Reasons for the Market Study2
The following summarizes the primary reasons for conducting a market study. An organization that wishes to establish a PPP in hospital management may refer to this list in evaluating the need for a market study.
Box 1.3: Notes on Market Study Knowing the market's needs and how it is currently being serviced provides an organization with key information that is essential in developing its public-private partnership (PPP) and marketing plan. The organization is cautioned against spending a significant amount of money in launching a "new" enterprise with a limited market because of factors such as poor appreciation of demand, stiff competition, supply constraints, and other operational issues. The organization must assess its strategy and determine if there is indeed a market and significant need for a PPP in hospital management. |
|
An interested organization should consider economic benefits and financial viability while considering a PPP option and drawing up a plan. Financial viability, in this context, refers to projects yielding a rate of return that exceeds the minimum level required by a private sector investor. Although the quality of health care services is important, the provision of competent health care services may not be maintained without financial viability. Factors that may lead to financial viability include increased resource generation and efficient fund utilization. Furthermore, the presence of the private sector ensures that financial viability is always considered. Conducting a market analysis will help an organization (i) prepare itself when entering a PPP venture, (ii) launch the new PPP application, and (iii) start and comanage a PPP in hospital management. At the completion of this step, the organization should be able to (i) explain the concepts of a market study or analysis, (ii) determine if there is a need for the PPP enterprise, (iii) identify the market, (iv) analyze the current market, and (v) gain insights on the PPP project's competitive advantage. | |
(i) Identifying opportunities to serve various groups of customers
An organization may want to verify and understand the unmet needs of a certain market or group of customers. What do they want and what do they need? Some examples of useful data collection methods are focused group discussions, interviews of customers and investors, publications, other key library sources, and observation of clients' behaviors. Sources of information may include statistical reports from hospitals within the catchment area and those adjacent to it.
(ii) Examining the size of the market (how many people have unmet needs?)
As mentioned in the glossary, "needs" are translated to "demands" under a universal health care framework to help PPP project planners and developers in developing the financial projections.
An organization may want to identify various subgroups, or market segments, in that overall market along with their unique features and preferences. Useful data may be derived from analyzing demographic, health, socioeconomic, and technological trends. Useful statistics will include population-bed ratio, population growth rate, disease profiles and patterns, bed occupancy rate, employment rate, and social health insurance enrollment. A prospective PPP implementer may even observe each group for awhile to notice what they do, where they go, and what they discuss. It may be worthwhile to interview some members of each group.
(iii) Determining the best array of services for the unmet needs of the target markets
The organization may want to answer the following questions:
• What services and features will the PPP enterprise offer based on the disease profiles and other data gathered so far?
• What are the services that the operations can sustain?
Focused group discussions can be useful here. The participants can be asked about their preferred services and how their needs might be met by such services.
Refining the array of services
The array of services can be refined if the hospital will also cater to patients who can pay. Therefore, conducting research on willingness to pay will be beneficial, providing information that will be important in determining the price of services.
(iv) Knowing and analyzing the competition
An organization hoping to establish a PPP in hospital management should also examine their proposed services, products, marketing techniques, pricing, location, etc. vis-à-vis their competitors. Some useful sources for obtaining this information are hospital statistical reports filed with the country's department or ministry of health and financial statements filed with its government agency handling securities and exchange.
____________________________________________________________________
2 Significant portions of this section were adopted from books and articles by A.B. Blankenship, W.D. Perreault, E.J. McCarthy, and C. McNamara.