Marketing Case Study 1 - 6 pages

1. Name:

2. Case Title/Class Date: Shoring Up the Servicescape

3. Case Summary: Grace Hospital is a 425-bed not-for-profit organization that provides general medical and surgical services in the West South-Central region of the United States. Maria, the Vice President of Nursing, was making her morning rounds when she noticed that the hospital’s interior design and landscaping were not up to par and were inconsistent with the excellent care provided at Grace Hospital. The paint on the walls was chipped, the tile floors cracked, the ceilings were leaking, and the color schemes and furniture were mismatched and damaged. Additionally, the landscaping around the hospital needed to be improved, and the parking areas had grass coming out of the crevices. The hospital was last refurbished 15 years ago, so Maria believes that if these areas were fixed the hospital would rise in the community and be more well respected. Maria has made great strides in her position, establishing uniform and grooming policies and protocols for the clinical staff members and making minor changes to improve its environment. Maria teamed up with Bradley Walters, the Vice President of Marketing at Grace Hospital, to develop and assemble an economic plan for initiating improvements. This plan will be presented to Todd Davis, Chief Executive Officer, who, in the past, has refused to act on Bradley’s suggestions and recommendations due to constituted costs.

4. 10-15 Case Facts/Factors:

1) Outdated facility décor. Existing furnishings, fixtures, and plants aren’t consistent with the standard of care being delivered. The hospital’s interior design and landscaping are out of date. The hospital was constructed 50 years ago and was last refurbished 15 years ago.

2) Grace Hospital is a financially sound not-for-profit organization. The hospital is doing well financially, which does not help convince the CEO to make the expense. Because the organization is doing well financially, updating the facility would not strain the organization.

3) Since it was last refurbished, only routine maintenance has occurred, and the hospital grounds have never been addressed professionally. 

4) Maria believes that minor repairs and enhancements would improve the aesthetics and ambiance of the hospital. 

5) Maria estimates that the only additional requirement for the improvements would involve the time and attention of maintenance personnel. 

6) During Maria’s time as VP of Nursing, she has established uniform and grooming policies and protocols for the clinical staff members. She has made minor changes to improve the hospital’s environment.

7) Maria shared her visions with the VP of Marketing, Bradley, who informed Maria that Todd Davis, CEO, has refused to act on Bradley’s previous suggestions and recommendations. 

8) Todd is reluctant to change because of the costs. The CEO does not believe updates are essential.

9) Bradley mentioned that Todd always responded that Grace Hospital was financially sound and generated significant business and questions why upgrades were necessary. 

10) Maria and Bradley teamed up to develop and assemble an economic plan for initiating improvements that they will present to Todd. 

5. Health Administration/Planning/Marketing Problem/Issue to be solved: The facility needs internal and external upgrades to improve marketing and increase market share in the community significantly.

a. Secondary Issues. Maria and Bradley need to work together to convince Todd that the organization will benefit significantly from the interior and landscape design improvements. Maria and Bradley must come up with a financially feasible plan with a list of all the expenses for the improvements so that they can present it to present to Todd.

6. Your recommended solution for the case (a.-d. below).  Make clear specific realistic recommendations. There must be a clear logical sequence to your thoughts and recommendations:

a. At least three possible realistic alternative solutions for the most important problem (stated above for 5)

i. Establish a culture of openness and trust to create ahigh quality, happier workplace environment for all employees so they will feel comfortable sharing their ideas with supervisors and managers. 

ii. Sponsor and collaborate with local furniture retailers and landscaping businesses by offering discounted services in exchange for discounted products that will help redecorate the organization at a lower cost. 

iii. Research and analyze competitors in the surrounding vicinity to see their furnishing and landscaping situation and then establish a strategic planning committee to create a strategic plan for this issue. 

b. Criteria to evaluate possible alternative solutions. For example: acceptability to stakeholders, needed resources, legality, timing, cost-effectiveness, ability to implement, side effects, qualifications, statistical data, financial data, ethical considerations, fit with case facts, likelihood of solving the problem, etc. 

i. Have the finance department create a comprehensive comparative analysis for the last 5-10 years, if possible. 

ii. Conduct an organizational survey regarding the interior furnishings and landscaping that will be given to all employees and patients. 

iii. Have a secret shopper come into the organization.

c. Evaluation of the possible alternative solutions (6a) using the criteria (6b).

i. Because the organization hasn’t been refurbished in 15 years, this analysis will show how this issue impacts patient revenue and if/how revenue will be affected if changes are made. This report will be given to the Board of Directors, Executives in the C-Suite, and top management to understand why this is a critical issue that needs to be addressed. 

ii. Employees and patients who take the survey will be able to list their opinions and suggestions so that management will obtain some insight into how their employees and patients perceive this issue and help them understand the needs and desires of both groups.   

iii. Having a secret shopper go into the hospital to analyze and survey the quality of the care and the overall internal environment will allow management to see a different perspective so that they can understand how this issue is affecting the well-being of the entire organization. 

d. Your recommended solution for the problem, based on 6a, 6b, and 6c. Justify your recommendation

My recommended solution for this issue incorporates a little bit of each of the three I have listed. I don't believe that one single course of action will resolve this issue because many factors come into play. Bradley has already stressed to Maria that Todd isn't keen on refurbishing the hospital due to financial reasons. As a team, both have to work hard to gather as much input and information as possible to prove to Todd that even though the hospital is financially stable now, it won't be later down the road if this isn't addressed. Working with top management to create a culture of openness and trust will allow the employees to feel comfortable expressing their ideas/opinions. It will encourage them to speak out as a group. I believe that this will force Todd to start making changes because if he wants to uphold his reputation as an effective leader, he will need to listen to his employees' opinions. The main reason Todd is holding out on this problem is because of the financial implications. If the organization collaborates with local furniture and landscaping businesses and works out an arrangement for discounted products and services, this project's financial aspect will be minimized. Lastly, I think it's vital for any organization to research their competitors to see what they're doing and how they're doing. Healthcare is an extremely competitive industry, so understanding the market competition provides management with useful information that they can work with to come up with plans for bigger and better operations than their competitors. This will allow Todd to understand how these details impact an organization and have the potential to drive up patronage and revenue.

The Chief Executive Officer of Grace Hospital does not see the importance of updating the facility. This is problematic because the lack of an update could cause significant issues in the future. The facility would have to make extensive and costly renovations when the furniture finally gives out by neglecting prominent problem areas. The chipping paint does not allow the facility to pass inspections, accreditations are lost, and market share is lost. The hospital has been doing well financially, but this will not last if the aesthetics of the facility continue to be neglected.

To convince the CEO to invest in updating Grace Hospital, Maria Stevens should start with a SWOT analysis of the organization. A SWOT analysis will show that the organization is doing great in certain areas, especially when it comes to patient care. However, it will help illustrate that the looks and style of the facility fog its accomplishments. It will also indicate that competitors are doing similar in their patient care, but they keep up with their appearances, which allows them to gain more patients and cause Grace Hospital to lose market share.

Another option would be to start a survey for both patients and employees. Many times, leaders are too far removed from the ground level and cannot see past the statistics and numbers. The hospital may be doing well on its own with the updates, but if these issues go unattended for too long, this can cause problems. If these surveys can help demonstrate that these are obvious and glaring issues, then the CEO could find the need to make the needed repairs and updates. While managers are voicing their concerns to the Chief Executive Officer, surveys are vital to getting information. It allows management to gauge their demographics' wants and needs, which should be the driving force behind important decisions.

Finally, a strategic plan would be an excellent tool. A strategic plan could help communicate to the Chief Executive Officer the need for the facility to be updated. The plan would show the goals and how the organization would use them to meet those goals. The CEO may not see it as essential to edit the facility currently. Still, a strategic plan could highlight why it is critical, and it can also use the results from the surveys and SWOT analysis to help depict it.

Additionally, a strategic plan adds a level of assurance and certainty that otherwise would be absent. The plan gives directions, sets goals, and gives metrics for which to follow and evaluate. It would guide the process by way of these things in addition to a budget and timeline. If the CEO can get behind the strategic plan, then management would have done an excellent job illustrating to the Chief Executive Officer the need for an update.

7. Specific MHA tools, methods, techniques, principles, theories, models, etc. from MHA courses that you used for this case. List specific tools (e.g., cost-benefit analysis, market segmentation, etc.).  Do not list general subjects (e.g., finance, leadership).

For this case, I used a variety of methods and techniques that I have learned from the Operations and Quality course, Health Systems and Services course, and Finance courses, such as; examining the internal and external environment, needs assessment, comparative financial analysis, strategic planning, budgeting, establishing a culture, and aligning organizational missions, vision, and values. When taking on a project like this, there needs to be some order and direction to be followed to ensure everything is being taken care of and everyone is on the same page. Therefore, a team needs to be formed to create a strategic plan that is appropriate for the issue at hand. Examining the hospital's internal and external environment is a necessity because when an organization is making changes, it's important that management recognizes the most pressing internal issues and understands what their competitors are doing. Conducting a needs assessment brings about an understanding of the problem and if it truly needs to be resolved. It also creates an outline of the wants and needs of their employee and patient population. The finance department plays an essential role in this issue because they must develop budgets and comparative analyses to determine if it's even financially feasible to take on this project and what the implications are going to be.

1) SWOT Analysis

2) Financial Evaluation

3) Strategic Planning

4) Marketing Plan

5) Patient/Staff Surveys

6) Financial Plan/Budget

8. Answer any case study questions that accompany the case. If a case question is answered by what you already wrote for 3-7 above, then just note which part of your case analysis provides the answer.

a. Grace Hospital seems to possess servicescape excellence in nursing service, but not in other important areas of the facility; something Maria sough to correct due to associate negative consequences. Think deeply on the aesthetics and ambiance of the servicescapes of healthcare institutions and prepare a list of negative effects that occur when servicescapes are inferior. Identify the parties that inferior servicescapes impact and describe how such environments impact each party?

When servicescapes are inferior in healthcare institutions the entire culture of the organization is thrown off. Presentation is everything, if an organization’s interior design and landscaping aren’t well kept and managed patients may perceive the organization as not caring and view it negatively, regardless if the care is exceptional. This can heavily impact patient satisfaction and deter patients away from obtaining services at those locations, which minimizes the amount of money going into the organization. The quality of the services at those types of healthcare organizations can also be affected. If the employees see the poor conditions of the environment they’re working in they will think that management doesn’t care about the organization so why should they.

b. Bradley mentioned to Maria that Grace Hospital’s servicescape weakness limited the appeals that the hospital could use in its various marketing communication campaigns. Based on your knowledge of marketing and marketing communications, what did Bradley mean by this statement?

I think what Bradley meant by this statement was that because the hospital hasn’t been refurbished in 15 years the servicescapes are outdated which hinders and limits their marketing campaigns. They can’t efficiently market the organization and the exceptional care that is provided because the physical being of the hospital isn’t consistent. If improvements were to be made, the marketing department would be able to incorporate that into their marketing campaign to drive up patronage.

c. Todd’s mindset that a financially sound and full hospital need not invest in improvements is unfortunately not uncommon among some in the healthcare industry. Why do you believe that individuals would possess such a mindset? What would you envision their career paths to be?

I believe that some individuals in the healthcare industry have that mindset because all they care about is numbers, the quality of care, and other operational functions of the organization. They aren’t concerned with the physical attributes of the organization and can’t understand why that would have as much impact as it does on patient satisfaction. It can be hard to convince an older individual in a top management position otherwise, because at the end of the day they’re the ones calling the shots.

d. Given Todd’s history of resistance to improvements, Maria and Bradley decided to strive for change by developing an economical plan for enhancing Grace Hospital, even suggesting the possibility of calling on volunteers for contributions. Based on the weaknesses noted by Maria, develop a cost-effective plan of improvement by identifying possible “fixes” that could be implemented in a manner that would likely be acceptable to Todd.

This question was answered in #7a-d.

e. Assume that Todd rejects the economic improvement plan formulated by Maria and Bradley. Given that the consequences of failing to make improvements might cause real harm to Grace Hospital, what action, if any, should the two takes? Please justify your response.

Seeing that Bradley has already spoken to Todd multiple times on this issue and he has refused to act on Bradley’s recommendations, I would take this issue to the Board of Directors if he were to reject Bradley and Maria’s plan. This issue is clearly affecting the overall well-being of Grace Hospital and it is imperative that these improvements be made before it becomes more serious. In order to be an effective leader, Todd has to take into consideration these types of issues, especially when multiple Vice Presidents are concerned about the same problem. Taking this to the Board might show Todd that this issue is bigger than he realizes, and that Maria and Bradly are committed to ensuring these improvements happen.

References

Fortenberry, J. L. (2011). Cases in Health Care Marketing. Jones and Bartlett Publishers.