Health Services Marketing 10-11 Discussions

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Topic

Narration

1

Introduction

Welcome to Health Services Marketing. In this lesson, we will discuss Organizing, Implementing, and Controlling Marketing.

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2

Objectives

Upon completion of this lesson, you will be able to:

Describe the various tools of the marketing mix available to health care providers.

And describe how health care providers can organize their marketing resources, implement their marketing plans, and use control tools to reach their stated goals.

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3

Organizing For Marketing

The roles and scope of marketing differ by the various types of health care organizations. An example is the essential role marketing plays in the pharmaceutical industry. It requires marketers to participate in every aspect of the development procedure such as:

Identifying opportunity areas;

Gathering information from doctors and consumers to help in decisions regarding dosage, pill size, packaging, naming, advertising, and sampling; and

Conducting post launch monitoring programs to monitor effectiveness and competitive positioning. The size of the marketing department, its budget, and its activities depend on many factors, including the organizational size, finances, and competitive position in the local area. Although the following sections describe the marketing department in hospitals, the principles are equally applicable to other health care organizations.

In order to achieve marketing excellence, marketing managers must think more holistically and less departmentally. To succeed in this fashion, they must get to know the medical staff and the heads of various departments, be available as advisors on marketplace problems, and be able to supply customer and competitive data and insight to others on the staff. Further, marketers must take some responsibility for identifying new services that will contribute to the hospital’s growth and help the hospital define its brand and communicate it to the public.

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4

Patient-Oriented

One of the major challenges of a hospital is to gain and instill in the staff a better understanding of patients and their needs. Many hospitals are adopting a drive to improve their service level and performance. The task is to build a consumer-oriented culture. To accomplish this goal, a CEO must:

Convince other senior managers of the need to become customer-focused. The CEO must convince physicians, nursing staff, maintenance, and others of the benefits of making patients as comfortable as possible during their hospital stays. Patients perceive quality care as much from their service experience as from the technical component of care.

Exemplify the behavior that the CEO wants others to emulate. The CEO needs to personally exemplify a strong patient concern by dropping in on patients, inviting discussions with nurses about their problems, making it easy for visitors to be comfortable, and investing in improvements in the facilities’ aesthetics and appeal.

Get outside help and guidance. Engage the services of a consulting firm that has firsthand experience in helping hospitals improve their service quality, customer orientation, and image.

Develop an improved information system on patient data and satisfaction. Install a system for gathering information on patient satisfactions and dissatisfactions. Change the organization’s incentive and reward system. Develop a system of incentives to reward the right behavior. Set up occasions to honor those staff members who are high performers in patient care.

Develop in-house training programs. Make sure that staff in all patient-related departments is trained in handling patient concerns and providing compassionate care.

Empower the employees. Progressive organizations encourage and reward their employees for coming up with new ideas to improve patient care and empower them to settle complaints quickly.

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5

Marketing Implementation

Plans address the ‘what and why’ of marketing activities. Implementation addresses the who, where, when, and how. There are four sets of skills for implementing marketing programs:

Diagnostics skills. These skills are what the result of poor strategy or poor implementation is. It essentially inquires what went wrong.

Identification of organization level. This can occur in three levels: marketing function, marketing program, and marketing policy levels.

Implementation skills. Marketers need to have broad business skills such as allocating for budgeting resources, organizing skills to develop an effective organization and interaction skills to motivate others to get things accomplished.

And evaluation skills. This is monitoring skills to track and evaluate marketing actions.

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6

Evaluation and Control

Many organizations have inadequate control procedures . One study’s findings indicated the following:

One. Smaller organizations do a poorer job at setting clear objectives and establish systems to measure performance.

Two. Less than half of the organizations knew the individual products’ profitability. About thirty-three percent had no regular review procedures for spotting and eliminating under performance products and services.

Three. Almost half failed to compare their prices with those of the competition, analyze costs, analyze the causes of customer dissatisfaction, conduct formal evaluations of advertising effectiveness, or review their sales forces call reports.

And four. Many organizations take four to eight weeks to develop control reports.

The remedy for these requires several types of marketing control:

One. Annual plan

Two. Efficiency control; and

Three. Strategic control.

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7

Annual Plan Control

The aim of an organization is to achieve sales, profits, and other goals established in its annual plan. Management by objectives is at the heart of the annual plan control. There are four steps involved:

Set monthly or quarterly goals;

Monitor marketplace performance;

Determine causes of serious performance deviations; and

Take corrective action to close the gaps between goals and performance.

Control models apply to all levels of the organization.

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8

Efficiency Control

Some profitability analysis reveals that the organization is achieving poor sales or profits in some products, services, territories, or markets. Some organizations establish marketing controller positions to improve marketing efficiency. Marketing controllers analyze adherence to sales and profit plans, assist in the preparation of marketing budgets, measure the efficiency of promotions, analyze media production costs, evaluate customer and geographic profitability and educate marketing personnel on the financial costs of marketing activities.

Sales force efficiency monitors the following key indicators of efficiency in their territories:

Average number of calls per salesperson daily;

Average sales call time per contact;

Average revenue or results per sales call;

Average cost per sales call;

Entertainment cost per sales call; and

Sales-force cost as a percentage of total sales.

Advertising efficiency tracks the following statistics:

Advertising cost per thousand target customers reached by media means;

Percentage of audience who noted, saw, recalled, or recognized each ad;

Consumer opinions on the ad’s content and effectiveness;

Before and after measures of attitude toward the organization or its service;

Number of inquiries stimulated by the ad; and

Cost per inquiry.

Sales promotion efficiency monitors the following statistics:

Number of persons attending health care events;

Number of inquiries resulting from an event; and

Display costs per sales dollar.

Distribution efficiency searches for distribution economies in providing ambulatory care sites by monitoring the following:

Number of patient cases at each ambulatory care site;

Profit or loss from operating each ambulatory care site; and

Number of patient referrals to the main hospital.

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9

Strategic Control

Periodically, an organization needs to reassess its strategic approach to the marketplace through marketing effectiveness review, marketing audits, and marketing weaknesses review.

In a marketing effectiveness review , an organization or marketing department’s effectiveness is reflected in the degree to which it demonstrates the five major attributes of a marketing orientation: Customer philosophy, integrated marketing organization, adequate marketing information, strategic orientation, and operational efficiency.

Marketing audit . If weaknesses are discovered, then a marketing audit should result. There are two key characteristics of an marketing audit:

Comprehensive. The audit must cover major marketing activities of a business. It is more effective in locating the real source of the problem.

Systematic. This is an orderly examination of the organization’s marketing objectives, strategies, plans, marketing systems, and specific activities. The audit indicates the most needed improvements that are incorporated into corrective action plan involving short run and long run steps to improve overall effectiveness.

Independent audit . The best audits are conducted by outside consultants who have the necessary objective, broad experience and familiarity with industry being audited, undivided time and attention to give the audit.

Periodic audit. Marketing audits are initiated only after sales or profits have turned down, morale has fallen and other issues have occurred.

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10

Check Your Understanding

11

Summary

We have now reached the end of this lesson. Let’s take a look at what we’ve covered.

First, we discussed how marketing organizations are evident in pharmaceutical companies and in health care organizations like hospitals. However, their roles and scope differ.

Next, we learned that one of the major challenges of a hospital is to gain and instill in the staff a better understanding of patients and their needs. Many hospitals are adopting a drive to improve their service level and performance. The task is to build a consumer-oriented culture.

Then, we identified four sets of skills for implementing marketing programs:

Diagnostics skills;

Identification of organization level;

Implementation skills; and

Evaluation skills.

Finally, we learned that the remedy for inadequate control procedures requires several types of marketing control:

One. Annual plan;

Two. Efficiency control; and

Three. Strategic control.

This concludes this lecture.