Expand your horizons? Easy with TanAx geographic expansion.
Covid pandemic has been extremely hard on most businesses. However, medical, pharmaceutical, and healthcare companies, have had it especially hard. On one hand, many have experienced a period of growth. For instance, producers of medical gloves and face masks had a tremendous year. On the other hand, the market has become more competitive. In order to differentiate and grow, many companies are looking to expand internationally.
However, growing in new geographies is no easy task. Especially, when it comes to the highly regulated Medical & Healthcare market. Most attractive markets like China, Russia, Saudi Arabia have strict regulatory policies in place. Additionally, these regulatory practices differ significantly from the US or European Union. Hence, product launch in such markets requires specific knowledge.
Healthcare marketing strategies
Additionally, it is important to take into consideration the country’s infrastructure and the healthcare system. The infrastructure is key when understanding whether you will establish your own entity or chose a distributor, if you will need one distributor or several, and, finally, where they are to be located. For instance, India has 27 states of which only 3-5 are home to the largest number of doctors, surgeries & private hospitals. So, if you are considering expansion to India, you will need several distributors strategically located in states Maharashtra, New Delhi, etc. On the other hand, if you are entering Russia, you will succeed with 1, possibly exclusive, distributor who has great geographical coverage.
When it comes to healthcare infrastructure, it is quite important to understand the country’s environment. The first step to take is to investigate regulatory requirements. When it comes to healthcare infrastructure, it is quite important to understand the country’s environment.
The first step to take is to investigate regulatory requirements. Different countries have their own way to guarantee the safety of medical products imported into their country. Some, focus on proper marking of medical goods, while When it comes to healthcare infrastructure, it is quite important to understand the country’s environment. The first step to take is to investigate regulatory requirements. Different countries have their own way to guarantee the safety of medical products imported into their country. Some, focus on proper marking of medical goods, while others subject the products to rigorous testing. In either case, it is illegal to import your goods without meeting these requirements first. Some regulatory frameworks are extremely complicated and require an expert opinion.
New market development & healthcare marketing strategies
The second issue on the agenda is to understand healthcare funding and the insurance system and how your product fits within that network. For instance, when selling surgical disposables in China or India you are faced with very similar market conditions, but in the case of China, these disposables are the cost of the hospital, while in India these disposables are charged to the patient. This vastly changes the landscape.
New market development & healthcare marketing strategies
Finally, it is worth understanding if the country promotes medical tourism and if it has a strong private vs public healthcare network. Countries that are famous for medical tourism have to respect the world-class standard of care. This means these countries are more responsive to premium products that are safe for healthcare workers and patients. For example, Thailand is well known to attract medical tourism. Due to that, the best hospitals in Thailand are JCI accredited.
JCI is a non-profit organization that was established in the USA and is recognized as the gold standard of care globally. JCI enforces that all of the accredited hospitals in the USA or abroad follow the same safe practices. Hence, JCI-accredited hospitals in Thailand are more likely to adopt the newest products & technologies that benefit patients and healthcare providers.
New market development: things to consider
Therefore, before launching in the new market, you need to understand a few things. First and foremost, you need to register your product with current Healthcare Authorities. Unsurprisingly, this can be a long and complicated process. Secondly, ensuring artwork compliance can also be an ordeal. The challenges range from translating the artwork to the new language to stamps of approval. For instance, we had customers experiencing issues printing their artworks in Japanese and Arabic languages. Since languages do not follow “typical: left-to-right writing. Thirdly, marketing channels may vary from market to market. For example, China and Russia use their own digital channels instead of LinkedIn, Facebook, Google. Therefore, it is worth hiring a consultant when considering geographical growth.
3 TOP TIPS
When approaching geographic expansion, many companies follow an opportunistic approach. Instead, we would strongly recommend a different, more focused method. Therefore, let’s review the strategy that we have found to be beneficial in the long run. First and foremost, the cornerstone of geographic expansion is to define which countries you want to target. This is no rocket science, but it is a helpful roadmap. There are a few considerations to take into account when it comes to choosing your target geographies.
TIP 1: MARKET SIZE
Based on our experience, we would recommend beginning by evaluating the market size first. The rule of thumb is, to begin with either the most populous countries or the biggest economies. For instance, if you are planning aggressive growth in Africa, you should certainly look at the biggest countries. According to Statista, the largest population is concentrated in Nigeria with 206 million people, Ethiopia with 115 million people, and Egypt with 102 million people. This would be a great starting point if your products are targeting low to medium price segment.
Another idea is to concentrate your efforts on the biggest economies – meaning, countries with the largest GDP. This approach is helpful if you are offering premium products. Returning to our example of Africa: Nigeria with a GDP of 515 billion dollars, Egypt with a GDP of 394 billion dollars, and, finally, South Africa with a GDP of 330 billion dollars is the largest economy to consider. This data is also based on Statista. As you can see, the list of countries will vary depending on which road you will take.
TIP 2: MARKET ATTRACTIVENESS
Market attractiveness sounds like a vague measure. However, if you think about it, there are objective ways to approach this complex topic. We found it helpful to use a country risk classification by ICTF, International Credit and Trade Finance Association. The organization assesses the country’s risk by a set of both quantitative and qualitative factors. The quantitative measures account for numeric factors like inflation.
The qualitative metrics take into consideration political stability and such. The resulting country ratings are a good guide to see how easy or hard it is to operate in a given country. For example, we have seen Ethiopia rank high in terms of population. However, the country is a high risk rating. This means that the size of the market alone does not make it attractive, because it is risky to do business.
TIP 3: DO YOUR HOMEWORK
Once you have come up with a preliminary list of attractive geographies, it is time to dig deep. We recommend mapping countries on a graph. Visual representation is often helpful when making complex decisions. What we would suggest is a bubble graph where the x-axis is Market Size, the y-axis is Market Attractiveness, and the size of the Bubble is your current turnover (if any). The upper right quadrant of the graph will show you the most compelling opportunities.
new market development
Once your focus country list is identified, you should prepare a business case for each of the geographies on your list. The business case will help you understand the regulatory environment, market players, duties, finally, the best approach for your geographic expansion.
How can we help with healthcare marketing strategies
Hence, if you plan to expand your business to new geographies, TanAx “change marketing” agency will help you achieve your goal. Perhaps, you faced challenges in your local marketing activities? Luckily, at TanAx, we have 15 years of experience dealing with geographical expansion. In fact, we have experience building and implementing business cases for large markets like India, China, Russia and achieving at least 10% growth rate for Fortune 500 companies in the Medical field.
Check out what we can do for you! You can explore our special offer for the Medical/Pharma & Healthcare sector or, perhaps, download our corporate presentation!