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    analysis

    All names and company are fictitious and bear no resemblance to anybody dead or alive,any similarity would be purely coincidental. This case is for educational purposes and

    shouldnt be used for any other purposes without prior permission.

    Courtesy: Mr. Sachin Uppal , Marketing Director ( Asia & Middle East)

    Going Small and Medium

    Introduction:

    Davinder Khillu, CEO, Healthcare IT Ltd. (HCIT), slipped into his comfortable flight seat, staring outinto the clear sky over the Bangalore city as his flight smoothly took-off and rose into the highaltitudes. He was contemplating his recent decision, with a bag of mixed feelings, on the

    investment done for a new software product for SME Healthcare Industry segment. His parentcompany enjoyed the 2nd position in the Indian IT services market and 10 th position worldwide inthe IT services market. Presently the other product offerings from HCIT had captured the majority50% market share and saw strong repeat business within 6 years of the product existence in Indianand Middle East markets. APAC market showed mild responses while the US and Europeanmarkets were deeply entrenched with big names like Cerner, Eclipsys and more. The companydecided to concentrate on Indian and Middle East markets simultaneously improving the productofferings and enhancing the value chain for the existing customers. He was happy that his largesized competitors havent yet started investing heavily in this segment as well as reports showedthat SME segment is still untapped by large players which is surely going to give him early moversadvantage. He was confident that his technical and domain specialists, along with leveragingexisting product knowledge, are the best of the lot, who can surely take up this challenge and builda product which will storm the market and cater to the needs of the SME hospitals and medical

    centers. However, few concerns were continuously intriguing him to compete with the small timeplayers in the SME market segment. With the BIG parent company name would the SME marketbe intimidated? Would they be ready to pay a premium for the companys brand name or wouldthey be happy with their existing small time vendor?

    Healthcare IT Industry Dynamics:

    Fig. 1: Timeline for Healthcare IT Solutions Integrated Approach

    Integrated

    HospitalManagement

    Systems

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    www.internsindia.com A Free source for live projects & business news

    analysis

    All names and company are fictitious and bear no resemblance to anybody dead or alive,any similarity would be purely coincidental. This case is for educational purposes and

    shouldnt be used for any other purposes without prior permission.

    Courtesy: Mr. Sachin Uppal , Marketing Director ( Asia & Middle East)

    Healthcare is a Sunrise sector with a lot of investment flowing in from healthcare providers andgovernment too is laying emphasis on enhancing patient care in India and globally. The HCITmarket continues to be heavily bifurcated between clinical vendors, which are seeing success innew customer sales, and Financial / administrative vendors, which are seeing elongated salescycles and limited buyer interest. This decision came with an in-depth research done at differentlevels including neutral agencies as well as highly focused individuals from the HCITs researchwing. Industry reports clearly showed that there is no single large player in the SME market

    segment. The industry is widely fragmented with small time players in each geographic location inIndia. Technology trends and Cues were taken from the US market trends, considering Indianmarket is bound to follow the advancements. Some industry noise of a rebound in financial andadministrative vendors has surfaced over the past year; some companies such as IDX Systems,WebMD, and McKesson saw little improvement to the outlook for financial and administrativesoftware. However, on the clinical side of the market, business continued to be strong. Cerner andEclipsys were clearly capitalizing on their leadership positions (in US No. 1 and No. 2, respectively)in the clinical market. Based on current view of the market, there is no reason for the momentum ofclinical vendors to abate in the near future. With just 5% of the market penetrated in India, thissegment should provide solid growth opportunities in the coming 5-10 years.

    Last month Davinder called for a meeting with Stephanie, the Alliances and Marketing managerwhom he had hired from the HCITs parent company. Stephanie had 7 years of Technical

    Marketing, Alliance management and Marketing Management experience. Sumit who had recentlyjoined as a Marketing Manager also joined the meeting. The agenda was to come-up with the Go-to-market (GTM) strategy as well as identify the USP of the product. Stephanies analysis showedthat HCIT should recognize this sector as an important sector and actively come up with thisproduct which should provide complete IT solutions for Hospital information management andautomation in the SME segment. Sumit was responsible for giving the Middle East industryanalysis. According to Sumit the product fitment didnt match the Middle East market as of now,hence he suggested holding on till the product is fit for the Middle East market. Now Davinder andStephanie were focused on the GTM for India wide Launch. A USP was built into the product byhaving an Integrated Solution which included financial, administrative and clinical systems allintegrated to match the requirements of the SME market segment. This product offering wasunique as most of the products catered only to either financial or clinical requirements, and thisproduct actually catered to all of the requirements in one single solution, saving cost and time for

    the Hospitals by taking up just one solution for all their needs. A draft of strategy was created andDavinder left the meeting handing over the responsibility to Stephanie and Sumit to proceed andbuild the specifics.

    Going after Small and Medium Healthcare Segment:

    After that meeting Stephanie and Sumit, got deeply involved in getting the GTM strategy out. Bothdid further analysis of the market and divided the healthcare market in the tier 1 and tier 2 and tier3 segments. Tier 1 segment refers to hospitals with over 350 beds, super specialty, multi-specialtyhospitals, corporate healthcare chains etc. Tier 2 refers to 150 beds to 350 bed hospitals bothpublic and private, general, super specialty and multispecialty. Tier 3 refers to sub 150 bedhospitals, private nursing homes, clinics and diagnostic labs. HCIT is already addressing the tier 1

  • 7/29/2019 HCIT_A_Case_Study[1].www.internsindia.com.pdf

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    www.internsindia.com A Free source for live projects & business news

    analysis

    All names and company are fictitious and bear no resemblance to anybody dead or alive,any similarity would be purely coincidental. This case is for educational purposes and

    shouldnt be used for any other purposes without prior permission.

    Courtesy: Mr. Sachin Uppal , Marketing Director ( Asia & Middle East)

    and tier 2 segments through HCIT HIS. However a need is felt to address the Tier 3 segments aswell, which is a volume market. Hence HCIT is introducing HCIT HIS Lite for this segment.

    The total number of healthcare facilities today in tier 1, tier 2 and tier 3 segment is expected to bearound 5000 numbers. Of which Tier 1 and Tier 2 are about 1000 numbers. Tier 3 segments isexpected to be about 4000 in number and includes hospitals which are sub 150 beds, nursinghomes, clinics and diagnostic labs.

    Hospital Type No of Beds No of Hospitals

    Tier 1 350 + 300

    Tier 2 150 - 350 700

    Tier 3 < 150 4000

    Exhibit 2: Hospital Split in India

    Competitive Analysis in a Single Snapshot:

    HCIT HIS Lite will be at the high end of the technology axis and low end of cost axis. Volumes willdrive down cost. Also the Company will operate through a partner model which will enable servingvolumes. There will be a product development roadmap with version management based ondomain and technology trends.

    Davinder, Stephanie and Sumit again met this time with their Sales Manager, Technical andDelivery heads. This time they had to present the GTM strategy to the entire audience and finalizethe same. With the support of Sales and Delivery managers they were supposed to come up withthe entire business plan with the time-lined calendar for product launch and market activities andthey came up with the following go-to-market strategy:-

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    www.internsindia.com A Free source for live projects & business news

    analysis

    All names and company are fictitious and bear no resemblance to anybody dead or alive,any similarity would be purely coincidental. This case is for educational purposes and

    shouldnt be used for any other purposes without prior permission.

    Courtesy: Mr. Sachin Uppal , Marketing Director ( Asia & Middle East)

    Stephanie started by explaining the target market segment as follows-

    Hospitals with less than 150 beds, nursing homes, clinics, diagnostic labs

    Pharmacy chains which can be national or local city based. Currently the target segmentinvolves only units in the private segment.

    Stephanie continued with explaining the Marketing Channels. She suggested this will be a

    partner led model. HCIT will have partners who will be both sales and services partners. Thepartner will be responsible for breaking into new accounts and also carrying the installation andtraining needed for rolling out the solution. Post implementation support will be provided by HCITdirectly through a remote support model which will have an e-helpline module and telephonicsupport.

    The partners will get a margin on the product license. The service revenue is for the partner. HCITwill have a partner manager for managing the partners. Also there will be technical specialistsneeded for enablement of the partners before they can take up the projects.

    Then she moved on to explain the Sales distribution strategy. It will be partner driven asmentioned earlier. The partner will make margins on the product license. He will make servicesrevenue for rolling and implementing the project. If he provides L1 support then he can make

    services revenue for support as well.

    Davinder took over the space this time to explain the Pricing strategy and briefly put it asVolume Based. Product license will be per user based (concurrent users). It will be sold inblocks of 5 users or 10 users. Post this he retired into his chair and asked Sumit to explain thepositioning.

    Sumit enthusiastically walked up and began explaining the Product positioning. He categoricallymentioned it will be positioned in the SME market segment as explained by Stephanie. There is aperceived gap of a national level strong IT player who can service this market. Currently theplayers in this segment are mostly small players who give customized packages addressingcustomer needs on a piece-meal basis. These players are priced very aggressively. HCITs pricingand positioning will be above these players. There will be a strong brand pull for the HCIT product

    and has to be backed strongly by hardware and software partners. Sumit suggested someStrategic partners names like Microsoft, HP, Intel and Cisco.

    Just when the Delivery Manger, Technical head and Sales manager seemed to be convinced,Davinder jumped in and clearly told Stephanie and Sumit - Your Marketing budget is Rs. 2 croresannually. I want annual sales of 32 units of this product (8 units from each of the 4 regions). Hecontinued and said the product should be ready within 3 months. Now the room was abuzz withenergy and everyone started discussing the targets and how they were going to achieve the same.

    Sumit explained the Marketing Activities he has planned and he suggested: Road shows,sponsored events, marketing collaterals, direct mailers, press releases, advertisement in selecthealth magazines.

  • 7/29/2019 HCIT_A_Case_Study[1].www.internsindia.com.pdf

    5/5

    www.internsindia.com A Free source for live projects & business news

    analysis

    All names and company are fictitious and bear no resemblance to anybody dead or alive,any similarity would be purely coincidental. This case is for educational purposes and

    shouldnt be used for any other purposes without prior permission.

    Courtesy: Mr. Sachin Uppal , Marketing Director ( Asia & Middle East)

    Branding: A new brand name HealthSmart IT with the parent brand name as umbrella brand waschosen and the Marketing communication message of:Simple, Comprehensive, Affordable Hospital Information Management Systemwas decided upon and used in various places like the Logo, packaging-shipping, Brochures,Mailers etc.

    Please fasten your seat belts as we are about to land at the Hyderabad airport And suddenlyDavinder came out of his chain of thoughts and gathered himself as he was going to review thefirst quarter performance of the company.

    Sales:

    FY 2006-07 Units Sold

    Region/Quarter 1 2 3 4

    North 1

    West 1

    South 2

    South East 2

    Exhibit 3: FY06-07 Q1 Sales Numbers

    Marketing:

    FY 2006-07 Q1 Marketing Activities

    Roadshows 4 cities covering India

    Product Brochures 1

    Direct Mailing to Accounts 1000

    Leads Generated India 240

    Customer Testimonials 3Accounts tapped with responses andVisits 120

    Press Releases(including online) 12

    Exhibit 4: FY06-07 Q1 Marketing Activities undertaken