Hospital Market Segmentation using Cluster Analysis
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The document presents a market segmentation analysis conducted by ABC Surgical to increase sales of orthopedic surgical equipment in US hospitals, focusing on California, Florida, Georgia, and Texas. It identifies four hospital segments through cluster analysis, ultimately recommending targeting Cluster 1 due to consistent demand for orthopedic surgeries influenced by demographics and injury rates. Future directions include refining analytical techniques and determining sales drivers to enhance market opportunities.
Hospital Market Segmentation using Cluster Analysis
- 1. MARKET SEGMENTATION Presented by P Sunil Kumar (A13020) Maruthi Nataraj K (A13009) Praxis Business School, Kolkata
- 2. AGENDA Business background Objective Dataset Tools and Techniques Evaluation Analysis and Inferences Conclusions Future direction
- 3. BUSINESS BACKGROUND XYZ Surgical is the leading manufacturer, supplier and exporter of a wide range of Orthopaedic Surgical Equipment. Orthopaedic Surgical Equipment - Reasonable price - Variety of options Products offered - Bone plates - Spinal system products - Femur locking plates etc Products are manufactured under strictly quality control, sterile and hygienic environment these are complete safe for these purposes. Have a list of satisfied and pleased customers based across major cities in US market.
- 4. OBJECTIVE Business : To increase sales of orthopaedic equipment from XYZ Surgical to hospitals in potential markets of the United States. Analytical : To identify the hospitals’ segments with overall high sales. Then look for hospitals within that segment where the company sales are low. States identified are California, Florida, Georgia and Texas.
- 5. DATASET No of Variables – 19 No of Instances – 1150 (for states California (CA) Florida (FL) ,Georgia (GA) and Texas (TX) A teaching hospital is a hospital that provides clinical education and training to future and current doctors, nurses, and other health professionals, in addition to delivering medical care to patients Outpatient is one who is not hospitalized overnight but who visits a hospital, clinic, or associated facility for diagnosis or treatment A trauma centre is a hospital equipped and staffed to provide comprehensive emergency medical services to patients suffering traumatic injuries. Inpatient Rehabilitation Unit helps individuals who have physical or cognitive deficits to recover from disease or injury Ex: Brain, Spinal cord Orthopedic injuries etc
- 6. DATASET
- 7. TOOLS AND TECHNIQUES Tools Technique - Cluster Analysis
- 9. EVALUATION
- 10. ANALYSIS AND INFERENCES Cluster 0 This is the segment where there the average sales is least with lowest number of average operations and output patient visits. Even the average revenue from the inpatients is identified to be lowest. Low average sales means that the hospitals in this segment have few patients who would need our products. So, we are not interested in them. Type of Hospital units 100 80 60 40 20 0 TH TRAUMA CA FL GA REHAB TX
- 11. ANALYSIS AND INFERENCES California has least average sales when though the average no of operations are decent. Cluster 0 Average Outpatient visits Average Inpatient Revenue 25000 5000 20000 4000 15000 3000 10000 2000 5000 1000 0 0 CA FL GA CA TX Average No of operations in YR95 80 70 60 50 40 30 20 10 0 FL GA TX Average Sales 35 30 25 20 15 10 5 0 HIP95 CA KNEE95 FL GA TX CA FL GA TX
- 12. ANALYSIS AND INFERENCES Cluster 1 Average Inpatient Revenue 10000 This is a segment which has got all the factors like no of operations, outpatient visits, inpatient revenue etc contributing to decent sales (considering overall averages). 8000 6000 4000 2000 0 CA Average Outpatient visits 160000 140000 120000 100000 80000 60000 40000 20000 0 CA FL GA TX FL GA TX
- 13. ANALYSIS AND INFERENCES Cluster 1 In this segment, Texas has least average sales when though its average no of operations are higher. Average no of operations 120 100 80 60 40 20 0 HIP96 KNEE96 CA FL GA FEMUR96 Average Sales TX 60 50 40 30 20 10 0 CA FL GA TX
- 14. ANALYSIS AND INFERENCES Cluster 2 In this case, though it has highest number of outpatient visits and administrative costs, we observe that average sales are not up to the mark. It includes hospitals where most of them have trauma units, teaching units and having highest average number of beds also supports the same. One more aspect of this segments is that it has highest average number of femur operations and also there is drop in number of knee operations from YR95 to YR96. Decent revenues from inpatients hints towards being a potential segment for equipment sales.
- 15. ANALYSIS AND INFERENCES Cluster 3 This particular segments has highest average sales where in highest revenue from inpatients can be observed. Interestingly, majority of the hospitals here are teaching hospitals. Greater number of hip and knee operations is also spotted. No of hospitals with zero sales 6 5 4 3 2 1 0 CA FL GA TX
- 16. CONCLUSIONS From our analysis, we have chosen cluster 1 (segment) to increase our sales because of following reasons : There has been a consistent demand for knee and hip replacement implants in this segment contributing to the growth of the market. As per the US census bureau, persons 65 years and over, percent, 2012 in California ,Florida and Texas are 12%,18.2% and 10.9% respectively leading most of them to opt for an orthopaedic surgery due to osteoarthritis. There is a chance for improvement of sales in hospitals where it is low in this cluster 1. California has been ranked as the most dangerous state for road users in the US and also the incidence rate of sports injuries in the younger population is growing across all other states.
- 17. CONCLUSIONS These states are witnessing the continued adoption of innovative, premium-priced devices which is favourable factor for increase in sales. Also , according to the American Academy of Orthopaedic Surgeons, approximately 28.6 million people in the United States sustain some type of musculoskeletal injury annually which is high in these cities and will eventually trigger the necessity of quality surgical equipments.
- 18. FUTURE DIRECTION Dimension Reduction using Factor Analysis Fine Tuning of Cluster Analysis using optimized parameters Regression Analysis to determine the drivers for sales
- 19. APPENDIX
- 20. APPENDIX
- 21. APPENDIX Communality value for OUTV,TH and TRAUMA < 0.4.So,they are dropped. (They are not contributing to formation of factors)
- 22. APPENDIX
- 23. APPENDIX