Chapter 1

The Role of Marketing

in Health Care Organizations
 LEARNING OBJECTIVES
1. What are the major areas in health care in
which marketing is regularly applied and
practiced?
2. What is the purpose of marketing thinking
and planning in health care organizations?
3. What are the major concepts, tools, and skills
in marketing?
4. How is marketing normally organized in
health care organizations?
 LO1. What are the major areas in health
care in which marketing is regularly
applied and practiced?

• Marketing takes place when at least one

party to a potential transaction thinks about
means of achieving desired responses from
other parties including
– Purchasing a product or service
– Increasing awareness, interest, or preference
toward an offering or supplier
– Changing behavior
– Voting or expressing of preference of some kind
 LO2. What is the purpose of marketing
thinking and planning in health care
organizations?

• Purpose of marketing
– “old” Transaction view - sell more
– “new” Customer satisfaction view - serve the customer
• “New Marketer’s” purpose - create a long-term,
trusted, and valued relationship with the customer
by getting the whole organization to think about
and serve customers and their interests
 LO3. What are the major concepts,
tools, and skills in marketing?

• Concepts - the “who” of market segmentation

and target market (CCDVTP)
– Create
– Communicate
– Deliver value - as perceived by the customer
– Target market - well-defined population
– Profitability - even for non-profits
 LO3. What are the major concepts,
tools, and skills in marketing? (cont)

• Tools
– “Old” Tools - 4 Ps of the marketing mix
• Product - features, benefits, styling, packaging
• Price - list price, rebates, discount program
• Place - where is it available and distribution strategies
• Promotion - advertising, personal selling, direct marketing
– “New” Tools - 4 As of marketing
• Awareness of the offering by the consumer
• Acceptable - value of the offering by the consumer
• Available - right time and place for the consumer
• Affordable - value of the offering by the consumer
– Positioning - requires how to best implement 4As of the
target market
 LO3. What are the major concepts,
tools, and skills in marketing? (cont)

• Using concepts and tools for a robust

marketing strategy:
– Segment first
– Target position next, then
– Determine 4As, and finally
– Set appropriate 4 Ps
 LO3. What are the major concepts,
tools, and skills in marketing? (cont)
• 7 Skills
– Marketing research
• Primary data - firsthand observation, interviews, surveys, and
statistical data on customer attitudes and needs
• Secondary data - sources such as population size, age,
income, and education distribution
– Product design - to appeal to consumer
– Distribution - readily accessible to customers
– Pricing - internal constraints and reality of the marketplace
– Advertising - best media mix (TV, billboards, newspaper,
magazine, radio)
– Sales promotion - incentives to stimulate trial
– Sales management - hire, train, compensate, motivate and
evaluate sales people
 LO4. How is marketing normally
organized in health care organizations?
• Two new positions
– Director of Marketing - provides and orchestrates
marketing-related activities and resources
– Vice-president of marketing - develops policies and
strategies and brings the voice of the customer into
management and board meetings
• Public relations (PR) person vs. Marketing
person
– PR person -Trained in communication skills and work
closes with the media
– Marketing person - Trained in economic analysis and
social sciences to understand and analyze markets
and customer choice behavior
 CONCLUSION

• Marketing plays important health care role

• Modern marketers start with consumers
instead of products or services
• Marketers have traditional skills
• Traditional skills must be supplemented with
new skills