Chapter 6 HEALTHCARE MARKETING

Chapter Objectives Define marketing and the progression of becoming a market-oriented organization Explain the important role of strategic marketing in today’s healthcare environment Distinguish between traditional and social marketing approaches Explain the major functions that are part of the marketing management process

Chapter Objectives (cont’d) Discuss several important marketing terms including market segmentation, target marketing, marketing mix elements and relationship marketing Define consumer behavior and the decision-making process as it relates to healthcare offerings Describe how healthcare managers can integrate ethics and social responsibility into marketing strategy

Key Concepts Strategic healthcare marketing Marketing as a critical function of the organization Approaches managers use to create, communicate and deliver value The importance of capturing value in return

Who is the Customer? “…the purchaser of product, services, and ideas” Is the customer the ultimate consumer? How and why a healthcare organization might consider the various roles in the healthcare decision-making process.

Historical Perspective Marketing did not exist in healthcare before the 1980s. Many healthcare organizations had well-established public relations (PR) functions to disseminate basic information regarding new organizational developments such as new staff additions. Some believed that marketing was unethical.

What is Marketing? The American Marketing Association (2007) defines marketing as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." Source: http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx  

What is Marketing? Marketing plays a central role in satisfying customer needs. Marketing activities center on building a sustainable value-driven system for customers, stakeholders, and society. Market-oriented healthcare organizations and managers have a relentless focus on creating long-term customer relationships to achieve superior performance.

Social Marketing and Cause Related Marketing Social Marketing refers to the application of commercial marketing principles and techniques to influence behavioral change, of a specific target audience, in order to promote public health for the benefit of society as a whole Cause related marketing links a for-profit company and its offerings to a societal issue, with the goal of building brand equity and increasing profits.

Strategic Marketing Factors Controllable Factors Consist of the four Ps Uncontrollable Factors Political Product Economic Price Social and Cultural Place Technological Promotion Regulatory Competitive

Figure 6-4: Strategic Marketing Strategy Process Framework

Marketing Management Healthcare marketing management is the art and science of selecting target markets, creating, communicating and delivering value to selected customers in a manner that is both sustainable and differentiated from the competition. Source: Kotler, P., Shalowitz, J., & Stevens, R. (2008). Strategic marketing for health care organizations: Building a customer-driven health system. San Francisco, CA: Jossey-Bass.

Segmentation, Targeting and Positioning (STP) Segmentation refers to the process of dividing the total market into groups or segments that have relatively similar needs for products and services. Targeting: concentration or multi-segment Positioning refers to the various techniques used by healthcare organizations and providers to position the brand image and offerings in the mind of the target market.

Organizational vs. Consumer Focus Organizational behavior concentrates on organizational buyers, such as employers purchasing healthcare insurance for employees. Consumer behavior refers to the totality of consumer’s decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas by humans over time.

Marketing Plan Marketing plan is a written document that serves to guide marketing initiatives across the organization. Part of the broader strategic plan with a long-term horizon. Contains specific tactical marketing activities that are more short-term in nature. Organizations usually develop tactical implementation plans on an annual or bi-annual basis.

Ethics and Social Responsibility Consideration for outcomes at three levels: Individual Organizational Societal

Conclusion The role of marketing in the healthcare organization is to create communicate and deliver value to customers through mutually beneficial relationships. Marketing is a discipline in itself. Healthcare managers should seek assistance from marketing specialists, including internal marketing managers, strategic planners, advertising agencies, public relations firms, strategic alliances, and other consultants.