Essentials of Health Care Marketing 2nd Ed. Eric Berkowitz Chapter 11 Promotion

Chapter 11 Learning Objectives Understand the nature of the communication process Recognize the alternative components of the promotional mix and their respective values Appreciate the range of sales promotion strategies for both consumers and the trade Know the alternative promotional strategy approaches for controlling the channel of distribution

Introduction Four basic components of promotional strategies: Advertising Personal Selling Publicity Sales Promotion Communication is at the heart of all these tools

Learning Objective 1 The Communication Model Sender – person or company Receiver – target of communication Encoding or developing the message Message Channel to send message Decoding or interpreting message by receiver Noise Feedback See figure 11-1, p. 294

Learning Objective 1 The message Two-sided: Sender presents both pros and cons of service being promoted Have stronger impact on educated consumers Comparative messages – Claims relative to the competition Emotional appeals – humor, fear Testing the boundaries Vs. rational appeals

Learning Objective 1 The channel Mass communication vs. personal approach Health Care – traditionally word-of-mouth Opinion leaders

Learning Objective 2 The Promotional Mix Four basic components of promotional strategies Advertising Personal Selling Publicity Sales Promotion

Learning Objective 2 Advertising – paid and nonpersonal Advertiser can control to whom, when, what and how often the message is delivered Most effective when buyer awareness is minimal Also when industry sales are rising When service features are not observable When opportunities for differentiation are strong When service is new

Learning Objective 2 Personal Selling Strength – allows for direct feedback More direct control over who receives message More direct targeting of audience Limitation – cost, personnel training

Learning Objective 2 Personal selling vs. advertising Trade-off Decision making

Learning Objective 2 Publicity – most common to health care organizations Indirectly paid form of communication Credibility No control over when or how message is delivered Planned vs. unplanned messages

Learning Objective 3 Sales Promotion Strategies Sales Promotion – temporary inducements to buy Coupons, sweepstakes, premiums Samples, trade promotions, allowances Cooperative advertising

Learning Objective 3 Sales promotion objectives To encourage trial usage To encourage customers to buy more than one To acquaint customers with service changes To identify new customers To build customer loyalty To encourage customers to switch facilities or providers

Learning Objective 3 Sales promotion objectives (continued) To gain entry into new markets To encourage intermediaries to utilize the facility To encourage intermediaries to devote more effort to selling/referring the product or service

Learning Objective 4 Factors affecting sales promotion Product life cycle Channel Control strategy Push vs. pull Discuss push vs. pull strategies

Summary Several factors are necessary for effective communication. Communication often is affected negatively by noise. Messages can take several forms; they can be one-sided, tow-sided, or emotional. The promotional mix for an organization consists of advertising, personal selling, publicity, and sales promotion.

Summary continued A major advantage of advertising over publicity is in terms of control over the message. Publicity has greater credibility than advertising. Advertising and personal selling each have distinct values. The decision to use one promotional tool more than the other is based on the risk of the decision, size of the decision-making unit, the complexity of the service, the size of the market, and the geographic dispersion of the market.

Summary continued Advertising and personal selling have differing levels of impact in each stage of the consumer’s decision-making process. The more personal the post-purchase contact with the buyer, the more satisfied the buyer. Sales promotion has been an underused tool of the promotional mix within health care. Sales promotion tactics can be directed to consumers or to the trade. In a push strategy, the promotional efforts are directed to the intermediaries in the channel, while in the pull strategy, promotional efforts are directed to the end user.