurance sector are raising healthcare expenditure, increasing disposable income, desire for better quality health services and medical care. Health insurance accounts for 20% of the total general insurance industry in India. Information Technology has also been one of the important drivers of growth in the health insurance industry. Several companies are now developing e-platforms such as PolicyBazaar.com and easyinsuranceindia.com which list all the aspects of the health insurance plans and allow consumers to compare, understand and apply for the health coverage online.
The aim of the study was to understand the role of branding in healthcare industry in India. The other objectives were to segment the healthcare industry and find the tangible conclusion for necessity of corporate branding in India and make relevant assumptions, if required, with reasonable explanations. The conceptual hypothesis was Corporate branding in healthcare industry is now imperative with the changing attitude of Indian market.
The major sectors in the healthcare industry – Hospitals, Pharmaceuticals and Health Insurance companies were considered for the study. Role of branding in hospital chains viz., Apollo hospital, Fortis hospital and Wockhardt hospital, pharmaceutical companies viz., Sun Pharma, Cipla and Biocon and in health insurance viz., Max Bupa Health Insurance, Apollo Munich Health Insurance and Reliance Health Insurance were considered.
The company annual reports and data were considered to understand the market position of the company. The news articles published on healthcare branding, speech of the eminent personality in healthcare industry on the market review and branding in healthcare industry and blogs were considered as the major source of the qualitative data collected. The understanding of their brand image and corporate brand reputation was undertaken by the primary follow up with corporate using telephonic interview and online questionnaire and consumer questionnaire survey.
48 Corporate and 60 consumer respondents were involved in the project survey. The newsletters and health magazines articles related to the project were also considered to answer the objective of the project. Insights of healthcare industry and opinion of the corporate were obtained from the blogs and online internet portals such as LinkedIn. Exploratory study was performed to understand the market structure and design and the competitive strategies that the major players in the company follow for the corporate branding. The data was analyzed and conclusions were obtained from the data.
ANALYSIS AND MAJOR FINDINGS
The advertising and promotion of hospitals have started in India over last decade. However the advertising and promotions are not major part of the strategy in industry. The healthcare industry is majorly dependent on the viral marketing and image building. Also the consumers rely on their family doctors, relatives or their own past experience to decide their next visit to hospital. They also compare unconsciously their own perception and the actual service offered in the hospitals.
ADVERTISEMENT OR PROMOTIONAL ACTIVITY OF HOSPITALS
The majority of respondents agreed that they rely entirely on their doctors or physician to recommend the hospitals. Self experience is the next major influencer for hospital visit as depending on their past treatment and services of the hospital their perception and expectations develop for the hospital. The respondents were asked about their opinion for the attributes essential in a hospital. Hygiene is the most important attribute for any hospital.
IMPORTANT ATTRIBUTES FOR HOSPITALS: RESPONDENTS WITH INDUSTRY OPINION
The respondents gave their opinion on the major attributes that should be present in the hospital which are essential and have impact on their branding perspectives. The respondents were asked to recollect their own experience in the selected three hospitals – Apollo, Fortis and Wockhardt, and revert on those attributes. Apollo hospital was given a good rating by the respondents. It was rated as best for hygiene and qualified doctors. Advanced machines and diagnostics were also given a better rating. These attributes were equally voted by the respondents and rating was also good for the attributes.
The changing income and lifestyle has rendered various new avenues in healthcare industry. The most explorating sector in the healthcare industry is healthcare insurance. Healthcare insurance is gaining importance in India due to the increasing survival rate, increasing income, globalization and better opportunities. Based on the respondents opinion fair idea on the leading brand and influencers were obtained. These influencers can be pitched further to improve the market for health insurance.
RESPONDENTS INSURANCE BRANDS
Maximum number of respondents went for Star and Allied Health insurance followed by Max Bupa and Bajaj Allianz. Majority of the respondents depended on the advertisement and their peers for the decision of the brands.
The respondents both consumers and corporate were given a separate questionnaire to obtain their insights on branding of pharmaceutical industry in India. Pharmaceutical sector can be divided based on the prescription drugs and over-the-counter (OTC) drugs. The branding for over-the-counter drugs was carried in the study as the prescription drugs are subjected to various regulation and safety issues.
CORPORATE BRAND AND PRODUCT BRAND
A simple deduction was made from the fact that the respondents normally do not pay attention towards the corporate brand or company. The respondents are well aware of the product brands but they do not recall or know the manufacturing or distributing company. D-cold brand was well known among the respondents however the manufacturer company was not in picture of their attention.
The eventual rise of generic drugs consumption irrespective of the fact that consumers have no idea of the same is a big problem for the branded pharma sector. Corporate had opinion that the major players in the industry should tackle the problem by introducing educational activities and promotion for consumers to make them aware of the potential threat of using generic drugs.
IMPORTANT ATTRIBUTES DRIVING PHARMACEUTICAL INDUSTRY
Past experience, advertisements and pricing were found to be the most important attributes in the OTC pharma sector. The recommendations of peers are also found to be important but they are not extensive in opinion of the corporate. The corporate view past experience can be sole driver for the OTC pharma sector.
Growth strategies in the healthcare industry are based on the consumer satisfaction, recall of brand and create a visible position of the brand. Hospitals where high income group patients get treatment were observed as expensive and out of the budget hospitals. Middle class consumers aspire to get treated in these hospitals as the well-known personalities are treated with advanced technologies. The hospital management also makes it a point to announce in press and media release the key personalities getting treatment as their branding strategy.
Healthcare insurance is gaining importance in India due to the increasing survival rate, increasing income, globalization and better opportunities. Maximum number of respondents went for Star and Allied Health insurance followed by Max Bupa and Bajaj Allianz insured by the office.
The respondents were all from Mumbai. So they were likely to provide similar views and pose a limitation in the study. The insurance sector corporate was not included and doctors were left from the study because the aim of the study was to understand the brand position in market and not the view of doctor. Sample size was small.
The major recommendations made during the study were that satisfaction of unsatisfied customers is critical for the healthcare brands as the industry depends to a large extent on viral marketing. As consumers totally depend on the doctors the hospital branding exercise should focus on doctors and their management. Threat of generic drugs with low price has potential to become a major attribute, to influence the pharma sector.