Apollo Hospital Marketing Assignment

1. EXECUTIVE SUMMARY

Apollo Hospitals group, the largest and most reputed healthcare provider in South Asia,
identified a significant market opportunity in the day-to-day healthcare segment. Size of the
business, extremely fragmented provider network, and increasingly demanding consumer
were some of the key facets of the prevailing market scenario. Apollo‘s enviable brand equity
and its domain knowledge created a uniquely advantageous position to enable the group to
exploit this market opportunity. The Apollo Clinic was conceived to offer specialists‘
consultation, diagnostics, preventive health checks and pharmacy services under-one-roof.
Convenience, coupled with trust associated with the brand, was the bedrock of the
product strategy. Suitable technology, value-for-money pricing and intent to create an overall
experience were the other key attributes of the product. Development of the business model
and assessment of the market potential resulted in adoption of franchising as business format.
Today, 29 of these clinics dot the length and breadth of the country. The concept has been
extremely successful with over 2,00,000 customers in about two years and a business of over
Rs 250 million. Customer satisfaction, as evidenced by ongoing audit, has been extremely
high. The viability of the business model is now proven and its impact on the image and also
the bottom-line of the parent organization has been equally encouraging. The Apollo Clinic
being awarded the Franchisor of the Year for two consecutive years is a testimony to our
focus on consistency and superior quality. Greater investment in communication and even
more stringent selection process for the prospective franchisee have been some of the major
learning. The early success has resulted in the need for accelerated scaling up and
development of product derivatives.

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2. INTRODUCTION

The purpose of the task is to develop an understanding of Marketing Planning, use of

Marketing Strategies & Communications and understand the Marketing Organisations‘
functions. The report aims at analysing the various marketing strategies followed by Apollo
Hospital that has enabled them to position themselves well in the health care sector. Apollo
Hospitals group, the largest and most reputed healthcare provider in South Asia, identified a
significant market opportunity in the day-to-day healthcare segment. Size of the business
(around two-thirds of the overall healthcare industry), extremely fragmented provider
network, and increasingly demanding consumer were some of the key facets of the prevailing
market scenario. Apollo‘s enviable brand equity and its domain knowledge created a
uniquely advantageous position to enable the group to exploit this market opportunity.
3. INDUSTRY BACKGROUND

In between the 1950's and 1980's the Health care facilities and personnel increased
substantially. Primary health centres are majorly the cornerstone of the rural health care
system. In the year 1991, India constituted about 22,400 primary health centres, 11200
hospitals, and 27,400 dispensaries. Such facilities were the part of a tiered health care system
which funnels more difficult cases into urban hospitals while attempting to provide routine
medical care to the vast majority in the countryside. Primary health centres and sub-centers
would majorly rely on trained paramedics to meet most of their needs. Indian healthcare
industry operates in both of the private and public sectors. The public sectors are healthcare
system consists of facilities run by the central and state governments. The facilities are
provided freely or at subsidized rates to lower income families in rural and urban areas.

There has been much done in the health care sector for bringing the improvement like till
date, approximately 12% of the scope offered by the industry has been tapped. In the years to
come the health care industry in India is reckoned to be the engine of the Indian economy.
Today the Health care industry in India is worth $17 billion and there are anticipation &
expectation of it to grow by 13% every year. The health care sector consists of health care
instruments, health care in the retail market, hospitals enrolled to the hospital networks. etc.
Indian healthcare industry comprises of hospitals and allied sectors which is projected to
grow 23 % per annum to touch US$ 77 billion by 2012 and according to the current estimated
size of US$ 35 billion.

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Fig.1 Trend Showing Increase In Healthcare Industry

4. ORGANIZATION BACKGROUND

Apollo was jointly promoted by Dr Prathap Reddy and Mr Obul Reddy in 1979. The
company began operations in 1983 with Apollo Chennai. Apollo is currently the largest
private healthcare service provider in the country, both in terms of revenues and in terms of
number of hospital beds. While hospitals form the core business of the company, it is also
present in other healthcare businesses such as pharmacies, clinics, hospital consultancy,
health insurance, healthcare business process outsourcing (BPO), education, research and
telemedicine. Apollo operates 1,050 pharmacy outlets, which are operated both within the
hospital premises and as standalone units. The company also operates clinics, which largely
operate as standalone centres for primary healthcare, consultancy and diagnostics. Apollo is
one of the largest third-party administrators in India, managing the insurance needs of 4.7 mn
individuals for 1,700 major corporate houses from 23 operating offices.

The Apollo Hospitals Group is recognized as the ‗Architect of Healthcare‘ in India. Apollo
today has over 30 owned/ managed hospitals across the country in cities such as Chennai,
Delhi, Kolkata, Hyderabad, Ahmedabad, Pune and Bilaspur. Internationally, the Group finds
presence in Sri Lanka, UK, UAE, Bangladesh, Nepal, Saudi Arabia, Ghanaand Nigeria.
According to Dr Reddy, India needs to add one lakh beds every year so as to meet the needs
of its rising population. Currently, the group has 56 hospitals with a capacity of some 9,000
beds across the country."By end of March 2014, we will increase our capacity to 11,000 beds
at an investment of Rs1,500 crore. Similarly, we aim to invest Rs2,500 crore to add another
4,000 beds between 2014 and 2017," said Dr Reddy.

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The Week magazine, in a recent 19-city survey, rated the Apollo Hospital, Chennai hospital
as the best private hospital in India. Other than a large network of hospitals, the group is also
a major player in hospital management consultancy services, medical BPO, telemedicine,
education, third party insurance administration and pharmacy retailing.

5. MARKET SIZE
Asia's largest healthcare service provider recorded a turnover of Rs 6465 million for the
quarter ended March 31, 2012. During the financial year 2007-08, 262 stand alone
pharmacies were added taking the total tally to 612. Standalone pharmacies tend to be cash
positive after 12 months of operations. However, the mature same stores continued to show
positive growth rate of 16 per cent. Apollo Hospitals has embarked upon an ambitious plan of
setting up Hospitals. The company has already procured two acres of land in Tiruchirapalli.

6. MARKET GROWTH
Apollo Hospitals currently has 51 hospitals with a total bed capacity of 9000 beds. Of these,
37 are fully-owned hospitals with an aggregate of 5,888 beds (5,374 were operational, 70 per
cent utilisation).In a few years, Apollo plans to have tertiary hospitals in eight Tier-I cities
even as it executes its ongoing expansion drive across Tier-II/III cities (Apollo REACH) —
expects to add 2,860 beds in a couple of years, taking the total count to take their number to
8,500 by 2017 (owned assets). It is currently implementing projects across various locations
in India, including Mumbai, Chennai, New Delhi, Hyderabad and Bangalore.

What's also helped Apollo is a vast talent pool of doctors, nurses and paramedics. For
instance, it had over 4,100 doctors across more than 50 specialities, 7,800 nurses and 2,400
paramedic personnel at the end of March-2011.

It plans to add 2,700 beds over the next three to four years, which includes the addition of
super and multi-speciality hospitals in metros/tier I cites and introduction of new format
(reach hospitals) in tier II cities. Its expansion plans are on track and we expect 2,700 beds to
be operational by FY14.

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7. MARKET SHARE

Fig.2.Figure showing the market share of apollo hospital in the health care
sector.

Market Share
Apollo Fortis Manipal Max

5%

24% 40%

31%

Apollo had a number of competitors in the market for privately-provided tertiary care. For
instance, the health care division of the Manipal Group, one of Asia‘s largest hospital
management groups, ran 11 private and 7 government-affiliated hospitals with more than
6,000 beds. Fortis Healthcare Ltd. managed super and multi-specialty hospitals in three
locations in India and planned to grow from 600 beds in 4 hospitals to 4,000 beds in 10
hospitals over the next few years. Ranbaxy Labs, India‘s largest pharmaceutical company,
was a strategic investor in Fortis, holding a 17% stake in the company. Many of Apollo‘s
competitors including Delhi-based Max Healthcare and Fortis worked on building integrated
delivery networks ranging from primary to tertiary care services.

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8. ENVIRONMENTAL FACTORS
 Political Environment

The development in the political environment strongly influences marketing

decisions. The constituent of political environment includes laws, statutes, government
agencies etc. In India, government has decided to spend 5 % of GDP in Medical Tourism.
This gives Apollo Hospital to earn revenues from various patients from abroad. However,
there is also a slight drawback of the fact that due to political imbalances within the country
and between countries, there is a slight risk that medical tourism attracted by India might go
down.

 Marketing Channel

Marketing channel help the company to promote, sell and distribute its goods and
services to the final buyer. Apollo hospitals undertook many social awareness campaigns like
SACH, BILLION HEART BEATS, GIFT AN HEART etc have positioned themselves well
in the minds of the general public. They also make sure while undertaking such awareness
campaigns they get famous personality endorsing their campaign so that they can easily
connect with people.

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9. SWOT ANALYSIS.

STRENGTHS

 Integrated Healthcare Company: Apollo Hospital provides end-to-end services to the

patients. Its almost all hospital is equipped with the well maintained pharmacy where
it has got unique advantage compared to its competitors.
 Best Technology & Resource to delivery quality services: It has good infrastructure
and quality resources which provides a world class service to the patients.

WEAKNESS

 It has added 297 stand alone pharmacies during the year , since most of the
pharmacies are in the incubation stage which can depress the margins
 High attrition rates among the nursing workforce to Western countries and
competitors due to higher salaries and perks being offered requires higher investment
for providing required trainings to keep the quality services

OPPORTUNITY

 In India for every 1000 people only 1.11 beds are available. To make this ratio even
of 1.85 beds by 2012, an investment of Rs.3480 billion is required which is beyond
the control of public sector.
 Booming Medical Tourism in India
 In India,for every 1000 person there are only 0.3 Doctors and 0.8 Nurses while the
same figure in the world is averagely 1.23 Doctors and 2.56 Nurses

THREATS

 Medical equipment accounts for 40-45% of the total expenditure in hospitals. This
requires a constant investment in new health care industry devices. Failure of this
might lead to loosing patients.
 A large amount of revenue comes from foreign tourist who come to Apollo for
treatment. But currently the foreign countries are trying to provide medical treatment
at a low cost in their own native. This might lead to reduction in revenue.

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10. SEGMENTATION

The market segmentation for an hospital industry can be done in different ways and in
different methods. Apollo hospital has done market segmentation based on different possible
ailments like

 Heart institute
 Cancer institute
 Institute of neurosciences
 Institute of orthopaedics
 Institute of gastro sciences
 Transplant institute
 Emergency
 Nephrology and urology
 Spine surgery
 Institute of preventive medicines
 Critical care
 Cosmetic surgery
 Radiology & imaging science

Heart

Spine
Radiology

Apollo

Cancer
Emergency

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11. BUYER BEHAVIOUR

 The customer for an health care industry are generally considered to be patients.
However there are few circumstances where in few people may use the health care
facility in order to make use of the offer made by the hospital. For eg: Women welfare
scheme put up during women week.
 The buying process starts with need recognition. Consumer experience certain
situations that lead them to need. Apollo hospital has been set up with the objective of
addressing the day-to-day healthcare needs of a typical family, by providing them
with a range of superior quality healthcare services under one roof and at affordable
price.
 Consumers seek information to identify which products will satisfy a need. Prior
familiarity with products determines the amount of searching. Most of the patients
who visit Apollo come through references. Also the brand Apollo plays an important
role. There is also one exclusive Apollo Information Centre which give public the
entire information they are looking for. Similarly customer will search about Apollo
competitors like about Fortis and Sriramachandra hospital.
 Evaluation stage plays an important role in influencing purchase decision of a
customer. However in case of healthcare industry purchase decision is influenced by
one major factor. People visit hospitals when they are in need of medical assistance.
However there are few incidents wherein people decide to go to hospitals in order to
take advantage of few advertisement campaign organised by the hospital. It is
believed that after Apollo‘s famous BILLION HEART BEAT campaign, millions
pledged to do regular exercises while there were over lakhs accros India who had their
heart checked during that period.
 Marketers must understand what exactly happens after a purchase. It is important to
know if the cutomer is satisfied or not. And in healthcare it is more a duty than a
feedback to know how the patient feels after being discharged from the hospital.
There is a separate team in Apollo hospitals that coordinate and understands how a
patient is post surgery. They are constantly called back for post surgery evaluation.
This personal care in Apollo has gained a name for itself.

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12.MARKETING MIX

Product: Apollo hospital provides quality healthcare services with more than 53 branches
across the country. Prominently Apollo is known best for heart problems and Knee and Hip
replacement surgeries besides other major ailments. The specialities include – Heart,
Orthopedics, Spine, Cancer Care, Gastroenterology, Neurosciences, Nephrology & Urology
Critical Care.
Price: The hospital is priced premium and it can afford to do the same because of its
positioning and its assurance as well as the reliability on the brand of Apollo hospitals. Along
with it, it also helps that there are so many locations and specialities in Apollo hospitals. Thus
a patient is reassured of his well being.
Promotions: Apollo promotes itself through the Community Initiatives viz
SACH – Save a Childs Heart
CURE – Extends preventive as well as rehabilitative cancer treatment to the
economically backward.
SAHI – Society to Aid the Hearing Impaired
DISHA – Distance Health care Advancement Project
People:
Currently engages more than 19,000 doctors, nurses, paramedics, clinical staff and
management professionals to manage over 9000 beds across 53 hospitals in India and abroad.
Along with this Apollo Hospitals has several courses along with research facilities to
facilitate innovation.
Process:
The largest achievement of the Apollo Group has been to take quality health care to
across the length and breadth of India. This operation in itself involves very established
procedures and documentation.It has been a major player in scripting the medical landscape
of the nation. This is primarily because the group has continuously been at the helm of
several game-changing innovations in Indian health care.
Physical Evidence:
Apollo Hospital has been know for its quality health care services, at much affordable price.
Provides the services for all the ailments & diseases, assuring the healthy recovery with
quality care from the staff.

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13.IMC

The advertisement targets soon to be mother and father, they aim at conveying to them how
much care they should take during pregnancy so as to have a safe delivery.

The advertisement was a promotional campaign for their famous ―Billion Heart Beat‖. This
ad was mainly targeted for above 35 age group and they tried to convey how a small activity
on a daily basis will enable one to avoid heart related problems.

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Given the sensitivities and the likely risk of being perceived as overly commercialized
business proposition, it was agreed to have limited focus on ‗paid‘ advertising and conserve
advertising spends. Instead, word-of-mouth advertising, public relations and local
promotional initiatives have played a greater role. The corporate segment has been targeted in
a focused manner for promoting regular health checkups for their employees and also pre-
employment check-ups for new recruits through personal selling. Apollo hospital is in regular
contact with existing customers through newsletters and direct mailers.

14. RECOMMENDATION
1. Apollo Hospital does not have any hospitals in Africa and West Asia. Apollo Hospital
can look to exploit these areas wherein even there is high scope for medical tourism
2. I would also recommend Apollo Hospital to build additional hospitals thus enabling it
to achieve its ultimate goal of providing quality service to its customers
3. Apollo Hospital can also expand its training programme and produce additional
management resources that can be employed.
4. Mobile Healthcare has become very famous in Western Countries. If Apollo could
bring in this mobile healthcare it would not only be first of its kind in India but also
add value to its brand.
15. CONCLUSION

Apollo Hospital the biggest healthcare provider in private sector has proven its strength to
attract clinical talents across the country. It has been the first perform liver, multi organ and
cord blood transplantation. It was also the first to perform radiotherapy and radio surgery for
brain tumours in the country. Apollo Hospital was also recognized as ― Super brand Of India‖
in the year 2003. This accreditation was not given based on the market share but on the brand
image and perception.

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REFERENCES

 http://cci.gov.in/images/media/ResearchReports/VasudhaWattalHealthcareSector.pdf
 http://www.apollohospitalsbangalore.com/Apollo_Clinic.html
 http://www.icicidirect.com/mailimages/Apollo%20Hospitals.pdf
 http://planningcommission.nic.in/reports/sereport/ser/stdy_ict/13_apollo.pdf
 http://www.vikalpa.com/pdf/articles/2009/34_2_91_105_page.pdf
 http://chennai.apollohospitals.com/united-states-immigration-medical-checkup/283-indias-
little-citizens-join-the-billion-hearts-beating-campaign-inspired-by-cine-star-suriya-on-the-
occasion-of-the-first-birthday-of-apollo-childrens-hospital-chennai
 http://www.myiris.com/newsCentre/storyShow.php?fileR=20120416073210200&dir=2012/
04/16
 http://www.crisil.com/pdf/capitalmarket/sample-ier-report.pdf
 http://www.crisil.com/pdf/capitalmarket/sample-ier-report.pdf
 Apollo hospitals audited report
 Apollo Hospitals Magazines
 Kotler Marketing Management book
 The Week Magazine.

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