STRATEGIC MARKETING PLAN DEVELOPED FOR EVERIGHT DIAGNOSTIC
STRATEGIC MARKETING PLAN
EVERIGHT DIAGNOSTIC & LABORATORY SERVICES
STRATEGIC MARKETING AND MANAGEMENT DECISION
STRATEGIC MARKETING PLAN DEVELOPED FOR EVERIGHT DIAGNOSTIC AND LABORATORY SERVICES LtdINTRODUCTION
Living and maintaining a healthy lifestyle has always been a great concern for humans (Divine & Lepisto, 2010), which invariably has to lead to the growth and proliferation of the healthcare industry, over the years there has been tremendous amount of attention (commercially and scholarly) such as (Davenport, 1993), in the service industry, particularly in the developing countries such as Nigeria.
The healthcare sector in Nigeria can be subdivided into 2 sector Government owned and privatized, with the Government-owned system running on a 3 tier level (Federal, state, and local government), however due to the devastation and inefficacy of the government to maintain its own hospitals, many Nigerians now seek medical interventions abroad, and the one who can’t afford foreign medical intervention take solace in privatized health care providers, within the country, as they off more reliable services, although they are more expenses.
However the recent economic recession that has plagued our country, has to lead to dwindling patronage of privatized industry, its on this premises that the case study firm “Everight Diagnostic and laboratory services LTD,” would be investigated and a strategic marketing plan developed to enable the firm gain more competitive advantage, with due consideration given to risk associated with executing this marketing plan as well as aligning it to the companies wider cooperate goals.
ABOUT Everight Diagnostic and laboratory services LTD.
Everight Diagnostic and laboratory services LTD, is a prime medical diagnostic and laboratory in Nigeria, offering a broad spectrum of advanced imaging and pathology services, The company’s mission is to ” provide the medical industry with accurate diagnostic services, benchmarking world-class standards by using the latest technologies with experienced professionals and administrative expertise ” (..website), and prides themselves on their state of the facility, and reputable medical personnel, the company is currently situated in 3 location action (Lagos, Port Harcourt, and Owerri) on the verge of expanding the fourth location.
Value proposition refers to a business or marketing statement that a company uses to summarize why a consumer should buy a product or use a service (Osterwalder, Pigneur, Bernarda & Smith, 2014).
The rise in medical errors as well as unnecessary delays in many Nigerian laboratories, even after collecting huge amount of money has lead to distrust in the validity of results produced by most laboratories, however Everight offers her consumers quality and reliable test results, at a reduced lead time and at an affordable price via its combination of state of the art medical facilities as well as the right crop of human resources. (http://www.everightlab.com/)
Situational analysis refers to a collection of methods that managers use to analyze an organization’s internal and external environment to understand the organization’s capabilities, customers, and business environment (Weihrich, 1982).
In relation to this marketing plan conducting a situation analysis of Everright’s Macro and Microenvironment, would enable us to identify opportunities the firm can capitalize on as well as pinpoint her pitfalls that would be strengthened, all in a bid to gain competitive advantage.
Due to constraints in wordcount, conclusions drawn from PESTLE and SWOT analysis would be presented below.
PESTEL ANALYSIS conducted for Everight diagnostic and laboratory services
PESTEL analysis is a measurement tool which is used to assess markets for a particular product or business at a given time frame. PESTEL stands for Political, Economical, Social, Technological, Ecological and Legal factors (Srdjevic, Bajcetic ; Srdjevic, 2012)
Operates on a democratic government based on a multiple party system (Zakaria, 2010)
Present administration interested in fighting corruption (Udombana, 2011), huge plans of economic diversification, to combat over-reliance on crude oil.
Political instability due to rise in terrorism Boko Haram, in the Northen parts of the country (Adebayo, 2014), as well as the controversy surrounding resource and revenue distribution.
Low business confidence by the masses of government-owned establishments, especially healthcare related (Zhang ; Zhang, 2014)
Complicated healthcare development policies, dilapidated and underfunded healthcare system (Aronson, 2015), National Healthcare allocation budget allocated on a tiered base (federal, state and local government)
Partial reliance on foreign health care aids such as WHO, UKAID, and establishing partnerships with European healthcare systems to provide quality assurance, machinery, and manpower.
Lack of institution/structure to collect and disburse taxpayers money. (Bougrine ; Seccareccia, 2002)
Current economic recession, in the country leading to high level of inflation, high exchange rates of foreign currency loss of jobs, high level of unemployment leading to increasing realize in traditional/herbal medicines, as the offer cheap alternatives, (Awogbenle ; Iwuamadi, 2010)
State and local government health institution are poorly funded. ( Okaro, Umeh ; Chigbu, 2005)
The surge in the establishment of private clinics and diagnostic facilities, of which majority don’t have correct lines to practice, hence the government spends money prosecuting offenders. (Zhang & Zhang, 2014)
Inadequately equipped/lack healthcare infrastructures in rural areas, (Jain, 2015), also lack of awareness of the benefits of healthcare insurance, hence the most health care cost is footed out of the patients pocket. (Agbakwa, 2002)
Lack of disbursable fund for the citizenry.
SOCIAL FACTOR TECHNOLOGICAL FACTOR
Huge market potential due to the high population
Increase in market potential due to a large population of the country (Daramola, 2005), Nigeria currently experiencing an increase in its ability to attract Foreign direct incentives (Dupasquier & Osakwe, 2006).
Diverse Ethnography and religious groups, (Hackett, 2013), increased urban to rural migration
Characterized by a young and Middle age population, Reduced life expectancy, low family planning, and skill gap in the medical profession, from a shortage in the availability of medical personnel and infrastructure. (Chand & Tung, 2014).
The rapid increase in medical tourism by rich people (Diener & Oishi, 2000), in search of good medical facilities/treatments. high penetration of internet services, the fastest growing telecommunication industry in West Africa (Chavula, 2013), increasing partnership with western firms for globalized growth.
Dependence on foreign countries/companies, for the provision and supply of technological goods. (Nnorom & Osibanjo 2010)
High interest of indigenous technocrats in applying contemporary technology in addressing Nigeria’s healthcare issue. (Gopalkrishna ; OLORUNTOBA, 2012)
ECOLOGICAL FACTOR LEGAL FACTOR
Due to poor eco-friendly practices such as bush burning, tree felling indiscriminate disposal of waste, and lack of provision of clean/running water there is high rise in the rate of spread of disease such as malaria, typhoid, etc (Samson, 2014), however the federal government of Nigeria has championed a Clean and green initiatives championed by the enforceable at the state/local government level, also due to the poor supply of electricity in the country, Nigerians rely massively on generators to power their houses, this has lead to massive air/noise pollution and in turn endangers Citizens health (Breeze, 2014). Rapid increase on clamp down on potential tax evaders, leading to a consolidated tax system (Remita) operated by the Federal Inland Revenue Board (Dickson ; Nwaobia, 2012), also there has been an improvement enforceable by law through the Medical Laboratory Science Council) in the standards, code of conducts as well as ethics of medical laboratory standard, however the country still plagued by a porous regulatory process for approving medical devices. (Onyemelukwe, 2008).
From the above PESTEL analysis it can be deduced that the inability of the Nigerian Government to improve/revitalize the healthcare sector resulted in loss of trust in National healthcare providers, this, in turn, gave rise to the proliferation of private healthcare providers, and medical tourism, furthermore due to lack of enforcement of healthcare policies and regulations, there been a surge in medical malpractices, from these private healthcare firm who take economic advantage of citizens in search of reliable medical diagnosis/treatment, nonetheless the recent economic crisis in the country has to lead to a high rate of unemployment hence there been a shift in contemporary healthcare service provider due to the high cost associated with them to Traditional/Herbal Medicine.
SWOT ANALYSIS conducted Everight Diagnostic and Laboratory Services
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues (Hill ; Westbrook, 1997).
Everight diagnostic has built a reputation for itself due to the quality of service it delivers to her customers, there are also known for their punctuality in service (fast turnaround time), hence they have won their customers loyalty, and resultantly their supplies trust due to the influx of customers and the diligence they execute in delivering their services.
Also to its difficult for new entrants due to the capital-intensive nature of the industry, thus new entrant’s stand a chance of running at a cost disadvantage.
The company also focuses on ensuring employee retention, by developing various talent management schemes for attracting and retaining potential and current employees, the firm also has in-house quality control personnel/checks, which most laboratories are not willing to spend on, they also have a strong ethical adherence to laboratory standards and protocols hence records insignificant/minute error in its service delivery, furthermore due their investment in modern medical equipment’s, the firm boast of a distinct technological capabilities.
Due its sole proprietorship, the growth rate of the firm is somehow flat, as the firm lacks investors/shareholders, hence the financial capabilities of the firm to expand at the rate intended is greatly limited, impacting on its asset distribution, also the firm targets everybody at the moment, hence has no clear customer segmentation, this, in turn, has resulted in difficulties building a brand image.
Opportunities.Nigeria has over-relied on fossil fuel (crude oil), for its economic growth, sadly with the proliferation of greener energies/fuel, there has been a massive reduction in the demand for crude oil, hence the genesis of the economic recession the country is currently plagued with (Caldecott ; McDaniels, 2014), to this effect the country is looking at diversifying her economy by investing into other sectors, such as the healthcare sector (Gylfason, 2001), is a superb FDI incentive in the sector, hence increasing its propensity to attract foreign-based technological organizations, interesting in solving health challenges while leveraging their technology (DeGhetto, Gray ; Kiggundu, 2016) , possibly from the fact that Nigeria is currently the most populous black nation in the world (Gerland, Raftery, Šev?íková, Spoorenberg ; Bay, 2014), hence represents a huge market potential for such industry.
Finally, Nigeria’s Ministry of health in a bid to improve the standard of healthcare services discharged by medical facilities has developed stringent policies and ensure regulatory bodies effectively monitor prosecute defaulting firms, this respensts a great opportunity for Everight diagnostics market its services.
As deduced in PESTEL analysis above the Nigerian Healthcare system is greatly underfunded, and insufficient infrastructures and social amenities to sustain good health, the influx rural-urban migration has also resulted to overpopulation of the urban areas, lack of clean water supply expedites the spread of diseases, the underutilization of health insurance, makes it difficult for low-income earners to access proper healthcare, furthermore the ratio of medical practitioners to the country total population, is low, this skill gap is also fueled by brain drain as good medical personnel migrate to westernised countries in search of greener pastures, leading to increased medical tourism of the rich, lastly technological advancement, especially in the medical field, has made it possible for self-test devices consumers can use at the comfort of their home, hence eliminating the need to go to laboratories for some tests.
Competitor analysis For Everight Diagnostics and laboratory services
Competitor analysis identify’s a competitor(s) and evaluates their strategies to determine their strength and weakness relative to those of your own product or service (Fleisher ; Bensoussan, 2003)
For the purpose of this marketing plan, 3 crucial competitors and the extent their presence threatens Everight Diagnostics would be analyzed in this section.
Similar Product and Target market: according to (McDonald, Christopher, ; Bass, 2003), these are competitors who offer same services/value to potential customers, in the context of Everight diagnostics these category of competitor includes, medical laboratories ran by either private laboratories or government hospitals/establishments, their existence threatens (high threat) Everrighs’s as most of these firms may have a higher financial resources to invest in medical equipment/personnel, also the government laboratory offer subsidized rate to its patients, hence they all compete for the same target audience.
Same service categories: in Everight’s context, these are competing for service providers, who can also carter for a patients health, without primarily conducting a medical test, such deductions and diagnosis can be made from symptoms/complains presented by the patients, and drugs/treatments dispensed to this effect, such competitors includes pharmacies, and herbal medicine providers, and self-testing devices/technology, although (Howell, Hadiwidjaja, Tong ; Thomas, 2012), classifies such competitors as moderate threat’s, as they (patients), would eventually utilize medical laboratories for intensive medical investigation, however with the present economic state of Nigeria (Adekunle & Ladipo, 1992), continuous patronage of such competitors by target market can lead to little or no business for Everight Diagnostics.
Same Spending Power: these competitors represent the least level of threat for Everight Diagnostics, as they focus more on preventing illnesses rather than curative, such competitor includes gyms, organic food providers, and dieticians, potential customers patronize them in order to maintain a healthy lifestyle , and rely more on fruits and vegetable to repair damaged body system, such customers rarely visit diagnostic laboratories
in conclusion of the various situational analysis carried out for Everright, in a bid to understand its strategic position in its competitive landscape, a marketing plan would now be created utilizing different marketing tools.
For the purpose of the marketing plan, Haley (1968), benefit segmentation analysis would be applied to identify different market segments, and benefits sought, which would then be used to ascertain, the segment Everight Diagnostics would focus on based on this marketing plan.
Based on the analysis given above, there are four major consumer segments as identified in the healthcare sector. This helps fit the firm’s services to their required needs. The contributors are the healthy segments who like to retain their health status. This set is committed and usually require accurate results and equipment. They are also committed customers who require a specialist in their chosen fields. This help builds confidence in the health provider with up to date technology. This is the population who go abroad for medical tourism because they take their health seriously.
The Deniers are however less conscious of their health. They usually need discounts and promotions to be able to afford laboratory costs while the free livers are healthy and do not care about their health needs. This group derive their information from the internet and social media on health issues and do not use health facilities unless they need it urgently. In situations when they need it, they use the most accessible and simple procedures available to them.
According to Hooley, Saunders and Piercy (2004) determines the strategic implication matrix, the attractiveness of Everight’s potential customer segments.
The engagers basically the primary target market. They usually spend largely and payment for health care services comes from their pocket or from health insurance from people working with high profile companies. This group comprises of the large population of the middle class in the country. They usually use health services and give priority to quality.
The Minders are the rich politicians and retired who seek health care outside the country when their health needs are not met. When they reside in the country, they have registered physicians who attend to their health needs and have the attractive high income to afford any form of health care. They also conduct regular checkups. However, the competition is very weak because the population is limited, and they tend to be loyal to a particular healthcare provider for a long time and do not entertain new health care providers but health care providers who win their interests, have made a major source of income.
The Deniers constitute the largest population of the health care population. They comprise of active workers in low paying and menial jobs. The attraction to health care providers is moderate because they have a low level of income because they depend on low prices to be able to access health care, but their population still constitute a major target market.
The free livers are the least health-conscious of all the segment because they have low income and would prefer to spend on technology than health care and do not spend of health care services until they are extremely ill.
Following the above matrix, this targeting matrix was developed, this will assist in giving a spot on the naming of the factors and push necessary for the individual segment
Figure 4: Targeting Matrix
Marketing of products and services is challenging due to different nature of markets. A country’s market components equate the relationship between the marketing mix elements sales performance of the brand CITATION SCe15 l 2057 (Bahadir, Bharadwaj, ; Srivastava, 2015). This is because the marketing mix has an unavoidable influence on the brand image and vice versa and this has been a rising discussion in recent literature CITATION Sin15 l 2057 (Sinapuelas, Wang, ; Bohlmann, 2015). Marketing mix variables are essential in setting up an appropriate and effective marketing plan CITATION Lua10 l 2057 (Luan ; Sudhir, 2010)therefore successful managers brand strength and marketing mix correspondingly in decision making CITATION Hua12 l 2057 (Huang ; Sarigöllü, 2012).
Marketing goods and services can be exceedingly challenging due to the volatility of the market, (Srivastava, Shervani ; Fahey, 1998), they further opine that marketing component is directly proportional to the interrelationship between the marketing mix and sales performance of a brand, because the marketing mix to a great extent influences a brand image, hence considering the variables of a marketing mix is crucial in developing a strategic marketing plan. (Grönroos, 1997),
To this effect the following marketing mix, in table … below has been developed, and tailored to suit the primary target Market ‘engagers’
Marketing Mix developed for EVERIGHT diagnostics
Product/ Service Price Place Promotion People Processes Image
What reliable, accurate and timely test/result MidpriceOvernight Facilities, as well as her online sites. (Websites) Brochures, flyers, targeted online adverts, referrals/Word of Mouth Always ensure good customer service. Devoid of medical errors, good quality control checks. Quality and reliable
How Automated/modern machines for running tests, leverage on medical software for storage and processing data Around ?3000 and ?6000 Company website as well as laboratory council/hospital website Social media, FB Page, Twitter, Instagram, health, and science-related magazines professional/Experts.
Ethical in practice Round the clock customer services. well equipped/trained staff.
Importance to Main target Market Engagers want, a reliable, fast, medical facility Value for money, yet not seen as cheap accessible, well structured
value for money. Target demographics are below 40 years, active social media users Engagers are health conscious, hence wants medical personnel’s to be experts in their field. Good service with minimal medical errors/risks Need to trust and be impressed with the brand to be able to brag about it.
Product: although engagers have a busy schedule, the fact that they are also health conscious would make the devote their time in visiting their doctors, in a situation where they are referred for investigatory test, they would want it to be in a facility that has the latest technology, fast and reliable, hence Everight must ensure her product conforms to this standards.
Price and place : the place would obviously be at Everight medical facilities, as established engagers naturally do not want o to be associated with cheap commodities (Vaver, 1990), and at the same time want good value for money, hence Everight Diagnostic can create a competitive edge by ensuring the aesthetics of their facilities/environment are maintained, and price pegged at rates suitable for the engagers status.
Promotion: Akule (2015), noted that Nigeria is one of the leading African Countries in terms of telecommunication, and internet technologies, notably the engagers are always abreast with information and technology, and active on social media platforms, Everight Diagnostics can leverage on technology to reach out to ‘engagers’ by placing target advertisement on social media, they should also encourage their clients who are satisfied with their services to refer their colleagues via word of mouth, for an incentive which may include upgraded customer service, this move could potentially attract more engagers who (Marketing, 2002) opines to be adventurous and love trying new things.
People: to efficiently attract the engagers who are often business owners or executives in the organisation they work in, Everight need to ensure its human resource (Mangement and staff), conduct themselves in the most professional manner to maintain an impressive customer service rating, as well as efficiently execute their jobs by having expert knowledge of the field, putting this factor in place would go a long way of inspiring trust and confidence by their customers on their business.
Process: risk (such as medical negligence) associated with using the laboratory facility should always be kept at the barest minimum, hence great precaution should be taken in order protect the integrity of the patients blood/other biological samples, and should be handled by experts, also the business operating model of the firm (operates a 24hrs service) should be made known to the engagers as it would boost their confidence in knowing they can access the laboratory at any time of the day.
Image: Everight Laboratories has to present a front that depicts quality and reliability, this can be projected by its human resource capital, i.e having knowledgeable professionals/expert in the field working for them, also to ensure a sense of belonging for their customer, the firm must project their state of the art equipments/machineries, when these elements are put in place the patients can brag about these factors, as it would also elevate their status and class.
For a brand to be effectively built, the organizations credibility should be rooted or perceived based on its attractiveness, prowess, reliability/trustworthiness, (Amat, 2008), furthermore (Borishade, 2017), opines that characteristics such as lifestyle conformity and physical qualities of a brand greatly affects brand loyalty, which can be stimulated by customer satisfaction,
Interestingly it can be deduced from Nam, Ekinci, & Whyatt, (2011) paper that customer satisfaction is huge driver of their attachment to a brand than the number of time the make purchases, furthermore a brands perceived ‘personality trait’ can potentially inspire trust in a brand, a sophisticated brand can make a consumer feel excited i.e have positive thoughts, whereas the ‘ruggedness’ of a brand could inspire negative feelings (Rampl & Kenning 2014).
Everight diagnostics value proposition promises its customers ‘quality diagnosis, accurate and timely delivery of the result, good value for money’ with this view in mind the laboratory brand perception would be analyzed below, to reflect how these promises are being kept.
Figure 6: THE BRAND FRAMEWORK
, state of the art technology
Experienced human resource
on Time BENEFITS
Value for money
Minimal medical error
joy What it says about the user
The above attribute describes Everight’s characteristics with respect to customer perception of the brand, a significant attribute here is the firms ‘reliability’ as it encapsulates a lot of attributes in the matrix.
From the customer segmentation in figure 1 above, the Engagers, would naturally be attracted to brands that would guarantee them a high safety Margin i.e low risk, as well as value for money, standardized healthcare system, diagnostic procedures and equipment’s, to be able to establish a relationship with a brand, (Danneels, 2002) to this effect Everight diagnostics, as a brand should be portrayed as a trustworthy, satisfactory brand, achieving this would ensure their customers are happy, which is the ideal state of healthy customers.
Engagers are also known to influential in the society (Bear, 2012), using Everight laboratory should make them look wealthy, health-conscious and have a good taste.
Challenges associated with implementing this marketing plan
there is always a high probability of experiencing marketing challenges/roadblocks when executing marketing plans because the plan aims at introducing fresh perspectives/ideas into the organization (Firat, 2014)
In the course of executing this marketing plan, the following factors below are challenges I perceive this marketing plan might face;
Availability of funds: this can forestall the implementation of this plan, in a scenario where the firm doesn’t have the funds to implement this plan.
Internet trolls and risk of cyber attack: the use of internet and technology as channels for implementing this plan, can become a challenge if patient data gets compromised/stolen by hackers, also leveraging the internet for executing component of this marketing plan opens an avenue for anyone to make derogatory/tarnishing comments about the firm.
Also in a situation the situation the firm doesn’t have the financial capabilities (due to its size) to attract/retain the right experts (medical, marketing and management personnel’s), as most expert in the field would want to work for incumbent firms, hence the firm might be left, fresh graduates would require training investments.
Ethical Considerations and Issues.According to Grandgenet (2010), professional obligation/accountability exit in the various fields/sector of which the healthcare sector is greatly laced with specific codes of ethics and practice.
Conflict of interest may arise as the company may be torn between being profit oriented and genuinely caring for their customer’s health,
To an extent the implementation of this marketing plan relies on establishing a social media presence for the firm, this may also require them to display certain procedures the adopt in carrying out a medical test, hence great care needs to be taken to ensure to their clients medical results or samples are not exposed, in order to maintain patients confidentiality., hence the organization should take extra precautions to ensure errors associated with negligence are greatly avoided.
Finally, the company might be tempted to overwork their employee in order to meet up with their customer need, by providing round the clock services, hence the human resource manager of the organization needs to ensure they have/recruit the adequate number of employees to cover shift rotations.
SECTION 2 PIMPS
Financial Implication of implementing this marketing plan using PIMS Methodology
PIMS (Profit Impact Marketing Strategy), originates from General Electrics in the mid 60’s, is primarily used to investigate the strategic performance of a business unit, we applied correctly it accentuates the correlation between the strategic decision of a business against the impact of these decisions, hence helping to pinpoint factors that could aid in enhancing an organization growth, by understanding its business environment to create a sustainable advantage (Farris ; Moore 2004)
Based on the strategic Marketing plan developed in section 1 above, the following figures (in Naira Official Nigerian Currency, 450N = £1), were made up based on assumption to reflect the financial implication of setting up a new branch, its also assumed that the firm would move some equipment’s from their other branch , hence this cost although stated would not be reflected in the fixed cost, Fixed cost referred to in this calculation would only reflect the current financial investment the business intends to make, and finally assumed annual test conducted by the firm would be 700.
EXPENDITURE COST (N)
Employee Cost 100,000
New Equipment’s 1,200,000
TOTAL FIXED COST 3,600,000
New Reagents 600,000
Administrative cost 800,000
TOTAL VARIABLE COST 1,400,000
TOTAL COST 5,000,000
To acertain the Variable cost per test (VCP)
VCP = Total Variable CostTest Done = N1,400,000700 = N2,000Calculating Return on Capital Employed (ROCE)
From the above equation N2,000 is the cost price for producing one medical test, which is in line with the Mid-price range identified to be suitable for the identified target market, from the situation analysis conducted in section 1, however we have assumed that the firm proposed a 50% Profit/return on this investment, which currently stands at N5,000,000, to achieve this a Return on Capital Employed (ROCE) analysis (Becker, 1962) would be conducted to ascertain suitable selling price to earn much profit.
PARAMETER ESTIMATE Target Return 50% Capital Employed N 5,000,000 Cost/Test N2,000 Assumed No of Sales 700 Tests % Markup = Capital EmployedAnnual Costx Target ROCE % Markup= 5,000,000(2,000 x 7000)x50% = 178.6%
Hence Mark/unit = 2000 x 178.6% = N3,572Thus Markup/700 Test = 3,572 x 700 = N2,500,00Therefore New Selling Price = N5,572ROCE = ProfitCapital Employed N 2,500,400 X 1005,000,000 =50%from the above calculation, if Everight Diagnostic is going to achieve a 50% ROCE, then their new price per unit test would be N5,572, this price is still within the safety net of price range suitable for the identified target market, however Everright Diagnostic must be conscious of the fact that some of their competitors may charger lower amount, or higher than the New selling price, in my opinion this new price represents a superb profit margin for the firm, however the firm must also invest in acquiring new medical technologies to justify the price, and try to reduce price in form of discount at off-peak periods to maintain competitive advantage.
CALCULATING BREAKEVEN POINT (BEP)
Assuming the current selling price/test is N3,000, a breakeven analysis (Brealey, Myers ; Marcus, 1995), would be conducted to ascertain the point whereby the company neither gains nor looses, (however the company should always strive to be above their BEP), this analysis would factor in the contribution needed to be made in a bit to cover fixed costs and also remain profitable.
Required sales = Fixed CostContribution (Selling price-Variable cost) = 3,600,000(3,000-2,000)Thus Breakeven sales = 3,600 Tests
As the firm expects to make a 50% profit from this venture, the calculations below are made to determine the effect of the breakeven point on the required profit.
Required sales = Fixed CostContribution (SP-VC) = 3,600,000 + 2,500,000(3,000 – 2,000) Required sales= 6,100 tests
Parameter Formula Total (N)
Revenue at Breakeven point Anticipated sales x selling price 6,100 X 3000 = 18,300,000
Variable Cost at Break Even Point Anticipated sales x Variable Cost 6,100 x 2000 = 12,200,000
Fixed Cost 3,600,000
The above analysis that for the firm to achieve the anticipated 50% profit (N2,500,00) at its current price of N3,000/test, then they are required to sale/conduct 6,100 tests, bearing in mind the established 3,600 test to achieve their BEP, its wise to conduct a Margin of Safety Analysis (……), to pinpoint the % of sales which would happen before the firm hits its BEP
% Margin of safety (MOS) = Expected sales – BreakEven SalesExpected Sales
MOS = 6,100-3,600 600x 100 = 2,5006,100 = 40.89%
This shows that Everight ‘s sales can drop up to 41% before it reaches its break-even point. Therefore there is a wide margin of profit for the firm before it reaches the point of no profit or loss.
From the above calculation it can be deduced that up to 41% drop before it reaches the BEP, hence there a huge profit margin for the firm to get to the point of breaking even.
Using the above financial models, the firm has a safe range with which it can place its selling price within 3000 – 6000 as recommended in the marketing mix. However, a 50% target profit might make the firm stretch its resources excessively. To achieve this profit range comfortable might require adding to the Total Variable Cost. However, this price range will pass the right message of quality and reliability to the target segment i.e. the engagers.
Going forward, partnering with a firm who outsource their services and getting investors are possible ways to increasing sales and financial resources respectively.
In conclusion having applied PIMs Methodology to analyse Everight Diagnostics medical stand, it can be deduced that the firm can safely place its selling price between N 3,000 to N6,000, as proposed in the Marketing mix, unfortunately, a 50% target profit although feasible may extensively stretch the organisations resources, should the organization insist on achieving this they can consider increasing their total variable cost, nonetheless the above price range still passes the ‘quality’ and ‘reliability’ message to the proposed targeted segments ‘Engagers’, finally as a means of increasing its financial resources the firm can also strive to establish partnerships with hospitals who outsource their diagnostic/laboratory test
RISK FACTORS AFFECTING THE IMPLEMENTATION OF THIS MARKETING PLAN.Having explored marketing from a research and experience point of view Studies conducted by Rutkauskas & Ginevicus, (2011) opines that it’s not devoid of risk, and would be careless of an organization not to acknowledge these risks, or have a mitigating approach of controlling the identified risk.
Hence for the marketing plan, the following are risk factors (grouped into external and internal risks ) Everright diagnostics need to be aware of,
EXTERNAL RISK FACTORS
as a result of the economic recession, there has been a decline in the income level of most people, business firms are also not excluded as some are also declaring bankruptcy, hence there are the probability shifting segments, like the Deniers or Minders.
The firm should also be mindful that the rise in terrorism especially in the northern part of the country, threatens the existence of the firm in such location, furthermore the country is experiencing massive instability in exchange rate, leading to inflation, hence he is a risk of fluctuation in the price of laboratory supplies/equipment’s from suppliers, this invariably would affect their selling price and can hinder them from delivering a fixed price tot heir target market, also the rapid technological advancement in this industry, can rapidly invalidate some equipment’s no matter how new they are, thus resulting in a gap which can be dominated by competitors with bigger financial capabilities to dominate the market by virtue of having the latest medical technology/equipment.
To combat this risk, customer satisfaction should be emphasized and reflected in the quality of service given, the company can also strategically reduce it price at off-peak periods, the camouflage of discounts but within the suggested rates (as shown in the financial section of this marketing plan), without necessarily loosing profits, also the company should be abreast with environmental/technological changes, constantly evolve and strategized and restrategize ways of staying afloat and creating competitive advantage, they can also leverage on partnering with other laboratories or establishments willing to outsource some of their laboratory needs, can be a great way of reducing competitive riskINTERNAL RISK
Internally, Lack of funds can highjack smooth operations as well as stabilize business growth, furthermore poor management culture could potentially disrupt the implantation of this plan, if the owner is egocentric, not willing to seek professional business advice in relation to strategic marketing, can lead to over assumption or misinterpretation of value or misplace prioritization.
Furthermore, there is a risk of misinformation i.e sending the wrong message to potential target audience storming from an advert or promotion stunt being perceived as ‘offensive’, hence the firm should be aware of the volatility/ vulnerability of the media as they are prone to manipulation. (Rajan, 2006), In addition, the firm needs to be aware of the potential risk of cyber attacks, (Byres ; Lowe, 2004) which can result in vital patient information being stolen/exposed hence the company stands a risk of being sued for breach of confidentiality, finally there is also a possibility of misdiagnosis, errors from medical procedures etc.
To alleviate these risks, the firm must constantly appraise its resources and capabilities, In order to make suitable adjustments where applicable, a good way of mitigating risks associated with insufficient funds, would distribute the firms resources into various channels, such as developing a consultancy wing for the firm, to conduct health research, collect epidemiology data, which can be published and sold to interested buyers, Everright Diagnostics should also seek out potential investors, to augment their financial resources, and ensure proper quality assurance and checks when conducting medical diagnosis, to reduce errors to the barest minimum, and finally great care and precaution should be taken when disseminating advertisement /promotional materials.
EVALUATION OF MARKETING PLAN WITH RESPECT TO THE COMPANY’S MISSION AND VISION.all business organization is established to realize one or more goal, these goals are further set based on the firm’s strategic direction (mission/visions), hence the overall success of a firm can be measured by properly monitoring the organization’s performance against its set goals/objectives. (popvola & Sharpankyhh 2011).With this view in mind its imperative to pinpoint that evaluation of a firms business process, aids in the identification of activities in the business process due for improvement (Aziz & Fady 2013)
Everright diagnostic vision is ‘to be the best medical diagnostics providers, and employer of best brain not just in Nigeria, but Africa at large’, their mission is to ‘provide the medical industry with accurate diagnostic services, benchmarking world-class standards through the use of modern technology, experienced professionals, and administrative experts’, (http://www.everightlab.com/), from the above vision we can deduce the firm intends to be ‘efficient’, achieve ‘customer satisfaction’, ensure ‘their sustainability’ as well as ‘expand’ across Africa, and also needs to be ‘profitable’ to achieve their wider cooperate goals, hence the proposed marketing plan is of great importance, as it can rapidly induce organizational growth, since the firm is still a small enterprise, and on the verge of expansion, it has more flexibility to plan for its growth, hence implementing this plan can be pivotal to the firm success, as it encourages the firm to achieve its strategic goals as discussed below.
Profitability: executing this marketing plan, Everight diagnostics can effectively identify ways the can hit their target operating profit, such plans includes adding other services such as establishing partnership with other laboratories and hospitals that would outsource contracts to them (Everight), this would in turn aid in creating a safe price margin, that can be adjusted increased or decreased according to changes In environmental dynamics.
Efficiency: implementing this marking would aid Everight Diagnostics, to pinpoint areas for improvement, and highlights methods that enables them effectively harness its technological capabilities, adopt control measures to minimize waste and diagnostic errors, and also continually strive improve customer satisfaction, and business excellence, in a bid to reach its goals, as this would simultaneously reflect the value the organization offers for its quality.
It’s important to note that improving the efficiency of the laboratory is a very important objective/goal of this marketing plan, as the ripple effect of improving the firm’s efficiency would a good increase its quality of service.
Expansion: although the laboratory currently has limited financial resources, to rapidly expand at the pace the CEO intends, as aforementioned the firm doesn’t have a defined target market, however, this marketing plan proposes an alternative expansion route, by focusing on the proposed target market, the firm can expand into a new demography, as well as extend the range of services it offers, hence ensuring wider coverage of the firm the locality they are based, also the use of social media as a means of promotion could help the firm save cost, and yet develop its virtual presence.
Satisfaction: one of the Everight goals is to ensure employee satisfaction, hence this marketing plan is also designed to improve work commitment and employee retention, although this significantly occurs via training and events, implementing this plan would ensure the firm focuses its resources on creating an enabling environment that encourages talent and learning development.
Sustainability: this marketing plan was designed with due consideration given to the firms wider societal commitment, and cooperate social responsibility, hence encourages the organization to be more ethical in its practice, ensure environmental sustainability by ensuring the tools they use, and method of waste disposal does not cause adverse environment to the environment.
CONCLUSION AND RECOMMENDATION
In conclusion, in as much as this marketing plan has been carefully put together, to ensure the expected outcome of this plan are realized, there need to be a supportive marketing process and to achieve the overall goal of this plan I propose the following steps are followed to achieve the desired effect.
Set expectations right and remember that it may take efforts and patient from the time of implementing this plan to seeing visible results.
In addition, for successful implementation, the right crop of human and financial resources must be available and utilized correctly.
There should also be effective communication across all channels, people responsible for the task should be made/helped to understand the goal of the marketing plan as well as their role towards achieving its success.
A timeline has to be set for implementing this plan, as well as divide the plan into little chunks, and the corresponding deadline set to achieve them.
There should be an agreed method for tracking success, KPI’s should be set, dashboards and templates regularly updated.
Furthermore, there should be systemic monitoring to enable the firm measure, the impact of the marketing effort, this could be done by ensuring teams meet up regularly to discuss progress.
The marketing manager should always measure the effectiveness of marketing mix and branding strategies, and in a situation where desired results are not seen, the plan should be adjusted with possible viable solutions added to achieve the desired goal.
Finally, the firm should always strive to communicate results (positive and negative) and celebrate success, as this could boost employee morale as well as business momentum,
This reflection would be written using the Gibbs Reflective Cycle Methodology, as depicted in the diagram below.
CITATION Gib881 l 2057 (Gibbs., 1988)The 3 days block lecture was very challenging for me, having to juggle my attendance at the lectures and ensure I keep up with my placement activities, nonetheless, the block lecture has been very intellectually stimulating, although I have learnt this module before, and failed the coursework severally, this particular lecture opened my mind to the application of this marketing modules and theories, also the fact that I am doing a hands-on placement helps me put these theories in context, as I was finding it very difficult to properly apply the theories I have been taught, although some of the theories are a bit confusing to me now, switching my case study organization a context I was familiar with to one I have volunteered for in Nigeria, and being familiar with the cooperative goal and made it a lot easier for me to apply these models from a clearer perspective, and to a large extent helped me eliminate the guess what I was doing with Ryanair.
The above fact coupled with feedback provided by my lecturers were very insightful, and made me realise my mistakes from my previous assignments, and shaped my understanding of how effectively analyzing a business environment to determine the competitive position of a firm, create a marketing segment and mix the firm could possibly focus on to gain competitive advantage, the financial section of the module as enabled me envision the financial implication of executing this marketing plan as well as how to factor and mitigate risk in case of an adverse effect.
Once this work is graded and possible corrections made, I plan on presenting it to the management of Everight diagnostic….. for implementation consideration.
On my part I feel I still need to explore more on this field of study to enhance my understanding, I plan on doing this after my placement as I am under pressure in the office as well as trying to meet up with my dissertation, although I recognize there is still much work to be done personally, on the bright side this module has challenged me mentally and has helped me improve my analytical skills as well as my writing skills, hence I have decided to engage more in consultancy projects in my placement to enable me to get a feel of how things are really done in a commercial setting .
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PORTER’S FIVE FORCES
234315063500POTENTIAL ENTRANT – LOW
00POTENTIAL ENTRANT – LOW
20193002768600SUBSTITUTE – HIGH
00SUBSTITUTE – HIGH
3295650198755000-952501254125SUPPLIER POWER – LOW
00SUPPLIER POWER – LOW
130492514827250052768501273175BUYER POWER – HIGH
00BUYER POWER – HIGH
455295014922490025812751301750RIVALRY – HIGH
00RIVALRY – HIGH
The threat of New Entrant – LOW
The development of a medical laboratory requires a huge amount of capital because of the increased innovations and technology costs in advanced technology.
Increased access to supply channels
The chemical reagents or the suppliers and equipment are limited as well and they provide increased access to the availability of the suppliers.
There are few medical laboratories and the main competitors are also dependent on the customer loyalty and the brand image.
The legislative actions are also taken by the regulatory bodies in order to make it extremely difficult for the entrants to enter the market.
Bargaining Power of Suppliers: LOW
There are many equipment and machines that are used in the laboratory and they perform effective functions in various ways because of the technological advancements. There are few clients that have the suppliers and the loyal client of the suppliers become the significant part of their business particularly when they have competition in the industry.
There are no switching costs in the altering suppliers and there is increased threat of the forward vertical integration because of the experience that is needed in order to learn the new skills.
Bargaining Power of Buyers: HIGH
This factor shows that they have a high concentration as well. In addition to this, the suppliers become buyers at one point or at another. There are no switching costs that are attached when the buyers take the decision to change their supply sources and there are also possible alternatives available to them. There is also an increased the threat of the backward vertical integration because if there is a buyer without any skills with the sufficient capital can develop the laboratory and employ the people with the required skills for work.
The threat of Substitute – HIGH
The threat of substitute is also high because of the presence of pharmacies that are the majority in number and there is also local herb market available that can alter their techniques and have acquired the ground in the country. Moreover, the technology has also created the substitutes by the provision of the test strips including the home pregnancy strips where there is the need to visit the laboratory before the detection of the pregnancy.
Rivalry – HIGH
There is an increased level of rivalry from two main perspectives. The first is the competition among the government owner laboratory and the top laboratories and the research institutes in the healthcare industry. They are mostly characterized by the process automation and they have the large economies of scale as well. There is also the second competition level which is from the top hospital laboratories. There are also many big hospitals some of which are largely operated by the wealthy individuals and the government. They have the main competitors that constitute the major threat to the increasing laboratories and making entry into the difficult industry. In addition to this, they have a strong brand image and they have affiliations with the major buyers and them also expertise in the health specialties as well. They have the international accreditations that make them very attractive for the customers who visit their country.
RESOURCE BASED VIEW
The Medical Laboratory has the sole owner and ha the financial resources for the firm that comes from the pocket of the owner. There is an increased availability of the bank loan in which the owner has the high credibility to the access whenever it is required. The financial resources of the company have also increased from the 2013 and the firm has improved a lot with the potential for the increase in the overall growth of the company.
Everight has the property because the building of the lab is rented, and it requires some of the equipment in which there are not many competitors. The laboratory is located in the part of the country where there is the increased acquisition of the customer loyalty.
Everight has the current investment in R & D without any affiliations with the technology firms and it improves continuously with the improvement of the overall operation including the test results and procedures. There are many laboratories in the country that carry out the diagnostic processes in an effective manner. There are also various machines that can automate the processes in an accurate manner.
The firm is run by a single owner with a maximum of two employers at one time and the control system and the evaluation is also easy but strong as well. The firm also allows the implementation of the ethical standards that are high includes the cleaning of the machines and the laboratory. The disposal of wastes also occurs in an effective by treating diagnosis with the confidentiality.
Everight does not have many employees and only a few of the employees are trained in an effective manner. The organization also provides the environment that is effective for the technicians and interns by the motivation of the talent. It also makes it suitable for the employees to develop the skills in the specialty area.
The firm has earned a good reputation among all its clients and they do not have the specific target or the customer segments that have made it challenging as well. The firm has also improved to become extremely reliable for the customer and the results of this company do not record has the fault or the error. They have also earned the reputation with the suppliers by letting them deal with the fairness. They have also developed the customer loyalty with the clients by serving the great benefit in the new location by the customer relationships.
It comprises of the external and internal relational contracts that exist outside and inside the organization. Everight has also developed the strong relationship with the employees that consists of the relational contracts. The owner of the company is also accessible to the employees in such a way that he becomes the trainer and mentor. It allows the employees to develop the values and expertise in becoming the value of the organization. They have also developed the strong relationship with the suppliers and customers that comprises of the external regional contracts. The firm has also attained the customer loyalty and they were able to achieve the relations by the production of the test results. This relationship is rate among the competitors of the firm because the accountability and honest becomes scarce. It is difficult to acquire the trust from the suppliers and clients and they have also developed strong affiliation outside the organization. It allows the firm to be well aware of the changes in the environment and responds to them including the laws that are mostly by the government and it includes getting accreditations and being aware of the epidemic to make the required changes.
Everight provides the high-quality service and it makes a referral for the potential suppliers and customers as well. It helps in the development of reputation among the competitors without any record of the errors or mistakes.