HEALTHY RETURNS: A business viability action map for corporate healthcare units in India's Tier 2 and Tier 3 Cities

BY: Rajesh Boddu, Regional Manager-Operations, Oasis Fertility, India - 16 Feb-2023

Healthcare companies generally establish units in Tier 1 cities since there won't be any issues with cost, availability, or accessibility, and because there are many marketing channels to promote their brands and make high profits in the predicted time frame.

The bulk of the groups are not interested in starting their facility in Tier 2 or Tier 3 cities in India because of the following challenges:

Affordability issues might arise since Tier 2 and Tier 3 cities frequently have lower per capita earnings. A lack of qualified medical staff, less marketing opportunities for brand promotion, and little support from the neighborhood doctors already in place.

Prior to this, B2B was the only industry in these areas that provided leads, including local doctors and general practitioners. It takes a while to allocate services or generate leads, which causes a protracted breakeven period as operating costs increase.

However, the current state of affairs has altered. With the appropriate planning and marketing techniques, we can soon break even by investing in tier 2 and tier 3 cities.

Here’s how we can reimagine some of the common functions to redefine growth beyond Tier-1 cities.


•    Based on the market's demographics and existing supplies, pinpoint any demand-supply gaps.

•    Hospital size based on payer mix, revenue, and specialty mix.

•    Appropriate recruiting strategy: - Avoid employing too many highly experienced doctors at once in order to attract patients because these doctors only see a set number of patients each day. As a result, the hospital's price increases, and at that price, you can only serve a specific demographic. Your operating expenses won't rise if you hire 30% highly experienced doctors for the most in-demand specialty, 30% with 7-8 years of experience, and 40% with 2-3 years of experience.

•    Before the pandemic, these markets relied only on government health programs, which caused hospital bill releases to be delayed by 60 to 100 days. Today, however, a majority of individuals have health insurance, changing the scenario. Consequently, arranging for mixed occupancy will lessen the associated costs.

•    Adding an extra 10% to 15% to the budget's operational cost buffer to account for execution delays.


•    All new firms in Tier 2 and Tier 3 cities adopt the same marketing tactics as those used by companies in Tier 1 regions, which has the unfavorable consequences of low foot traffic and expensive marketing expenses. For their problems, residents of Tier 2 and Tier 3 cities commonly go to nearby hospitals in Tier 2 cities. If their problems cannot be resolved at their institutions, the specific doctor will direct them to hospitals in nearby Tier 1 cities where the facilities are available. When we construct a new hospital in a Tier 2 or Tier 3 city, we must first convene conclaves to tell the local doctors about the facility and the services we provide. where the loop of referring patients to Tier 1 may be broken.

•    It frequently takes time to increase foot traffic in tier 2 or 3 cities unless we join the market right away before a month or two from start. Regularly holding health screening or specialty-focused camps at small businesses, community health centers, large group unions, governmental and private sector organizations will help to promote brands at a fair cost.

•    Training and development concepts will do well in these markets. When we launch our center in these locations, we frequently acquire facilities that are not currently accessible as well as clinical staff with excellent knowledge. We should support local doctor’s professional development and training in their specific fields of specialty in order to develop long-lasting partnerships with them.

•    There are 10–12 villages with a minimum population of 6–8 thousand people around every city in Tier 2 and Tier 3. For guidance on all of their medical concerns, residents in these places frequently consult a regional medical practitioner (RMP) or a government health assistant; if extra help is required, they go to major cities. We would attract more clients if we could meet with these RMPs or government health aides and explain our services to them, including the price we charge.

•    Having a strong sales team may assist boost foot traffic since they should be able to speak with local influencers and doctors about the facility services the company offers and how the infrastructure, doctor profiles, and successes compare to the competition. We can increase our lead generation by teaching our sales force on these areas from day one.

•     In addition to these, there are a few offline marketing avenues that have good results in these locales at little cost. Some of these include hoardings in rural locations, flyer inserts in regional newspapers, canter events, and regional television advertisements.

Digital Marketing 

India's Tier 2 and Tier 3 cities now use five times as many digital platforms as they did five years ago. In Tier 2 and 3 cities, the number of social media users and online shoppers has significantly expanded since the covid outbreak.

For instance:

Amazon India has experienced a two-fold surge in its client base from Tier 2 and 3 cities during the first 36 hours of its holiday season sale. According to an Amazon India spokesman, Tier 2 and Tier 3 cities made up 75% of the e-commerce giant's overall consumer base during its "Great Indian Festival" promotion.

The spokesman went on to say that this year, there were twice as many clients from Tier 2 and Tier 3 cities as there were last year.

A wide range of channels are used in digital marketing, including both paid and unpaid ones like Google advertising, Facebook ads, Instagram ads, YouTube commercials, news apps, emailers, and WhatsApp broadcasts. Here, the things we choose, the money we spend, and the way we deal with customers all matter greatly.

1. Placing commercials in local languages.
2. Selecting a target market that need your service or product.
3. Ads that capture the eye.
4. Marketing deals and discounts less aggressively than rivals.

Examining and investing in the channels that worked and those that didn't.

Many single-speciality clinics in India are targeting tier 2 and tier 3 cities because residents of such areas are searching for a specialized level of care and cleanliness in medical procedures. Many of the units have already begun operations and are making a profit. Even in Tier 2 and Tier 3 cities, you may anticipate more company development with adequate planning, marketing, and patient care.

By: Rajesh Boddu,
Regional Manager-Operations, Oasis Fertility, India

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