Post 7 - Market Feasibility
THE MEDICAL FITNESS IMPERATIVE
AN IN-DEPTH SERIES ABOUT THE HOWS AND WHYS OF
MEDICALLY-BASED FITNESS AND WELLNESS
When contemplating any new business, the study of market demand comes first. The feasibility of a medical fitness center project must be analyzed within the context of the overall hospital mission, goals and objectives to determine how the center will fit into the organization's strategic imperatives.
RELEVANT QUESTIONS INCLUDE:
Is the hospital committed to improving the health of the community? Where and how is the hospital allocating its capital? Who are the potential supporters for the project? Answer to these simple questions will form a foundation for how the center is positioned, who the target customers are and whether the center will be approved for development
- Determining medical staff buy-in to the concept of exercise and wellness as an extension of healthcare services.
- Conducting a comprehensive analysis of community demographics and understanding the related implications for the center.
- Determining the nature and strength of the existing fitness "competitors" in the community, and identifying gaps in service which indicate need and opportunity.
- Evaluating location and identifying program preferences of the market prospects, as well as price sensitivity.
- Estimating the demand for the concept envisioned, and if necessary, adapting the vision to the true opportunity.
- Identifying potential barriers to success.
When considering development of a new hospital campus in Viera, Florida, Health-First decided to "place a stake in the ground" and create a positive, energetic health destination in the minds of the community before building hospital beds. Health-First had three successful medical fitness centers and understood the volume of traffic created by member utilization, and more importantly, the positive impact of membership relationships on the image and reputation of its hospitals. The driving force was to create an affinity with the Health-First brand in a new and growing market area. Although the executive team had confidence in their fitness product line, they needed to know if the demand was there and if the location was convenient to the residents in this new market area. The feasibility study revealed the membership potential and the preferences for location and programming.
FEASIBILITY STUDY ELEMENTS:
A feasibility study should determine not only whether a center is economically feasible or not, but how best to ensure the success of the facility by right-focusing, right-locating, right-sizing, right programming and right pricing. Elements of a proper feasibility study should include the following:
- Establishing a collaborative process between the hospital and the feasibility consultant
- Agreeing on the market positioning concept, for the center (most things to most people; targeted to a specific segment of the population; accessible and affordable or upscale and exclusive).
- Agreeing on the intended outcomes from the center.
WHAT TO AVOID
- Making enemies - Opposition from key constituents )C-level executives, physicians, clinicians)
- False assumptions - Failing to differentiate the concept in the minds of key constituents ("we shouldn't be in the fitness business", "we shouldn't compete with the YMCA", "how do we make money by keeping people healthy?", etc).
- Biased decision-making - Allowing the enthusiasm of key constituents to determine the scope of the center without confirming market demand ("build it and they will come").
- Wrong site - Placing the convenience of internal users above the convenience of outside members ("location, location, location").
Up next time...Post 8 -Business Planning.