Challenges WITHIN THE Indian Medical Diagnostics Market Economics Essay

As you see in the physique above, as the general trend for growth in the market looks healthy, the two main regions contributing to market growth by 2015 are the United States and the RoW (Remaining World). The RoW market will expand by around 8% from 2011 to 2015 and hence would be the major concentration area for some medical diagnostics companies. In order to aid this expansion, a number of of the firms have set up global research, development and production centres within the rising market economies and India and China host most of these centres.

There is a considerable level of investment in healthcare underway in the producing economies in order make health care accessible to most their society which is still under the poverty line. Also, the checking of the financial sector to overseas direct investment in some of these key markets in addition has opened up the insurance market and this is move should start the growing middle income to utilizing more of the medical and diagnostics services

Roche Diagnostics in India

Roche Diagnostics in India is focussed on the Professional and Molecular Diagnostics portfolios plus a strong background on the Diabetes Health care front, and has had an annual progress rate of approximately 18% year-on-year over the last 3 years. The customer bottom varies from large hospital chains and global lab chains with business in India to local lab chains and government owned or operated health centres and hospitals. The gross annual turnover at Roche India is around 45 M USD for the entire year 2011 and has been displaying steady growth over the last 3 years. There are plans on producing the Applied Science and Muscle Diagnostics portfolios also in the immediate future in to the country.

Challenges in the Indian Medical Diagnostics market

While there is a broad spectrum of potential and current customer foundation, there are always a multitude of troubles facing the business in India. While many of these issues are common across all manufacturers, there are some which are far more challenging to solve than the others. While the extensive troubles facing anyone who would like to do business in India include the political, plan and bureaucratic hurdles, there are a few that are specific to the medical diagnostics industry. In order to understand these better, there have been a few interviews conducted with employees in Roche Diagnostics India and also with employees from some of our customers (nursing homes and laboratories). The questionnaire and the outcome of the study are included in Exhibit A.

A quick conclusion of the study shows the following points coming across as key difficulties for the medical diagnostics market in India

High price of medical diagnostics equipment (most of the equipment is imported from western economies or Japan and hence there is a high level of import taxation)

A majority of India's people lives in villages and don't have access to sophisticated medical diagnostics and medical care

The central and state government health departments do not have the ability to fund acquisition of large buys and don't make adequate assets in the diagnostics area

Bureaucratic and coverage delays make it very difficult to even receives a commission for those buys that contain been made by the government

A general notion exists that the majority of the imported equipment, while they treat and focus on critical disease identification, do not give attention to the more common illnesses in the rural areas in India. So since there is a lot of operation and science, is this what India needs?

Another interesting point of view from quite a few of the respondents to the survey was the question on whether the price was too much since the quality of the products were too much and if the expected life of the devices were too much. In essence these were questioning if indeed they were spending money on quality that was not needed.

While the above were viewed as difficulties, the sector continues to be considered one with a significant potential for growth and companies like Roche, Abbott and Siemens are market market leaders in the country. There is not enough local competition in this sector which could be due to the advanced of technology integration between your hardware, software and chemistry components (reagents). There are a few local technology companies which have partnered with some of the international companies (e. g. Wipro and GE Medical Systems) and also have turn out with products more relevant to the Indian market, however, they are simply a handful.

The Problem Statement

Roche's Obstacles in India

Roche has had a subsidiary in India going back 35 years and has made significant improvement in the medical diagnostics market in India. The existing turnover for the subsidiary is around INR 150 crore (about 45 Mio USD) and the development rate is pegged to be around 20% per annum. While the numbers make the account look impressive, it is relevant that we give attention to the issues facing the company in India and position the company to achieve a growth rate at par with a few of the faster growing regions. To be able to understand the issues faced by the business (as perceived by Roche), I needed a few interview trainings with - the Roche India GM, the Head of Sales for Roche India, the APAC Region Brain for Roche, the Head of Roche Professional Diagnostics (RPD) and the top of Roche Molecular Diagnostics (RMD).

The priority that arrived from these interviews was having less a structured laboratory and medical diagnostics industry in India. This insufficient composition and maturity has wide-ranging effects on Roche's capability to move forward within the market

As a result of the above mentioned, it becomes more and more difficult to place our instruments in the small laboratories and hospitals which are most the vehicles that deliver these diagnostics services to the people in India. About 70% of India's population are in rural areas and hence the access to the larger market should be through these smaller laboratories and authorities hospitals and health centres.

We don't have any manufacturing or assembly taking place in India for our tools and hence suffer from the expensive import or equipment from Germany, america, Switzerland and Japan. This sets us at a disadvantage with a few of our competitors who've manufacturing and assembly facilities locally and have the ability to price their equipment lower.

The finances that nursing homes and laboratories bring and the rates models that exist prevent them from procuring highly costed Roche instruments

Lack of your structured and widely widespread insurance repayment model makes it even more complicated to price the diagnostics tests at the right level. Currently the prices of diagnostic evaluation is much reduced India than in most other countries and hence the profits on return is much low in assessment to other countries

How would you sell adult products in developing economies

The above results from the interviews and the studies highlight the intricacy that is present within the prevailing infrastructure, business techniques, policies and the bureaucratic functions in some developing economies. Though they might have market for all sorts of products, it can complicate the ability of your company to market within the united states effectively and leaves the company to find alternative solutions to either make the product more acceptable or to circumvent the existing hurdles and find the road of least resistance towards reaching the market. The higher level of capital investment needed by the buyer reaches times mitigated by funding provided by the multinational that earns the product. A good example of this is how the trucking industry in India has opened up completely to companies from MAN, Volvo and so on whose trucks cost more than double the trucks produced and sold by Indian manufacturers like Tata and Ashok Leyland. MAN and Volvo have installation their own funding arms which fund these expensive acquisitions and hence attract customers who often wouldn't normally have had the opportunity to. Leasing of such equipment too has been positioned as a new option to make such expensive bargains viable.

Volume advertising of hi-tech products

While hi-tech products can be purchased in India either through the direct import way or through CKD (Completely Knocked Down) packages that happen to be then built within India, there still is a big space between their expected sales vs. genuine revenue. The higher level of taxation on imports and the high cost of production under western culture make it essential these companies maintain a low margin and make the product more accessible to the quantity market. The primary challenges upon this entrance can be summarised as

High rates of transfer taxation and high cost of processing resulting in very high price tag

Low margins when rivalling with locally created products

Low rate of consumption on the market due to raised selling price

Data Collection

Medical diagnostics in India

"Heightened physician recognition to better professional medical benefits and increasing patient requirement to avail of high quality care and attention, have made it very important for providers to deliver targeted therapy. This has been made possible by the option of sensitive and specific diagnostic testing, along with technologically advanced medical devices and equipment. These further allow healthcare providers to make use of material and human resources optimally. " (KPMG CII Statement, 'Excellence in Diagnostic Attention 2011')

Overall, the Indian health care industry is predicted to grow for a price of 23 percent per annum, from the existing size of USD 35 billion, to reach USD 77 billion by 2012. 1, 2 This development will be powered by healthcare facilities, private-public tasks, medical diagnostic and pathological laboratories, and the health insurance sector. The diagnostics sector is projected to contribute USD 2. 5 billion, by 2012. An overview of the medical diagnostics and devices market, shows that as of FY 2008, the diagnostic and pathological laboratory (path laboratory) test services market contains 52. 1 percent of show, followed by devices.

Demand for these industries has been spurred by a reliable rise in

medical care spending, which makes up about over 5 percent of GDP. Of the, open public spending will approximate 2. 5 percent by 2011, compared to the existing degree of 0. 9 percent2

increasing consumerism. With economic growth augmenting incomes of the middle and top classes, their demand for exact and timely medical care, will probably increase. As a result, healthcare costs will command a larger show of the budget. Indians are becoming more alert to their health, because of the improved availableness and convenience of better health related information. Current movements include constant monitoring of health status through regular check-ups, and of health information by patients

the dynamic healthcare panorama in the country will further augment the demand for effective restorative modalities. Movements include increasing occurrence of lifestyle related diseases, increased awareness of health related concerns, expansion of medical tourism, increasing penetration of medical health insurance in the country. Statistics indicate that there has been an approximately twenty five percent increase in laboratory business scheduled to screening and follow-up for lipid account3, blood glucose levels, glycosylated haemoglobin, speciality checks for thyroid hormone levels, basic tumor markers.

Despite the wide ranging issues and problems mentioned above, these two areas are slated to emerge as powerful health care players. The diagnostics and pathological lab test market gets the potential to increase at a CAGR of 18. 9 percent from FY 09-13, while on the other side, the medical devices market is predicted to develop at 23. 2 percent, above the same period

Insurance and payee models

"Global experience, both in highly industrialised countries as well as in low- and middle-income economies plainly demonstrate the importance of achieving widespread coverage through either a purely tax-based plan or social medical health insurance mechanisms or a variety of both. Although India followed a mix of these strategies since 1950s, the penetration of medical health insurance remained low for another six years. "

In India there are four main types of insurance models

(1) Voluntary health insurance strategies or private-for-profit strategies - Bajaj Allianz, ICICI Lombard etc are samples for this

(2) Employer-based strategies - about 30 - 50 million people get covered under these schemes

(3) Insurance proposed by NGOs / community established medical health insurance, and

(4) Mandatory health insurance schemes or federal run plans (namely ESIS, CGHS).

India's tryst with health insurance program dates back to the early 1950s, with the release of Employees State Insurance Plan (ESIS in 1952) and Central Administration Health Plan (CGHS in 1954).

However, India's surroundings of medical health insurance has undergone tremendous changes in the last three years with the release of several more medical health insurance schemes in the country, largely initiated by central and state governments. It is fascinating to observe the swift and significant change in the geometry of health insurance coverage in the country. The country that is see to three medical health insurance programs until 2007 (ESIS, CGHS and Private Health Insurance - PHI), is now swamped by a plethora of insurance programs, in under 3 years time. The breadth, depth and level of health insurance coverage has observed enormous leap during this period.

The breadth of the coverage- denoted by the percentage of population covered by the insurance design - has accelerated from about 75 million people covered (around about 16 million family beneficiaries) in 2007, to around 302 million people this year 2010, about one-fourth of the populace. Relatively, the breadth of the coverage is by any global criteria quite breath-taking and occurred at a rapid rate in a course of 3 years, which feat could be achieved even one of the vulnerable populace and informal staff, where in fact the penetration is often difficult till just lately. The realisation among the list of leadership for the commitment to cover nearly every one of the human population despite their socio-economic status is quite commendable, since information clearly suggests that in India, it is not only the poor but a sizable parts of above poverty brand (APL) inhabitants also finish up paying catastrophic obligations and suffer impoverishment (transitory poverty) credited to health problems.

Given its comparative infancy, private medical health insurance has certainly advanced within the last twenty years, although there is much to do if it is to cover the current and future needs of a large number of individuals and families. To discover where it can or should develop it is first important to consider where it stands today. In what areas should the industry improve its capability, including the details of its offerings, its operations and its supervision? Specifically, this means looking at what products are on the marketplace, how and to whom they are really marketed, the way the industry pertains to its customers and also to the delivery system and its own administrative capabilities. Virtually all medical health insurance products in the Indian insurance market are designed to meet up with the hospitalization expenses of the policyholder. This has not changed significantly because the introduction of medical health insurance in 1986. Medical health insurance policies do not cover oral services, eyesight services, preventive care, home health services or long-term health care and, seldom, out-patient services. In many cases procedures exclude certain kinds of good care, even if a hospitalization occurs.

Drug costs and treatment options

Public sector vs. Private sector in India


Profile of laboratories in India

The diagnostic landscaping inside our country is highly fragmented. Still essentially filled by unorganized players, approximately 10 percent is constituted by organized entities. The diagnostic laboratory business has typically been considered a higher margin, asset-intensive business. Thus, in order to match increasing demand, large players have endeavoured to increase pan-Indian presence, by building nationwide networks, over the last few years. All together, the marketplace has witnessed constant mushrooming of overseas players as well as standalone local players. In addition, market market leaders have expressed intent to penetrate overseas markets like the Middle East and Sri Lanka, whose economies are growing on par with India.

Growth has been pursued via a combo of the organic and inorganic course. Most development in the prepared sector has took place through acquisitions and Brownfield assignments, rather than establishing green field laboratories. Different approaches have included growth via hub and spoke models (one guide laboratory - many collection centres), PPP initiatives, IPOs, and getting funding from private equities.

Model information: Hub and spoke expansion

Tier II and III places present a good chance for large commercial players. These places represent a location of underserved need, with a growing need for increased health infrastructure. From your standpoint of large players, seeking to establish presence, extension into these unexplored areas is associated with certain individuals and issues, as the following


They are areas with huge unmet demand for diagnostic services

Improved ease of access of these areas due to building of new nationwide/international international airports for example: Nagpur, Vishakapatnam

Government is trying to start these untapped marketplaces through general population private partnerships.


Difficulty in recruiting and retaining medical and paramedical talent

Difficulty in patient recruitment and retention as business is dependant on trustworthiness in local communities

Success of centres in Tier III places restrains large players from getting into them i. e, challenges exist around level and price points.

It is thus easier for large players, to partner with a renowned local lab in the region which has received a good brand, accreditations, good quality and service. Thus, a hub and spoke model is a popular strategy and is normally established in the following manner

1. Research labs, which act as regional hubs, are setup in large urban centers. They offer thorough and specialized assessment capabilities.

2. Satellite labs feed research labs, and provide a limited test menu. These can be either had or franchised.

3. Collection centres are found in hospitals, assisted living facilities, pathology labs, doctors' treatment centers, etc. Here samples are accumulated and forwarded to either a satellite/reference lab.

CC = Collection centre

Source: http://www. slideshare. net/vandalmax/medical-diagnostics-india-sample

A common variant in these model is the absence of satellite labs. This model offers several advantages. For the top diagnostic players (acquirers): (i) Potential for better leverage of capital expenditure by effective extension of catchment area by tapping local/local network of acquired labs (ii) Referral to the hub is locked in, from the satellite television labs/ collection centres (iii) satellite television labs have less capital expenditure framework (iv) They can leverage the travel and logistics network of the existing standalone labs. The duration of time taken to move the sample from site of collection to site of handling is of critical importance, because the turnaround time for reporting is proportionately influenced by the same.

On the other palm, this model prevents the smaller diagnostic players which get received, to (i) endure the competition proposed by large players, in conditions of your wider repertoire of assessments (ii) they can leverage the scientific infrastructure, including IT network of the acquirer. Again, this is another critical element in minimizing enough time lag for reporting since, for example, online reporting of lab diagnosis over a local area network significantly enhances reporting time.

Laboratory management in India is a super specialized arena. The necessity of the hour is to make dedicated investment funds in terms of complex analytical systems, and skilled recruiting, equipment, reagents; comply with stringent accreditation suggestions; provide excellent customer support such as an exhaustive test menu, along with brief and accurate reporting times. It is found that the price of assessment is inversely proportional to the workload and immediately proportional to the overheads. Since a lab within a clinic is run among the many departments, it typically does not receive the necessary attention from clinic management.

This ends up with high inventory and costs, pilferage, inadequate quality / service turn-around-time causing dissatisfaction between clinicians and patients. To be able to overcome these challenges, clinics today are ever more outsourcing lab management to exterior referral laboratories. This relatively new happening is called Hospital Laboratory Management (HLM).

HLM allows hospitals to offer the best diagnostic attention to their patients, while maintaining focus on providing their main healthcare services. First, the hospital helps you to save both time and cost to set up a full-fledged, technologically advanced lab

The recommendation lab bears out an array of clinical tests, and delivery time of results is reduced (by as much as 80 percent), as compared to manual workflow

Expert thoughts and opinions can be garnered from different areas such as Haematology, Clinical Pathology, Genetics, Molecular Biology, and Microbiology. Automation and other technology can be employed effectively and efficiently. Thus, in-house laboratory experts can ensure that doctors are provided with associated medical information to assist medical diagnosis, on reports

The amount of Hospital Personnel can be reduced, as existing clinic personnel can be supplemented by highly skilled and trained manpower from the exterior lab

Hospital can leverage the IT (information technology) infrastructure of the exterior lab. This supplies the subsequent advantages: (i) Operational streamlining of lab functions: for example, bi directional interfacing with lab equipment reduces data admittance errors, reduced staff and time focused on manual data entrance and specimen traffic monitoring, real time status of each laboratory review allowing doctors to estimate enough time of reporting without interrupting laboratory personnel (ii) Seamless and relevant information becomes available over the hospital to aid effective decision making for patient treatment, hospital supervision and critical financial accounting. The laboratory management systems can be integrated with an electronic medical record (iii) This IT backbone can also help the hospital prepare itself as a centre for medical trials, requisitioned by international pharmaceutical companies. Customer romantic relationship management can also looked after by the external lab

HLM is being offered by diagnostics majors such as Metropolis, 3 and it is a boon specifically for smaller private hospitals (200-250 bed durability), who find it difficult to control it themselves.

Instrument price vs. Purchasing power

In 2004, creator C. K. Prahalad provided a paradigm-shattering reserve entitled "The Lot of money in the bottom of the Pyramid: Eradicating Poverty Through Profits. " The book challenged the notion that the only path to increase the lives of these living in poverty in the bottom of the Pyramid (hereafter BOP) was through general population and non-profit sector intervention. The book suggested that the private sector has a critical role to play in the alleviation of global poverty- not by donating product but by selling product that benefits the lives of people making significantly less than $2/day.

The pyramid developed by Prahalad divides the world into four tiers

Source: "Fortune in the bottom of the Pyramid" C. K. Prahalad

Selling to the worlds poorest people (around 4 billion people) means a re-examination of the "price-performance" interactions for products/services in conjunction with a new level of capital efficiency. Because of that, advertising to the BOP presents a managerial obstacle that requires a change of managerial tactics in proven multinational organizations. BOP strategies are about providing the massive populace platform living on significantly less than $2/day access to alternatives that radically improve their well-being. While geography and infrastructure are significant barriers, the greatest limiting factor is cost, corresponding to creators Prahalad and Hart because poor have to pay a "poverty charges. " This refers to the premium that they are required to pay for products that the rich pay a lesser price. The poor pay more for drinking water, food, electricity, etc. because they buy reduced quantities.

A second limiting factor is prominent logic: players in both the general population and private sector have a tendency to operate in familiar ways and could be resistant to thinking beyond your box.

Source: "Bundle of money in the bottom of the Pyramid" C. K. Prahalad

BOP initiatives may require private, public, and non-profit sector entities to develop partnerships or at least understand how to work in parallel within the new paradigm. Founded managerial methods in multinational organizations require a paradigm shift in order to meet the needs of underneath of the pyramid. Decision-makers within multinational firms have never been conditioned to concentrate on dealing with problems for the worlds poorest.

Successful BOP products deliver on three key questions

1. Should it solve a difficulty for the poorest?

2. Is it economically viable? Does the business circumstance endure to scrutiny?

3. Could it be scalable? Could it be repeatable somewhere else?

The Indian market for medical equipment and equipment ranks among the list of world's top 20 but, still, the market remains disproportionately small with very low per capita spending. The hi-tech end of the medical device market is dominated by imports, while Indian manufacturers of good quality mid/low tech products have a problem with a stigma for unreliability. However, it's been estimated the marketplace will expand by an average of 15. 6 percent over the next couple of years, to around USD 4. 8 billion by 2015. Detailed rules of medical devices continues to be under consideration. Despite the fact that, this may deter sectoral growth, a significant opportunity is shown by the huge influx of overseas players that are consolidating functions in India. They are either joining joint endeavors / licensing agreements to make their products locally / utilize local agents to deliver them. These collaborations have been boosted by exhibitions, trade fairs and seminars conducted by the federal government physiques and equipment manufacturers, to set-up consciousness about their international specifications of creation and display their products.

Companies with making facilities in India


Facilities in India

GE Medical Systems

Overhaul and refurbishment centre in Bangalore in South India


Manufacturing place in Goa - X-rays, Scanners, Ultrasound systems etc


Manufacture of chemical type/immunochemical test systems as well as blood vessels and serum analysers

Source: IBEF Health care, Indian Law Office buildings "Indian Medical Sector"; Company websites; Livemint "GE sets up center in Bangalore to refurbish medical equipment", ; Webpic "Proven Trade Associates" Nov 2009;

JV/Tie-ups between foreign and Indian companies


Nature of JV/Tie-up

Pyng Medical Corp

Expanded its exclusive supplier network globally with the addition of vTitan Corp. (P) Ltd. in India

ET Trivitron Medical Technologies

Will make and market Cardiac Diagnostic equipment by setting up Trivitron's Medical Technology Park in Chennai

Wipro GE Medical Systems

It is India's largest exporter of medical systems, pioneered manufacture of Ultrasound and Computed Tomography systems in the country

Proton Health Care

Tied-up with Delhi established SM Logistics for distributing its digital health monitoring devices such as blood circulation pressure screens, ultrasonic nebulisers, body fat scales and thermometers.

Source: IBEF Professional medical, Indian Law Office buildings "Indian Health care Sector"; Company websites; Livemint "GE sets up center in Bangalore to refurbish medical equipment", ; Webpic "Proven Trade Associates" Nov 2009;

Companies like GE Medical Systems have implemented the startegey of designing and making products for the BOP portion and have turn out with disruptive advancement to be market leaders in these products. This obviously means an acceptance of a lesser margin per product sold, however the opening of the entry doors towards a much higher volume sale. An example in this circumstance is a fresh ECG (Electro CardioGram) that was launched by GE in India (in collaboration with their companions Wipro). The price of this equipment was one-sixth the expense of a normal ECG, and therefore leading to significantly lower margins while sales skyrocketed with a new class of customers having been put into the ECG portion.

Here is how I'd try to portray this balance between success/sustainability vs. value to the community

GE Medical Systems have since used this advancement to other parts of the world (South East Asia and Latin America) and also have also broadened out into an entire family of products which were investigated, developed and marketed for a much broader section of society.

Pricing per product consumed or alternatively pricing per service

While one of the ways in which to attain out to underneath of the pyramid is to lessen the cost of manufacturing and also to limit the functionality of the product to what is required along with sourcing components locally, there exists yet another perspective to approach this problem. In almost all of the conditions today, they cost of service is motivated by the price tag on the product that is employed to execute the major area of the service. Invest the the example of a restaurant, the expense of having meals in a restaurant is mainly motivated by establishment costs, cost of labour and yes there's a final part which is the price of the material found in the meal. In the same way the price of diagnostics test is determined by the investment in the asset and the investment in the laboratories themselves.

This leads us to the question of lowering the price of the advantage in addition to techniques used to attain the BOP. Quite early in the planning of the business, it needs to be decided whether to offer products or services. The outcome of the decision this will be based upon an array of factors, all of which is highly recommended carefully. To be able to come to a finish on which one is way better, there has to be an examination of the detail. Harry Beckwith in his book 'The Invisible Touch: The Four Secrets to Modern Marketing' laid out the following primary differences

* Products are manufactured while services are delivered

* We used products and experience services delivered to us

* While products have physical qualities and characteristics before we evaluate and make a decision whether to buy them or not, services do not even exist even when we buy them

* Products are impersonal while services are personal. Something romantic relationship is intangible but can be experienced and unveils the people engaged, both the provider and the customer.

While the first two of his four details above are self-explanatory, the progression of technology has rendered his third point not relevant nowadays. Digital products like software don't have a physical living, but can be examined by means of trial packages before a definitive purchase. Companies offering services are usually considered based on the proof of their work history with other clients, or a profile. The client will need to trust the service provider to be able to deliver at the same quality level as they have in the past if indeed they do get chosen for a job.

With respect to his fourth point, it would be incorrect to feel that products are impersonal. Both products and services need to hook up on an individual level with the clients, although the significance of the bond with the client is manifold higher for services. It needs much more conversation, and clients will not only measure the quality of the service provider's work, but also the way they present themselves and exactly how much the company connects with them and caters to their needs.

Let us now take a look at two potential cases that this could convert on the medical diagnostics front

Option 1: Cost free instrument and charge per volume of checks/reagent used

This model has already been in use in a few parts of the world today. Among the key advantages with this model is the very low level of capital investment that the laboratory/hospital will need to make. The tool is placed at the laboratory by the product manufacturer who is also then accountable for the service and repairs for the device and therefore frees the laboratory from any responsibility about the maintenance of the instrument. This model also helps avoid the necessity for huge CAPEX expenditures, however, it can significantly hike up the operational expenditure due to having to pay for the reagent. The reagent itself could be significantly expensive and might prove prohibitive towards success of the offer.

While this model has significant benefits, there are a few negatives too. The high cost of the reagent might zero out the huge benefits gained from devoid of had to make any capital investment on the device. Therefore means that the net price per test will not drop significantly and therefore these will still remain out of reach of the common customer in India. Another challenge with this model is the fact that the assessments on the device still cater to a more developed population and do not necessarily

Option 2: Run the lab: Outsourced lab services being run by the gear manufacturers themselves.

This is a model that is available in go for situations where the manufacturers themselves take over the operating of an entire laboratory, usually through the subsidiary company. This model has its positives and negatives too and is also usually very people rigorous and changes the entire dynamics of the company, hence usually run through a subsidiary than the business themselves.

In this model, the laboratory owners (brand owners), have limited investment and could have outsourced the entire activity to the manufacturers. This usually also means that there is not a lot of amount of capital investment needed by these laboratory brand owners and they get a percentage of the operating income but are not mixed up in day-to-day management of the labs

Core distinctions between products and services

1) Capital: Products are capital extensive while services require significantly lower degree of initial investment. Taking into account setup, asset and developing costs, products on the whole need a great deal of capital prior to the enterprise can begin. While services require which you have the necessary skills available, it is much quicker to begin with, usually people intensive, and remunerated based on effort put in in delivering the service. Once a service is delivered, remuneration is guaranteed, whereas there are no promises regarding selling already produced products.

2) Time: There doesn't need to be always a direct linkage between the time the merchandise is produced at vis- -vis enough time at which it is sold. This is not however true for services as enough time at which they are really remunerated for is directly linked to when they are supplied and the terms and conditions decided to before the delivery of the service

3) Charm: Products are built to satisfy and charm to a broader portion of the consumers while services are usually made to suit more specific needs. In another sense, services are tailor-able while products are configurable. However, there are specific services which may have been standardised and this usually is a sign of maturity of the service itself.

4) Scalability. Products can be produced in higher quantities and once there is a standard design, then it is a question of how fast the manufacturing can happen to be able to create, market and sell higher numbers. For services though, the procedure is significantly different with more effort being had a need to deliver a greater number of services. This implies there is generally a need for increased human capital investment to be able to generate more impressive range of earnings/profits.

Cultural fitment - budgets and expenses

During the span of this write-up we have been exploring the actual fact based distinction between products and services. While this is more often than not the main criteria for distinction and should help determine the fitment of a product based or something founded model for a

Why would a service based model work better

Outsourcing laboratory management: 'sell a lab'


There is not a difference in how one "should" approach the sale of products vs. services. But there exists more of a natural inclination by both seller and the prospect to concentrate on the product and its own features rather than what it can do for the prospect.

Using a consultative or solution-based way is nearly always the most practical method to use in nearing sales of products or services. The concentration should be on how the merchandise or service can complete a need, solve an issue or make life/work easier for the prospect.

Giving a typical "pitch" which targets what a service or product does indeed generically, i. e. discussing rather than tuning in is a like moving the dice. It only works when the individual has already been sold on the product or service and has regarded the need/want before you walk in the entranceway.

Focus on the customer in either case is the main element to making more sales per call as well has having more satisfied customers and creating repeat business and recommendations.

I also trust those who sell products by bundling them with services (e. g. faster delivery, better follow up, personal attention, seller managed inventory, etc). I sell something which could be looked at as a commodity (industrial hose pipe), but I make sure my customers know that it should be considered an engineered product which helps to make a safer workplace environment. I walk my customers' facilities to see where there are problems and work out how we will get a solution. It is about providing REAL value, not simply identified value to my customers and I cannot do this unless I meet with them and Pay attention to what they need, want and expect.

http://www. youtube. com/watch?v=NaotZTDL5jg



Landscape of Health Insurance Plans in India

Percentage of Population covered by Health Insurance

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