Chapter 6 - Health Care Marketing

Examples of BTB marketing:

- Employers purchase health insurance coverage for employees. - Local, state, & national governments hire health policy consultants. - Physician practices contract with vendors of EHR software. - Pharmacy benefits managers administer prescription drug programs and maintain the formulary for health plans. - Medical devices, pharmaceuticals, & medical surgical supplies comprise a large share of virtually every hospital's total expenditures & intermediaries often control the distribution of these products. - Group purchasing organizations facilitate the complex task of sourcing and contracting for discounts on health products and services.

Outcomes and Research

- Marketing analytics - Informed decision making - Sample research sources: - Balanced Scorecard institute - the Dartmouth Atlas of Healthcare - American hospital Association - The Henry J. Kaiser Family Foundation - Society for Healthcare Strategy & Market Development

Marketing Promotions

- Traditional channels - Digital Channels

Segmentation, Targeting, & Positioning Moves to Community

- customers are no longer passive recipients - they are empowered with enormous amounts of info & rely on the opinions of others *Communities are the new segments which are formed by customers within the boundaries that they define themselves and opt into.

Not-for-Profit Marketing

- foundations - disease research entities - crisis services - most hospitals employ similar meriting tactics as for-profits

What is your moral responsibility in marketing as a health care manager?

- inducing the use of unhealthy products? - influencing children or vulnerable populations? - ensuring well-being or patients or society? - avoiding conflicts of interest?

For-profit marketing

- marketing that results in the purchase of products of services offered by companies attempting to make a profit for their owners

All the ways of dividing a global marketplace:

- mass market strategy - niche or concentration strategy - multi-segmented strategy

What or who influences buying decision?

- the employer - the insurer - the pharmacy benefit manager - others

Why did marketing in healthcare not exist before the 1980s?

- was not widespread as an organizational function - few had dedication staff -------------------- - clinicians still clung to altruistic concept of medicine - few professionals had experience & expertise in healthcare marketing - outcomes & return-on-investment of early campaigns were not widely known, & in some cases were ineffective - Skeptics about the value & ethics of marketing programs were vocal including concerns about intrusiveness, manipulation, & creating unnecessary demand - Belief that marketing wasted money

Health Care Segmentation: Categories, Variables, & Indicative Examples (p. 126)

1. Demographic 2. Geographic 3. Psychographic 4. Situational 5. Behaviora;

The development of a marketing strategy can be viewed at 3 main levels:

1. Establishment of a Core Strategy 2. Creation of the company's Competitive Positioning 3. Implementation of Marketing Strategy

What are the key considerations prior to determining the marketing mix, marketing plan, & implementation of tactics via promotional channels?

1. segmentation 2. targeting 3. positioning

Why is marketing unique in health care?

> Personal & possibly life-altering products and services. > Altruistic focus > Weak consumer-driven system - patients usually don't pay (directly) for services - patients don't have critical information to make decisions > Irregular competition > Regulated industry

Implementation of Marketing Strategy

A holistic marketing orientation must be capable of putting the strategy into practice. Implementation is concerned with establishing the optimal marketing mix & documenting it in the marketing plan. Methodical implementation and evaluation of the marketing tactics will discern the ultimate effectiveness of the plan.

Content Marketing

A marketing approach that involves creating, curating, distributing, and amplifying content that is interesting, relevant, and useful to a clearly defined audience group in order to create conversations about the content

Competitive Positioning

At the next level, target markets are selected, which determine who the competitors are. At the same time, the company's differential advantage, or competitive edge in serving the customer targets, is defined. Together the identification of targets & the definition of differential advantage constitute the creation of the competitive positioning of the organization.

Historical Perspective

Before the 1980s, marketing in healthcare did not exist.

4 Cs (evolution of 4Ps for a Digital world)

Co-creation: customization Currency: pricing based on demand and capacity Communal Activation: word of mouth referrals Conversation: hearing the message

Digital channels

Owned media: websites, blogs, patient portals, podcasts Earned media: recognition by customers via social media postings, retweets

Who is the father of modern marketing?

Philip Kotler - defined the marketing concept

Orientation of a Healthcare Organization

Product: > achieve organizational goals through clinical experience Sales: > achieve organizational goals by generating volume and filling beds Customer: > achieve organizational goals by identifying patient needs, creating, communicating, & delivering value Holistic: > achieve organizational goals by uniting around shared ideals & creating a community-based strategy for health

4 Controllable Ps:

Product: goods, services, or ideas Price: product value Promotion: marketing activities Place: delivery route

How do organizations choose some segments to serve and not others?

Take into consideration the following: -combination of target market needs and characteristics such as size and growth - offering portfolio -organization's resources, objectives, and financial goals

Marketing Analytics

The practice of measuring, managing, and analyzing marketing performance to maximize its effectiveness and optimize return on investment

Decision-Making Process

Traditional Consumer Decision-Making Process 1. problem recognition (identify need) 2. Internal influence (search memory for solution) 3. External search (outside research) 4. Alternative evaluation (evaluate all options) 5. Purchase (commit to solution Customer Decision-making Path in the Connectivity Era 1. Awareness (see ad) 2. Appeal (Click link or go to website 3. Ask (read more & chat with sales associate) 4. Act (make purchase) 5. Advocate (recommend the item or service)

Niche marketing strategy

a concentration strategy whereby a single narrow market is selected in order to specialize and meet the very specific needs of this group - should be of sufficient size to be profitable while at the same time they are of less interest to major competitors - calls for creativity Advantage: - specialization enables the practice to focus all marketing activities on creating, delivering, & sustaining long-term value to a distinct set of customers Disadvantage: - specialization may preclude the practice form entering other potentially attractive markets

Market

a diverse group of organizations or individuals who have disparate needs for products and services

Chatbots

a two-way interactive communications for real time and robust communications to help build relationship

Marketing Plan

a written document that serves to guide marketing initiatives across the organization > part of the broader strategic plan that has a long-term horizon > contains specific tactical marketing activities that are short-term in nature

Core Strategy

an effective strategy starts with a detailed and creative assessment of both the copy's capabilities - its strengths & weaknesses relative to the competition - & the opportunities and threats posed by the environment - may require conducting primary or secondary market research

Marketing concept

an organization must create, communicate, & deliver customer value to selected target markets more effectively than competitors to achieve goals and objectives

External influences for consumer behavior:

can include a consumers': - family and friends - reference groups - situational factors - subculture and culture - marketing stimuli

Internal influences for consumer behavior:

can include a consumers': - motivation - attitudes - perceptions - learning memory & retrieval - personality - values - emotions - behavioral intentions

Organizational behavior

concentrates on business buyers (for-profit or non-profit) e.g., employers purchasing healthcare insurance for employees

Target Market

consists of a more narrowly defined group of customers with relatively similar wants and needs

Market Segmentation

dividing the total market into groups or segments that have relatively similar needs for products and services & results in a target market > can be done via geography, demographics, psychographics, etc. > enables organizations to design distinct marketing strategies that are aligned with the selected segments

Direct-to-the-Customer Advertising

marketing directly to the end user of health care products and services

Cause-related Marketing (CRM)

marketing that links a for-profit company and its offerings to a societal issue, with the goal of building brand equity and increasing profits e.g., TOMS shoes - create partnerships for mutual benefit

External (Uncontrollable) Forces

marketplace

Attractive health care market segments must be ...?

measurable, accessible, durable, & actionable

For-profit marking is common among who?

medical device manufacturers clinical software vendors insurance companies hospital systems

Internal (controllable) Forces

organizational

How do you connect directly with patients and decision makers?

organizations must ensure that they know where their customer derives values - may require primary or secondary research

Strategic Management Framework for Development of a Marketing Plan

page 123

Traditional channels

paid media: television, radio, billboards, mailings

Business-to-Business (B2B) Marketing

refers to businesses that market products or services to other businesses

Consumer behavior

refers to the influences on purchase decision making of consumer's acquisition of goods, services, time, & ideas - explicit actions of consumers e.g., person choosing a cosmetic surgeon

Central role of marketing:

satisfying customer needs - all marketing activities center o building a sustainable value-driven exchange - long-term customer relationships (better than short-term)

Voice-activated search engine optimization (SEO)

searches that are voice-activated; digital assistants

SWOT analysis

strengths, weaknesses, opportunities, threats > help to uncover unique characteristics of a given offering, set of offerings, or an entire portfolio of services > used to scan external environment

Multi-Segment Strategy

targets several market segments with differentiation among the selected group of customers - wants & needs of multiple customer segments must be addressed through product offerings & marketing messages e.g., vitamins packaged and segmented to diff. people (women, kids, men, etc.)

Marketing

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

Marketing Management

the art and science of selecting target markets and creating, communicating, and delivering value to selected customers in a manner that is both sustainable and differentiated from the competition

Marketing Mix (4 Ps & 4 Cs)

the classic tool for deciding what to offer and how to offer it to certain customers

Customer Value

the difference between the benefits a customer desires and perceives from the purchase of a product, service, or idea, & the cost to acquire those benefits **In the mind of the customer, value is the outcome relative to costs.

Mass Market Strategy

the organization designs a product and markets to the broadest group of buyers - may require intense marketing

In health care, is the customer the decision maker, ultimate consumer or payer?

the patient - patient does not always make the purchaser decision

Customer

there purchaser of product, services, & ideas

What is the key to achieving organizational goals?

to be more effective than competitors in determining and satisfying the needs of customers

Why do more and more companies use the technique of cause-related marketing?

to express their social responsibility & attain charitable, corporate, & consumer benefits

Patient Portals

used by health care organizations to present user-friendly information related to the patient's own health

Social Engagement

used to improve health outcomes - patients will interact with others using social media to obtain information regarding best practices or reliable practitioners - establish sense of community

Social Marketing

utilizes the psychology of persuasion to create messaging to affect major social and public health problems

Positioning

various techniques used to differentiate offerings and establish the brand image in the mind of the target market (e.g., logos, colors, tagline, values, etc.)

When is segmentation most useful?

when buyers in target segments have the budget, authority, need, & time with a propensity to purchase products and services