chapters 1-3 welcome to the world of health care marketing
TRANSCRIPT
Chapters 1-3
Welcome to the World of Health Care Marketing
What is Marketing? Marketing is the process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. (AMA definition)
More simply: Marketing is all about satisfying needs. Health Care is no different than other industries
The Marketing Concept
The Marketing Concept is a management orientation that focuses on identifying and satisfying consumer needs to ensure the organization’s long-term profitability objectives.
A consumer is the ultimate user of a good or service.
Marketing is an Exchange of Value
An exchange is the process by which some transfer of value occurs between a buyer and a seller. At least two people or organizations must be
willing to make a trade, and Each must have something the other values. Most exchanges occur in the form of a
monetary transaction.
Role of PrerequisitesRole of Prerequisites
Two or more parties with unsatisfied Two or more parties with unsatisfied needsneeds
Desire of one party to meet needsDesire of one party to meet needs Must have something to exchangeMust have something to exchange
What if you have no insurance or money?What if you have no insurance or money? Means to communicateMeans to communicate
Role of Advertising and PromotionRole of Advertising and Promotion What do you think of Health care ads?What do you think of Health care ads?
Needs, Wants and Benefits
NeedsNeeds
WantsDesire to Satisfy Needs
“I want to seek treatment at a facility of my choice”
BenefitsOutcome Sought Motivates
Buying Behavior. “I’ve received treatment and am
healing”
Difference Between a Consumer’s Actual State and Some Ideal or Desired State.
I’m Sick!
Markets, Consumers and Demand
Market
Customerswho share a common
need that can be satisfied by a
specific productAND
who are willing, able and have the authority to make the exchange.
Customers
PotentialCustomers
DEMAND
Social Marketing Concept
ConsumersConsumers CompanyCompany
SocietySociety
Orientation that Focuses on Satisfying Consumers Needs While Also Addressing the
Needs of the Larger Society.
(Almost) Anything Can be Marketed
ConsumerGoods
andServices
ConsumerGoods
andServices
Business-to-
BusinessMarketing
Business-to-
BusinessMarketing
Idea,Place,People
Marketing
Idea,Place,People
Marketing
Not-For-Profit
Marketing
Not-For-Profit
Marketing
Marketing’s Tools: The Marketing Mix
ProductGood, Service, Idea, Place, Person
ProductGood, Service, Idea, Place, Person
PriceAssignment of Value
PriceAssignment of Value
PlaceAvailability of Product
PlaceAvailability of Product
PromotionActivities to Inform Consumers
PromotionActivities to Inform Consumers
Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers
Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers
Role of Each of 4 P’sRole of Each of 4 P’s
ProductProduct How do I develop the product or service How do I develop the product or service
to meet needs?to meet needs? What is the role of pharmaceutical What is the role of pharmaceutical
companies, insurance companies, companies, insurance companies, doctors?doctors?
PricePrice Healthcare costs continue to riseHealthcare costs continue to rise Accessibility of insuranceAccessibility of insurance Role of employers setting rules for hiring Role of employers setting rules for hiring
Role of Each of 4P’sRole of Each of 4P’s
PlacePlace When, where, how deliver product to When, where, how deliver product to
patientpatient Role of Internet, office hours, home visits, Role of Internet, office hours, home visits,
regional hospitalsregional hospitals
PromotionPromotion How do you know about products and How do you know about products and
services offered by Health Care services offered by Health Care providers?providers?
Marketing is a Process “Marketing is a process of planning and
executing...” The concept of Relationship Marketing
sees marketing as a process of building long-term relationships with customers to keep them satisfied and to keep them coming back.
How is Marketing Done?Marketers Develop and Implement a Marketing
Plan Based on the Following Information:
Organization’s Strengths and Weaknesses
Organization’s Strengths and Weaknesses
Organization’s Overall ObjectivesOrganization’s Overall Objectives
Opportunities and Threats to theOrganization in the Marketplace
Opportunities and Threats to theOrganization in the Marketplace
When Did Marketing Begin?
Product OrientationProduct Orientation
Selling OrientationSelling Orientation
Customer OrientationCustomer Orientation
•High Quality Health Care Delivery•Seller’s Market
•Satisfies Customers’ Needs and Wants, targeting •Total Quality
New Era OrientationNew Era Orientation •Benefits to Customers, Plus Firm’s Employees, Shareholders, and Communities.
•Marketing as a Sales Function•Get as many patients & drs as possible•Buyer’s Market
Why is Marketing Important? Marketing Creates Utility
Form Utility Place Utility Time Utility Possession Utility
Marketing’s Role in the Firm A firm’s marketing-related decisions must
affect and be affected by its other operations such as accounting and manufacturing.
Non Marketing Driven Non Marketing Driven PlanningPlanning
Mission and GoalsMission and Goals Strategy FormulationStrategy Formulation ImplementationImplementation MarketMarket
Marketing Driven Marketing Driven PlanningPlanningProcessProcess
Mission and GoalsMission and Goals Assess TM Needs Assess TM Needs Identify Differential Identify Differential
Advantage RequirementsAdvantage Requirements
Strategy FormulationStrategy FormulationPretest Service ConceptPretest Service Concept
ImplementationImplementation MarketMarket
Planning at Different Planning at Different Management Levels Management Levels
Strategic Planning by Strategic Planning by Top ManagementTop Management
Strategic Planning Matches an Organization’s Resources and Capabilities to its Market
Opportunities for Long-Term Growth and Survival..
Business MissionBusiness Mission
SWOT AnalysisSWOT Analysis
Organizational Goals & ObjectivesOrganizational Goals & Objectives
Business PortfolioBusiness Portfolio
Growth StrategiesGrowth Strategies
Strategic Planning:Strategic Planning:Define the Business MissionDefine the Business Mission
What customersshould we serve?
How should wedevelop the firm’s
capabilities?What business
are we in?
What products & benefits can wecreate for ourcustomers?
A Mission
Statement Describes the Organization's
Overall Purpose
Strategic Planning:Strategic Planning:Evaluate the Environment: Evaluate the Environment: SWOT AnalysisSWOT Analysis
SWOT Analysis
Assessment of Organization’s Internal &
External Environments
SWOT Analysis
Assessment of Organization’s Internal &
External Environments
External Environment Identify Opportunities & Threats to a Firm From
Consumers, Competitors, the Economy, etc.
External Environment Identify Opportunities & Threats to a Firm From
Consumers, Competitors, the Economy, etc.
Internal EnvironmentIdentify Strengths &
Weaknesses in Firm’s Employees, Technologies,Facilities, Finances, etc.
Internal EnvironmentIdentify Strengths &
Weaknesses in Firm’s Employees, Technologies,Facilities, Finances, etc.
Set Organizational Goals and Set Organizational Goals and ObjectivesObjectives
Objectives (Goals) are specific Objectives (Goals) are specific accomplishments or outcomes that an accomplishments or outcomes that an organization hopes to achieve by a organization hopes to achieve by a specific time.specific time.
Direct outgrowth of the mission statement.Direct outgrowth of the mission statement. May relate to:May relate to:
revenue/sales, profitability, ROI, orrevenue/sales, profitability, ROI, or innovation, customer relations, etc.innovation, customer relations, etc.
BCG MatrixBCG Matrix
Develop Growth Strategies Develop Growth Strategies
Product/ Market Expansion Grid
Consolidation StrategiesConsolidation StrategiesDivestmentDivestment
Sell off a product line Sell off a product line or SBU due to lack of or SBU due to lack of fitfit
i.e., Quaker Oats and i.e., Quaker Oats and SnappleSnapple
PruningPruning
Reduce # of products Reduce # of products and services offeredand services offered
IBM drops typewritersIBM drops typewriters
RetrenchmentRetrenchment
Withdraw Withdraw
Withdraw from certain Withdraw from certain marketsmarkets
HarvestingHarvesting
Gradually withdraw as Gradually withdraw as demand draws downdemand draws down
LAVA soapLAVA soap
Tactical (Marketing) Tactical (Marketing) Planning by Middle Planning by Middle ManagementManagement
Tactical Planning Concentrates on Developing Detailed Plans for Strategies and Tactics for
the Short Term that Support an Organization’s Long-Term Strategic Plan.
Evaluate Marketing EnvironmentEvaluate Marketing Environment
Set Marketing ObjectivesSet Marketing Objectives
Develop Marketing StrategiesDevelop Marketing Strategies
Environmental FactorsEnvironmental Factors
Economic ConcernsEconomic Concerns TechnologyTechnology Social/Demographics ChangesSocial/Demographics Changes CompetitionCompetition RegulationRegulation
Economy and TechnologyEconomy and Technology
Inflation and Health Care CostsInflation and Health Care Costs Consumer IncomeConsumer Income
Impact of innovation on smaller and Impact of innovation on smaller and larger competitorslarger competitors
Impact of Internet/MD websitesImpact of Internet/MD websites Information gathering Information gathering
Social and Demographic Social and Demographic FactorsFactors
Population GrowthPopulation Growth Aging PopulationAging Population Shifts in Working Women and MothersShifts in Working Women and Mothers Traditional vs. Nontraditional FamilyTraditional vs. Nontraditional Family
1950’s 1950’s 70% stay at home Mom and working Dad70% stay at home Mom and working Dad
CurrentCurrent 25% have traditional profile; 25% singles; 28% 25% have traditional profile; 25% singles; 28%
couples without childrencouples without children Geographic TrendsGeographic Trends Racial and Ethnic FactorsRacial and Ethnic Factors
Reduction of white majority, rise in Hispanic and Reduction of white majority, rise in Hispanic and African AmericansAfrican Americans
Evaluate Competitive Evaluate Competitive Market - EnvironmentMarket - Environment
Threat of New EntrantsThreat of New Entrants Bargaining Power of SuppliersBargaining Power of Suppliers Bargaining Power of CustomersBargaining Power of Customers Threat of SubstitutesThreat of Substitutes Existing CompetitorsExisting Competitors
Regulation and HIPAARegulation and HIPAA
Health Care CompetitionHealth Care Competition
What is the definition of competition?What is the definition of competition? Thank goodness capitation is not the norm Thank goodness capitation is not the norm
anymoreanymore HospitalsHospitals
# beds and facilities declining# beds and facilities declining Admissions increasing – why? Are we just older?Admissions increasing – why? Are we just older?
Managed Care Providers Managed Care Providers HMO enrollments peaked in 1995HMO enrollments peaked in 1995
Role of International MarketsRole of International Markets i.e., pharmaceuticalsi.e., pharmaceuticals
Creating a Competitive Creating a Competitive AdvantageAdvantage A A competitive advantagecompetitive advantage is the ability of a is the ability of a
firm to outperform the competition, providing firm to outperform the competition, providing customers with a benefit the competition customers with a benefit the competition can’t. How?can’t. How? Step 1. Identify distinctive competency Step 1. Identify distinctive competency
(firm’s capability superior to that of its (firm’s capability superior to that of its direct competition).direct competition).
Step 2. Turn a distinctive competency into Step 2. Turn a distinctive competency into a differential benefit (one that is important a differential benefit (one that is important to customers).to customers).
RegulationRegulation
CompetitionCompetition Anti-Trust IssuesAnti-Trust Issues Sherman Antitrust ActSherman Antitrust Act Pricing StrategiesPricing Strategies
Evaluating the Marketing Evaluating the Marketing Environment and Setting Environment and Setting ObjectivesObjectives
Evaluating the Marketing EnvironmentEvaluating the Marketing Environment
Setting Marketing ObjectivesSetting Marketing Objectives
Sales ObjectivesSales Objectives
Product-Oriented ObjectivesProduct-Oriented Objectives
Market ObjectivesMarket Objectives
Developing Marketing Developing Marketing StrategiesStrategies
Selecting a TargetMarket
Selecting a TargetMarketMarketing
Strategies-Activities to Achieve the MarketingObjectives
Marketing Strategies-Activities to Achieve the MarketingObjectives Developing
the Marketing
Mix
Finding and Reaching a Target Market
Step 1. Segmenting the Market Divide the overall market into segments, in which
consumers have similar characteristics.
Step 2. Selecting a Target Market Evaluate the segments identified in the
segmentation process; select target market(s).
Step 3. Positioning the Product Marketer plans the product’s market position,
which is how the target market perceives the product in comparison to competitors’ brands.
Developing Marketing Developing Marketing Mix ProgramsMix Programs
Product StrategiesProduct Strategies
Pricing StrategiesPricing Strategies
Promotion StrategiesHow Marketers Communicate Product Benefits and Features to Target Market.
Distribution StrategiesOutlines How, When, and Where the Firm Makes the Product Available to Customers.
Determines What Specific Price a Firm Charges for a Product.
Decisions about Product Design, Packaging, Branding, Positioning, and Features.
Decisions about Product Design, Packaging, Branding, Positioning, and Features.
Preparing a Marketing Preparing a Marketing PlanPlan
Situation Analysis
Marketing Problems and Opportunities
Marketing Objectives
Control Plans
Marketing Strategies
Marketing Action Plans
Implementation Plans
Contingency Plans
Implementing the Implementing the Marketing PlanMarketing Plan
Organizing the Marketing Function
Organizing the Marketing Function
Marketing Budgets
• Total amount of money spent on marketing, and• Allocation of money for each activity under the marketer’s control, such as for:
– product development– promotional activities
Marketing Budgets
• Total amount of money spent on marketing, and• Allocation of money for each activity under the marketer’s control, such as for:
– product development– promotional activities
Strategies are Put Into Action on a Day-to-Day Basis Through:Strategies are Put Into Action
on a Day-to-Day Basis Through:
• Functional Structure• Geographic Structure• Product Structure
Controlling the Marketing Controlling the Marketing PlanPlan
Measuring Actual Performance, Comparing it to Planned Performance, and Making
Necessary Changes in Plans and Implementation.
Trend AnalysisTrend AnalysisTrend AnalysisTrend Analysis Marketing ResearchMarketing ResearchMarketing ResearchMarketing Research
Marketing AuditMarketing AuditMarketing AuditMarketing Audit