Competition, Marketing Mix, and Pricing - Research Paper Example

? COMPETITION, MARKETING MIX AND PRICING Introduction Maryland General Hospital has been serving people for more than a century. The hospital also provides special facilities to the patients. This report will emphasize the key characteristics of the patients, competitive environment of the health care sector and the strategic solutions for the organization. In this report, the best marketing mix tool would be selected for Maryland General Hospital with respect to the health care market of Baltimore. The pricing strategies will be discussed in this report for finding out the best pricing strategy practiced in that market and most effective for this specific organization. Key Characteristics of the Users Maryland General Hospital offers wide range of services to its customers with different characteristics and with different needs and requirements. The hospital is based in Baltimore City, which is the largest city of Maryland. A sharp decline can be found in the Baltimore’s poverty line. Most of the people who find themselves under the federal poverty line are moving to the suburban areas from the urban or metro cities. In the city of Baltimore, there are more than 21,000 people who are below poverty line, but recently a major decline in the rate of the poor population has taken place. Maryland General Hospital targets people from both the metro and suburban area of the Baltimore. They offer specialized premium services for the premium patients with high income level and also offer general service for the mass. They also offer different special services to different demographic strata, such as children care, senior citizen care and women care. For example, Heart catheterization is provided to adult and children separately. The Hospital offers some specialized service within the framework of women care. The Competitive Environment of the Health Care Provider The competition generally arises on one or more elements like quality, price, convenience etc. Competition eliminates the inefficiency of the players. But in case of Maryland General Hospital, there is no such price competition among the leading players in the market as 75% of total cost for the treatment of an individual is provided by the health insurance company (Kronick, Goodman & Wennberg, 1993). Different hospitals try to differentiate its services on the basis of quality. If Porter five forces model is applied for Maryland General Hospital it will be clear that most of the competitions are coming from the rival hospitals. The competition is immense for Maryland General Hospital. There are 14 hospitals in Maryland. All the hospitals provide customized services. A study suggests that 58% of the patients recommended for going again to Maryland General Hospital while 77% people recommended for going Greater Baltimore medical centre. Many people also recommended for Good Samaritan Hospital. Even in this respect the Mercy Medical Centre Inc has also got high points than Maryland General Hospital. The hospital faces quite low bargaining power from the suppliers as there are many suppliers present in the market. The timely delivery of equipment and medicines are very essential for the hospital. The hospital needs to depend highly on its suppliers to maintain goodwill in front of the customers as most of the hospitals are competing mostly on the quality and not on the price. There is no such threat from a new entrant in the market as the set up cost is very high for any new entrant and the physical evidence is the most important factor for any hospitals so the new entrant has to face a tough competition from the old players as the physical evidence is very strong of the old players. There is no such substitute in hospital’s product as it is a necessary service for all. The buyers bargaining power is also strong but as mostly the insurance company pays the bills, the bargaining power gets reduced. Tools of Marketing Mix Marketing comprises of seven elements. For the health care sector all the 7P’s of marketing are discussed as follows: Product: Maryland General Hospital has services for its “Inpatient”, “Outpatient”, “Patient/Family services”, “Community outreach” and “Imagine services”. Examples of “Inpatient” services are Elderly /Disabled care, Birthing room, Heart Surgery, Infection isolation room, Heart Catheterization, Cancer services, Psychiatric services. The examples of Outpatient services are Alzheimer centre, Arthritis Centre, Certified trauma centre etc. Ambulance service, Patient support group, Transportation for elderly/handicapped these are all examples of Patient/ Family services. “Health screening” and” Health fairs” are the examples of Community Outreach. Imaging Services are – CT scanner, Diagnostic radioisotope facility, Single photon emission CT etc. Maryland General Hospital provides all the services under one roof for customer satisfaction (Ummidtown (a), 2013). Price: Most of the customers are coming under the health care insurance plan. The hospital provides plan that come under the insurance coverage and those customer who does not have any insurance coverage for some services hospital provides them compensated services. Place: The distribution network of the hospital is widely spread. They have a wide spread chain of suppliers for supplying the medical equipments and other facilities. In the forward channel, they have many representatives or agencies in the suburb areas who recommend patients to the Hospital. Promotion: The promotional activities include building good relationship with the doctors. With recruiting good doctors the hospital can promote its brand. Except the broadcast media advertisement, the hospital should leverage on social media networking as well. Engaging the patients into the social networking conversation, providing them necessary information about the service can create awareness among the first time user of the service. Building brand through the promotions by doctors can create the faith among the patients. Providing hoardings and appointing agents also help the hospital to acquire and retain the customers. Process: The hospital follows a smooth process of information providing to the customers. By calling in their helpline number the customers can get all the relevant in formations required. In emergency service the process maintained by the hospital is very systematic. Physical Evidence: It is the most important tool for service marketing. The hospital generally provides the modern equipment and facilities to the patients to create an impact in the patient’s mind. It has more than 500 doctors with 30 specialties. Such physical evidence is enough to create impression in the patient’s eyes. People: The patients from all age group and all income background are the most important element for the hospital. The customers are god and for satisfying their God, The hospital has kept immense numbers of facilities for their patients. The Best Pricing Strategy As the patients mostly come under the coverage of any government or private insurance policy so in that case a fix pricing strategy is maintained and that would be matching with the other hospitals in the area. Most of the hospitals cannot maintain a transparency while providing the price offerings to the patients. Some patients do not come under the insurance benefits. For them it is necessary to provide the best compensated pricing. When a patient would come for admission, it is advised to communicate with the patient regarding the pricing. They should offer customized pricing policies to the patients. For the patients who belong from the below federal poverty level, the hospital should offer compensated pricing. For premium patients the price structure should be high and if a patient takes more than one medical facilities from the hospital then the patient can be offered a bundled pricing. Sometimes the hospital offers bundling pricing in a way that the patient need to take all the facilities together from the hospital itself but in that way the cost of the service sometimes becomes high for the patient. If the patient could avail the separate pricing then it might be beneficial for him (Ummidtown (b), 2013). Conclusion The Maryland General Hospital has shown a significant growth in the recent years. Focusing on the adequate pricing policy can be proved as a good strategy for the hospital. For maintaining the sustainability they have to focus on continuous patient satisfaction. References Kronick, R., Goodman, D., & Wennberg, J. (1993). The marketplace in health care reform-the demographic limitations of managed competition. New England Journal, 12(3), 9. Ummidtown (a). (2013). Medical Services. Retrieved from: http://ummidtown.org/Medical_Services/MedicalServicesDirectory.aspx. Ummidtown (b). (2013). News Release. Retrieved from: http://ummidtown.org/Media/news_releases/20121011_MGH_CEO_namedOneOf100WomenHealthSystemLeadersToKnow.aspx. Read More