The extent to which private hospitals in Nairobi have adopted service differentiation strategies

Abstract

Competition in hospitals both private and public in Kenya has become stiff. Hospitals therefore need to differentiate their services to remain competitive. The study objectives were to determine the extent to which service differentiation strategies have been adopted in private hospitals and determine the challenges of adopting these strategies. This was a descriptive survey. The population of interest included all the private hospitals in Nairobi. According to the Kenya Medical and Dentist Practitioners directory of 2004 there were 48 private hospitals in Nairobi. A census study was conducted. Data was collected using semi-structured questionnaires which were administered using the drop and pick later method. Marketing managers or any other person entrusted with the hospitals' marketing activities of each hospital were studied. The response rate was 63%. Data was analyzed using frequencies, percentages, mean scores and standard deviation. The findings indicated that of the three service differentiation strategies, that is, service offering, service delivery and image, the hospitals performed best on service delivery as a strategy, which tended to be practiced to a great extent consistently across the industry. Image and service offering dimensions were adopted to a lesser extent. It is also evident from the findings that most of the service differentiation dimensions in each of the three strategies were positively correlated with hospital size. This implies that hospitals that were considered to be big in terms of having a bed capacity of 70 and above adopted service differentiation strategies to a greater extent than their counterparts with lower bed capacities (less than 70). The main challenges faced in adopting the differentiation strategies included; marketing activities being crowded by operations, difficulties in controlling customer interface, restrictive regulations for advertising, problems of growth, difficulties in improving productivity without compromising on quality, among others. The researcher also recommended that there is need for dedicated departments to deal with marketing activities so as to improve on the marketing orientation of hospitals which would in turn help in crafting of the service differentiation strategies. Service delivery and service offering strategies could be adopted to a larger extent if formal market research is done so as to design services that are suitable to specific target markets. The limitation of the study was that the survey was based on only private hospitals in Nairobi. A more regional representation would have provided better results. The researcher recommended that a study should be conducted to cover both private and public hospitals in Kenya as well as health management organizations (HMOs).