Market Segmentation in Healthcare Depertment - Research Paper Example

Market Segmentation Introduction Market segmentation is categorization of potential customers into different classes based on one or more characteristic. It is aimed at identifying customers who have similar needs and demands for a product or service i.e. clusters of needs. Market segmentation is targeted at matching the customers’ needs in the best way. This is because customers have different needs. Segmentation also enhances more profit for the business. Due to differences in disposable income, customers have varying sensitivity to prices. Therefore, segmentation, the business can increase its average profit by targeting different segments. In addition, market segmentation enhances better opportunity for the business to grow, enhances customer retention, ensure proper communication with the target market and increases market share for the business (Kotler & Keller, 2006). This article discusses market segmentation a hospital as the strategic business unit targeting two market segment i.e. diabetic obese population and diabetic hypersensitive population. Hypertensive population Hypertension is a common condition affecting the majority of the population in the world today. Though the exact cause of hypertension is not known, there are a number of factors associated with the condition. Diabetes is one of the major factors the is highly associated with hypertension. Adler Stratton and Neil (2000) found that an estimated 75% of diabetic patients develop high blood pressure in the long run. According to CDC (2011a), about 25.8 million people in the United States have diabetes. This comprises 8.3% of the American population. Mental Map for Hypertensive Population Hypertensive patients perceive medical care being beneficial to their health. According to Inoue, Inoue & Matsumura (2010), many patients who received their medical attention from clinics were seen more often and for a prolonged period of time. They also observed that such patients were less likely to develop complications as compared to those who sought their medical care from hospitals. Private clinicians are perceived to know their patients’ medical status well and thus preferred more than government hospitals. Rationale of the two market segments Due to the high prevalence of diabetic hypertension and diabetic obesity and the perceived preference for private clinics over government hospitals, a hospital targeting this markets likely to succeed. In addition, the target market also requires the service. Therefore, the organization just requires proper strategies to tap the market. Effective Segmentation Criteria for Hypertensive Population Needs -Based Segmentation When a business is drawing up its marketing strategies, it must establish the needs of its market segments. Markets are segmented based on a match between advantages being offered by the business and the need of the prospective customer. Hypertensive population needs medical attention. Quality oriented segmentation demands the hospital to offer quality services to its clients regardless of the price. In this case, quality of medical care determines success of the hospital. On the other hand, price oriented segmentation involves offering the lowest possible price for the service as the clients are price sensitive. In this case, the hospital needs to offer low prices for its services compared to its competitors. Segment Identification Demographic Segmentation It divides customers based on variables such as gender, ethnicity, age, education, religion, income, social class, family size, lifestyle, nationality and occupation. Hypertension affects all these demographic categories though there are significant differences from one group to another (CDC, 2011b). Lifestyle segmentation Hypertension is a lifestyle disease. Though it has other causes, a person lifestyle greatly determines if one will get the disease or not. Therefore, this can be a success factor while segmenting the market for hypertensive patients. Behaviors Segmentation This categorizes customers based on their actual behavior toward the product or service. Customer’s knowledge about the product or service, the attitude towards it and the response determines the grouping of customers. Hypertensive patients are aware of their condition and must use the services making this an effective market segment for hypertensive patients. Segment Attractiveness In hospital business, hypertensive population is an attractive market segment. High prevalence of the disease means that the business has more customers for its products. Prospective market growth for this target market is attractive. This is because the number of hypertension case is on the rise, and there is projected increase (CDC, 2011b). The number of hospitals and clinics is on the rise. However, despite the increase in competition for clients by hospitals and clinics, the business is expected to blossom. This is because the number of clients is also on the rise and the service offered is a must-use for the client. Segment Profitability Segment profitability is a direct reflection of market segment. Profitability of a profit segment is calculated by setting off its returns against its cost. It is influenced by various environmental factors that influence customer behavior and the competitiveness of the service or the product. Populations suffering from hypertension are either insured, uninsured, under-insured, or they pay for themselves i.e. self pay. Mode of payment influences the profitability segment due to the time lag between service delivery and settlement of payment. Segment positioning Positioning is the improvement of the image of a product or service to the target customers by an organization. Positioning is essential as it creates a perception of the product in customers mind. Perception of the product determines if the customer will buy the product or not. Positioning involves impacting the product on the mind of the customer. Segment Market profitability Positioning of an organization determines the buying behavior of the customers which in turn influences the profitability of the business. Profitability of the hospital will be dependent on the number of patients it receives at a given time. The number of patients seeking medical attention will be determined by how well the hospital has positioned itself in the market e.g. through advertising. Value proposition This is the promise by an organization to its customers that the product or service will give them more value or it will solve an existing problem. The hospital’s proposition to give better quality medical services to hypertension patients can increase its market share. However, the customer must experience the value. Therefore, the hospital should offer better quality services to its customers as compared to its competitors. Investment Planning Investment in the right area will ensure proper service delivery to customers. The hospital should invest wisely in infrastructure and staff. The hospital should have qualified staff and modern equipments to ensure quality services. The business should also invest in advertisement. Segment “Acid Test” This involves evaluating the take of the customer to the product. It entails testing the customer level of needs. If the level of need is high, the customer will likely to be interested in the product. It involves evaluating if the product will solve an existing problem or if it will give extra value to the customer. Therefore, the organization must be communicating to the customer effectively and the customers must believe in the product. Marketing – Mix strategy This is a mixture of all elements of the marketing process. It is a combination of product, price, promotion and place which is commonly known as the 4Ps. Product This refers to the elements of the product that satisfy the customer. They create value to the prospective customer. In a hospital set up, this can be the availability of good hospital facilities and qualified staff. Hospital environment should be appealing to the customer. Price Price has a major influence on the response of the customer to the product. It communicates vital information to the customer regarding a product just as advertising does. People attribute value of a product to the price. Low prices do not necessarily mean increased volumes of sales. In fact, low prices can lead to reduction in sales as customer perceive low price product as being of low quality. An organization should be strategic when pricing their products. It should put into consideration competition for the product, sensitivity or insensitivity of the customers, price elasticity, values of the product versus the price, and the market. Place This is provision of products in a place that is accessible the customer. It entails distribution of the product to the customer. Placing of the products communicates about the quality of the product which determines who will buy or not buy the product. Promotion This is passage of information regarding the product to the target market. Apart from the message to be delivered, the channel of distribution also matters a lot. Promotion section is divided into six categories i.e. public relations and publicity, advertising, direct marketing, premium items, product marketing materials, promotion and events and sales force. Education for Target Market Population Diabetes Triggers Obesity and Hypertension Diabetes is a condition characterized by an increase in blood sugar level above acceptable limits. Increase in blood sugar level triggers obesity (body overweight) and hypertension (high blood pressure). Presence of high blood sugar in the blood increase blood viscosity. Increased blood viscosity lowers the flow of the blood in within the blood vessels. The body responds by increasing the heart rate in an attempt to increase the flow of blood. This leads to development of high blood pressure. When the glucose level increases in the blood stream, the body responds by converting excess glucose into fat. The fat is deposited in the adipose tissues causing obesity. Hypertension Population Needs People suffering from hypertension require adequate medical care that is affordable. Anti-hypertension therapy is important to manage the condition. Patients also need to follow doctor’s instructions as well as take the drugs as prescribed. This means that communication between the patient and the doctor should be improved to ensure proper passage of information. Frequent patent follow-up with the doctor is also essential. Since there is a high connection between obesity and hypertension, patients should be advised to change their lifestyles to avoid being overweight hence reduce chances of getting hypertension. Exercising and not smoking also significantly reduce the chances of getting hypertension. Hypertension Population Needs People affected or at the risk of being affected by hypertension should seek medical attention. Health education is also essential for hypertension patients. Patients should be educated on healthy living. Reduced alcohol consumption, not smoking, reduced fat energy intake, increased intake of proteins and fluids and physical exercises significantly reduce the severity of the condition. Hypertension Population Preferences Hypertensive patients prefer non-therapeutic interventions as opposed to using drugs. Due to the side effects associated with drugs, patients often prefer non-therapeutic measures such as dietary management. Since hypertension is irreversible, non-therapeutic intervention such as lifestyle change is more effective compared to use of drugs. Conclusion The article concludes that the strategic business unit of the hospital should improve their services and enhance their marketing strategies to enhance competitive of the business. Since the target market is viable, the business should position itself strategically to order to curve a market niche. References Adler, A.I., Stratton, I.M., & Neil, H.A., (2000). Association of systolic blood pressure with macrovascular and microvascular complications of type 2 diabetes (UKPDS 36): prospective observational study. BMJ, 321:412-419. Centers for Disease Control and Prevention (2011a). National diabetes fact sheet: national estimates and general information on diabetes and prediabetes in the United States, 2011. Atlanta, GA: U.S. Department of Health and Human Services. Centers for Disease Control and Prevention (2011b). Prevalence of Hypertension and Controlled Hypertension — United States, 2005&ndash2008. MMWR, 60(01); 94-97 Inoue, M., Inoue K., & Matsumura, S. (2010). Hypertensive patients’ perceptions of their physicians’ knowledge about them: a cross-sectional study in Japan. . BMC Family Practice, 11:56. http://www.biomedcentral.com/1471-2296/11/56 Kotler, P., & Keller, K. L. (2006). Marketing Management. Prentice Hall, NY. Read More