Health Services Marketing 1-3 Discussions
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Week1Lecture1Slides.pptHealth Services Marketing
HSA 305
The Role of Marketing in Health Care Organizations
Kotler, P., Shalowitz, J., & Stevens, R. J. (2008). Strategic marketing for health care organizations. San Francisco: Jossey-Bass
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Welcome to Health Services Marketing. In this lesson, we will discuss the role of marketing in health care organizations.
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Objectives
- Upon completion of this lesson, you will be able to:
- Describe the health care system and the role of marketing.
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Upon completion of this lesson, you will be able to:
Describe the health care system and the role of marketing.
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What is Marketing?
- Definition:
- Marketing is a function of an organization and a set of processes for communicating, creating, and delivering value to customers and for managing customer relationships in manners where the organization and its stakeholders benefit
Marketing is a function of an organization and a set of processes for communicating, creating, and delivering value to customers and for managing customer relationships in manners where the organization and its stakeholders benefit. In essence, marketing begins when a minimum of one party of a possible transaction thinks about the ways of achieving a desired impact from targeted parties. Examples of this concept are as follows:
A hospitals build a breast cancer center for excellence to attract more people with breast cancer;
An endocrinologist puts out an advertisement describing his metabolic weight loss practice in hope of attracting new patients;
A health insurance offers medical tourism to attract more patients;
The Centers for Disease Control and Prevention or CDC runs public service announcements to get children immunized; and
A state health department develops a campaign to motivate more of its citizens to exercise more, manage, their stress, and eat healthy foods.
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Purpose of Marketing
- Transaction view
- Aims to get an order or make a sale
- Customer relationship building and satisfaction view
- Focuses on the customer and less on the specific product or service
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The purpose of marketing can be described in two views:
Transactional view; and
Customer relationship building and satisfaction view.
The transactional view has the mission to obtain an order or get a sale. This view is a traditional view.
The customer relationship building and satisfaction view focuses more on the customer and less on the specific product or service. The marketer seeks to serve the customer in a manner that he or she will be satisfied and come back for more services or products and recommends the seller to others. There is a paradigm shift to move from the transactional view or old marketing, to the customer relationship building and satisfaction view or new marketing to create long term, trusted, and valued relationship with customers.
Today’s consumers are also producers in that they are constantly sending messages regarding their experiences, creating new uses, providing new findings from the Internet and other resources to their physicians, and lobbying for more and better benefits. Hence, marketing can be viewed as playing the role of servicing as the customer’s agent or representative.
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Set of Concepts in Marketing
- Market segmentation
- The process of distinguishing groups or segments that make up a market
- Target market
- Identify the market segment it can best serve
- Forces in creating, communicating and delivering value (CCDV)
- Turn invisible value into perceived value by creating, communicating, delivering value and targeting market profitability (CCDVTP)
A health care organization offers products and services. However, the organization is interested in knowing who is potentially interested its products and services. Since it is not possible to serve all populations, many organizations target different groups or segments that make up a market. The process of distinguishing is called market segmentation. The organization seeks to identify the market segment or segments it can best serve in accordance to what its needs and its organization’s capabilities. This is called the target market. Once the target market has been identified, then the customer focused marketing philosophy of
Creating;
Communicating; and
Delivering Value.
with the acronym CCDV can summarized..
The term value is what the supplier believes he or she is giving as well as what the customer perceives. Hence, the job of the marketer is to turn invisible value into perceived value. Therefore, the CCDV can be extended to CCDVT which stands for:
Create;
Communicate;
Deliver Value; and
To the target market profitability.
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Set of Concepts in Marketing, continued
- 4 Ps: Framework to prepare a valued offering
- Product
- Price
- Place
- Promotion
- 4 As: Transition from Old to New Marketing
- Awareness
- Acceptable
- Available
- Affordable
The four Ps marketing mix is a tools framework to help organizations prepare a valued offering. The four Ps stand for:
Product such as its features, benefits, styling, and packaging;
Price such as the list price as well as rebate and discount programs;
Place such as where the product is available and its distribution strategies; and
Promotion mix such as advertising, personal selling, and direct marketing.
The four Ps marketing mix is evident in the CCDVT formulation. In the transition from Old Marketing to New Marketing, the consumer must have an Awareness of the offering and find it Acceptable, Available at the right time and place and be Affordable.
An organization must position itself to be the choice for its target market. This would require looking at how to best implement the 4As of the target market.
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Seven Traditional Marketing Skills
- Marketing skills
- Marketing research
- Product design
- Distribution
- Pricing
- Advertising
- Sales promotion
- Sales management
Marketers rely on the seven traditional marketing skills:
Marketing research
Product design
Distribution
Pricing
Advertising
Sales promotion
Sales management
The first step is market research. Market research is used to help decision makers make the best informed decisions. Marketing research uses both primary and secondary data. Primary data are first hand observations such as data from focus groups, in depth interviews, data from surveys. Secondary data come from already existing sources such as census data and data from the health department. Market research provides the marketer with information regarding its targeted population and the environment in which it resides.
Product design is the next marketing skill. The marketer applies or supplies the data obtained from the marketing research to the product design team.
Distribution is the process of deciding where the products and services will be readily accessible and available to customers.
Pricing is guided by internal and external constraints such as the companies’ production cost structure and the realities of the marketplace such as price elasticity of demand.
The marketer must advise the organization on the best media mix to use. This may include designing messages, choosing media, setting budgets, and evaluating outcomes of advertising campaigns.
Sales promotion is the use of incentives to stimulate trial or purchase of a product or service.
Sales management makes sure its sales force is well trained in selling its products and services.
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Sales management
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Summary
- Purpose of marketing
- Segmentation
- Target market
- CCDVTP
- 4Ps and 4As
- Traditional skills
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We have now reached the end of this lesson. Let’s take a look at what we’ve covered.
First, we discussed the purpose of marketing with an emphasis on the paradigm shift from Old Marketing to New Marketing. The set of concepts of marketing include:
Segmentation;
Target market;
CCDVTP;
4 Ps; and
4 As.
Finally, we discussed the main skills of marketing which are the seven traditional skills:
Marketing research;
Product design;
Distribution;
Pricing;
Advertising;
Sales promotion; and
Sales management.
This concludes this lecture.
