the Sophistication Factor - elevation of the Sector to its rightful status
Konstantinos Konstantinidis, M.D., Ph.D.
Director - ExCtu - addressing the Health Tourism Sector "Builder Class" (a.k.a. the "growth makers" and “developers”) with originated T-shaped knowledge for thinking and doing.
…with the help of Health Tourism Lux and Boutique Health Tourism
NOTE
Simplicity is the ultimate expression of Sophistication.
With this in mind, “Sophistication” and “Simple is Best” have been designated Strategic Concepts and Practices.
And of course, "factoring in sophistication" is also one of the Strategic Concepts and Practices.
the Message to take home
…the only market worth addressing is the Mass Affluent
The message to take home from this article is that with the help of Health Tourism Lux and Boutique Health Tourism, the Sector has been elevated to its rightful status – and that the only market worth addressing is the mass affluent.
geared towards Luxury and Sophistication
…almost by design and default
Almost by design and default, Contemporary Health Tourism (a.k.a. Internet Century Health Tourism) is geared towards Luxury and Sophistication.
As will be made known in this article, Contemporary Health Tourism includes “High-End Brands” – a.k.a. Cachets.
Provided they satisfy a set of preconditions, these brands are awarded the “Stellar” rating.
making the Bottom Line the Top Line
…from “need” to “want” – and from “commodities” to “cachets” (High-End Brands)
The Health Tourism Market (the Demand Side) is both segmented (along the lines of “preferences”) and stratified (along the lines of “affordability”).
In response, the Industry (the Supply Side) is, likewise, segmented and stratified.
A lot of what is now referred to as Conventional Health Tourism – especially the Medical Tourism Segment – belongs to the “Economy Class” (or downmarket) – which in my view, is not a market worth addressing.
Besides, Economy Class Tourism – which can be regarded as synonymous with Mass Tourism – is now shunned by the supply side (for obvious reasons).
It is with this in mind that Contemporary Health Tourism (which repurposed the concept & practice and activity from a “need” to a “want”) includes two Classes which are associated with sophistication and relative exclusivity:
At the same time, Destinations and Providers are being urged to elevate themselves from a “commodity” to a “cachet” (i.e., a High-End Brand).
This will allow them to address the more lucrative “Mass Affluent Market”.
Downmarket:
The repurposing of Health Tourism
From the perspective of the Health Consumer (the Demand Side), the feature which, most obviously makes Health Tourism “Internet Century” is that it has been “repurposed” - from a “need” (to be endured because of financial circumstances) to a “want” (to be enjoyed as an attractive lifestyle choice – for life).
Cachet:
Sophistication
Sophistication is the quality of refinement, culture and worldliness — and about displaying good taste and wisdom.
Sophistication is the result of education and worldly experience.
Luxury
In my dictionary, Luxury is the Ability and Right to Choose, Express and Practice one’s Lifestyle.
Much of what is “Luxury” is – and will be - determined by the Millennials.
And much of it will be about services and experiences – rather than “things”.
See also (below): “a short note on the subject of Luxury”.
Boutique
The term “Boutique” refers to an “entity” which is small and characterized by sophistication.
Mass Affluent Market
In marketing and financial services, mass affluent and emerging affluent are the high end of the mass market, or individuals with US$100,000 to US$1,000,000 of liquid financial assets plus an annual household income over US$75,000. Mass affluent consumers are an important target market for sellers of luxury goods. (Wikipedia)
what the “Lux” and “Boutique” qualifiers can be applied to
…when appropriate
In the world of Health Tourism, the “Lux” and “Boutique” qualifiers can be applied (when appropriate) to:
Qualifier (in the context of grammar):
my message to Providers of Health Tourism services
…who can see beyond today – and deeper than a few centimeters
My message in this paper is that providers of Health Tourism services who can see beyond today – and deeper than a few centimeters - should now aim to address the “sophisticated” class of consumer – who is not primarily “cost sensitive” – and / or demands a degree of exclusivity and “distinctiveness”.
The overly cost sensitive “Economy Class” market is saturated and going nowhere.
But of course, addressing the demanding “want” market – with its expectations of sophistication and relative exclusivity – requires serious investment – and a longer-term view of things.
It is not for those who are after a “quick buck”.
Playing in this game demands long term commitment and persistence.
And we will see who is leading the race to the top.
a rat race to the Bottom
…a “lose – lose” situation
No doubt, a lot of Medical Tourism (or Travel) may continue to belong to the overly cost sensitive “Economy Class”.
But is cut price Medical Tourism an unqualified “bargain” for the consumer? Some will tell you that “cheap is expensive”.
And is the Bottom of the Pyramid Medical Tourism Market worth “wooing”?
The way I see it, addressing the Bottom of the Pyramid Market may make perfect sense when you are addressing a mass market of repeat buyers (think McDonald’s and Hamburgers and French Fries).
Economy Class Tourism – which can be regarded as synonymous with Mass Tourism – is now shunned by the Tourism Industry (after learning a lesson – the hard way).
And as Alan Tonelson in his book “The Race to the Bottom” (published in 2002) makes us realize, this type of rat race (like every rat race) is shortsighted, ill-advised, futile and “no-win”. And it is certainly not sustainable.
A “race to the bottom” occurs between competing countries and businesses when competition becomes fierce (i.e., “cutthroat”).
In this type of race, competitors are motivated to compromise on standards and principles in order to be able to lower costs and prices – to achieve a competitive edge.
the role of Resorts
…leading the race to the Top
As pointed out, addressing the demanding “want” market (which includes Health Tourism Lux and Boutique Health Tourism) requires, as a rule, serious investment.
And serious investment in Health Tourism tends to be associated with “destination level” development projects, such as Resorts.
So, it is obvious that Health Tourism Lux will first take root at these resorts (especially the Integrated Resorts which offer services in all of the 8 Health Tourism Segments).
And of course, it will be a matter of time before it spreads from there to the rest of the Sector.
the role of Investment
…and the “Punt” Strategy
To state the obvious, nothing happens without investment.
Taking this fact into account, Contemporary Health Tourism, as part of its architecture and operating system (arcHTos), includes the “punt Strategy”.
The purpose of this strategy is to connect the Investor with the Investee – and ensure that Investment “happens”.
The component parts (and resources) of the strategy are:
a short note on the subject of Luxury
…defined by market position – high-end
Luxury goods and services are known as Veblen Goods – because they do not obey the laws of supply and demand.
As their prices rise – demand goes up.
Veblen goods (services and products)
A Veblen good is a type of luxury good for which the demand increases as the price increases, in apparent contradiction of the law of demand.
Thorstein Bunde Veblen was an American economist who wrote the book titled The Theory of the Leisure Class.
Veblen coined the concepts of conspicuous consumption and conspicuous leisure.
Luxury is not defined by a specific good, service or production process, but rather by a market position (high-end).
A common question which arises is: at what point do “common goods” end and “luxury goods” begin?
The issue is further clouded by the fact, there are several degrees of “luxury”, including:
In the context of Health Tourism, things have become “clear and simpler” by defining luxury as: “the Ability and Right to Choose, Express and Practice one’s Lifestyle”.
Much of what is “Luxury” is – and will be - determined by the Millennials.
And much of it will be about services and experiences – rather than “things”.
role of the “Luxury Industrial Sector” (and its Brands)
…Supplier and Sponsor
NOTE (the Sector – Industry debate)
Some continue to argue on whether to talk about the “Luxury Sector” or the “Luxury Industry”.
The issue has been resolved by the simple and clear fact that Luxury is not defined by a specific good, service or production process but rather by a market position (high-end). In other words, the Luxury “business” is transversal (i.e., extends across – or covers - several service and product categories).
It includes goods and services from several industries.
Sectors embrace Industries (Industries are part of Sectors).
Consequently, one should talk about the “Luxury Industrial Sector” (i.e., a Sector of Industries) - which is the term used in this article.
Luxury – including the “sensible” kind (something I have written about in another article) – goes hand-in-hand with Luxury Brands.
Since we now have Health Tourism Lux, it should be obvious that the Luxury Industrial Sector is a Health Tourism Supply Side Stakeholder.
It is expected that the Luxury Industrial Sector (i.e., the supply side) will play a significant role in the growth and spread of Health Tourism Lux and Boutique Health Tourism.
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The “Lux” and “Boutique” classes of Health Tourism, as a concept and practice, is relatively new – and still an unknown entity, as far as the Luxury products and services supply side is concerned.
But soon, this industrial sector will realize it is a stakeholder – and will appreciate the potential of the specific market (i.e., the demand side).
As for its role, it will be that of supplier and sponsor.
Supplier …a.k.a. Vendor
Within the context of Health Tourism, the Luxury Industrial Sector (being “transversal” - i.e., extending across – or covering - several service and product categories) will provide services (and even products) referred to as:
Sponsor…of initiatives related to Health Tourism Lux and Boutique Health Tourism
The Luxury Industrial Sector, generally, has deep pockets and observation and experience has shown that it tends to splurge when it comes to promotion and marketing.
The objective is to encourage and motivate the Luxury Brands to act as Sponsors of initiatives related to Health Tourism Lux and Boutique Health Tourism.
establishment of the “High End” Health Tourism supply side
…to address the Mass Affluent Market
Understanding the establishment of the “High End” Health Tourism supply side begins with the definition and scope of Contemporary Health Tourism: “the provision and consumption of Health-related, Travel- and Tourism- related and Sector-supporting Services”
This means the need for “vendors” who provide – or are willing to provide - services regarded as Cachets (a.k.a. High-End), which are:
From the pool of existing and potential vendors, the process involves identifying, segmenting and then integrating these “special category” supply side players into the Sector.
Segmentation and Integration are component elements of the “pentad” Strategy.
Segmentation
“Segmentation”, serves to identify the stakeholder groups - and the individual Stakeholders - to be integrated into the ecosystem.
Unless you start with Segmentation (before proceeding to Integration), you will end up with an amorphous (and anarchic) "hodge-podge" of supply-side Stakeholders without unique identities and domain role and purpose.
Integration
In the context of the supply side, Integration is the process of making the Stakeholders part of the domain (ecosystem) - while at the same time, ensuring that their “identity, distinctiveness and independence” is maintained.
By the way, Integration is not about regulations and additional new rules and “standards”.
The incentive and motivation for vendors to be integrated into the Health Tourism Sector is provided by the kwe Strategy (very briefly described below).
Kwe Strategy
kwe Strategy enables rewardable collaboration and alliance formation – amongst Health Tourism Sector “businesses” – which compete against and collaborate with each other – at the same time. In other words, the strategy encourages and rewards collaboration and alliance-formation – even amongst competitors.
The Strategy is underpinned by Blockchain (Distributed Database) Technology, which in turn serves as the controlling and operating system for the following “features”:
Participating businesses are part of the arcHTos Coalition – with each “business” being a node in the Blockchain (Distributed Database).
how Luxury Industrial Sector vendors become part of the Coalition
…of the Willing
Much about Contemporary Health Tourism (which embraces the Luxury Industrial Sector) is about Transformation. And as with the Brightline Transformation Compass (with which it has quite a bit in common) Contemporary Health Tourism includes a Coalition (of the willing).
Luxury Industrial Sector vendors become part of the (arcHTos) Coalition once they have been integrated into the Sector.
The primary purpose of the Coalition (through the corresponding Strategies), is to:
The work of the kwe, waft and punt Strategies is funded by the Coalition – with funding being secured through a crowdfunding campaign.
A short note on the “Project Management Institute” and “Brightline”
The “Project Management Institute” collaborated with several leading global organizations to create Brightline, a coalition, which in turn, came up with the Brightline Transformation Compass - a comprehensive system for transformation – albeit, only for “organizations”.
There are some similarities and commonalities between Brightline Transformation Compass and arcHTos (the Health Tourism “Architecture and Operating” System – a comprehensive system for creating – or transforming – and then operating what are now known as arcHTos Derivatives).
Coalition:
Crowdfunding
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.
The term crowdfunding refers to Internet-mediated registries.
The model is based on the following actors:
“arcHTos Derivatives”
“arcHTos Derivatives” is the collective term for the “entities” created or transformed (in terms of “architecture” – i.e., design and structure) - and then operated (according to the Operating System):
identifying, locating and addressing the Mass Affluent Market
...which is not primarily, “cost sensitive”
No point in having a high-end industry (and Brands) if there is no corresponding Market – and an “aware market”, at that.
We know that Health Tourism Lux and Boutique Health Tourism were designed to address a “sophisticated” class of consumer – who is not primarily “cost sensitive” – and / or demands a degree of exclusivity and “distinctiveness”.
The Industry needs to identify and locate the Available Market (i.e., those in the potential market who have enough money to buy the services).
Of course, for an upmarket Health Tourism Supply Side to be a “viable proposition” there needs to exist an “aware market” which is not primarily “cost sensitive”.
This means “awareness promotion” – i.e., making the potential market aware of the existence of Health Tourism Lux and Boutique Health Tourism – and where to get it.
This is where the “Waft” Strategy comes in.
a very short note on waft Strategy
…motivating Market Engagement
The aim of Waft Strategy is to Cultivate and Prime the Market – and keep it perpetually engaged - on behalf of the Industry – by the Industry.
The Strategy motivates Market – Health Consumer – Engagement (in Health Tourism) through the following innovations:
Waft Strategy “overlaps” with kwe Strategy to provide additional benefits to the Consumer.
These additional benefits are:
during Recessions and Uncertain Times
…being dressed and ready for the Party
Although I did not design Contemporary Health Tourism (a.k.a. Internet Century Health Tourism - ICHT) with the intention of introducing it on the occasion of a Black Swan event and crisis, the COVID-19 Pandemic presented an “opportune moment” (suitable time for implementing a “plan of action”), because it is during such periods that introduced changes have a good chance of being adopted and taking root.
During recessions and uncertain times, people walk around in a state of shock.
They tend to instinctively demote themselves to – and settle for:
It would seem counterintuitive to choose times like these to introduce Contemporary Health Tourism (which includes Health Tourism Lux and Boutique Health Tourism), with its emphasis on “want”, “cachets” and “sophistication”.
So, I need to explain.
It is in times like these that the far-sighted (I want to count myself amongst these) rub their hands in glee, roll up their sleeves and get to work – with a lot of optimism and enthusiasm.
In the paper titled “Being Dressed and Ready - when the Party arrives” I relate the story of Emile Hadad, a California Property Developer who started developing 45 000 residences and 19 million square feet of commercial space – in the midst of a recession (Bloomberg Businessweek, 14 – 20 March, 2011).
When asked why, he replied: “I don’t want the party to show up and I am not dressed”.
Recession does not mean that money (capital) was burned in a fire. It just means that money has changed hands - and locations.
Destinations addressing the classy “up-market”
…selection always starts with the choice of Destination
In April of 2013 we learned that Dubai Police Force added a Lamborghini to its fleet of cars.
The $550’000 vehicle will be used mostly in tourist areas.
In the words of its deputy police director, it is to show how “classy” Dubai is.
And of course, Dubai is associated with Dubai Healthcare City – which in turn is associated with Health Tourism addressing the more affluent sector of the market.
Monaco is also an established “upmarket” (classy) tourism destination.
In 2013, Monaco hosted the International Medical Travel Exhibition and Conference (at which I was an invited and hosted speaker).
The location for this event was chosen because Monaco attracts some of the more affluent International Patients seeking Treatment Abroad.
And I can list a few more Tourism Destinations which, likewise, attract Health Tourists who are not “price sensitive”.
More and more, we hear and read of countries (i.e., destination) wanting to take their Tourism Product “upmarket”.
Just Google: Tourism+Upmarket.
They, no doubt, want to take their Health Tourism Product “upmarket”, as well.
For example, in the October 7th 2004 issue of The Economist, we read: “India wants to become an upmarket health-care destination”.
When it comes to Health Tourism, selection always starts with the choice of Destination.
And we did see that the sophisticated Health Tourist will opt for relative exclusivity and distinctiveness.
Being aware of this preference, the question being asked by the decision-makers and purse-string-holders (the Vital Few) of “plain vanilla” Destinations is: “how do we elevate ourselves from a “commodity” to a “cachet” (i.e., a High-End Brand)?”
Of course, it all starts with investment (see: the role of Investment).
Beyond the issue of investment, it is a matter of “knowledge” (the “how”).
To keep things simple (for the purpose of this paper), the knowledge resources are provided through the arcHTos Sandbox and its associated “tools”.
arcHTos Sandbox
The arcHTos Sandbox is a comprehensive system for designing, creating – or transforming – and then, operating arcHTos Derivatives – including Destinations.
In addition to compatible and compliant commodities, the Sandbox (through a process of optimization) enables the de novo creation – or transformation – of Destinations which are: