Marketing Challenges in the Health Care Industry Order Instructions: Case Assignment
Part 1: For the first Case Assignment, please write a 2-page essay in which you discuss marketing challenges in the health care industry, and comment upon their level of importance. Specifically, please respond to the following questions:
1. Why is it difficult for marketing concepts and strategies that are commonly used in other industries to “penetrate” the health care industry?
2. In your opinion, has marketing been truly accepted as a necessity for health care organizations yet, or is it still regarded as a luxury?
Part 2: Please write a 2-page essay on marketing in the health care environment in the following two-part case scenario:
1. Compare and contrast marketing techniques among for-profit vs. non-profit organizations.
2. Suppose that you are the manager of a start-up health care organization that previously had a for-profit structure, but has achieved non-profit status. Describe how you would change your marketing strategy.
Marketing Challenges in the Health Care Industry Module Overview
Introduction
We begin this course by defining “Marketing.” According to Rooney (2009), the American Marketing Association defines marketing as “the activities and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” Marketing “…is a broad endeavor that involves relationship-building methods that rapidly multiply as technology evolves” (Rooney, 2009).
Health care organizations are increasingly recognizing that they face marketing problems. Shrinkage in clients, members, funds, and other resources remind them of their dependence on the marketplace.
Many public agencies face tough marketing problems. These organizations are confronting changing client attitudes and societal needs, increasing public and private competition, and diminishing financial resources.
Marketing is geared toward examining how, why, and when people satisfy their interests and desires, so as to attempt to influence the decision-making process. Marketing is carried out through the conception, pricing, promotion, and distribution of ideas, goods, and services. The goal of marketing is to create internal and external exchanges in order to satisfy individuals or organizations. Powers & Jack (2008) assert that the marketing of health care services must often be tailored so as to be volume-flexible in the face of changing demand, especially when considering patient satisfaction as an outcome.
As we will learn in this course, marketing is all about people, just as business and health care are about people-oriented industries. Successful marketing is built on strategic human bonds. Personal relationships occur before business relationships.
Not only does marketing drive an organization’s competitive position and overall success, but marketing activities also influence a broad range of activities and people within a health care organization, from planning to the medical staff.
Marketing Challenges in the Health Care Industry Marketing Mix Principles
The marketing mix principles (also known as the 4 ps.) are used extensively by businesses.
The marketing mix is a part of the organization’s planning process and consists of analyzing:
•Product strategies
•Price strategies
•Place strategies
•Promotion strategies
The four components must be carefully controlled to meet the needs of the defined target group.
The second part of this module is devoted to marketing in non-for-profit organizations. We will examine how marketing techniques differ in the for-profit vs. the not-for-profit sectors of the health care arena.
As you have perhaps learned in your other coursework at TUI, competition is very strong in the health care industry. In an interview, John Kaegi (group vice president of marketing with BlueCross BlueShield of Florida) asserted that non-profits are able to build their brands quickly and effectively by advertising through public education and engagement of consumers by appealing to their health (McPherson, 2008). We will learn more about the concept of branding in Module 4.
By contrast to not-for-profit organizations, profit-seeking organizations utilize marketing to enhance their operations. Despite the fact that many health care providers operate as non-profit organizations, such organizations also need to implement marketing strategies. One example of non-profit marketing in the health care arena is the recruitment of students to careers in health care.
Not-for-profit organizations also appeal to a different aspect of the marketplace than for-profit organizations, such as public education programs. For example, according to Jeffrey Cowart (Chief Marketing Officer of Inova Health System), nonprofit organizations may devote a considerable portion of their advertising budget on heightening awareness of the availability of health and wellness classes, HIV clinics, or other subsidized community programs (McPherson, 2008). In the next Module, we will examine in greater detail the way wellness programs can be marketed effectively.
Please proceed to the background readings for this module.
Marketing Challenges in the Health Care Industry Required Reading
Astuti, H. J., & Nagase, K. (2014). Patient loyalty to healthcare organizations: relationship marketing and satisfaction. International journal of management and marketing research, 7(2), pp. 39–56. Available in the Trident Online Library.
Clariture; The Martin Companies Accelerates Healthcare Marketing Innovation via Clariture (2014). Marketing Weekly News, 68.
Codourey, M. (2013). The Public Handshake, the Pushed Gossip and Healthcare Marketing. Economics & Sociology, 6(2), 11-27. Available in the Trident Online Library.
Garcia, M. R., & Gonzalez, L. I. A. (2013). The untapped potential of marketing for evaluating the effectiveness of nonprofit organizations: a framework proposal. International review on public and non-profit marketing, 10(2), pp. 87-102. Available in the Trident Online Library.
Fellows, J. (2013). Rebranding Helps Sharpen Marketing Strategy. Healthcare Marketing Advisor 14(11), 4-7.
Legato Healthcare Marketing, Inc.; NRHA selects Legato Healthcare Marketing as a marketing partner. (2013). Marketing Weekly News, 232.
Health care brands
Sell, S. (2014). Healthcare brands. Campaign Asia – Pacific [Hong Kong] 46,48-49.
Stamats Healthcare Marketing; Stamats Healthcare Marketing Acquires Wellness Outreach Product, Lighten Up 4 Life. Mergers & Acquisitions Week (Apr 30, 2014): 36.
Star Life Sciences Medical Monitor Research Captures Healthcare Communications Trends. (2013). Business Wire [New York].
Marketing Challenges in the Health Care Industry Sample Answer
Introduction
Marketing can be defined as the processes and activities for crafting, communicating and supplying offerings that are valuable to the clients, customers, partners as well as the community. As such, marketing is an extensive effort that encompasses relationship building techniques that swiftly increase as technology advances. Health care institutions progressively realize that marketing problems are inevitable with the reduction in clients, finances, members and other possessions reminding the organizations of the reliance on the market (Astuti and Nagase, 2014). One of the aims of marketing is to study how, when and why individuals fulfill their desires and interests in order to try to influence the process of making decisions. Besides, marketing is conducted through the formation, promotion, pricing, and supply of concepts, possessions, and services. Moreover, another objective of marketing is to build internal as well as external relations to gratify persons or organizations.
Why is it difficult for marketing concepts and strategies that are commonly used in other industries to “penetrate” the health care industry?
Presently, consumers are becoming extra savvy when seeking health services in hospitals and clinics with distance not being an issue currently due to better means of transport. As such, patients are more eager to look for services in places such as hospitals based in universities because the services in those centers are better than in other hospitals and clinics. As such, marketing has become a necessity for most healthcare organizations (Fellows, 2013). Notably, specialized treatment for example cancer centers is predominantly featured in most advertisements on the Television and attend to the sick with better and more advanced technology. Moreover, there are several websites nowadays that provide more information regarding compliance records for several healthcare corporations. Collecting and reporting compliance information is necessary for determining the healthcare organization that offers the best services and such information is available on the internet. As such, if an individual hospital does not provide better services in a particular area, the patient may not select that hospital (Astuti and Nagase, 2014). This could be incredibly devastating especially for care in the countryside where most of the variables may be within the standard of treatment except for a few other areas. For example, a health care organization may provide better laboratory services but perform dismally in consultation services. Remarkably, the Internet is a channel for numerous healthcare concerns in marketing where most people search for various diseases and health problems and take the information to be accurate and authentic which is precarious because not all the sites are reliable
Health care organizations compete and this may have an adverse impact on the employees that work in close collaboration with each other. Also, given that most people search the ratings of the various hospitals via the Internet may impact how information is collected with the staff being trained how to utilize the words they may encounter on the satisfaction review so that they will get a positive rating
From a positive viewpoint, customers can conduct additional inquiries of care services to pursue an improved experience. When viewing satisfaction information, it’s hard to repudiate a high ranking as being false (Garcia and Gonzalez, 2013). Apparently, the organization is undertaking something right to gain the respect of the customers. Without having a form of advertising that resonates well with the clients and offers up to date information, consumers may never be aware of the services present in their communities. Besides, the data about the services is present on the internet and for the people who do utilize the internet can be helped by their families and friends
When engaging the customers, it is paramount to them that not everything they see and read on the web is accurate and genuine. Reliable data must be founded on sources that clients are aware of and which the organization typically uses because reporting untrue information is unlawful and be damaging to the body. As such, patients need to utilize sources that are credible and reliable to acquire information that is true and accurate.
In your opinion, has marketing been truly accepted as a necessity for health care organizations yet, or is it still regarded as a luxury?
Notably, most healthcare companies nowadays spend vast sums of money on advertising, and this can be evidenced by the elegant billboards and lavish advertisements featured in televisions (Fellows, 2013). However, it is the consumer who in this case is the patient that pays for the ads through the high prices charged when the customer seeks for health care services. Therefore, healthcare companies are highly relying on marketing to the extent that it has become a necessity or else the organization will lose the client base. However, there is a lot of misleading information to the extent that it is not easy to find something accurate written concerning healthcare marketing activities. Also, it is tough to deny that there is dishonesty in marketing in healthcare since there are many false claims submitted to insurance organizations. Moreover, several healthcare providers convince patients through marketing that certain procedures and tests are necessary to them yet the tests are not beneficial for their health in the long run(Astuti and Nagase, 2014). As such, with the advertisement in healthcare becoming a necessity it is paramount for the customer to do deep investigations to ascertain that the services advertised by healthcare providers are accurate, real and adequate.
Compare and contrast marketing techniques among for-profit vs. non-profit organizations.
Compared with nonprofit organizations healthcare companies established for profit purposes use marketing to boost their operations. Regardless of the fact that several health care providers operate as nonprofit corporations, such organizations require to adopt marketing strategies. For example one of the forms of marketing utilized by nonprofit providers in the healthcare industry is the enrolment of students to professions in health care (Fellows, 2013).. Considerably, both organizations need marketing to appeal to their diverse target markets and provide additional information about their services. For example, organizations that operate to earn profits market their services through various methods such as the identification of the target market, branding, and marketing mix to generate more revenues. On the other hand, nonprofit corporations also utilize marketing to heighten awareness about the availability of wellness and health classes and other subsidized programs in the community (Garcia and Gonzalez, 2013). Similarly, marketers working for nonprofit organizations labor as hard as their counterparts in profit corporations to boost the visibility of the company and maintain the organization’s reputation as well as achieve the goals and aims of the firm
Intuitively, there are certain differences between for-profit and non-profit companies in healthcare marketing. First, the two organizations differ in the way they are governed and the manner in which various groups or parts within the firm behave. For instance the organization of the members of the board and the manner in which they are compensated.
Notably, a profit corporation mostly pays its members’ salaries for services provided and hires other participants outside the company to perform certain duties for them. On the other hand, nonprofit corporations rely highly on volunteer work and conduct most of its individual activities within the enterprise itself to realize their marketing goals. Further, profit corporations pay a certain percentage of the profits realized in the form of taxes to the government which is a legal requirement failure to which the entity may be charged huge penalties (Astuti and Nagase, 2014). On the other hand, nonprofit organizations do not pay taxes but cannot utilize their resources for other purposes different from the mission of the organization.
Suppose that you are the manager of a start-up health care organization that previously had a for-profit structure, but has achieved non-profit status. Describe how you would change your marketing strategy.
First, the strategy employed in marketing would change in the logic that more focus and emphasis would be on time as opposed to money in stimulating the new marketing policy. Also, instead of using a significant amount of the budget in financing current areas where marketing can be utilized, less money would be utilized in the new marketing plan with more hours being utilized in activities such as volunteering and organizing for motivational talks (Garcia and Gonzalez, 2013). Secondly, the philosophies and motivations guiding the corporation would be made clearer to the target groups and would be presented in a very persuasive and eye-catching manner. Lastly, greater creativity and innovation would be of great value in the new marketing plan in highlighting the critical concerns of the company while stressing the more considerable resourcefulness shared amongst persons that seek to aid the organization to achieve its set goals.
Marketing Challenges in the Health Care Industry References
Astuti, H. J., & Nagase, K. (2014). Patient loyalty to healthcare organizations: relationship marketing and satisfaction. International journal of management and marketing research, 7(2), pp. 39–56
Fellows, J. (2013). Rebranding Helps Sharpen Marketing Strategy. Healthcare Marketing Advisor 14(11), 4-7.
Garcia, M. R., & Gonzalez, L. I. A. (2013). The untapped potential of marketing for evaluating the effectiveness of nonprofit organizations: a framework proposal. International review on public and non-profit marketing, 10(2), pp. 87-102
