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MARKETING MANAGEMENT INDIVIDUAL PROJECT: COLLECTIVE HEALTH #4
BUSI 520: Strategic Marketing Management
Professor:
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MARKETING MANAGEMENT INDIVIDUAL PROJECT: COLLECTIVE HEALTH
Q1. Explain the selected pricing strategy (penetration, skimming, competitor-based, etc.).
Value can be thought of as a ratio of the benefits a customer receives to the costs incurred
for a particular bundle of benefits they select. Collective Health is building their brand based on
the perceived value their customers receive, using big data to prove they can provide a
competitive advantage based on cost leadership (Collective Health, 2024).
Due to their continued goal of expanding their market, it could be argued that they could
price their services by Penetration pricing, which would be the most useful strategy to quickly
gain as much market share as possible. Collective Health was founded on the principle of
creating a streamlined process that makes it easy for everyone to understand their healthcare
benefits, and how to easily navigate that terrain. Taking that into consideration, Value pricing
aligns with Collective Health’s goal of providing a deliverable that differentiates themselves
from the competition by building a competitive advantage with their brand image, service and
product quality, and innovation (Marshall & Johnston, 2023, p.300). Proving Collective Health
uses value pricing is as simple as looking at the home page of their website. They tout
themselves as a modern Third Party Administrator that pulls all aspects of healthcare
administration together into one platform that provides engaging health benefits for the people,
and proven value for companies utilizing their services (Collective Health, 2024).
Q2. Discuss various pricing tactics (product line pricing, captive pricing, price bundling,
etc.) that have or would prove effective in stimulating sales. (Ch.11)
There was an independent study that analyzed a small number of customers over a 5-year
period, and there were five key findings Collective Health shares on the website to prove their
value over the competition. The study found that Collective Health cust costs by 52% compared
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to the matched controls, they were able to cut cost for members with chronic conditions, the
member engagement increased with the patients dealing with more complex clinical issues, they
improved cost efficiency by almost 14% for patients with the top 10 most prevalent conditions,
and they were able to reduce spend by up to 22% for key outpatient services. (Collective Health,
2024). Looking at the data that Collective Health provides for their value input, and their desire
to have a data driven model where companies can evaluate exactly where their money is being
spent, utilizing Value-based pricing is the most effective tactic Collective Health can use.
Collective Health has built their brand on the premise that they can provide value that their
competitors can not, which aligns with value-based pricing’s principles of alignment with
customers’s perception of value. The perception of value needs to tie in the product offerings
with the willingness for the customer to pay the price for that particular value. Utilizing this
pricing structure requires the input of all marketing mix elements when prices are established.
With a value based strategy, there are three key ways that Collective can show they delivery
more value organizationally than their competitors, which is by offering low prices, reducing
costs of users, and adding benefits that make the price more attractive (Vural & Baltaci, 2022).
Q3. Explain the channels of distribution (manufacturer to retailer to consumer, etc.) used
to distribute the product/service. (Ch.12)
Collective Health has a business focus that is strategically geared toward direct sales to
employers, effectively utilizing an indirect channel to distribute their services. In this capacity,
Collective Health can be considered the manufacturer, with the companies purchasing the
services being the retailer, and the consumers are the employees of the companies. By
prioritizing a push strategy, Collective Health allows themselves the opportunity to have a more
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intensive promotional stance to their network. This strategy has allowed them to accomplish the
goal of expanding to different markets across the country (Marshall & Johnston, 2023).
Q4. Discuss the distribution strategy (intensive, selective, exclusive) relevant to the
product/service.
Collective Health utilizes a selective distribution strategy which allows them to focus on
markets that they want to distribute their services into. They recently selected Plano, TX to build
a new facility because it allows them to focus on servicing their Spanish speaking customers
from that location (Crouchley, 2024). By implementing the selective distribution strategy,
Collective Health has the benefit to selecting who they want to partner with, which ensures that
their services are aligned with what employers are looking for to provide their employees with
personalized healthcare services and innovation that is tailored to the needs of employers and
employees alike (Collective Health, 2024).
Q5. Explain the firm’s use of e-channels, e-retailing, or other non-traditional methods of
distribution.
Collective Health’s product offering is an all-encompassing digital platform that is a
portal for employers and employees alike, which dictates their distribution channels are strictly
digital.. Their platform enables the end user to manage their healthcare services in the most
efficient way possible, while providing the companies with data to ensure they are getting the
most value for the money. The use of e-channels is evident when looking through the
partnerships that Collective Health has entered, specifically with firms such as TeleDoc, which
integrates Collective Health’s platform with the virtual healthcare capabilities of companies such
as TeleDoc to allow customers to have access to a doctor through a virtual appointment
(Collective Health, 2024).
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References
Collective Health. (2024). Impact Study. Collective Health. https://collectivehealth.com/impact-
study/
Crouchley, M. (2024, April 23). Collective Health opens new Plano office in Granite Park.
Community Impact; Community Impact. https://communityimpact.com/dallas-fort-
worth/plano/health-care/2024/04/23/collective-health-opens-new-plano-office-in-granite-
park/
https://www.researchgate.net/publication/
363669333_PRICE_AS_A_MARKETING_MIX_ELEMENT_IN_THE_FINANCING_
OF_HEALTHCARE_English_Version_of_the_Original_Book
Marshall, G. W., & Johnston, M. W. (2023). Marketing management (4th ed.). New York, Ny
Mcgraw-Hill Education.
Vural, A., & Baltaci, A. (2022, September). PRICE AS A MARKETING MIX ELEMENT IN THE
FINANCING OF HEALTHCARE (English Version of the Original Book). Researchgate.
https://www.researchgate.net/publication/363669333_PRICE_AS_A_MARKETING_MI
X_ELEMENT_IN_THE_FINANCING_OF_HEALTHCARE_English_Version_of_the_
Original_Book
