Marketing Health Care Services

PRINT ED BY: Teny Hudgins <teny.hudgins@ laureate.net>. Printing is fo r personal, private use only. No part of this book may be reproduced or transmi tted without

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The differences between such items reflect important considerations in any marketing action. Nondurable products are often heavily advertised because consumers frequently purchase such products. Many

pharmaceuticals, such as Rogaine ®, are heavily advertised directly to the consumer. Retail store displays

play a major role in direct marketing to the consumer. For durable products, personal sales often play a major role. General Electric (GE), for example, has an extensive sales force that calls upon hospitals to sell

them the latest GE scanning devices. Durable products usually cost more than nondurable items and are

often far more complicated to use. For these products, personal sales are essential to help answer customer questions and to explain the intricacies of the product.

The marketing of services is often more challenging because of their unique elements, given that they are not

tangible. Services differ from products on five components, which can be referred to as the fi ve I' s.

The Five l's of Services

Service marketing is a challenging and often difficult aspect of marketing. The five characteristics of services that any health care marketer should recognize are intangibility, inconsistency, inseparability, inventory, and interaction.

Intangibility

Services are intangible in that they cannot be felt, touched, or heard before they are encountered. Cardiac surgery, for example, is intangible. Prior to undergoing such a procedure, a patient cannot see the surgery or examine it, as can be done with the purchase of a computer. A major challenge in the

marketing of intangible services is to show the tangible benefits from their use.1 An advertisement for an occupational medicine program, for example, might show a productive worker back on the job; the

hospital birthing center advertisement might show a mother with a contented baby. Because services are

intangible, consumer interactions with the processes and the individuals who deliver the service are often the bases by which consumers evaluate the actual service itself.

Inconsistency

Health services are delivered by people- the nurse practitioner, the physician, or the admitting clerk in

the group practice. In this regard, service marketing is more difficult than product marketing. In the

manufacture of a product, exact standards can be developed by which the production line assembles a

car, telephone, or other product within some defined tolerance levels. Deviations in the tolerance can lead to a simple adjustment in the production machines. People-delivered services have inherent variability. The delivery of the service changes with the individual who delivers the service. For

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example, two surgeons may have noticeably different levels of proficiency at performing a particular 258 procedure. Although they perform the same clinical procedure, no one would argue that they are 259 delivering the same service. Similarly, on any given day, the admitting clerks at the hospital may deliver

their services differently as a function of their own motivation, morale, or attitude.

For service marketers, the objective in reducing inconsistency is to achieve as much standardization as poss ible. In McDonald' s restaurants, for example, s ervice workers a]I wear the s ame uniform to

Essentials of Health Care Marketing, 3rd Edition Page 1 of 2

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publisher's prior pennission . Violators will be prosecuted.

minimize inconsistency. The key, however, to any attempt at reducing inconsistency in people-delivered

services is training.

Inseparability

Services cannot be separated from the individuals who deliver them. The classic example of this

characteristic in health care settings is known as the "bedside manner" of the physician. The link between the issues of inseparability and inconsistency underscores the complexity of health care service marketing.

Inventory

The issue of inventory is often ignored in the discussion of services. Inventory is a concept that is common to product businesses. In the analysis of costs associated with product businesses, a major

concern is the cost of carrying any inventory. Yet services, too, have inventory. Whenever an employee

who delivers the service is not being utilized, but is still being paid, an inventory exists. A hospital emergency room physician who is paid on a contract represents an inventory cost that the hospital carries. As long as the emergency room is not being utilized and the physician has down time, the cost of that inventory is large.

Service businesses can manage the cost of inventory by either managing the service deliverer or by

shifting the demand. One strategy for managing the delivery of a service is to employ part-time workers

who work at peak time periods. Nurses are frequently paid premium wages for working certain shifts or worki ng overtime to cover unusually busy periods of activity.

Managing the demand for a service is more difficult. It involves shifting demand to nonpeak hours to level out the costs of personnel and overhead. Movie theaters, for example, offer discounted admissions during the afternoon, or matinee, shows. Management's goal is to attract customers throughout the day to defray the costs of building maintenance and the movie rental fees. In health care, accomplishing this strategy requires an understanding of the ebb and flow of customers through the business.

Interaction with Customers

Because services involve processes, an important consideration in marketing a service is the quality of

the interaction between the customer and the service provider. As was discussed in Chapter 7, the customer contact audit or medical practice blueprinting is one approach that highlights the encounters

between a customer and the service offering.2

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