There has been some discussion in Iceland as to what the country’s image should be. As a result, the country displays multiple images that have a weakening effect on one another as they confuse the market. Maintaining a single outward image is essential for the image to take hold; the question is, what should that image be? One possible – and strong answer – is health and vitality.
Iceland’s nature is virtually unspoiled. The air is clean and the water pure without additives. The health care and health services sectors are untainted by the economic collapse (which the country has recovered from) and the country itself is rapidly becoming a top-notch tourist destination. A range of companies operate in the health field either directly or indirectly and their number is growing. January 20 2011, the Health Industry Association was founded. Operating within the framework of the Federation of Industries in Iceland, the association includes companies such as Ossur, Actavis, Nox Medical, Oxymap, MentisCura, Stiki and Saga Medica. In the pipeline is the establishment of private clinics aimed toward foreigners seeking to lower medical expenses. This has raised red flags in the Ministry of Welfare as there is a risk that these operations will eventually call for government support. The argument: Foreign patients will not sustain these operations as their number will be insufficient.
While we agree that there are certain risks involved, claiming that these private hospitals are unsustainable without domestic patients (and therefore increased government capital outlays through the Social Insurance Administration) ignores the effect of a well formulated and executed marketing strategy. With the right strategy in place and a coordinated effort to promote Iceland as the #1 destination for health and vitality, there is no reason to believe domestic patients will be necessary. The weakening of the local currency (ISK) has provided the country with a major competitive advantage that can be utilized effectively to bring all these operations to capacity.
Iceland is recovering from the image shock following the collapse of the financial system and the introduction of the IMF on the scene. Promoting the country as a financial center is off the table and so is attracting foreign investors desiring to move into the market – it is really too small to be of significant interest. The only viable option is to promote the country based on its strong image of health and purity. Coordination of companies involved in that particular field with solid backing from tourism boards gives ample reason to believe that sufficient traffic can be generated to make the planned private clinics self-sustaining. The key to a successful marketing strategy is cross-selling.
This diagram shows four major cornerstones that each is aimed toward a specific target audience. Private clinics target foreign private and public insurance firms in order to lower insurance claim expenses. This action increases the profitability of private insurance firms and reduces the capital requirement of public (state-run) insurance firms, which in turn lowers budgeting requirements and therefore has direct impact on public taxes. The U.S. in particular is likely to take this option under serious consideration as it makes financial sense. These private clinics in turn make use of pharmaceuticals produced in Iceland (low energy and labor cost results in competitive pricing) during and after treatment and will promote natural medicines, health spas and a range of other services provided by other firms as after treatment or as preventive measures against future ailments.
Health spas benefit directly from these clinics as tourist volume increases. There is ample room for package deals, in which clients may be offered medical treatment with health spa activities as after treatment. Health spas in turn promote healthy food selection and lifestyle, which includes healthy cooking, natural raw materials production, homeopathy, and detoxification.
On the non-medical side, Iceland provides the ideal setting for tourists that want to experience something unique. There are not many places that combine a volcanic geography with northern lights and midnight sun, which incidentally open the gateway for winter and summer tourist season targeting. Again, combined with private clinics and spa-related activities, this kind of activity is an extension of the services provided by the former in addition to resorts and hotels offering vitality items on the menu backed by professionals in that field.
For the adventurous, Iceland packs an arsenal of services designed for that specific end. Although not completely scientifically proven, there is ample reason to believe that a positive outlook on life, the reduction of stress and a healthy – and controlled – dose of adrenaline has positive impact on health.
When these four cornerstones are compiled into a cross-selling chart, the strength of Iceland’s image as a health and vitality center becomes a compelling argument. The introduction of KLM and Delta on the Iceland scene presents a great opportunity that must be transformed into revenue. The best way to do that is to sharpen the country’s image and aim it toward carefully selected targets. A coordinated effort where firms operating within this framework target specific audiences will result in increased cross-selling and expedite Iceland’s economic recovery.
We are currently organizing a vitality conference to be held in Reykjavik February 19 – 20 2011, which is focused on disease prevention through food and lifestyle selection. While the project is a market test aimed toward the domestic market, it will serve as an evalutation of holding a much larger – and international – conference later this year.