Health Care Strategy
The subject of this essay is strategic marketing in the health care industry. To begin, there is an examination of the conceptual principals of marketing. Then, the application of these principals in the health care industry is explored. The essay concludes with a discussion of the challenges of health care marketing and the new possibilities presented to marketing as a result of evidence-based medicine and consumer-driven health care.
Keywords Consumer Driven Health Care; Health Care Marketing; Integrated Marketing Communication; The Marketing Mix
Health Care Management: Health Care Strategy
Traditionally, the sales or marketing of health care services was considered unprofessional and unethical. Any activity suggesting sales, advertising, or promotion was considered tantamount to selling and promoting sickness. People chose their doctor based on family tradition, word of mouth, or the doctor's reputation in the community.
With the explosive growth in health care in the mid-1960s, choosing a physician, hospital, or other health care provider became a more complicated task, both for consumers and providers. A consumer could now choose between the family general practitioner or an array of specialists. With the development of health care systems in the late 1970s, the intensity of competition for patients increased and health care administrators began building the marketing departments in their organizations to attract more patients (Beckham, 2001).
Concepts in Marketing
The Marketing Mix
Marketing is a process that facilitates the exchange between the maker of a product and a buyer or potential buyer of that product. The functions of marketing include:
- Determining the wants or needs of customers (product design);
- Determining the best way of getting the product to the customer (product placement or distribution);
- Identifying what price a customer is willing to pay (pricing);
- Identifying the strategies that will motivate the customer to buy the product (promotion).
Traditionally, these functions are referred to as the four Ps of marketing, or the marketing mix. Generally, people think of marketing as only the promotion aspect, or the sales function of a company. For marketing to be effective, however, each of the four Ps must be addressed. The proportion of resources dedicated to each "P" may vary depending on the specific product, the current market for the product, and the overall environment (Clarke, 2004).
Strategic Marketing Communication
Although communication occurs with each of the four Ps in the marketing mix, what is generally considered marketing communications occurs in the element of promotion (Smith & Taylor, 2004). The marketing communication tools used in promotion include: Selling, advertising, direct marketing, publicity and public relations, exhibitions, sponsorships, corporate identity, packaging, merchandising, word-of-mouth, and e-marketing (Smith & Taylor, 2004).
Strategic marketing communication can be defined as how an organization decides on the specific tactics and tools it will use to promote its product. Varey (2001) defines the process of formulating a strategy for marketing communication as "a design for enabling and facilitating appropriate forms of interaction, relationship, and so on." Vickers (cited in Vary, 2001) describes seven levels of communication that form the basis of communication interaction and relationships. The seven levels both coexist and overlap. The levels (violence, threat, bargain, information, persuade, argument, and dialogue) are based on degrees of trust and appreciation.
This understanding of the degrees of trust is particularly pertinent to health care communication where 'information' has largely been the strategy most used. As Vickers describes "information" in his communication taxonomy: "The receiver must not only trust the giver's competence and reliability, they must also be assured that the giver's appreciative system corresponds sufficiently with their own to ensure that what is received fits the receiver's needs (Varey, 2001, p. 293). This trust was, and to a large extent still is, the foundation of the doctor-patient relationship, relationship that has also shaped health care policy and health care finance.
Integrated Marketing Communication
The 'promotion' component of the marketing mix includes a variety of activities: Advertising sales promotions, direct mail, telemarketing, e-commerce, and events. In the corporate organization, a different department or office is responsible for each element of promotion activity. Integrated marketing communications (IMC) is an approach to the marketing function that emphasizes the delivery of a unified message that is consistently reinforced across the marketing mix and across all the interactions of an organization and its customers, both internal and external. This consistent and unified message serves to "wrap communications around customers and move them through the various stages of the buying process" (Smith & Taylor, 2004). In this way, IMC serves to build and strengthen the relationship between the customer and the organization. Through IMC, the marketing paradigm shifts from discrete individual transactions to total management of the transaction process. The focus shifts from knowledge of the product to knowledge of the customer (Wright & Taylor, 2005). This approach serves to not only secure new customers, but of more strategic importance, serves to build brand loyalty and retain customers over the long term.
The Evolution of Marketing in Health Care
Beckman (2001) provides a retrospective view of marketing beginning in the 1980s. Early attempts at marketing health care consisted principally of adopting advertising tools that predominated in non-health businesses. As new marketing approaches evolved in non-health care businesses, health care — in particular hospitals, adopted these new approaches. Some of these adaptations worked, some did not. Among the approaches that Beckman presents as successful were the ability to grow new markets, develop new services, positioning, customer relations and service excellence, physician productivity, and leadership. These successful approaches exploited health care providers' ability to capitalize on new technologies and new facilities that projected an image of "clinical sophistication" that was effective in marketing campaigns (Beckman, 2001). The cumulative effect of these strategies was enhanced by population growth, especially in the suburban areas of major cities. Beckman observes that in this case, providers were not so much skilled marketers as they were lucky enough to be at the right place at the right time.
Beckman claims that the strategies that haven't worked include branding, building "We Care" campaigns, acquiring private practices, and sales (i.e. traditional advertising). Branding has been a less than successful strategy in large part because of the impact of mergers and acquisitions among smaller hospitals. A hospital, which may originally have had a solid and successful reputation in the market, when morphed into a component of a larger or newly created health system, would lose its brand identity, and frequently its position in the market.
"We Care" campaigns were an attempt to develop a positive customer care image. The problem with "We Care" campaigns is two-fold.
- First, is the definition of care, which often is expressed in terms of what the provider thinks the customer should have as opposed to what the customer wants.
- Second, is the problem of differentiating care at the...
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