2011

Innovation week
Beeper
Improve the quality of treatment and patient satisfaction with Beeper !

Red team 2 :Andreea Popa & Zuzana Jandikova Supervisor: Carsten Balling Lund Project D 10/28/2011 Characters:

AP Marketing Management

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Table of Contents
1.Introduction ......................................................................................................................................... 3 1.0 Background description ......................................................................................................... 3

1.1Problem formulation ..................................................................................................................... 3 1.2 Delimitation .................................................................................................................................. 3 2. Current situation analysis ................................................................................................................... 4 2.1 External marketing audit .............................................................................................................. 4 2.1.1 Macro environment- PEEST analysis..................................................................................... 4 2.1.2 Micro environment ................................................................................................................ 4 2.2 Internal marketing audit ............................................................................................................... 5 2.2.1 Generic strategy ................................................................................................................... 5 2.2.2 Core competence ................................................................................................................. 5 2.2.3 Ansoff Growth Strategies .................................................................................................... 6 2.2.4 Product life cycle .................................................................................................................. 6 2.3 SWOT analyses ............................................................................................................................. 6 3. Objectives ........................................................................................................................................... 7 3.1 Strategic objectives ...................................................................................................................... 7 3.2 Financial objectives ................................................................................................................ 7

4. Strategy .............................................................................................................................................. 8 4.1 Market Segmentation................................................................................................................... 8 4.1.1 4.1.2 Macro segmentation ...................................................................................................... 9 Micro segmentation ....................................................................................................... 9

5.Target marketing strategies.......................................................................................................... 10 4.2 5. Positioning ............................................................................................................................ 11 4Ps ............................................................................................................................................ 11

5.1Product......................................................................................................................................... 11 5.2 Price ............................................................................................................................................ 12 5.3 Promotion ................................................................................................................................... 12 5.4 Place ............................................................................................................................................ 12 6. Executive summary .......................................................................................................................... 13 6.1 Mission ........................................................................................................................................ 13 6.2 Vision .......................................................................................................................................... 13

7.Conclusion ......................................................................................................................................

Bibliography ......................................................................................................................................

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1.Introduction

1.0 Background description In week 41 the students of Via University College have been challenged with an innovation project. The project involved students from Marketing Management, Global Business Engineering, Value Chain, IT and Constructing Architecture. They were divided into groups and were expected to share knowledge from each department in order to achieve a common goal. The purpose of our group was to find an innovative way of reducing the waiting time of patients in the Regional Hospital from Horsens. The innovative process has lead us to a new system development introduction of beepers a system that allows the communication between doctor and patient to be easy and that helps the patient reduce the time spent in the waiting room. In order to sell the Beepers, the producers of the product have established a new company, named SYSTEMATICS A/S. 1.1Problem formulation After we manage to develop Beepers, the next step had to be done. This involved analysis of the current situation, as well as finding the target group and understand their needs. In order to do so, the marketing plan had to be executed. Marketing Plan is a necessary tool for creating and communicating the value to the customer. The use of relevant theories and models will be included. 1.2 Delimitation The main interest of this report is to develop a marketing plan, which is a key stone for finding the customer needs, creating value for them, positioning the company and segmenting the market. Beepers can be useful for hospitals in Denmark because they have a high-technology system developed and they are interested in ensuring patient satisfaction. This product can also be suitable in the European hospitals, in the well developed countries which would like to invest into creating value for their patients. After the company launches this product they will of course try to improve the system and also adapt it in order to be used by other companies as a smart tool that makes communication easier between people.

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2. Current situation analysis 2.1 External marketing audit 2.1.1 Macro environment- PEEST analysis

Political and legal environment Beepers will only be sold in the European Union, so there is only a minimum political and legal aspects. The environmental law, financial regulation, trade restrictions and tax policy should be respected. Economy SYSTEMATICS A/S need to choose how to finance their business. The company can choose to finance their business through retained profit (self-financing) but only if they have the physical and financial capacity to do this. Another option would be to source capital through debt (from private investors, financial institutions, mortgage institutions).This would a bit risky, while the company will get a considerable debt to repay in the future. The best idea would be to combine those two and see if they can handle to start up their business on the right foot. It is hard to say that the company will face risks at the beginning even if the financial crisis which started on September 2008 is slowly declining. For a new company like SYSTEMATICS might be the best time to launch a new and original product , in 2012. Ecological SYSTEMATICS will consider the LEAN concept so they can remove waste which is a positive fact when thinking ecologically. Social/cultural The main purpose of this product was to make doctor-patient communication easier in hospitals in order to remove the wasting time of the patients in the waiting room. It is obvious that after the company will launch the product and see the way it is working, they will adapt and improve the product so it can be used by other companies as an easy and smart tool that allows better communication. Technological Beepers are technologically unique products that help people communicate fast and easy .However it is necessary to improve this technology continuously in order to stay on the market because innovation is an ongoing process.

2.1.2 Micro environment Market The company will start promoting and selling beepers in Denmark but at some point they will also try to expand in the European market. The fact that the company is new on the market shows us that there is lack of experience, so in order to sell the product in the European market it

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needs to face the cultural differences, to make researches, to define the target groups, to hire more employees and make bigger investments. Customers The main customers for beepers will be Danish hospitals that want to improve communication system and create value for their patients. In time the company will try to sell their product into other European hospitals. However if the company will grow and make good profit, they will be able to adapt their product for every kind of company that wants to improve their communication system between departments, employees and so on. Competitors As a result of innovation, Beeper is a unique product, developed to help the hospitals with their organization which means that there are no competitors at the moment. However the company might face the risk of new competitors that will try to adapt or copy the SYSTEMATICSs technology. 2.2 Internal marketing audit 2.2.1 Generic strategy Michael Porter has argued that a firms strengths ultimately fall into one of two headings: cost advantage and differentiation. Cost leadership strategy

Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether. In this case we cannot talk about competing with rivals about the prices because they are launching an original product so competition at that moment will not exist. The company should not approach a low cost strategy because being a new product on the market, problems may arise when customers try to relate the price to the value they get by purchasing the product. Also because of the products unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily. Differentiation strategy A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products. Beepers are a result of an innovation process which means that they are aimed to create a different never seen product. Being unique, SYSTEMATICS is clearly using a differentiation strategy. Even though, the company will develop this product, in order to be useful as well for other organizations than the hospital. The company will focus on creating competitive advantage on the market by providing a superior value, meaning that it will perform better in terms of quality, usefulness, durability etc. ( http://www.quickmba.com/strategy/generic.shtmli )

2.2.2 Core competence In CK Prahalad and Gary Hamels theory, core competencies are the collective learning in

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organizations, and involve how to coordinate diverse productions skills and integrate multiple streams of technologies.( http://en.wikipedia.org/wiki/Core_competency) For SYSTEMATICS, the core competence is to produce a high quality communication system that improves communication processes and removes the waste of time. This core competence gave the company a unique position on the market, because with Beepers, the company has differentiated itself completely and gained competitive advantage.

2.2.3 Ansoff Growth Strategies The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth strategy. The Matrix suggests the company in which way to grow a business. This depends on whether it markets a new or existing product in new or existing markets. Taking into consideration that the Beeper is a new product, two options remain: product development and diversification. The other two options, market penetration and market development, are not suitable in this case because they suggest that the companys product should already exist. (http://tutor2u.net/business/strategy/ansoff_matrix.htm ) Product development indicates that the new product is being introduced to the current market. Taking into consideration that the company is new and came up with an original product, the EU market for them is also new, therefore they will not use this strategy. Diversification indicates that the new product is being introduced in a new market. It is the case of SYSTEMATICS because of the reasons mentioned above. On the other hand the company is penetrating the markets where it has no experience and it needs to have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. (http://tutor2u.net/business/strategy/ansoff_matrix.htm ) 2.2.4 Product life cycle Product life cycle is defining the stages the new product has to experience. Those stages include introduction, growth, maturity and decline. This is an introduction stage where Beeper is positioned now. In the future Beeper will gain more sales and go through the growth stage and the maturity stage. At this stage SYSTEMATICS will try to hold the Beepers for as long as possible. After that Beepers will decline and the company will have to harvest and divest the product. 2.3 SWOT analyses Strengths: - improves communication - reduces time waste -easy to use -good quality -core competence -technological knowhow Weaknesses: -lack of experience in a market -hard to be adapted for every market ( can be distributed only where high technology is used and for other companies that want to create value for their customers)

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Opportunities :- new potential markets -technological advances Threats: -arising competition -threat of copying the product -economic slowdown can reduce demand

3. Objectives 3.1 Strategic objectives Objectives are the general areas in which the effort of the company is directed to drive its mission statement. With objectives the company moves from motive to action. (http://mystrategicplan.com/resources/objectives-and-goal-setting/ ) Beeper is a new product which tries to enter on the market. The strategic objective for a new product will definitely be to build sales and market share. The company will exhibit a technical innovation tendency, stressing the improvement of product manufacturing flow and production techniques to produce and launch high quality products. The company will be involved in pursuing stable growth and improved production efficiency. Their goals will be to: implement technological innovation in product design establish the supplier and distributor relationships and ties create the best value possible for the price offered manufacture and maintain upgraded product quality level increase product added value enforce marketing information and adaption ability establish new target markets and improve design and development procedures.

3.2 Financial objectives

Financial objectives focus on achieving acceptable profitability in a companys pursuit of its mission/vision, long-term health, and ultimate survival. Establishing the company required a high initial investment, involvement of banks and other investors. Therefore the main financial objective is to pay their debts in the next decade, while remaining profitable each year. In the next years the companys objective is to remain in a good financial shape with ROI of at least 25 %. Other financial objectives will be: attractive economic value added (EVA) performance, attractive and sustainable increases in market value added (MVA), a more diversified revenue base, bigger cash flows etc. http://mystrategicplan.com/resources/objectives-and-goal-setting/

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4. Strategy 4.1 Market Segmentation To implement the marketing concept and successfully satisfy customer needs, different product and service offerings must be made to the diverse customer groups that typically comprise a market. Therefore we need to use market segmentation to identify individuals or organizations with similar characteristics. First we will start with the target marketing which is a key element in marketing strategy. 1. Target market selection Our primary objective is to target Denmark regional and private hospitals in 5 Regions. The regions are North Denmark Region with 580,000 inhabitants, Central Denmark Region with 1,21 000 inhabitants where Horsens is situated, Region of Southern Denmark with 1,180 000 inhabitants, The Capital Region of Denmark with 1,630 000 and The Sealand Region of 810,000 inhabitants. Overall Denmark has only 5,5 million inhabitants. There are not many private hospitals 95% of beds are public, therefore we will be mainly focused on regional hospitals. As we are targeting hospitals and they are targeting their patient the age should be 14 and up to old group patients, because young kids go to the hospital with their parents. In overall consumer market it is not possible to create a marketing mix that satisfies every individuals particular requirements exactly. Market segmentation, by grouping together hospitals and patients with similar needs will provide a commercially viable method of serving these customers. So the company will try to create value for its customers. For now we can not talk about competition, as we came up with a new product and better system for the hospitals and patients. After we will promote our product the relevant people in the organization should be aware of its importance, and be involved in the process as much as is practicable. By gaining involvement, staff for example nurses, volenteers and even doctors will be more committed to the results, leading to better implementation in the later stages. 2. Tailored marketing mix

Our company is targeting hospitals with a same problem which is waiting time , we have solution with beeper which will provide hospitals and patient a lot of benefits to reduce their: waiting time, amount of people waiting in the hospital and illness as you

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dont have to wait among ill people long hours. So there are same benefits for hospitals and patients. 3. Differentiation We dont need to have different marketing strategies as we are only one in the market offering beeper, so there is no competition. 4. Opportunities and threats As customers are more affluent, seek new experiences and develop new values, new segments should be invented. The opportunity is therefore to use beeper instead of long time waiting. This will also require marketing research which plays important role here.

4.1.1 Macro segmentation It focuses on the characteristics of the buying organization such as size, industry and geographic location. SYSTEMATICS A/S is a new small organization with no experience on this market which will provide good pricing on beepers to start their business and promotion to commercialize them more to big regional hospitals. The healthcare industry has problem with waiting time in the hospitals and patients with wasting their time, where we have our solutions with no competition. This small company will start focusing mainly on Denmark and later maybe international and all Europe Geographic location.

4.1.2 Micro segmentation It requires more detailed level of market knowledge as it concerns the characteristics of decisionmaking within each macro segment, based on such factors as choice criteria, decision-making unit structure, decision-making process, buy class, purchasing organization and organizational innovativeness. One group of customers may rate price as the key choice criterion, another may favour productivity and third one service-orientated. I assume that the hospitals in Denmark may be service-oriented to their patient with beepers. Overall hospitals in Denmark are supported by government. The healthcare in the regions is financed by four kinds of subsidies. A block grant from the state 75%, a state activity- related subsidy 5% a local basic contribution 10% and a local activity- related contribution 5%. The decision-making unit composition - SYSTEMATICS A/S is focusing more on organization in the hospital where purchasing managers plays the key role. Decision making process is taking more time to be on track with effort placed on personal selling as we are only beginners. The buying process is relatively short for hospitals , where the purchasing manager is involved.

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The regional hospitals in Denmark as a buying class affects the lenght of the decision-making process and the number of choice criteria whichs are service-oriented where the lenght of dicision will be. The purchasing organization in the hospitals is centralized with purchasing specialists who become experts in buying a range of products, which means they are more fimiliar with cost factors, its strenghts and weaknesses than decentralized generalists. The degree of innovativeness for potential buyers is high as we came with a new innovative idea of using beeper, which has no competitors. Competitive factors Among the competition SYSTEMATICS A/S is a New entrants, in which a segment seems superficially attractive because of the lack of current competition, but care must be take to assess the dynamics of the market. A judgement must be made regarding the likelihood of new entrants, possibility with new technology, which might change the rules of the competitive game. Political, social Political- the attraction of entering new geographic segments may be reduced if political instability exists or is forecast, but in other way political forces can open up new market segment. Social trends- changes in society can give rise to market segments, by using effective system instead of waiting. Beeper is very innovative, has a nice design and also the younger population can benefit from it as well as the old people. Instead of waiting in the hospital they can stay at home or go shopping etc.

5.Target marketing strategies

There are four generic target marketing strategies from which to choose undifferentiated marketing, differentiated marketing, focused marketing, and customized marketing. SYSTEMATICS A/S is using focused marketing for now, because they are using a single marketing mix beeper aimed at one target market, which are hospitals. Focused marketing allows research and development expenditure to be concentrated on meeting the needs of one set of customers, and managerial activities can be devoted to understanding and catering for their needs. The differentiated marketing is used for several potential targets, which SYSTEMATICS A/S has only hospitals and their patients. The customized marketing is focusing mainly on requirements of individual customers that are unique and designing a separate marketing mix for each customer viable.

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Undifferentiated marketing needs to have a separate marketing mix to meet customer needs and requires good marketing orientation and good customer knowledge to develop only a single product.

4.2 Positioning The most important things in positioning are where we want to compete, hospitals, and the differential advantage which is Beeper how we wish to compete. SYSTEMATICS A/S doesnt have to compete with other companies as we have only one idea that has never been before for one target group. Our product will create something special for customers, which is a good service for patients. It is also very innovative and easy to use also for old generation, as they have no smart phones and such. The differential advantage is on saving the patients time to do more useful and joyful things. Beeper has features which give customer benefits that rivals cannot match. Promotional differentiation stem from unique, valued image created by advertising, or superior service provided by salespeople. The distribution may arise through making the buy situation more convenient for hospitals. And the price may involve giving superior value for customers through good prices. SYSTEMATICS A/S would like to benefit from consistent message being communicated to their target customers by quote catch the time or use your time. The differential advantage that is chosen must be credible in the minds of the target customers, therefore our brand name is Beeper to ensure the hospital that they are buying a good brand.

5. 4Ps 5.1Product To satisfy the customer needs and solve the problem of wasting time the Beeper has been created. Beeper is not only a product, but also a good service to customers. After we have designed our product, we have created a brand named SYSTEMATICS, to enhance company value, positively affect consumer perceptions and preferences and build trust among customers. Our product has a good quality and design and is easy to use. Every patient who has managed an appointment and still has time left will get a beeper, where the display will show the number of customers left as well the time left. Instead of waiting the patient can spend their time more useful and wont be in the crowded room full of ill people. When there is a time and minimum amount of patients it will beep, which is also very useful for old people, so they can hear the signal. It is also very good for the hospital since they will have this system, because the waiting rooms wont be full and they can use more space for themselves. It is a core product which provides the central benefits required by customers.

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5.2 Price As the price is not mentioned yet, SYSTEMATICS A/S will put a good price for this product, to target as many hospitals in Denmark. When the product will be successful the price will probably rise as this is an innovative and a good quality product. The pricing also depends on the degree of competition, but as the competition doesnt exist at the moment we will put higher price later on.

5.3 Promotion It is very important to promote the SYSTEMATIC A/S product in the best way as they are new on the market. Advertising is and important element in the promotional mix. Therefore we will use all six major components of the promotional mix which are advertising, personal selling, direct marketing, Internet promotion, sales promotion and publicity. Firstly we will advertise in prime media through television and press, and then we will communicate with prospective purchasers in the hospital. We will use direct marketing the distribution of products, information and promotional benefits to target hospitals in Denmark through interactive communication. Also using Internet promotion and developing our new website to promote our product. And also we will create some posters and layouts that will be given to purchasers (hospitals). In advertising we will focus on the product and service, which the Beeper can offer. We will also mention our brand and quote catch the time or use your time.

5.4 Place Producing product the customers need, pricing them correctly and developing well designed promotional plans are necessary, but not sufficient conditions for customer satisfaction. The final part is distribution. Gaining distribution channel doesnt come easily. We still have to find the most affective channel of distribution in Denmark. Now it will be either from producer directly to Business customer or Producer through Agent to Business customer. We want to sell directly to the ultimate customers not through the retailers or

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wholesalers. First the hospitals will need a limited quantity of beepers at the first time, so there is not need for a large quantity of this product.

6. Executive summary 6.1 Mission The mission should be based on the vision that top management and its subordinates have of the future of the business. SYSTEMATICS A/S has been developed to help hospitals to provide better service for patients, by developing beeper. Their mission is to commercialize the product that has been developed, to ensure the hospitals for using it and to make the patients happy. They would like to sell their product to all hospitals in Denmark and later on in Europe and internationally, if it will proceed successfully on Danish market. They would also like to do some surveys from the patient to get some feedback, solve problems and improve their product usage for the near future. By adopting the customer perspective, new opportunities are more likely to be seen. 6.2 Vision The vision is a coherent and powerful statement of what the business should aim to become. SYSTEMATICS A/S vision is to make service with beeper for patients and the hospitals all around the world.

7. Conclusion
To conclude with, Bepper is much more than a regular product, its a concept which will be introduced to a real market and real customers. Carrying out a marketing plan is the baseline for the main marketing decisions. The marketing plan has to be checked and evaluated on a regular basis in order for SYSTEMATICS to stay on track. It is a key process for a successful launch of a new product. The marketing plan is suggesting us that Beeper is a differentiated product which is carrying a competitive advantage from the beginning for SYSTEMATICS company. Promoting the product in the best way and with the right advertising methods, the company can gain a lot of success on the market.

Bibliography
http://www.quickmba.com/strategy/generic.shtml http://en.wikipedia.org/wiki/Core_competency http://tutor2u.net/business/strategy/ansoff_matrix.htm http://tutor2u.net/business/strategy/ansoff_matrix.htm http://mystrategicplan.com/resources/objectives-and-goal-setting/ http://mystrategicplan.com/resources/objectives-and-goal-setting/

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