Health Services Marketing 7-9 Discussions

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Topic

Narration

1

Introduction

Welcome to Health Services Marketing. In this lesson, we Designing and Managing Integrated Marketing Communications.

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2

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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3

Marketing Communications Role

In this lesson, we will focus on how marketing communications work, what marketing communications can do for an organization, and how holistic marketers combine and integrate marketing communications. Specifically, we will examine the different forms of mass or personal communications such as advertising, sales promotion, events and experiences and public relations and publicity.

Marketing communications are the instruments organizations use to relate the benefits, positioning, and characters of their brands to consumers. In essence it:

Represent the voice of the brand;

Are the primary mechanisms implemented to establish a dialogue and build relationships with consumers;

Demonstrate consumer how and why a product is implemented, by what kind of person, and where and when;

Educate consumer regarding who makes the product and what the organization and brand represent;

Can provide consumers an incentive or reward for trial or usage; and

Enable organizations to link their brands to other people, places, events, brands, experiences, feelings, and thing.

All of these are ways in which marketing communications can contribute to brand equity. By establishing the brand in memory and crafting a brand image is how these can contribute to brand equity.

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4

Marketing Communications and Brand Equity

Marketing communication mix has six major modes of communications:

Advertising. This is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Sales promotion. This is a variety of short-tem incentives to encourage trial or purchase of a product or service.

Events and experiences are organization-sponsored activities and programs designed to create daily or special brand-related interactions.

Public relations and publicity. These are a variety of programs designed to promote or protect an organization’s image or its individual products.

Personal selling . This is face to face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders.

Direct marketing. This is the use of mail, telephone, fax, email, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects.

Marketing communications transcends these platforms. The product’s packaging shape and color, the way the individuals delivering the service, the physical surroundings and décor, the organization’s stationery communicate something to the buyers. These types of brand contract provide an impression which can strengthen or weaken a customer’s perception of the organization.

Marketing communications activities contribute to brand equity. By creating awareness of the brand, linking the right associations to the brand image in consumer’ memory, eliciting positive brand judgments or feelings, and facilitating a stronger consumer brand connection is activities that contribute to brand equity. In general, all marketing communications activities must be integrated to provide a consistent message and achieve the strategic positioning.

Brand awareness is a function of the number of brand related exposures and experiences that have been accumulated by the consumer; therefore, anything that causes the consumer to notice and pay attention to the brand can enhance brand awareness. The beginning of marketing communications is an audit of all possible interactions that consumers in the target market may have with the brand and the organization. Marketers need to examine the experiences and impressions that will have the most influence at each stage of the buying process. Hence, this will assist them in allocating communication funds more efficiently and design and implement adequate communications programs.

After the marketers have acquired the insights of the consumer, marketing communications can be assessed according to their ability to build brand equity and drive brand sales. It is very important for marketers to evaluate all different possible communication options that are available according to effectiveness criteria to determine how well it works as well as efficiency considerations to determine how well it works given the cost.

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5

Communications Process Models

Macro and micro models are two models that provide helpful structures that assist marketers in understanding the basic elements of effective communication. Macro model of the Communications Process has nine elements:

Sender;

Receiver;

Message;

Media;

Message encoding;

Decoding;

Response;

Feedback; and

Noise.

The sender and the receiver are the major parties of communication. Message and the media are used to send the message. Message encoding, decoding, response, and feedback are four elements that represent major communications functions. The last element is noise or random and competing messages that may interfere with the intended communication. The macro model focuses on the key factors in effective communication:

Senders must be familiar with what the audiences they want to reach as well as which responses they want to obtain;

Senders must encode their messages to that the target audience can decode them;

Senders must transmit the message through media that reach the target audience;

Senders must develop feedback channels to monitor the responses;

The more the send’s field of experience overlaps the receiver’s, the more effective the message is likely to be.

Selective attention, distortion, and retention process may be happening during communication.

Selective attention is when people filter messages to avoid sensory overload.

Selective distortion is when receivers of the messages will hear and process what fits into their belief systems.

Selective retention is when people will retain in long-term memory only a small part of the message that reaches them.

Micro Model of Consumer Responses focuses on consumers’ specific responses to communications. AIDA, Hierarchy of Effects, Innovation Adoption, and Communication models are all classic response hierarchy models that assume that the buyer passes through cognitive, affective, and behavioral states in evaluating marketing communications messages. There are three potential sequences:

Learn-feel-do . This is sufficient when the audience has high involvement with a product category perceived to have high differentiation. This is evident in purchasing cosmetic surgery or an assisted living property.

Do-feel-learn. This is the second sequence when the audience has high involvement but perceives little or no differentiation with the product category. This is evident in purchasing hospital emergency services or cholesterol lowering medication.

Learn-do-feel. This is the third sequence when the audience has low involvement and perceives little differentiation within the product category. This is evident in purchasing travel vaccine or health insurance.

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6

Eight Steps in Effective Communications

There are eight steps in effective communications. The first one is identify the target audience. There must be a clear target audience that includes potential buyers of the organization’s products and services, current users, deciders or influencers, individuals, groups, certain publics, or general public. The target population is so essential and influential that the communicator makes decision regarding what to say, how to say it, when to say it, where to say it as well as to whom to say it.

The second step is determining communications objectives. In this step, four possible communications objectives can be identified:

Category need;

Brand awareness;

Brand attitude; and

Brand purchase intention.

Design the communications is the third step in which designing communications to meet the desired response requires solving the following three problems:

What to say or also know as the message strategy;

How to say it or the creative strategy; and

Who should say it or the message source.

The fourth step is selecting the communication channels. It is important to note that choosing efficient channels to carry the message becomes more difficult as channels of communication become more divided and chaotic. There are two different channels to choose from: personal communication channels and nonpersonal communication channels.

Personal communication channels have two ore more people communicating directly with each other. It can be face to face, person to audience, over the telephone, or through email. Another vehicle is using instant messaging and independent sites to collect consumer reviews. The effectiveness of personal communications channels come from individualized presentation and feedback.

Nonpersonal communication channels are communications meant for more than one person. These channels include media, sales promotions, events and experiences, and public relations.

The next step is establishing the budget which is one of the most difficult marketing decisions to make regarding how much to spend on promotion. There are four common methods for deciding on a budget:

Affordable method . This method ignores the role of promotion as an investment and the immediate impact of promotion on sales volume. This method is based on setting the promotion budget at what they organization thinks the company can afford. The caveat to this method is that it leads to an uncertain annual budget which makes long range planning difficult.

Percentage of sales method . This method is when a company set promotion expenditures at a specified percentage of sales or of the sales price. Advocates believe that this method links promotion expenditures to the movement of corporate sales over the business cycle which focuses on the interrelationship of promotion and selling price and unit profit and encourages stability when competing firms spend approximately the same percentage of their sales on promotion.

Competitive parity method. With this method, some companies set their promotion budget to achieve share-of-voice parity with competitors. Proponents of this method argue that competitors’ expenditures represent the collective wisdom of the industry and that maintaining competitive parity prevents promotion wars. However, company reputations, resources, opportunities, and objectives differ so much that comparing promotion budgets is not an appropriate guide.

Objective and task method. This method calls on marketers to develop promotion budgets by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks.

The sixth step involves choosing the media mix . Companies must allocate the marketing communications budget over the six major modes of communication: advertising, sales promotion, public relations and publicity, events and experiences, personal selling, and direct marketing.

Measuring results and managing the integrated marketing communications process is interrelated into the topics in that later part of this lesson.

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7

Check Your Understanding

8

Advertising

Advertising is a form of paid nonpersonal presentation and promotion of ideas, goods or services by a sponsor. An ad can be the most cost effective way to get the message out. Many business and organizations use communication companies or advertising agencies to create advertising campaigns as well as select and buy media. Advertising is instrumental in establishing long term image for products and services as well as facilitating quick sales. It has the ability to reach geographically dispersed buyers.

Qualities of advertising:

Pervasiveness;

Amplified expressiveness; and

Impersonality

Developing and managing an advertising program

Five major decisions of communications:

Mission;

Money;

Message;

Media; and

Measurement.

Setting the advertising objectives involves:

Informative advertising;

Persuasive advertising;

Reminder advertising; and

Reinforcement advertising.

When deciding on the advertising budget there are five environmental issues that marketing manager must consider:

Product life cycle stage;

Market share and consumer base;

Competition and clutter;

Advertising frequency; and

Product substitutability.

In developing and evaluating an advertising campaign, it is important to distinguish the message strategy or positioning from its creative strategy. There are three steps to developing a message strategy:

One. Message generation and evaluation

Two. Creative development and execution.

And three. Social responsibility review.

Deciding on media involves five steps:

Deciding on desired reach, frequency, and impact;

Choosing among major media types;

Selecting specific media vehicles;

Deciding on media timing; and

Evaluating effectiveness.

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9

Sales Promotion

Sales promotion is a key ingredient n marketing campaigns which consists of a variety of incentive tools that are designed to get others to buy specific products or services. It provides an incentive to the consumer to purchase where advertising gives a reason to purchase. The tools for sales promotion for consumer promotion, trade promotion, and business and sales force promotion.

Free samples, free management advisory service, incentive type promotion is some tools that have specific objectives. Free samples seek to get consumers to try out a product or as service whereas a free management advisory service seeks to obtain long term relationships with a retailer.

In making major sales promotion decisions, an organization must establish the following:

Objectives. The objectives come from broader promotion objectives which comes from more basic marketing objectives developed for the product or service. For consumers, the objectives are designed with the purpose of getting the consumers to purchase larger size units, building trials among nonusers, and attracting switchers away from competitors’ brands. On the wholesaler side, the purpose of the objectives is to persuade retailers to carry new items and higher levels of inventory, incentivizing off season buying, encouraging stocking of related items, offsetting competitive promotions, building brand loyalty, and gain entry into new retail outlets. For the sales force, the purpose of the objective is to encourage support of new products or services and to get them to do more prospecting and encouraging more off season sales.

Select tools. These tools can be consumer promotion or trade promotion tools.

Develop the program. In developing a program, marketers have to determine the size of the incentive, establish conditions for participation, decide on the duration of promotion, choose a distribution mechanism, establish timing of promotion, and determine the total sales promotion budget.

Pretest, implement, control, and evaluate the program . Pretests can help to determine if the tools used are appropriate. There are three methods of evaluations: sales data, consumer surveys, and experiments.

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10

Public Relations and Publicity

Public relations are a traditional promotional tool in health care.

Appeal is based on three distinctive qualities:

High credibility;

Ability to catch buyers off guard; and

Dramatization.

Functions of Public relations:

Press relations. Provides positive news and information regarding the organization

Product publicity. Publicizes sponsoring efforts regarding specific products.

Corporate communication. Provides understanding of the organization through internal and external communications.

Lobbying. Working with legislators and government officials to promote or defeat legislation and regulation.

Counseling. Advising management regarding public issues and organization positions and image during good and bad times.

Market Public Relations supports corporate or product promotion and image making. They engage in the following tasks:

Assisting in the launch of new products;

Assisting in repositioning a mature product;

Building interest in a product category;

Influencing specific target groups;

Defending products that have encountered public problems; and

Building the corporate image in a way that reflects favorably on its products.

Major Marketing Public Relations Decisions in determining when and how to use market public relations. They are as follows:

Establishing the marketing objectives;

Choosing messages and vehicles; and

Implementing and evaluating the plan

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11

Events and Experiences

There are reasons why marketers indicate they sponsor events. They are as follows:

Identifying with a particular target market or life style;

Increasing awareness of company or product name;

Creating or reinforcing consumer perceptions of key brand image associations;

Enhancing corporate image dimensions;

Creating experiences and evoking feelings;

Express commitment to the community or on social issues;

Entertain key clients or reward key employees; and

Permit merchandising or promotional opportunities.

In developing successful sponsored events, the following is involved:

Choosing the appropriate events;

Designing the optimal sponsorship program for the event;

and

Measuring the effects of events

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12

Factors in Setting Marketing Communications Mix

In order for an organization to develop its communication mix, the following must be considered:

Type of product market;

Consumer readiness to make a purchase;

Stage in the product life cycle;

Organization’s market position;

Cost effectiveness of the promotional tools; and

Advertising and publicity

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13

Managing Integrated Marketing Communications Process

Integrated marketing communication is the management of all organizational communications that builds positive relationships with potential customers and stakeholders including employees, legislators, the media, the financial community, and other segments of the public.

A combination of personal and nonpersonal communication channels help to achieve a maximum impact. Multiple media within a well defined time frame contributes to more targets being reached and impacted.

Coverage . This is the proportion of the audience reached by each communication option used as well as how much overlap there is among communication options.

Contribution . This is regarding the inherent capacity of marketing communication effort to design the desired response from consumers in the absence of exposure to any other contract option.

Commonality . This is the extent to which common relations are reinforced across communication options.

Complementary . This is the extent to which different relationships and linkages are emphasized across communication options.

Versatility . This is the extent to which a marketing communications option is rich and works for various groups of consumers.

Cost . This is the evaluations of marketing communications on all of the above criteria. They must be weighed against their cost to arrive at the most effective and efficient program.

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14

Check Your Understanding

15

Summary

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

First we looked at the importance of health organizations having communications skills. Successful communications include the following elements:

Sender;

Encoding;

Message;

Media;

Decoding;

Receiver;

Response;

Noise; and

Feedback.

Then we looked at developing effective marketing communications. There are eight steps:

Identify the target audience;

Determine communication objectives;

Design the communications;

Select the communication channels;

Estimate the total marketing communications budget;

Decide on the media mix;

Measure the results; and

Manage integrated communications.

All of these steps have different activities and tools.

Finally, each health care organization has to determine the best mix to make the communications tools of the following:

Advertising;

Sales promotion;

Public relations and publicity;

Events and experiences;

Personal selling; and

Direct marketing.

This concludes this lecture.