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Midlands State University

Bachelor of Commerce in Consumer and Marketing Intelligence

LEVEL 1.2

MODULE TITLE: PRINCIPLES OF MARKETING 2 (CMI132)

GROUP 2 STUDENTS:

NICHOLAS RUZVIDZO CHIPONDE R234050F

MICHAEL MPOFU R233780F

ROBERT MUNYIKWA R234278X

TAWANDA VARAIGWAI R2010233F

SEAN JAZI R2216580Q

TONDO BARDWELL KAHARI R1914540N

LECTURER: MR MASHERO

QUESTION:
You are the marketing team for a new Medical Aid Company Budget Medical Aid:
Design a marketing plan following the following stages. (100 Marks)

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TABLE OF CONTENTS

EXECUTIVE SUMMARY………………………………………………………………………………………………………3
CHAPTER ONE………………………………………………………………………………………..….........................4
Company,introduction………….………………………………………………...…………………………….4
Vision, mission, core values…….……………………………………………………………………………..4
CHAPTER TWO…………………………………………………………………………………………………………………..5
Situational analysis…………………………………………………………………………………………………5
Micro-environmental Factors…………………………………………………. …………………………….5
Macro-environmental Factors……………………………………………………. …………………………6
CHAPTER THREE……………………………………………………………………. …………………………………………10
Marketing Objectives…………………………………………………………………………………………….10
CHAPTER FOUR …………………………………………………………………………………………………………….….11
Marketing Strategies…………………………………………………………… ……………………………….11
CHAPTER FIVE…………………………………………………………………………………………………………………….13
Action and Budget………………………………………………………………………………….………………13
CHAPTER SIX……………………………………………………………………………………………………………………….16
Evaluation and Control……………………………………………………………………………………………16
CHAPTER SEVEN……………………………………………………………………..………………………………………….17
Gantt Chart…………………………………………………………………………………………………………….17
Conclusions…………………………………………………………………………………………………………….17
REFERENCE…………………………………………………………………………………………………………………………18

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EXECUTIVE SUMMARY

Budget Health Medical Aid Society is registered in terms of the Medical Services Act [Chapter
15:13]. The Society was established on the 23rd of June 2013 to contribute to the provision of
medical assistance to the people. It is an open medical aid society which accepts any willing
member of the Zimbabwean citizenry. The Society, with its Head Office situated at number 26
East Road, Belgravia, Harare, offers premium and standard schemes.

Budget Health Medical Aid Society aims to demystify the notion that medical insurance is a
preserve of the elite through providing affordable medical cover to all social classes while
maintaining the highest standards of safety, consistency and efficiency. It is designed for
individuals and corporates wanting access to private medical cover in Zimbabwe.

The package has 3 schemes, Core, Core Extra and Superior with annual global limits ranging
from US$5 000 to US$50 000 per member per annum. The schemes are tariff driven as we use
AHFoZ (Association of Healthcare Funders of Zimbabwe) rates.

Our marketing plan is to be the leading medical aid company providing the best healthcare
funding options to members of our different plans, schemes and programs within the borders of
Zimbabwe. We aim to bring foreign and latest technologies and unique advantages to our
Zimbabwean through our global strategic partnerships.

The estimated growth in the healthcare funding industry is expected to be 30% by 2026 with a
budget of $270 000 per annum. Our target market stretches from the insurance marginalized
communities, the informal and formal sectors of our growing economy. Our product range will
cater for all societal classes though 60% will be constituted by the low-income earners and 40%
being the middle to high income earners.

Budget Health Medical Aid will use a competitive pricing model and also make use of social
media, influencers, mass media promotional methods such as TVs and Radios to promote our
services.

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CHAPTER 1: INTRODUCTION

BACKGROUND

● A wholly Zimbabwean owned and fastest growing Medical Aid Society registered in

terms of the Medical Services Act [Chapter 15:13].

● The Society was established on the 23rd of June 2013 to contribute to the provision of

medical assistance to the people.

● The Society, with its Head Office situated at number 26 East Road, Belgravia, Harare,

offers premium and standard schemes.

● Provides affordable medical cover to all social classes while maintaining the highest

standards of safety, consistency and efficiency.

● Members have access to all private institutions of their choice within our provider

network.

● Gives members value for money and modern ways of healthcare funding.

Vision

To be recognized as the leading regional health care organization providing personalized world
class service with utilization of expert local knowledge.

Mission

To provide professional, efficient, and personalized health care services to our customers whilst
remaining sensitive to the needs of all our stakeholders.

Core Values

 Confidentiality

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 Compassion
 Caring
 Understanding

CHAPTER 2 -SITUATIONAL ANALYSIS

Micro - environmental analysis:

SWOT Analysis:

These are the strength and weaknesses for and against our marketing plan.
Strengths
 Strong human resource base with years of experience and marketing expertise.
 Access to modern technology and marketing software.
 Strong balance sheet and access to sources of finance
 Wide e-business network.
 Strong closed supplier network.
 Large captive market.
Weaknesses:
 Small brand on the market.
 High production costs and labor costs.
Opportunities:
 Large marginalized market.
 Easy of entry into the business.
 Growth potential.
 Potential partnerships with major health suppliers.
 potential investments into downstream industries.

Threats
 competition from already established firms.
 unstable macroeconomic environment
 unstable exchange rate
 inconsistent polices
 high inflation

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Macro environmental analysis:

PESTEL Analysis

Political
 Unstable political environment with an unstable exchange rate
 Corruption scares away investors and foreign direct investment.
Economic
 The unstable economic environment headlined by the bilateral dispute between Harare
and London will weigh down the plan’s objectives
 The inconsistent economic policy announcements the RBZ are going to be major risk
Social
 A portion of our target market still belong to the apostolic sects who still don’t believe in
taking medication thereby reducing our intended market share
 The target market still believe in their tied and tested brands and have resistance to
change
Technology
 The country is lagging behind in information communication technology and the broad
band is not widening fast enough
 Quite a big chunk still have no access to internet connectivity which is adverse to our
intended electronic marketing initiatives
Ecological:
 The global world is now environment conscious
 Companies and legislation now encourage a green world.
Legal:
 There is need to follow the cumbersome legal route of obtaining and maintaining licenses
which comes at a cost.
 There is need to register with the health services board which is cumbersome.
 There is need to register with the regional funder associations.

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 There is need to align our operations with the laws of the country.

Internal Competitive Analysis

The Porter`s Five Forces Framework is a tool used to analyse the competitive dynamics of an
industry or market. The framework identifies and examines 5 key forces that shape the industries
competitiveness and profitability. In the Figure 1 below, competition is analyzed by assessing
five factors which are: threats of new entrants, bargaining power of suppliers, bargaining power
of buyers, threats of substitute products and rivalry amongst existing competitors.

Figure 1: Porters Five Forces Model

(i) Threat of new entrants:

The insurance side of the healthcare industry is governed by the Ministry of Health and Child
Care, with little to no barriers to entry. A company should only meet the numbers required and
the funding requirements. Health insurance is not governed by the Insurance and Pensions
Commission (IPEC). This makes it easy for new players to enter the market. It also poses a great
threat to Budget Health.

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Cumulative experience and access to distribution channels constitute a threat to new entrants.
This is because, over the years, clients have developed relationships with their providers such
that it is difficult for a new company to get create links with service providers and get business in
such an environment.
The main differential factor could be an established brand as these insurance companies interact
with individual providers in the private sector. Over the years, Budget Health has established
trust with its clientele, generating strong customer loyalty. However, owing to changes in
consumer tastes and preferences, such as customers seeking more benefits from medical aid
packages, new entrants are slowly gaining momentum, rendering Budget Health and companies
such as CIMAS as the biggest pool of private players, to target by agents, brokers and insurance
companies.

(ii) Bargaining power of suppliers:

The industry has been heavily influenced by suppliers, most of which are private players with
little regulation. Besides that, Zimbabwe as a country relies on imports for medical supplies and
medical equipment. This then results in increases in service fees as the private players are
negatively impacted by the economic environment as foreign currency is hard to get. Major
suppliers have associations that lobby with healthcare funders. On the contrary, the net effect of
this is negligible as they tend to effectively monopolize the industry. Switching suppliers is not
always possible as some skills are limited, for example gynae-oncologists. This comes along as a
huge benefit for Budget Health as it maintains a stable book of clients. Apart from that, it will
take years for insurance companies such as Budget Health, to invest in downstream businesses.
The threat of substitute services is high in the industry with cost and service becoming the main
reasons why people substitute insurance with self-funding options. Corporates now opt for self-
funding options as they deem it cost effective. However, as insurance is a practice of risk
management, it always become senseful for companies with high-risk medical conditions to be
funded by a traditional insurance company.

(iii) Bargaining power of buyers:

According to the Zimbabwe National Statistical Agency, (ZimSTAT, 2022) and Association of
Healthcare Funders of Zimbabwe (AHFoZ) of Fourth Quarter, 2022, 11.6% of the Zimbabwean
population have health insurance and most of these are under corporate insurance. This means
that the cake is too small for the players and the buyers have the ability to influence terms,
benefits and prices. To illustrate, using price sensitivity as a factor to influence buyers`
bargaining power; when CIMAS increased fees by at least 100%, most members defected to
other funders, including Budget Health. Overally, buyers have high bargaining power because
clients have high purchasing power and demand specific additives according to their preferences.
(iv) Threat of substitute products:

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There are thirty-six (36) registered medical aid funds, which creates room for clients to switch
services. However, Budget Health, in addition to medical aid, offers health insurance, thus
creating high switching costs for clients as they have to switch to ‘medical-aid only’ companies
when they choose a different firm. Furthermore, buyer propensity to substitute is low for clients
with high-risk medical conditions and these constitute the bulk of Budget Health customers. In
addition to that, the price of substitute products is high in the long-term, therefore clients
continue to choose Budget Health as their medical aid provider. The perceived level of product
differentiation is also high as Alliance offers medical insurance products besides medical aid and
as the company also offers tailour-made products to meet client requirements.

(v) Rivalry Among Existing Competitors:

As mentioned above, there are thirty-six competitors in the medical aid industry. However, these
are not diverse in their product offering and Budget Health is among the few companies that
offer medical insurance. There is high industry growth due to the opening up of the economy to
foreign investors and new business alike. As such, Budget Health is reaping the benefits of the
country`s overall economic development as it adds new clients to its existing customer base.
Other companies as well are also targeting new business in the same way and this implies there
is high industry rivalry. Besides that, Budget Health, CellMed and First Mutual are the main
rivalries where the main business is concentrated. In terms of quality, Budget Health offers high-
quality products, enjoys brand loyalty and low switching costs.

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CHAPTER 3: MARKETING OBJECTIVES:

Budget Health Medical Aid Society aims to demystify the notion that medical insurance is a
preserve of the elite through providing affordable medical cover to all social classes while
maintaining the highest standards of safety, consistency and efficiency.
We would like to grow our sales by 60% in 2026 and increase our market share by 7% on the
minor societies segment as per the Association of Healthcare Funders of Zimbabwe categories.

Market

Sales Market Share

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CHAPTER 4: MARKETING STRATEGIES:

Price:

The pricing model is to accommodate the different social classes. It is value-based pricing for the
middle to upper income earners. We will also use penetration pricing for the low-end products.
According to RBZ financial Report 2022, 7% of our population borrow money for medical
reasons and it is mainly the low-income earners hence our drive to target them using price
penetration.

Place:

Our Head Office is in Belgravia. The suburb is ideal, as it is closer to where most service
providers in the capital city are located. We intent to employ intensive distribution strategies in
Harare and Bulawayo to achieve a wide market coverage. Our services will be available at
reception waiting rooms of various service providers, online platforms and through independent
sales agents.
Promotion:
Mass media communication is ideal for our target market. For example, the use of newspapers,
billboards, branding public transport etc. Targeted promotion through association’s conference
sponsorship and attendance is also ideal.
The graph below show preferences of members as far as communication is concerned. With this
data, we are able to effectively communicate with our members.
Figure 1: Communication preferences:

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Total
12000
8000
4000
0
l; ; ; ; ; ; ;
ai App App ent App dia ent Total
Em ats ats /Ag ats Me /Ag
h h er h i a l er
k k
e);W ail;W bro ail;W ;Soc bro
t r m r m il r
en E You );E ma You
lC l; e E ;
a l ai ntr pp; App
(C E l Ce tsA ats
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ep (C W W
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ai e ph
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Em Te

People:
The service is emotive and there is need to have our staff trained in customer service, handling
difficult and emotional clients, palliative care as well as having an insurance and medical
appreciation. The graph below show issues faced by our members that we need to address:

Total

Billing
Call centre accessibility
Claims processing and
payments
Membership amendments
Treatment preauthorisa-
tions

Figure 2: Challenges to be resolved:

Process:
The Budget Health Medical Aid scheme cover can be purchased online, through email, website,
WhatsApp channels or by visiting our office or one of the sales agents. Upon completion of the
enrolment application forms, the policy will be generated automatically. During the membership
period, digital and traditional means of policy servicing will be of use so as to cater for the
diverse clientele.

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CHAPTER 5: ACTION & BUDGET:

Product:

We have various products targeting various industries and markets within the low to middle
income earners. For example, the Educare plan is designed for students therefore it has to be
affordable and yet providing basic medical cover for scholars. We will continue improving our
products in line with market needs, actuarial recommendations and profitability.
Pricing
The main focus is on 2 types of products therefore we have 2 different pricing models we are
using, value based pricing and penetration pricing. The value based pricing if for the middle
income earner products whereas, the penetration is being used on the low income earner
products.
Distribution
The company will adopt an intensive distribution strategy to achieve its goals of capturing a wide
market as well as ensuring convenience and accessibility to our members. We will employ sales
agents and enlist brokers in Harare and Bulawayo as a start. The company will also provide
marketing support to our agents. This support will include promotional materials, training
programs etc. to ensure that our medical aid receive adequate visibility and generate demand.
In the future, we will expand our customer service centres to other towns as per the demand so as
to support the sales agents and members. The figure 3 below shows client distribution in
Zimbabwe.

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Figure 3: Client Distribution:

Total
Banket Banket Beira, Mozambique Beitbridge Bindura
Bindura bulawayo Bulawayo Byo Centenary
Chinhoyi Chiredzi Chitungwiza Chitungwiza, Harare Concession
Glendale Goromonzi Gweru Harare Harare
Harare - zimbabwe Harare & Beatrice Harare and Marondera Harare Zimbabwe Harare, Zimbabwe
Harare/karoi Hwange Kadoma Kariba Kariba
Karoi Karoi-Zimbabwe Kwekwe MABVUKU Marondera
Masvingo Mukumbura (Mt Darwin) Murambinda Murewa Mutare
Mutare Mutorashanga Mvurwi Nkayi Norton
Ruwa Southleapark Harare Victoria Falls Victoria Falls. Zimbabwe
Zimbabwe

Promotion:
Start with mass advertising so as to raise awareness. This can be through Radio chats, TV, social
media promoted posts and opinion leaders. We will adopt paid adverts approaches and
promoting our posts on social medical. We will also make use of SEOs and other online
initiatives to boost our brand.
Budget Health brand speaks to a niche market with the brand itself defining what we stand for –
having a budget medical aid that takes care of your needs, this demystifying the notion that
medical aid is for the elite.

Resource Allocation
We will start with 3 resource areas in the marketing dept. The resources need support of agents,
brokers and sales people.

Duties Allocation:

 Marketing Executive - responsible for overall supervision and executive decision making.
 Marketing manager - responsible for the day-to-day brand marketing. This resource will
also work on design and feed into the distribution channel.
 Sales Agents - the key deliverables are boosting sales with healthy business and meet
targets.
 These are used by management to analyse and assess their marketing activities and
programs over a specific period of time.

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 Annual plan control - done by senior managers to determine if planned marketing results
are meeting expectations through sales analysis, market share analysis, sales to expense
ratio and financial analysis.
 Profitability plan control: done by marketing manager through determining where the
firm is earning profits and where they are losing money by determining profitability for
product, territory, and segment and trade channel.
 Efficiency control: done by line and staff management and marketing manager through
determining spending efficiency by sales force, advertising, sales promotion and
distribution
 Strategic control: is done by senior managers through determining if the business is
following the best options with respect to market, product and channels by doing market
audit and ratings.

Marketing Budget
The business is funding full marketing costs from capital injected. From Y2, Q1, 2024.
Our marketing budget will focus on:
 High-return channel
 Budget for customer retention
 Budgets for new marketing channels moonshot.
 Budget to align with the business goals (demystifying the notion that medical aid is for
the elite)

Proposed Budget:
Mode Cost – US$ Target

Billboards 50 000 All

Electronic media 15 000 Middle and upper
class
Public transport branding 20 000 Low income earners
Branded material (e.g. 20 000 All
tshirts, caps)
Road shows 15 000 Low income earners
Other expenses – Salaries, 150 000
Motor Vehicles, Fuel etc.
Training of staff 10 000 Employees and agents

Total proposed 270 000

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CHAPTER 6: CONTROL AND GANTT CHART

Control measures are essential for evaluating the effectiveness of a marketing plan.
As we are a new medical aid company with a growth focus, we will use the following measures
as a control:
 Quarterly Sales analysis – monitoring revenue, market share, sales growth over time.
 Marketing research – frequent research to gather insights on market trends and buyer
behaviour.
 Quarterly Customer surveys and feedback – these help in product development and
improvements.
 Ongoing Service Level Agreements to measure KPIs. These include turn-around times
for email responses, call centre answering calls, placing authorisations.
 Ongoing use of and adherence to the marketing budget.
 Quarterly assessment of ROI – this also speaks to the marketing budget as we do not
want to be over budget.
 Quarterly competitive analysis – keeping abreast with what is on the market and adjust
accordingly.
 Bi-annual calculation of the Return on Marketing Investment (ROMI) – this is by
comparing revenue generated/sales attributed to marketing efforts against the cost of the
activities.

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Gantt Chart:

Please refer to Appendix A.

CONCLUSION:

In conclusion, the above marketing plan is very comprehensive, touching all crucial aspects
based on the Company’s SWOT, Competitive and PESTEL analysis. Key to this plan is the
target market and objectives; low-income earners and demystifying the presumption that Medical
Aid is for the elite, the high society, at the same time adhering to the deontological principles
since its main target are families.

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REFERENCES

www.jstar.org . accessed 29 September 2023

Kotler, P. & Armstrong G, (2017) Principles of Marketing, 17th edition

https://scholar.google.com/accessed.29 September 2023

Ballande and Kemper(2019).Journal of Marketing Management,Vol 35 issue 3-4 page 4.

Kotler,P. (1991) Marketing Management. Prentice Hall:Englewood Cliffs.

Green G (1983) An overview of Marketing Planning in UK services: Marketing intelligence and

planning Vol 1 issue 3:55-68

https://www.rbz.co.zw/documents/BLSS/2022/
Zimbabwe_FinScope_Consumer_2022_Survey_Report accessed.03 October 2023,

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