Disscussions

11 Marketing Programs and Tactics

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Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

—Sun Tzu Learning Objectives

After reading this chapter, you should be able to do the following:

• Discuss each of the five I’s that characterize services, from the perspective of a service provider at an HCO.

• Delineate the two essential decisions related to fees that need to be made by an HCO.

• Describe the role played by the physical environment as it relates to patient satisfaction in a healthcare setting.

• Identify four promotional tactics that can be used by all types of HCOs.

• Explain how publicity can affect an organization, including its public perception in a community, and i dentify elements of a crisis management plan.

• Outline an action plan, and discuss the effective use and management of social media as part of an HCO’s marketing plan to implement strategies with tactics.

Section 11.1Product/Service Mix Elements

Introduction This chapter focuses on the key elements of marketing programs: tactics. Tactics are the actual marketing activities an organization engages in as it develops ways to create its brand, attract and retain customers, and accomplish objectives. These activities involve the development or alteration of the marketing mix elements described in Chapter 7. Blending the marketing mix elements, along with effective public and community relations, creates a consistent image for an organization and helps customers differentiate the organization’s brand from its competi- tors. In this technology-driven age, social media marketing tactics have become an integral part of the marketing arsenal available to organizations.

A marketing program is composed of all the short-term or tactical marketing plans used by an organization. Each of these plans must be developed with all the components described in the outline of the marketing plan presented in Chapter 8. While it is often feasible to use one plan to cover several services, such as a birthing center and neonatal care, other services that are high-revenue producers or have special initiatives need their own specific plans for managing marketing-related activities. All marketing tactics involve some aspect of the four Ps of marketing described in Chapter 7.

11.1 Product/Service Mix Elements While healthcare does involve products, for example, medical equipment and pharmaceuti- cals, much of what is delivered by HCOs and medical providers can be classified as services. A service may be defined as an intangible task or action that satisfies a patient’s needs. The following subsection discusses the characteristics of services in the context of executing the HCO’s strategic marketing plan.

Characteristics of Services Services differ from pure products in several ways. One is that services are intangible. Another is that the service provided cannot be separated from the person providing the service. Many healthcare services are combinations of service and product. For example, an annual flu shot is a combination of the flu serum and the person who actually administers the shot. For pure services and service/product combinations, it is helpful to distinguish the characteris- tics of services. Figure 11.1 illustrates the tangible/product to intangible/service continuum for healthcare.

Services can be described according to the five I’s: intangibility, inventory (perishabil- ity), inseparability, inconsistency (variability), and involvement (Kotler, Bowen, & Makens, 2014).

Section 11.1Product/Service Mix Elements

Figure 11.1: The tangible continuum for healthcare products and services

Healthcare products are more tangible than healthcare services.

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Flu shot

Prescription medication

Non-prescription medication

Medical equipment

Dental cleaning

Psychiatric services

Pure service (intangible)

Pure product (tangible)

Source: Adapted from Booner, L. E. & Kurtz, D. L. (2011). Contemporary marketing, Cengage: Mason, OH.

Intangibility Services are intangible. That is, services cannot be touched or handled, smelled or tasted. Services also cannot be resold or even owned by someone other than the service provider. In fact, only a service provider can deliver a service. For example, having your teeth cleaned by a dental hygienist is very close to a pure service. While there is some product involved (the dental polish), the bulk of the experience is service. The hygienist cleans and polishes your teeth, involving specialized work you could not have done yourself. You can see the results of the service, but you cannot hold the service in your hands, or sell or give your service to someone else.

The intangibility of services makes the marketing of services difficult. Services, because of intangibility, are credence goods. Credence goods are those where the quality cannot be determined at the time of consumption. For example, if a patient receives a root canal, he or she will not know whether the service was correctly performed until possibly months or years afterward. In contrast, if that same patient takes pain medication immediately after the root canal, the pain will be reduced by the medication, or it will not.

Section 11.1Product/Service Mix Elements

Thus, marketers need to reduce the intangibility of services. This can be accomplished in several ways. One way is to explain to patients the process of treatment. This allows the cus- tomer to visualize the service, making it more tangible. Another way to make services more tangible is to design pleasant surroundings. A dental practice can have a comfortable wait- ing room and flat screen TVs in the treatment rooms. A hospital can have art on the walls in each room. Finally, service providers can guarantee their work. The promise of a guarantee instantly makes the service more tangible.

Inventory (Perishability) As the example with the dental hygienist shows, services are produced and consumed at the same time. Thus, services cannot be stored in inventory for future use and, if unused, the service perishes.

Services are perishable in the following two regards:

• As noted, services are produced and consumed at the same time. Thus, if the con- sumer is not present to receive the service, the opportunity to provide that service, and the related revenue for the service provider, is lost forever. If a patient is a no-show for a scheduled appointment with a dental hygienist, the opportunity to provide a service during that time period perishes. Another example is an empty bed in a hospital. During every 24-hour period that the bed remains empty, it absorbs the fixed costs of the hospital with no revenue. Once that time period has passed, that revenue can never be recovered.

• Services perish because of irreversibility. That is, a service vanishes once that par- ticular service has been performed for a patient or customer. To continue with the example of the dental hygienist: Once the cleaning has been completed (that is, the patient has consumed the service), the service vanishes, and it cannot be reclaimed. While the dental hygienist may clean the patient’s teeth again in six months, the condition of the teeth and the situation in which the service will be provided will be different.

The perishability of services leads HCOs to manage service capacity. Idle service providers draw salaries and use other resources that cost the HCO money that cannot be recovered. Additionally, empty beds in hospitals or nursing homes absorb fixed costs while contributing no revenue. A detailed discussion of capacity management is beyond the scope of this text- book, but a basic explanation can be made with a few examples.

One way to manage service capacity is to schedule service employees during the hours of peak demand. For example, a dental practice may schedule more hygienists early in the morn- ing and late in the afternoon to match the times patients would prefer to have their teeth cleaned. It is more difficult for hospitals to fill empty beds, but there are strategies. One is to add services, such as obstetrics and neonatal care, to fill empty beds. Another is to transfer critical-care beds to long-term-care beds.

Section 11.1Product/Service Mix Elements

Inseparability Services are inseparable from the service provider and the person receiving the service. The dental hygienist cannot clean a patient’s teeth without both the patient and the hygienist being present in the same place at the same time. Contrast this with another healthcare sce- nario: filling a prescription at a pharmacy. In this case, there is a combination of product and service. The product is the prescription and the service is the pharmacist’s dispensing of the prescription. For example, your physician transmits your prescription to the pharmacy and, sometime later, you go to the pharmacy to pick it up. A clerk hands you the filled prescription, and you pay for it. The pharmacist who filled the prescription may have gone home. There was no reason for you and the pharmacist to be in the drugstore at the same time. This illus- trates the difference between a product and service in terms of inseparability.

Inconsistency (Variability) A service cannot be separated from the service provider, and, because that provider is human, each service is unique. Thus, a particular service can never be repeated exactly in the same form. Different circumstances and resources are present each time a service is provided. No two teeth cleanings, tonsillectomies, or flu shots are the same. Differences in the quality of service given to a patient by the same provider might depend on how the provider feels physi- cally and emotionally. Additionally, each patient is different. For example, one dental patient may need more time than another patient for an anesthetic to work before a tooth extraction can be performed.

Involvement Finally, consumers participate in the consumption process. This is known as consumer copro- duction. In healthcare, the customer may modify the service within the bounds of the pro- vider’s guidelines. For example, a dental patient may be able to determine the type of crown he or she receives, or a patient can request a generic instead of a brand-name medication.

Quality Service Dimensions Companies have been concerned with the delivery of a satisfactory level of customer service for decades, but it is safe to say that the level of concern has increased during the past decade. Competitive forces and the more demanding nature of customers have combined to put cus- tomer service at, or near, the top of most marketers’ lists of important issues. Research has revealed five quality service dimensions used by customers to define the quality of service they perceive they are receiving. These dimensions include tangibility, reliability, respon- siveness, assurance, and empathy, as shown in Table 11.1.

Further research has revealed that while respondents ranked all five toward the “very impor- tant” end of the scale in defining service quality, they did respond, when asked, that reliability was the most critical.

Section 11.1Product/Service Mix Elements

Table 11.1: Dimensions of service quality

Dimension Description

Tangibility Appearance of physical facilities, equipment, personnel, and communications materials

Reliability Ability to perform the promised service dependably and accurately

Responsiveness Willingness to help customers and provide prompt service

Assurance Knowledge and courtesy of staff and their ability to inspire trust and confidence

Empathy Caring, individualized attention the organization provides its customers

Source: Adapted from Zeithaml, V. A., & Bitner, M. J. (2003). Services marketing: Integrating customer focus across the firm (3rd ed.). Boston: McGraw-Hill/Irwin, p. 93.

These research results, regarding the critical importance placed by customers on service reli- ability, suggest that firms must accomplish the following tasks with regard to their service strategy:

1. Determine the specific service expectations of the target market. 2. Design a service strategy grounded in meeting or exceeding those expectations. 3. Deliver on those promised service levels consistently when dealing with customers. 4. If Steps 1–3 are performed better than by competitors, a competitive advantage

exists in the area of customer service and should be exploited as such.

Improving Customer Perceptions of Service Quality The most vexing challenge for management, given the importance of reliability in defining service quality, is to close any gap that exists between customer service expectations and the ultimate delivery of service to those customers. This is sometimes referred to as gap analy­ sis. The following four service-related gaps should be of particular concern to marketing planners:

1. Gap between customers’ expectations and management’s perceptions. Conducting the proper research into what customers are actually thinking is necessary—we cannot just assume that, absent such research, we know with clarity what the expectations of customers are, in fact.

2. Gap between management perception and service-quality specifications. Manage- ment’s knowledge of customer expectations is but the first link in a chain of steps leading to customer satisfaction with service delivery. It is important that specifica- tions of policies and tasks of service delivery be developed, based on that knowl- edge, and communicated to employees. Further, the employees must see that their job performance will be rated in part or in whole on meeting those service-quality specifications.

3. Gap between service-quality specifications and service delivery. Highly motivated, trained, and well-informed employees are needed to actually perform the tasks

Section 11.2Price/Fee Mix Elements

specified as necessary for delivery of quality service. Control systems that are capable of measuring any gap between desired and actual service delivery should be in place to indicate where excellence or shortfalls are occurring.

4. Gap between service delivery and external communication. Excellent delivery of service specifications can still disappoint customers, if marketers have caused those customers to have unrealistically high expectations of service. For example, facility photos that suggest the accommodations are more spacious or luxurious than they really are will likely raise customer expectations higher than can be delivered upon, resulting in disappointed customers (Kotler et al., 2014).

Product quality and customer service decisions should be the cornerstone of product deci- sions in the marketing plan for HCOs.

11.2 Price/Fee Mix Elements Pricing decisions have gained importance in recent years because of increased concern over controlling healthcare costs. Fee structures and third-party reimbursement is one vari- able that can bring about immediate market response—either positive or negative. Price may not be the determining factor in a decision for a consumer, but it is, usually, at least a qualifying factor. Price is always a consideration for consumers and, therefore, for marketing planners. Some insurance companies have a reduced deductible for those taking an online health survey, which offers immediate feedback on the insured’s health status and a $250 reduction in the deductibles for the next year’s healthcare services (BlueCross BlueShield of Oklahoma, 2013).

Two essential decisions related to fees that need to be made by an HCO are (a) the basic level of fees charged and (b) how specific fees are set. For example, each hospital has its own policy for setting prices on tens of thousands of different items on its price list. Most hospitals use the estimated amount that it costs to provide the service or item as the major factor. The hospitals have to factor in the sometimes hundreds of different payment arrangements they have with insurance companies. Some of these arrangements make it necessary to set a base price that is higher than the cost to provide the service in order to get paid enough to cover the costs. The DRGs, Diagnosis Related Group, must also be factored in for inpatient care. Recall that DRGs are universal groupings used by Medicare and most insurance companies to clarify the type of inpatient care a patient receives. Insurance companies use the DRG code, along with a diagnosis/CPT® (Current Procedural Terminology), which consists of codes set and revised by the American Medical Association (American Medical Association, 2013), and the length of the inpatient stay, to determine payment and reimbursement for claims (Henry Ford Health System, 2013).

The fees charged can be a way to attract new patients. For example, the clinic My Dentist, in Oklahoma, offers an exam and cleaning for $39 for new patients. This is a tactic to attract new patients and let them experience the services. The My Dentist clinic’s strategy behind this tactic is to create a regular patient for the clinic (My Dentist, 2013). In this situation, the clinic is pricing this service below the market average as a tactic to attract new patients and build the clinic’s revenues.

Section 11.4Promotion Mix Elements

If an HCO’s fees are above the market average, then the HCO is usually positioning the organi- zation as a high-quality provider or a provider of services that are not available through other providers. This tactic targets higher income or better insured patients to attract them to the organization.

11.3 Place/Delivery Mix Elements Place tactics involve the locations at which the healthcare services will be provided. An HCO may have only one location. An HCO may also operate satellite locations with more limited services, or it can have franchised locations in other geographical areas. While the location of operating units is a strategic decision, tactical place decisions are a critical component in the delivery of services and patient satisfaction with those services.

Healthscape is defined as the emotional, affective, cognitive, and physiological patient/pro- vider behaviors and outcomes related to the physical environment in which the healthcare services are delivered. The term healthscape thus describes the role played in the marketing mix by the physical environment in which the healthcare services are delivered (Sheaffer, 2008). For example, a facility’s layout, noise level, temperature, lighting, and décor should all be designed to reinforce the organization’s overall positioning strategy. Research has shown that these environmental elements play a role in patient satisfaction (Fugate, 1991).

Marketing plans that involve tactical changes to the healthscape, such as new brochures, sig- nage, audio/video, and so forth, must be carefully considered before being incorporated into the existing healthscape to ensure that the proposed changes are complementary and consis- tent with the organization’s brand and image. Even a simple change, such as the standardiza- tion of staff uniforms or a new uniform color, should be given careful consideration in terms of its impact on both patients and staff. Otherwise, the interaction of these proposed changes with the current healthscape may have a detrimental effect, such as the effect on patients of red uniforms worn by staff in an operating room.

11.4 Promotion Mix Elements Promotional efforts are the most visible manifestation of a marketing plan. Some observers might think of the promotional strategy as the marketing strategy. However, much planning and strategizing must necessarily precede promotional decisions. Until a solid positioning strategy is articulated to reach a clearly defined target audience, it is not appropriate to begin consideration of promotional decisions.

Promotional tactical decisions center on what is to be communicated, to whom, through what methods and media, and at what appropriate costs. Promotional tactics are activities designed to inform, persuade, or remind consumers about the HCO and the services it offers.

Insight into the types of decisions involved in promotional tactics can be gained by viewing promotional tactics as a communication process, as shown in Figure 11.2. In the commu- nication process, a source (HCO) sends a message by using a certain method, or medium.

Section 11.4Promotion Mix Elements

This message reaches a receiver (existing or potential), who, by his or her words and actions, sends a message back to the source about what was received and his or her willingness to respond to that message. This process is always goal oriented. The sender is communicating to get a response from the receiver. The response may be internal, such as learning certain information or having certain attitudes, or the response may show itself in more overt behav- ior through immediate or precipitant acts. Regardless, a response is desired.

Figure 11.2: Promotional tactics as a communication process

Successful communication between the source and the receiver occurs when the message is understood by the receiver as the source intended.

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Source: Healthcare

organization Message transmitted

Method or

medium

Feedback

Message received

Receiver: Patients, public, payers

Source: Adapted from Stevens, R., Loudon, D., Wrenn, B., & Mansfield, P. (2006). Marketing planning guide. The Hawthorne Press, Inc., p. 200.

The checkered areas in the Sender (Source) and Receiver boxes represent common frames of reference. A common frame of reference is a prerequisite to effective communication. Unless there is a common area of understanding between the sender and receiver, no communica- tion takes place. The simplest example is a language barrier. If the smoking cessation message is sent in English and the receiver understands only Spanish, no communication takes place. The symbols (words) used as the means of communication are not common to the two parties taking part in the process.

One point that must always be con- sidered by the marketing planner is that promotional tactics involve sending the right message to the right audience through the right medium by using the right methods at the right costs. Deciding what is “right” constitutes the marketing planner’s work in the communica- tions part of the marketing plan.

Consider the two Italian signs shown in the nearby photos. Each sign clearly identifies the location of a pharmacy, or farmacia in Ital- ian. However, one sign brings the concept of state-of-the-art service offerings to the prospective patient,

iStock/Thinkstock The word on these two signs indicates the location of a pharmacy, but the two distinct styles may generate different assumptions about the type or quality of the facilities and their services.

Section 11.5Community/Public Relations

while the other sign may cause outsiders to avoid the facility because its rustic nature might suggest limited service offerings. The choice of the color green for the large sign could even be a tactical decision to create the image of an environmentally friendly organization or to tie it to other promotional materials used by the organization.

While promotional tactics may differ from one type of HCO to another, the following tactics can be used by all types of HCOs:

1. Physician-referral initiatives aimed at networking with other healthcare providers 2. Patient experience-sharing aimed at letting patients share their experiences

(testimonials) 3. Reputation building and management supported by integrated branding and

communications 4. Integrated messaging that drives customers to the HCO’s website (Rodak, 2012)

11.5 Community/Public Relations Publicity, when properly managed, provides another opportunity to promote a company’s offering but in a way unlike those discussed thus far. Publicity involves mass communications transmitted through the media in editorial space rather than paid space. When a company or its products and services create news through the media, the company is receiving publicity. Publicity has been called “the velvet hammer of promotion” because it can drive home a point in an unobvious manner.

Recently, Baylor Health Care System, which is based in Dallas, Texas, combined with Scott & White Healthcare, which is based in Temple, Texas, to form a new organization: Baylor Scott & White Health. Both health systems were nationally known for quality patient care, and their respective management felt that the environment was right to combine their strengths to provide more resources. Because this business merger generated a great deal of press in the North Texas media, a great deal of the branding effort benefiting the new organization has not come at a financial cost to the organization(Baylor Scott & White Health, 2013).

Publicity, however, can also be negative because production errors, court cases, service fail- ures, and so on also make news. For example, the FDA is currently questioning the safety of antibacterial soaps. According to the FDA, the soaps have not proven to be any more effective than soaps without antibacterial ingredients; further, the antibacterial soaps contain triclo- san and triclocarban, which may be harmful ingredients. Manufacturers of antibacterial soap, such as Dial®, will need to formulate responses to the FDA in order to protect their reputa- tions (Jacobsen, 2013).

One question that most organizations face is how to get good publicity. One source offered the following suggestions (Walker, 2013):

1. Research your media market to identify which media firms cover healthcare topics. 2. Identify who is assigned to cover healthcare topics at those media firms. 3. Study the media for the types of healthcare-related news stories they publish. 4. Understand what is and is not news with regard to healthcare topics.

Section 11.5Community/Public Relations

5. Create a professional press release. 6. Establish yourself as an expert. 7. Cultivate professional relationships. 8. Be deadline-sensitive.

Crisis Management Despite the efforts of the public relations department to project positive information about the HCO, negative publicity can, and often does, happen. For example, in 2004, the Duke University Health System accidentally substituted hydraulic fluid instead of detergent when cleaning surgical instruments at two satellite hospitals (Dzau, 2005). One of the largest not- for-profit hospitals, Kaiser Permanente, was investigated in 2006 by the California Depart- ment of Health Services concerning its kidney transplant program and patient health (The Associated Press, 2006). As recently as 2013, the personal data of 90,000 patients at the University of Washington Medical Center were compromised. Those persons who hacked this medical center’s system obtained patient contact information, medical record num- bers, and Social Security numbers (KOMO Staff, 2013). These examples point to the need for a crisis management plan that can be implemented when negative publicity strikes (Freeo, 2013).

Many crisis management plans are available, but almost all contain the following elements. First, there needs to be a crisis communication team that includes the CEO, chief marketing or public relations officer, and other senior management. This team is on call 24/7 if a crisis develops. The team should also have a backup staff that can immediately answer phone calls, especially from the media. The key for the first response is to protect the integrity and repu- tation of the HCO. This is done in virtually every instance by telling everything, telling it fast, and telling the truth.

Second, the crisis management team needs to put itself in the role of the audience affected by the news. For example, in the Duke University Health System case involving the use of hydrau- lic fluid, instead of assuring patients that internal controls were strengthened, the crisis man- agement team hired an outside expert. This expert determined that the high heat process kept the surgical instruments clean even though they had not been washed in detergent, thus assuring patients that no health risks were posed from the use of the surgical instruments in question.

Another crisis management tactic is to have a designated spokesperson. This person should be comfortable with the media and project confidence to the audience. An advantage of hav- ing one spokesperson is that the message delivered will be consistent. Additionally, all infor- mation regarding the crisis can be funneled to one person rather than fragmented throughout the organization.

Fourth, have a designated media center. If the crisis is visual (for example, a fire or tornado has occurred), then allow the media access so it does not look as though the HCO is hiding information. It is always best to have staff assigned to escort the media during a crisis so that members of the media are not allowed to wander into areas where misinformation may be disseminated.

Section 11.6Implementing Strategies With Tactics

Finally, a crisis management plan needs to be in place, as much as possible, before a crisis hap- pens. This plan can include sample, prepared statements and practice sessions for respond- ing to tough questions. If the public relations department waits until the crisis to plan, it will be too late.

11.6 Implementing Strategies With Tactics A useful technique for implementing strategies is called an action plan. An action plan for each key result area should be developed. The key result areas are the overall goal of a specific set of activities. The action plan places key result areas, objectives, strategies, and action plans into perspective with each other and helps an HCO develop the interrelationships among plans at each institutional level. The action plan helps strategies come to life with appropriate action, as shown in Table 11.2.

Table 11.2: Action plan for a new adult day care center

Key result area: Improve the financial condition of the center through increased services and improved enrollment (new and retention).

Objective: Increase revenue from $200,000 to $300,000 per year.

Benefits statement: To improve the financial capability of the center and reduce dependence on the need for additional funding.

Strategies: A. Develop the case or story of the center, and identify 10 media outlets that might communicate the center’s story to their audiences.

B. Develop proposals for new services. C. Develop an alumni survey and telephone campaign.

Action plan Person responsible Start date Date completed

Send letter to all local physicians.

Call on directors of the 10 media outlets.

Write an appeal letter to alumni.

Personally visit every home health service provider for leads.

Arrange speaking engage- ments at each area service club.

BUDGET: $5,000

Section 11.6Implementing Strategies With Tactics

Note that the plan includes who is to be responsible for each task and the dates that the task is to be started and completed. More details can be added to manage more specific subtasks. For example, if an appeal letter is to be written, then who will be responsible for addressing and mailing the letters? This format can also be used for updates from the staff responsible for a task to determine the progress made to date and whether additional help is needed. Also, note that a budget has been specified to cover the costs of the activities.

Managing Marketing Tactics Marketing tactics must be carefully managed to avoid the impact of Murphy’s Law: “Anything that can go wrong will go wrong” (Wikipedia, 2013, para. 1). This means that someone (or a group), who is capable and with decision-making authority regarding details, must be given responsibility for the oversight of planned marketing activities. In certain circumstances, it is advisable to outsource the management of these activities and events to ensure that they are managed by experienced professionals.

Consider just a few of the activities that are involved in something that seems as uncompli- cated as a luncheon and groundbreaking ceremony for the construction of a new wing at a hospital:

1. Time and date have to be established so that all the key players can be present at the event; each key player must be contacted to coordinate a date for availability.

2. Press releases need to be prepared and timed to coordinate with the event’s media representatives and photographers, and media deadlines.

3. The luncheon menu must be established within a given budget and any specific menu items determined, such as vegetarian plates for some guests.

4. The room setup must be determined in advance, along with any audiovisual equip- ment needs and head-table arrangements.

5. There must be a participant sign-in sheet, and a nametag created for each partici- pant, with each name spelled correctly.

6. Seating arrangements must be established so that guests know at which table to be seated.

This is just a partial list of the activities that must be done, and done correctly, for the event to be successful. For each of these specific tasks, there is the potential for error. While some mishaps may be minor and easily corrected, others, such as not having the audiovisual equip- ment available and tested before the start of the luncheon, are either more difficult or impos- sible to correct during the time of the event. Therefore, management’s question is this: What person or group will be responsible for the event, and what system of checks and balances will be used to make sure the event goes smoothly?

Social Media Programs—Connecting With Stakeholders As discussed in Chapter 10, Social media marketing (SMM) is the use of social networking websites as a marketing tool (WhatIs.com, 2013). The basic objective of SMM is to create con- tent that users, or followers, will read and share with their social network, thereby enabling

Section 11.6Implementing Strategies With Tactics

an organization to increase its brand awareness and customer knowledge, and to establish broader customer contact (MedTouch, 2013). Additionally, SMM provides use as a tool for customer relationship management (CRM), whereby interactive parts create opportunities for customers to get information, raise questions, complain, and feel like someone is listening to them. If used properly, it is much more than a website link for questions and complaints because (a) it is interactive and (b) other members of the network also post information and experiences. The increased popularity of Facebook, Twitter, LinkedIn, Myspace, YouTube, and so forth make SMM a powerful marketing tool that must be managed.

One of the first decisions to be made about SMM is who will manage the use and content of social media for the organization. For example, without specific managerial oversight, it is possible for several departments in a large organization to have multiple Facebook pages with different or even conflicting logos and information. And, if an employee in a department without SMM oversight starts using social media for business purposes and then leaves the organization, those customer interactions stop. In some cases, it is wise to hire an experienced staffer to manage an organization’s social media content and usage, or to bring in social media consultants to help train those vested with that responsibility. It is also extremely important to have specific written policies on who may post and what can be posted through social media. A social media audit may be needed to determine which media are currently being used; who has the authority to post, using that media; and what kinds of communications are being posted. Such an audit will often identify inconsistencies, and, in some cases, misinfor- mation, being sent out under the organization’s name.

Another key component in effectively managing SMM is determining the content strategy that the organization will use. Does the organization have the “right” content to share, and what are the messages to be shared with its followers? Next, continual analysis of the num- ber, types, and content of posts or tweets is necessary to determine the impact of social media usage. This is where many organizations fail. It is not sufficient for an organization to say that it has a specific number of likes or followers. Rather, an organization needs to know who those respondents are, what they are saying about the organization, and how this information can be channeled into even more exposure for the organization through the use of social media.

Examples of the effective use of social media by HCOs are shown in the following links:

• www.youtube.com/user/rochestergeneral • www.facebook.com/UHRainbowBabies • www.facebook.com/AlaskaPhysicianJobs

While getting the medical staff involved in using SMM to help promote the services of an HCO is always a major challenge, this should still be a goal of the SMM director at the HCO. Some medical staff may feel that consumers want to focus their attention not on the HCO but on their relationships, as patients, with the physicians who are actually going to treat them at the HCO. A solution to increasing consumer interest in the HCO’s services could be as simple as posting a video on YouTube to introduce several physicians on the medical staff of the HCO, and to let them discuss their educational and professional backgrounds and their clinical and philosophical approaches in treating patients.

Summary & Resources

Summary & Resources

Chapter Summary While it is necessary to understand the strategic aspects of marketing planning, it is also criti- cal to know how to implement plans through the development of tactical marketing plans. These tactical plans involve the application of the marketing mix: price, product, place (dis- tribution), and promotion. Healthcare marketing involves both products and services, and it is therefore necessary to understand how these two entities are marketed differently.

Today’s HCO needs to maintain good relations with the community while marketing to differ- ent targets or constituencies. Image and reputation are important, so HCOs must be able to counter negative publicity. Additionally, no marketing program is now complete without the effective use of SMM.

Key Points 1. The marketing program is composed of all the short-term (tactical) marketing

plans used by an organization. While developed from the overall marketing plan (as discussed in Chapter 8), the tactical plans outline what is to be done, who is respon- sible for doing it, and the time frame for completion.

2. Products differ from services and therefore need special marketing considerations. Additionally, many offerings in the healthcare industry are combinations of product and service. Products and services are elements included in the marketing mix, which consists of the four Ps of marketing: product/service, price, place (distribution), and promotion. Product/service refers to the specific offering of the HCO, while price is often referred to in healthcare as fees. In terms of distribution, healthcare is unique because it often requires large expenditures for buildings and equipment, limiting the number of available locations. Promotion is critical to HCOs because the nature of the product/service is sometimes complex, with varying results.

3. HCOs are increasingly aware of the need to manage both public relations and pub- licity. It is important to understand the distinction between public relations and publicity. Public relations is an area controlled by the HCO that involves participat- ing in projects designed to help the community and ensuring that positive stories about the HCO reach the public. Publicity, on the other hand, is not controlled by the HCO, and publicity about the HCO may be positive or negative, depending on the news story about the HCO. Negative publicity can often cause damage to an HCO’s professional reputation and public image. Thus, part of an HCO’s crisis management program is to counteract negative publicity.

4. The marketing executive of an HCO is often responsible for several marketing pro- grams at once (for example, advertising, publicity, and social media). An effective marketing program integrates all aspects of the marketing mix to send a consistent and positive message about the HCO to target audiences.

5. The use of social media is essential in today’s business environment for almost any organization, certainly HCOs. An important element of managing social media is managing its content. While an HCO can manage its own social media content, it is difficult for the HCO to manage the content of all its employees and even more dif- ficult to manage the social media content provided by the public. Therefore, an effec- tive and well-communicated social media policy needs to be in place at an HCO.

Summary & Resources

Key Terms assurance A customer’s perception of the knowledge and courtesy of a healthcare pro- vider’s staff and their ability to inspire trust and confidence.

capacity management The process of matching service demand with supply in order to maximize revenue.

communication process The process through which communication takes place between a sender and a receiver.

credence goods Services that a buyer finds difficult to evaluate after purchase.

CPT® Current Procedural Terminology, which is the most widely accepted medical nomenclature for reporting medical proce- dures and services under public and private health insurance programs. CPT is a regis- tered trademark of the American Medical Association.

empathy Caring, individualized atten- tion that the organization provides to its customers.

gap analysis Analysis of the difference between expectations and actual service delivery.

healthscape The emotional, affective, cognitive, and the physiological patient/pro- vider behaviors and outcomes related to the physical environment in which the services are delivered.

inconsistency (variability) The idea that service cannot be separated from the service provider or the service recipient. Because each is human and each service takes place in a unique setting with differing circum- stances, each service varies from the one before it.

inseparability The idea that services are inseparable from the service provider and the person receiving the service.

intangibility Refers to the idea that ser- vices cannot be touched or held and cannot be transferred to someone other than the recipient.

inventory (perishability) Refers to the concept that services cannot be inventoried or stored for future use. Once the time for a service passes, the service perishes, either by not having been performed or by having been completed.

involvement Refers to the idea that cus- tomers often aid in the production of services. For example, a patient may be required to “cleanse” before a colonoscopy or fast before a blood test.

place tactics The location and ambiance of service delivery.

pricing decisions Fee structures and third- party reimbursements.

promotional tactical decisions Decisions relating to what is to be communicated, to whom, through what methods and media, and at what appropriate costs.

publicity Refers to mass communications transmitted through the media in editorial space rather than paid space.

quality service dimensions Service char- acteristics used by customers to define the quality of service that they perceive they are receiving.

reliability Refers to the ability to perform the promised service, dependably and accurately.

Summary & Resources

Critical Thinking Questions 1. In what way(s) do tactical decisions and actions differ from strategic decisions and

actions? 2. How do community and public relations activities impact the service mix of an HCO? 3. What are some of the ways that an HCO can incorporate social media into its market-

ing programs?

responsiveness Providers’ willingness to help customers and provide prompt service.

service An intangible task or action that satisfies a patient’s needs.

social media marketing (SMM) Market- ing through social media, such as Facebook, Twitter, LinkedIn, Myspace, and YouTube.

tangibility Refers to the appearance of physical facilities, equipment, personnel, and communications materials.