St. Andrew’s College Of Arts, Science and Commerce St.Domnic Road, Bandra (W) Mumbai 400050 Certificate This is to certify that the above mentioned students have done the project on 18 September 2009 as a part of Service sector management Subject. This study has been carried out by the students under my guidance and supervision during the period of 2009- 10. The project work is original and authentic to best of knowledge. Place: Mumbai Date: Signature of the guide
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St. Andrew’s College
Of Arts, Science and Commerce
St.Domnic Road, Bandra (W)
Mumbai 400050
Certificate
This is to certify that the above mentioned students have done the project on 18
September 2009 as a part of Service sector management Subject.
This study has been carried out by the students under my guidance and
supervision during the period of 2009-10. The project work is original and
authentic to best of knowledge.
Place: Mumbai
Date:
Signature of the guide
TABLE OF CONTENTS Page No.
1. Introduction to Service Sector
2. Concept of Service Marketing
3. Hospitals in India
4. History of Hospitals
5. PEST Analysis
6. Unique Characteristics of Hospitals
7. Classification of Hospitals
8. 7 P’s of Hospital Sector
9. Market sementation
10.Quality Dimension
11.Conclusion
INTRODUCTION- SERVICE SECTOR
The service sector has been growing significantly for more than fifty years to the
extent that in the developed world, more people earn their living from producing
services than making manufactured goods. In fact around three quarters of the
population in the United States and the European Union are employed in service
industries. Services therefore have a major impact on national economies. The
subject of Services Marketing has grown in response to this. Latterly however,
manufacturing and technology industries have also recognised the need to
provide services not only as a means of adding value to the physical products
which they market but also as the basis for a different orientation to the
management of their businesses. This module will address the key issues,
concepts and models which form the core of Services Marketing theory, focusing,
as far as possible, on the service industries of relevance to students taking the
module.
What is a Service?
Services include all economic activities whose output is not a physical product or
construction, is generally consumed at the time it is produced and provides added
value in forms (such as convenience, timeliness, comfort or health). That is
essentially intangible concerns of its first purchaser.
Concept of ‘Service Marketing’
The perception of service marketing focuses on selling the services in the best
interest of users/ customers. Marketing a service is meant marketing something
intangible. It is marketing a promise. In the marketing of services, we go through a
number of problems directly or indirectly influencing the business index. The
problems like market segmentation, marketing information system, behavioral
management are studied minutely which simplify the task of formulating a sound
mix for marketing, such as Product mix, Promotion mix, Price mix and the Place
mix. It is important to mention that we find “People” an important mix of
marketing services. If we market the services in a right direction, the available
opportunities can be capitalized on optimally and also it contributes substantially
to the process of development. In view of the above, we observe the following
key points regarding the concept or perception of services marketing:
It is a managerial process of managing the services.
It is an organized effort for providing a sound foundation for the
development of an organization.
It is a social process helping an organization to understand the emerging
social problem and to take part in the social transformation process to
justify its existence in the society.
THE HOSPITAL INDUSTRY
Service Management is:
1) To understand the utility the customers receive by consuming or using the service
offering of the organization
2) To understand how the organization (personnel, technology, physical resources,
systems and customers) will be able to produce and deliver this utility
3) To understand how the organization should be developed and managed so that the
intended quality can be achieved
4) To make the organization function so that this quality can be delivered on a
continuous basis.
Today the hospital is a place for diagnosis and treatment of human ailments and
restoration of health and well being. The basic function of a hospital is to give
proper treatment to the injured and sick without having any social, economic and
racial discrimination.
Some of the other important functions and services of modern hospitals are
training of the doctors and nurses, support to medical research and assistance to
all activities carried out by public health and voluntary agencies to prevent
diseases. It is also a center for training of health workers and bio-social research.
Today it also acts as an institution that provides accommodation to patients for
medical nursing and care. Medical services are primarily provided by the central
and state governments.
Hospitals are not for profit making, they are social institutions that make the
required medical services available to society. With time the classes and quality of
hospitals have changed a lot . Most hospitals today are trying to provide all ultra
facilities and are in the process of making state of the art hospitals. Hospitals
provide the infrastructure facility to healthcare
The last two decades have seen the mushrooming of corporate and privately run
hospitals. Most large trust and corporate hospitals have invested in modern
equipment and focus on super-specialties.
The private sector accounts for 70% of primary medical care and 40% of all
hospital care in India. They employ 80% of the country’s medical personnel.
The corporate hospital sector is most evolved in the south while charitable/trust
hospitals proliferate in the west. However, the north and east are also showing a
growing trend in private hospital expansion. Key therapeutic areas are cardiology,
nephrology, oncology, orthopedics, geriatrics, maternity and trauma/critical care.
Hospitals are not for profit making, they are social institution to make available to
society the required Medicare services. However this may not be true for private
hospitals. Today hospitals are a place of diagnosis and treatment of human ills, for
the training research, promoting health care activities and to some extent a
center helping biosocial research. WHO states that hospitals are socio-medical
organization whose functions are: Curative, preventive, patient services and
training of health workers in biosocial research.
With time the classes and quality of hospitals have changed a lot today. Most
hospitals today are trying to provide all ultra facilities and are in the process of
making state of the art hospitals. Hospitals provide the infrastructure facility to
healthcare.
Hospitals in India
By the late 1980s, there were approximately 128 medical colleges--roughly three
times more than in 1950. Data for 1987 shows that there were 320,000 registered
medical practitioners and 219,300 registered nurses. Various studies have shown
that in both urban and rural areas people preferred to pay and seek the more
sophisticated services provided by private physicians rather than use free
treatment at public health centres.
The fast pace of development of the private medical sector and the burgeoning
middle class in the 1990s have led to the emergence of the new concept in India
of establishing hospitals and health care facilities on a for-profit basis.
Current Scenario
India, the growing economic power in Asia is witnessing frenetic growth of its
health care sector. India’s much-noted economic growth is rapidly improving
living standards and the healthcare industry will be a major beneficiary of the
overall increase in incomes. Recent major regulatory reforms have improved the
growth prospects for health insurance and, as a result, a large section of middle
income families will be able to afford healthcare services leading to high demand.
The report of the National Commission on Macroeconomics and Health had
estimated the size of private healthcare sector in India to be worth Rs 69,000
crore and projected that size to double to Rs 156,000 crore by 2012,besides an
additional Rs 39,000 crore if health insurance picks up. With the current pace, the
corporate segment in the private medical service sector is likely to absorb a good
share of this business.
Large domestic market is well complemented by inflow of overseas Medical
tourists. The number of Medical tourists has increased ten-fold from 10,000 in
2000-01 to about 100,000 in 2004-05.
HISTORY OF HOSPITALS
Etymology
During the Middle Ages the hospital could serve other functions, such as
almshouse for the poor, or hostel for pilgrims. The name comes from German
“hospes” (host), which is also the root for the English words hotel, hostel, and
hospitality.
Early history
In ancient cultures, religion and medicine were linked. The earliest known
institutions aiming to provide cure were Egyptian temples. Greek temples
dedicated to the healer-god Asclepius might admit the sick, who would wait for
guidance from the god in a dream. The Romans adopted his worship.
Catering & Dietetics: Provide for nutritional needs of the patients
PHYSICAL EVIDENCE
The physical evidence is defined as the environment in which the service is
delivered and where the firm and the customers interact; and any tangible
commodities that facilitate performance or communicate the service. It plays a
role in enhancing customer’s perception of the service quality. The acceptance of
services is communicated through the physical evidence; therefore, it is of great
significance to the service marketers.
How important is the physical evidence of “Wockhardt” or “Lilavati”. In a city like
Mumbai where the income of people is higher as compared to the other parts of
India, one is ready to spend on one’s health and hence the look of a hospital too
would matter.
The environment in which the service is delivered and where the customers and
firm interact, and any tangible components that facilitate performance or
communication of the service.
The physical evidence of services includes all of the tangible representations of the services such as brochures, letterhead, business cards, report formats, signage and equipment. Physical evidence makes a huge impact on the customer. Physical evidence provides customers means of evaluating the service
Elements of Physical Evidence
Often customer evaluates the services on the tangible clues of physical evidence,
before its purchase. The general elements of physical evidence are:
EXTERIOR ELEMENTS OF HOSPITALS
Exterior elements include the outer look of the place of delivery of service. The
exterior gives a formal introduction to the customer as to the kind of service he/
she is to receive. In the case of hospitals, the physical evidence is a very crucial
element as one is seeking medical help relating to one’s health and no one would
take chances in such cases. Hence, exterior as well as interior factors should be
kept in mind.
Some of the exterior factors essential in Hospitals are as follows:
Exteriors Design
Entrance
Signage
Parking
Surrounding Environment
Security
INTERIOR ELEMENTS OF HOSPITALS
In case of hospitals, the interiors play a very vital and important role. If the
hospital is not hygienic, does not look up to the standard as it promises to be and
the equipment used is not of good quality, patients would hesitate coming for any
treatment to such a hospital.
Given below are some interior elements in context of hospitals:
Interior Design
Safety Signs
Rooms
Washrooms
Equipment
OTHER TANGIBLES
Along with the exterior and interior elements in hospitals, other tangibles also help
in putting up a good impression of the hospital in the eyes of the customer.
Sometimes, small elements too may make a big difference. This section refers to
those small elements. The other tangibles are as follows:
Uniforms.
Staff
Equipment
Visiting Card
ATM Centers
Telephone service
Ambulances
Service sector management
PROCESS
Process is a set of activities that take an input, convert it and add value to the
input and finally, create an output. Process has only recently been given much
attention in the service sector although it has been the subject to study in
manufacturing for many years. Blueprints design processes, which sets a standard
for action to take place and to implement the service.
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Joining Phase
The Intensive Consumption Phase
Detachment Phase
Feedback
Service sector management
1. The joining phase – which includes
The arrival of the patient
Registration – where a patient has to make an initial deposit at the
inpatient billing counter after which a file is opened in the patient’s name
to know the patient’s medical history.
2. Intensive consumption phase – which includes
Diagnosis – where the consultant diagnoses the illness by making the
patient undergo various tests
Treatment – where the illness is treated with proper medication or surgery
Information about further actions – the consultant will instruct the patient
regarding the diet to be followed, the medication to be taken etc.
3. Detachment phase – which includes
Discharge of the patient
Payment – after the patient is discharged, the bill will be paid at the billing
counter.
4. Feedback – at this stage, the patient is requested to fill an evaluation
form, which helps the hospital authorities to know the level of satisfaction
derived by the patient. Patient’s suggestions are always considered for
improving the hospital services.
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Service sector management
General Process Organization in a Hospital
Within the hospital, if we look at each individual department, we notice that each department serves the needs of another department, for instance, the purchase department serves the need of the stores, the billing department serves of the finance department etc. So in each way, each department is a customer to another department, while at the same time it might be a supplier to another department. Each department is an ‘internal customer’ or the other departments.
Only when each unit of the hospital understands who their customers are and what their needs are, will the hospital develop basis for giving the best service in the most efficient way to the patient.
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Finance Dept Billing
Purchase Dept Stores Doctors
Nurses
Patient ( External customer)
Service sector management
Market Segmentation
Market segmentation is a useful business tool to identify new and expanded ways
to improve services and enhance revenues. This tool identifies unique subsets of
the population to target for specialized services and marketing initiatives.
SEGMENTING
Segmenting variables such as geographic, demographic, Psychographic and
behavioral segmentation helps in knowing consumer wants needs and responses
of various services and products. It is very essential to know which segment would
be right for setting up our hospital as only after studying the diseases and the
people who are diseased or at high risk of getting those diseases form our
segment.
Geographic Segment
It calls for dividing the market into different geographical units such as nations,
states, regions, countries, cities or neighborhood. One can operate in few
geographic areas, or operate in all but pay attention to local variations. It is
advisable to target all sections of people, by and large the entire mass by
delivering varied services to a specific disease.
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Service sector management
Demographic Segment
The market is divided into groups on the basis of variable such as age, family size,
family lifecycle, gender, income, occupation, education, religion, race, generation,
nationality and social class. With these variables of segmentation we get to know
the preferences and the usage rates associated with different consumers
Psychographic Segment:
This segmentation is done as per the lifestyle, personality of the people. Different
people have different lifestyles and different personality, so for them the
expectation of service also differs, so keeping all such points in mind the hospitals
provide services.
People living with very high level of sophisticated lifestyle prefer hospitals which
provide best quality service.
On the other hand people having very simple lifestyle may also go to public
hospital.
Behavioral Segmentation
In this the segmentation is done as per the following variables i.e. knowledge of,
attitude towards, use of, or response to a product or a service. These behavioral
variables – occasions, benefits, user status, user rate, loyalty status, buyer
readiness stage and attitude- are the best starting points for constructing market
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Service sector management
segments. For e.g person having diabetes would go to the hospital after knowing
the facilities that they offer and the care, comfort they provide. This would help in
creating loyal patients and create goodwill for our hospital.
Quality dimensions
Quality refers to the inherent or distinctive characteristics or properties of a
person, object, process or other thing. Such characteristics or properties may set
a person or thing apart from other persons or things, or may denote some degree
of achievement or excellence. When used in relation to people, the term may also
signify a personal character or trait.
For example, hospitals have to decide what quality of food to buy for their
patients. The buying objective here is not profit, because the food is provided to
the patients as part of the total service package. Nor is cost minimization the sole
objective, because poor food will cause patients to complain and hurt the
hospital’s reputation. The hospital purchasing agent has to search for institutional
food vendors whose quality meets or exceeds a certain minimum standard and
whose prices are low. Knowing this, many food vendors set up a separate division
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Service sector management
to respond to the special needs of institutional buyers. Thus, Heinz, for example,
will produce, package, and price its ketchup differently to meet the different
requirements of hospitals, colleges, and prisons.
Quality dimensions by Parasuraman
The quality customer service is the foundation for long run businesses. This
quality dimensions will regulate the business process, solutions and services.
Quality of service is the most important and the most critical component for a
customer. These are five quality dimensions, which can be taken into account for
the assessment of service quality.
BY Parasuraman et al – Parasuraman, Valerie Zeithaml and Leonard Berry
identified five dimensions with which consumers judge services.
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Service sector management
RELIABILITY
It shows the ability of the service provider to perform the promised service
accurately and dependably. It means that the service provider should be able to
identify and provide business solutions to their customers to achieve their goals
and objectives. Reliability assures performing the promise given to the customers
in the most effective and efficient manner.
In the case of hospital industry it is consistently shown to be the most important
determinant of service quality because this is the main reason why the customer
i.e. patient comes to a hospital for his treatment and as soon as he enters in a
hospital, it becomes an implied promise of the management of the particular
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Service sector management
hospital that they will try their level best to treat him properly. A person should
be assured of the acute physical and mental disorders also. So this is the most
vital promise which a hospital gives to its customers and if it is broken then it will
cause a great problem to its customer as well as it affects the reputation of the
hospital but as such there is no hard and fast rule in any of the hospital that a
patient will be cured.
Basically the main service, which a hospital gives, is cure and treatment only and
they shouldn’t compromise a bit in this criteria. Hospitals should hire the best
doctors affordable and available to them in the industry, which can provide the
best of the services. Hospitals should also provide all the other services like the
accommodation, medicines, timely appointments, appropriate diagnosis, and etc.
to their level best to the patients.
ASSURANCE
Assurance is all about trust and confidence. It comes with the brand equity, trust
and loyalty towards consumers. Consumers should be assured about the service
and they should have trust on the brand. This dimension is particularly important
for hospital industry because it involves a high risk and there is a great
uncertainty of the outcomes. Trust and confidence may be embodied in the
person who links the customers directly to the company for example securities
brokers, insurance agents, etc. but in the hospital industry the customer is not
directly linked to the whole organization but with only a part of it in the way of
some particular doctors and attendants.
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Service sector management
So in the early stages customer may use the tangible evidence to assess the
assurance dimension like the degrees, honors, awards, and special certifications in
this type of professional services. So if the hospital is rated 5 star, than the patient
may be assured that at least they are getting treated by the best professionals in
the industry and the probability of they getting cured is high in a critical disease
with such hospital other than low graded hospitals. So here the knowledge, skills,
credentials and reputation of hospital and its employees is of immense
importance to assure the customers about the service.
TANGIBILITY
Tangibility means representing the service physically. It stands for the appearance
of facilities, equipments, personnel and communication material. Making
customers happy with business environment is the motto of service providers. All
of these provide physical representations or images of the service that customers,
particularly new customers, will use to evaluate quality.
Hospital is a type of service in which the customer himself comes to the service
factory hence there is more interaction with the tangible cues. In a hospital the
tangibles are the waiting rooms, examination rooms, surgical and operational
tools, and facilities inside the rooms, modern infrastructure, essential drugs,
equipments for investigations, etc. on which a patient can make out the service
quality of a particular hospital.
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Service sector management
Hospitals should also take good care of their kitchen and canteens. They should
be kept absolutely clean and clear to insure hygiene. This is the main aim for a
hospital to attract more and more customers. As there is no particular tangible
service like in real estate industry or in catering industry in which you can actually
try a product and then can approve it. But in this case a patient can’t just try the
service of the doctors in the hospital so he will have to rely on these type of
tangible goods and the profile of the surgeons and doctors to take a decision to
get admitted in a particular hospital.
EMPATHY
Empathy means the individualized attention and customized service given to the
customers by the organization. Understanding the customer’s needs, goals, and
objectives and providing solutions with good quality and helping them to
overcome their problems. A hospital should acknowledge patient as a person,
should remember his previous problems and should than hear to him with
patience to treat him in the best possible manner. This industry is all about giving
customized service to everyone because every patient has different problems so
he should be treated with a great empathy.
More than the treatment, what a patient wants is care and comfort. A patient
gets distressed when he is alone, when there is no one to hear him and there is
nothing to pass his time on. So staff and doctors should always be friendly and
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Service sector management
there should be a friendly environment in the hospital because it relieves the
mental pressure of the patient and so he can be recovered soon. He should be
given the best of the food and best of the services, which he demands taking care
of his treatment so that he feels good.
A patient is the customer of the hospital but not a regular customer so whatever
he is experiencing and getting will be his perception throughout his lifetime and
this is the only time when a customer can be satisfied and there will be no second
chance. This will also create the word of mouth publicity when he is discharged
from the hospital and he will tell about his experiences to others.
RESPONSIVENESS
Responsiveness reveals the service providers awareness in problem solving with
viable business solutions. It can be defined as the way the service provider
responds to the customers and his willingness to help. The foremost thing is that
the service provider must be accessible to solve the problem whenever it occurs
and there the service provider should see through it that there should be no
waiting after that. Than the service provider should be willing to listen to the
problem and solve it as soon as possible.
Attentiveness and promptness is something on which a hospital should emphasis
on while dealing with them at the time of their treatment, problems and
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Service sector management
complaints. To excel in this dimension the hospital must view the process of
service delivery and handling the requests from the patient’s point of view and
should try to minimize the time taken to respond to the patient problems. Speed
and the promptness are the two main criteria, on which a hospital’s
responsiveness dimension can be evaluated.
In the case of any emergency or critical matter the responsiveness of doctors and
staff are very important so they should be alert for such situations at any time of
the day. So responsiveness of a hospital is communicated to the patient by the
length of time taken to assist them, answer their questions or giving attention to
their problems. Training is the most vital tool given to the employees i.e. doctors
and the staffs to deal with even the worst conditions during emergency and they
should be responsible enough to deal with it then and there.
BY David A. Garvin eight dimensions of quality were identified by Garvin:
1. Performance: every product is supposed to deliver benefits and the
measure of its quality is performance of the offer. A dish scourer, which can
clean plates completely and quickly, would be a performance.
2. Features: these are in addition to the core product, which does not come as
standard ‘features’, like add-ons.
3. Reliability: this is a measure of the degree of probability of the product