Market segments help organizations determine how to appropriately market products and services to consumers. For example, consider baby aspirin. This product is used by pediatric patients for pain relief and by older adults for the prevention of heart conditions. The plan for marketing baby aspirin would vary depending on the market segment, particularly in relation to communication techniques. Techniques used with parents of young pediatric patients would likely differ from those used with older adults. Communication, whether written or oral, is a key element of marketing. For this Discussion, you examine the impact of market segments on health care marketing.To prepare:Scan current health care delivery systems in your local community and select a health care organization. Consider that you have been hired by this organization’s board of directors to develop a new segmentation service.Identify market-based segments of the health care organization you selected.Note: For this Discussion, you are required to complete your initial post before you will be able to view and respond to your colleagues’ postings. Begin by selecting the “Post to Discussion” link and then select “Create Thread” to complete your initial post. Remember, once you click submit, you cannot delete or edit your own posts, and cannot post anonymously. Please check your post carefully before clicking Submit!Post an executive summary that addresses the following:Describe market-based segments of the health care organization you selected. Include demographic characteristics of segmented consumers that influence buying behaviors of the market. Then, analyze how the organization is responding to these market segments. Finally, evaluate the impact of these market segments and consumers on the future of the organization’s market. Support your response by identifying and explaining key points and/or examples presented in the Learning Resources.Note: Your executive summary should be no more than 600 words. Be sure to apply best practices of business communication when writing your executive summary.
marketing_health_services_book.pdf
a_youth_led_social_marketing_intervention_to_encourage_healthy_lifestyles..pdf
one_size__never__fits_all._segment_differences.pdf
personal__social__and_environmental_correlates_of_physical_activity_in_adults_living_in_rural_south_west_england..pdf
understanding_heterogeneity_am.pdf
Unformatted Attachment Preview
MARKETING
HEALTH
SERVICES
AUPHA
Editorial Board
HAP
Frederick J. Wenzel
University of St. Thomas
G. Ross Baker, Ph.D.
University of Toronto
Sharon B. Buchbinder, R.N., Ph.D.
Towson University
Caryl Carpenter, Ph.D.
Widener University
Leonard Friedman, Ph.D.
Oregon State University
William C. McCaughrin, Ph.D.
Trinity University
Thomas McIlwain, Ph.D.
Medical University of South Carolina
Janet E. Porter, Ph.D.
University of North Carolina at Chapel Hill
Lydia Reed
AUPHA
Louis Rubino, Ph.D., FACHE
California State University–Northridge
Dennis G. Shea, Ph.D.
Pennsylvania State University
Dean G. Smith, Ph.D.
University of Michigan
Mary E. Stefl, Ph.D.
Trinity University
Linda E. Swayne, Ph.D.
University of North Carolina–Charlotte
Douglas S. Wakefield, Ph.D.
University of Iowa
MARKETING
HEALTH
SERVICES
Richard K. Thomas
Health Administration Press, Chicago
AUPHA Press, Arlington, VA
AUPHA
HAP
Your board, staff, or clients may also benefit from this book’s insight. For
more information on quantity discounts, contact the Health Administration
Press Marketing Manager at (312) 424-9470.
This publication is intended to provide accurate and authoritative information in regard to the subject matter covered. It is sold, or otherwise provided, with the understanding that the publisher is not engaged in rendering
professional services. If professional advice or other expert assistance is
required, the services of a competent professional should be sought.
The statements and opinions contained in this book are strictly those of
the author and do not represent the official positions of the American
College of Healthcare Executives, of the Foundation of the American
College of Healthcare Executives, or of the Association of University
Programs in Health Administration.
Copyright © 2005 by the Foundation of the American College of Healthcare
Executives. Printed in the United States of America. All rights reserved.
This book or parts thereof may not be reproduced in any form without
written permission of the publisher.
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Library of Congress Cataloging-in-Publication Data
Thomas, Richard K., 1944–
Marketing health services / Richard K. Thomas.
p. cm.
Includes bibliographical references and index.
ISBN 1-56793-234-7 (alk. paper)
1. Medical care—Marketing. I. Title.
RA410.56.T48 2004
362.1’068’8—dc22
2004059852
The paper used in this publication meets the minimum requirements of
American National Standard for Information Sciences—Permanence of
Paper for Printed Library Materials, ANSI Z39.48-1984. ∞
Acquisitions editor: Audrey Kaufman; Project manager: Jane C. Williams;
Cover designer: Trisha Lartz
Health Administration Press
A division of the Foundation
of the American College of
Healthcare Executives
One North Franklin Street
Suite 1700
Chicago, IL 60606
(312) 424-2800
Association of University Programs
in Health Administration
2000 N. 14th Street
Suite 780
Arlington, VA 22201
(703) 894-0940
CONTENTS IN BRIEF
Introduction………………………………………………………………………………..xi
Part I
Healthcare Marketing: History and Concepts
1
The History of Marketing in Healthcare………………………………..3
2
The Challenge of Healthcare Marketing ………………………………23
3
The Evolving Societal and Healthcare Context……………………..51
4
Basic Marketing Concepts ………………………………………………….77
5
Marketing and the Healthcare Organization…………………………99
Part II Understanding Healthcare Markets
6
The Nature of Healthcare Markets ……………………………………133
7
Healthcare Consumers and Consumer Behavior ………………….167
8
Healthcare Products and Services ……………………………………..197
9
Factors in Health Services Utilization ………………………………..223
Part III Healthcare Marketing Techniques
10
Marketing Strategies………………………………………………………..247
11
Promotions, Advertising, and Sales ……………………………………275
12
Emerging Marketing Techniques ………………………………………301
v
vi
Contents
Part IV Managing and Supporting the Marketing Effort
13
Managing and Evaluating the Marketing Process ………………..333
14
Marketing Research in Healthcare …………………………………….351
15
Marketing Planning…………………………………………………………377
16
Sources of Marketing Data……………………………………………….399
Part V The Future of Healthcare Marketing
17
Healthcare Marketing in the Twenty-First Century……………..427
Glossary …………………………………………………………………………………..441
Index……………………………………………………………………………………….457
About the Author ……………………………………………………………………..469
DETAILED CONTENTS
Introduction………………………………………………………………………………..xi
Part I
Healthcare Marketing: History and Concepts
1
The History of Marketing in Healthcare………………………………..3
The History of Marketing ……………………………………………………..3
Marketing in Healthcare………………………………………………………6
Evidence of the Acceptance of Marketing ……………………………….17
Case Study 1.1 An Early Attempt at Healthcare Marketing…………..21
2
The Challenge of Healthcare Marketing ………………………………23
Why Healthcare Is Different………………………………………………..23
Why No Healthcare Marketing? …………………………………………..34
Why Healthcare Marketing Is Different ………………………………..38
Developments Encouraging Healthcare Marketing ………………….42
Reasons to Do Healthcare Marketing…………………………………….45
Case Study 2.1 Marketing Up the Wrong Tree……………………………49
3
The Evolving Societal and Healthcare Context……………………..51
The Emergence of Healthcare as an Institution……………………….51
The Cultural Revolution and Healthcare ………………………………58
Changing Societal Context ………………………………………………….59
Healthcare Developments…………………………………………………….65
Case Study 3.1 Capturing an Emerging Market…………………………73
4
Basic Marketing Concepts ………………………………………………….77
Marketing Concepts……………………………………………………………77
Components of Marketing……………………………………………………79
Healthcare Products and Customers ……………………………………..85
The Four Ps of Marketing ……………………………………………………90
Other Marketing Processes …………………………………………………..94
vii
viii
Detailed Contents
5
Marketing and the Healthcare Organization…………………………99
Factors Affecting the Adoption of Marketing ………………………….99
Healthcare Organizations and Marketing……………………………102
Stages of Healthcare Marketing ………………………………………….119
Case Study 5.1 Low-Intensity Marketing………………………………..129
Part II Understanding Healthcare Markets
6
The Nature of Healthcare Markets ……………………………………133
Marketing’s Context ………………………………………………………..133
Defining Markets …………………………………………………………….134
Delineating Geographic Market Areas…………………………………142
Profiling Healthcare Markets …………………………………………….146
From Mass Market to Micromarket……………………………………..151
The Effective Market ………………………………………………………..153
Evaluating Market Areas………………………………………………….155
The Changing Nature of Markets ……………………………………….157
Case Study 6.1 Determining the Effective Market ……………………161
Case Study 6.2 Is There Really a Market for It?……………………….165
7
Healthcare Consumers and Consumer Behavior ………………….167
The Healthcare Consumer …………………………………………………167
Why Healthcare Consumers Are Different ……………………………168
Why Healthcare Consumers Are Similar………………………………169
The Variety of Healthcare Customers …………………………………..170
Characteristics of Healthcare Customers ………………………………175
Consumer Attitudes …………………………………………………………181
Segmenting the Market for Healthcare Products ……………………185
Consumer Behavior ………………………………………………………….188
Consumer Decision Making……………………………………………….190
8
Healthcare Products and Services ……………………………………..197
Defining the Product ……………………………………………………….197
Ways to Conceptualize Products ………………………………………….201
Common Healthcare Products ……………………………………………208
9
Factors in Health Services Utilization ………………………………..223
Defining Demand ……………………………………………………………223
Factors Influencing Demand……………………………………………..231
The Elasticity of Health Services Demand …………………………….236
Measuring Health Services Utilization ………………………………..237
Predicting the Demand for Health Services ………………………….239
Case Study 9.1 Using Lifestyle Analysis to Predict the
Use of Behavioral Health Services……………………243
Detailed Contents
Part III Healthcare Marketing Techniques
10
Marketing Strategies………………………………………………………..247
Strategy Defined ……………………………………………………………..247
The Strategic Planning Context …………………………………………249
The Strategic Planning Process …………………………………………..249
Developing the Strategic Plan…………………………………………….257
Strategic Options……………………………………………………………..258
Strategy Development and the Four Ps …………………………………262
Branding as a Strategy……………………………………………………..267
Case Study 10.1 Strategy Development ………………………………….271
Case Study 10.2 Establishing a Brand …………………………………….273
11
Promotions, Advertising, and Sales ……………………………………275
Promotional Mix ……………………………………………………………..275
Promotional Categories …………………………………………………….275
Media Options…………………………………………………………………288
Integrated Marketing……………………………………………………….292
Case Study 11.1 Integrated Marketing …………………………………..297
12
Emerging Marketing Techniques ………………………………………301
Emerging Marketing Techniques ………………………………………..301
Limitations to Contemporary Marketing Techniques ……………..315
Case Study 12.1 A Concierge Plan ………………………………………..319
Case Study 12.2 Promoting Heart Health Using Customer
Relationship Management ……………………………323
Case Study 12.3 Effective Web Integration:
A Hospital Case Study …………………………………327
Part IV Managing and Supporting the Marketing Effort
13
Managing and Evaluating the Marketing Process ………………..333
From Marketing Plan to Marketing Campaign…………………….333
The Players in the Marketing Process……………………………………341
Components of a Marketing Department……………………………..344
The Marketing Budget ……………………………………………………..346
Marketing Management……………………………………………………348
14
Marketing Research in Healthcare …………………………………….351
The Scope of Marketing Research ………………………………………..351
Marketing Research and Healthcare Decision Making …………..356
Steps in the Marketing-Research Process ……………………………….357
Primary Data-Collection Methods ………………………………………363
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x
Detailed Contents
15
Marketing Planning…………………………………………………………377
The Nature of Marketing Planning…………………………………….377
The Marketing-Planning Process ………………………………………..379
Implementing the Marketing Plan ……………………………………..387
The Evaluation Plan ………………………………………………………..389
Case Study 15.1 Sample Goals, Objectives, and Activities …………393
Case Study 15.2 Marketing Planning for a New Program …………395
16
Sources of Marketing Data……………………………………………….399
The Data Challenge …………………………………………………………399
Data Dimensions …………………………………………………………….402
Data-Generation Methods …………………………………………………405
Sources of Data for Healthcare Marketing ……………………………415
Health Data and the Internet ……………………………………………419
Part V The Future of Healthcare Marketing
17
Healthcare Marketing in the Twenty-First Century……………..427
Where Healthcare Marketing Is Today…………………………………427
Where Healthcare Marketing Is Going ………………………………..429
Trends Affecting the Future of Healthcare Marketing ……………430
Healthcare Marketing: Seizing the Opportunity ……………………435
Glossary …………………………………………………………………………………..441
Index……………………………………………………………………………………….457
About the Author ……………………………………………………………………..469
INTRODUCTION
M
ost observers consider 1977 the “official” launch data of marketing as a component of healthcare. The first conference on healthcare marketing was sponsored by the American Hospital Association,
and the first book on the topic was published in 1977. While formal marketing activities became common early on among retail-oriented healthcare
organizations like health insurance, pharmaceuticals, and medical supplies,
health services providers had long resisted the incorporation of formal marketing activities into their operations. Of course, hospitals and other healthcare organizations had been doing “marketing” under the guise of public
relations, physician relationship development, community services, and other
activities, but few health professionals equated these with marketing. To
many, marketing meant advertising, and, until the 1970s, advertising on the
part of health services providers was considered inappropriate.
The formal recognition in the 1980s of marketing as an appropriate
activity for health services providers represented an important milestone
for healthcare. The acceptance of marketing by health professionals opened
the door for a variety of new activities on the part of healthcare organizations. This development led to the establishment of marketing budgets and
the creation of numerous new positions within the organizations, culminating with the establishment of the position of vice president for marketing in many organizations. This development opened healthcare up to an
influx of concepts and methods from other industries and helped to introduce modern business practices into the healthcare arena.
While most would agree that, after years of grudging acceptance, marketing has become reasonably well established as a legitimate healthcare function, the process has not been without its fits and starts. Healthcare has
demonstrated surges of interest in marketing, followed by periods of retrenchment when marketing, and marketers, were considered unnecessary and/or
inappropriate. Periods of prosperity for marketing have alternated with periods of neglect over the past 25 years. There have been periods of exuberant,
almost reckless, marketing frenzy and periods of retrenchment. There has
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Introduction
been ongoing tension between those who eagerly accepted marketing as a
function of the healthcare organization and those who doggedly resisted its
intrusion into their realm. With each revival of marketing in healthcare, new
wrinkles have been added that made the “new” marketing, if not better, at
least different from previous approaches.
Once the dam broke and marketing made its initial incursion into
healthcare, a stampede ensued as healthcare organizations, led by major
hospitals, established aggressive marketing campaigns. Urged forward by
marketers recruited from other industries, hospitals and other healthcare
organizations embarked on a whirlwind of marketing activity. The effectiveness of these initial marketing campaigns did not match their proponents’ enthusiasm, and it was soon realized that marketing healthcare was
not the same as marketing hamburgers. The approaches required for the
healthcare arena were not easily adapted from other industries, and much
of what was effective elsewhere was not necessarily effective in the healthcare industry. The evolution of marketing in healthcare is discussed in a
later section within the context of developments in the healthcare field.
Today, healthcare is still struggling to find the appropriate role for
marketing, and marketers continue to strive to find their niche within healthcare. The industry still suffers from a lack of standardization when it comes
to marketing, and this has not been helped by the fact that few graduate
programs offer coursework in healthcare marketing. Today, healthcare marketing appears poised to play a greater role in the new healthcare environment. But, as the chapters illustrate, this is likely to be a different kind
of marketing than that envisioned in the mid-1970s when the first marketing efforts were introduced into healthcare.
Before the 1980s, marketing campaigns targeting healthcare consumers were relatively rare. In fact, the marketing activity that existed was
primarily on the part of industry segments that were not involved in patient
care (e.g., pharmaceuticals and insurance) and whose targets were not
patients but other players in the healthcare arena (e.g., physicians and
employers). Healthcare organizations did not need to market their services.
The industry was product driven and most “producers” of services operated in semimonopolistic environments. There was an almost unlimited
flow of customers (patients), and revenues were essentially guaranteed by
third-party payers.
This situation began to change in the early 1980s. …
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