Analysis of Healthcare Marketing in with Regards to 4Ps - Term Paper Example

Healthcare Marketing Knowledge Name: Course: Tutor: Date: Healthcare Marketing Introduction Hospitals started as a non-marking organization, and even this status was supported by the industry’s code of ethics before 1975 (Thomas & Calhoun, 2007, p.15). This restriction was eliminated by the Federation Trade Commission & the American Medical Association in a legal action in 1982 (Thomas & Calhoun, 2007, p.15). However, as the changes took shape in the 21st century, business in the healthcare industry has been forced to start marketing their products and /or services. The industry is currently dominated by private businesses compared to government healthcare institutions. According to Gapp & Merrilees (2006, p.162) the private healthcare institutions pose a major competition to dominate share market through the product and services. Currently, more healthcare firms comprehend the significance of product management and have started to integrate these ideas into their firm’s marketing strategy. Based on this realization, this paper analyzes healthcare marketing in with regards to 4Ps, wants and needs in the healthcare industry, marketing culture and VALS framework. 1.0 4 Ps and healthcare product marketing This paper discusses 4Ps with regard to GlaxoSmithKline’s product paroxetine. GlaxoSmithKline (GSK) is a British international pharmaceutical and consumer healthcare corporation located in London, UK (Writepass, 2012). According to Writepass (2012) this company is ranked fourth after Pfizer, Novartis and Sanofi in the manufacture and sale of drugs globally. Product GlaxoSmithKline Company produces pharmaceutical and consumer healthcare products aimed at prolonging the life of the consumers (Writepass, 2012). One of the products in focus is the ant-depressant, paroxetine. This product is produced in bulk and sold to doctors, healthcare providers and patients all over each the world. It is reported that paroxetine was the major-selling product attracting a sale of $11.6 billion, followed by the diabetes medicine Avandia, which attracted $10.4 billion in 2012 (Writepass, 2012). With this large quantity of products sold all over the world and with consumer loyalty of not less than 90%, it is obvious that these products manufactured by this MNC are of higher quality. They also act as an indicator that the drug is so effective for depression, which prone in every part of the world (Writepass, 2012). Price The price of paroxetine varies depending with the country tax and cost of raw materials. However, due to competition and struggle for market dominance by the major players in the industry, price has remained one of the flexible elements which changes by means of the market mix (Kotler & Keller, 2006). The corporation uses both psychological and competitive pricing strategies to attract its customers. Kotler & Keller (2006) argue that this enables the consumer perceive that firm’s product are reasonably cheaper compared to those of other market players. For its competitive prices, paroxetine had the best sales in 2012. Promotion Since GlaxoSmithKline Company functions on a global scale, its strategies on promotion concentrate on considering the external environmental facet like economy, natural resources, political structures, technological developments and demographic makeup (Writepass, 2012). On the global map, the company has taken part in different promotional actions, particularly partnering with different universities and different healthcare centers to carry out more research on anti-depressants drugs. The company has participated in various CSR activities to give back to the society. Through CSR and other promotional activities together with World Health Organization, an opportunity which they have used to market paroxetine and create brand awareness among customers, improving its global market share (Kotler, & Armstrong, 2010). Place GlaxoSmithKline is a Multinational Corporation with several sales offices across the globe. It is available for people in 150 countries (Writepass, 2012). It sold paroxetine majorly sold in pharmacies, chemist shops, healthcare facilities and hospitals. According to Writepass (2012) the firm clearly points out in their mission statement that their aims are to provide products to better the lives of their consumers globally. The corporation uses intermediaries as distribution channels and retailers rather than directly distributing the paroxetine (Writepass, 2012). To enhance distribution in the developed nations, the firms employ automated vending machines. 2.0 Want versus need in healthcare Motivation is considered a significant process in comprehending customer behavior (Thomas & Calhoun, 2007, p.14). In any society, a motivated person is determined by the ability to realize personal goals. This motivation is brought by having met personal needs and knowing your wants. A need is defined as a condition where there is an absence of something which requires a relief (Thomas & Calhoun, 2007, p.16). On the other hand, a want is what is desired for. It is claimed that individuals normally hold unlimited wants, though they have limited resources (Berkowitz, 2010). Hence, individuals cannot get all they that they want and has to look for better alternatives which are affordable. Just like in any other situation, in healthcare there are some medications there are considered needs while others remain wants. Some of the needs in healthcare are: 1. Malaria treatment: Malaria treatment is considered a need because lack of treatment can cause death or dysfunction such as liver dysfunction. The treatment of malaria is cheap and available 2. Polio treatment: it is a need because lack of treatment cans cause paralysis. In most cause the government provides treatment free of charge. 3. Tetanus treatment: it becomes a need because it can cause deformity and paralysis. Just like Polio, in most situations the government provides free treatment for tetanus. 4. Medication for hypertension: it is a need since lack of its treatment cases death. Most hospitals now offer treatment of at an affordable cost. 5. Medication for chest pain: it is a need because if it is not treated one cannot work effectively. Treatment is affordable. Wants can be categorized as 1. HIV/AIDs: it is want because its treatment is yet to be discovered. 2. Cancer treatment: it is a want for the majority because its treatment is expensive. 3. Suppressing appetite and lose weight: it is want since most obese people would like to lose weight yet its management has become difficult. 4. Securing health insurance: everybody would want to have insurance cover, but it is expensive to pay. 5. Corrective surgery: it is a want because its cost is expensive and not everybody can afford. Some deformities cannot be corrected. 3.0 Marketing Culture Marketing culture is defined as the style, philosophy and value of marketing undertaken by the organization (Kotler & Keller, 2006). For some institutions, marketing is carried out by the marketing department. However, in the healthcare industry, marketing is carried out by clinical nurse administrator from neurology programs (Berkowitz, 2010, p.14). In the perspective of healthcare marketing, the nurse explains the programs their hospital offers and quality and rates. This form of marketing culture is evident is healthcare facilities likes Royal Melbourne hospital in Australia, Texsan’s Heart Hospital and Harlingen Medical Center both in the U.S. In Melbourne hospital, the admission of a patient is performed on the floor in which the bed is assigned, and staffs are trained for nursing skills which make them aware of importance of quality health care. In this aspect, it is considered that admitting clerks and house maintenance staffs appreciate and understand the significance of customer orientation. Marketing Orientation Marketing orientation is where an organization identifies and aspires to meet the needs or wants of its customers (Kotler & Keller, 2006). This also consists of responding to the recognize consumer needs by tailoring new products, enhancing the existing products or enhancing services. Royal Melbourne Hospital suits the descriptions. This is a major teaching hospital with a name in clinical research (RMH, 2014). Their research on disease and services has made it one of the leading referral hospitals in Australia (RMH, 2014). Berkowitz (2010) asserts that component that describes a marketing orientated healthcare institution consist of customer orientation, competitor orientation, inter-functional orientation, long-term focus and profitability. 1. Customer orientation: As stated in marketing culture, the most significant focus in a market-based business is the client (Berkowitz, 2010). Businesses that mainly focus on customer in every activity (values, philosophy and visions and marketing strategies) have loyal customers (Berkowitz, 2010). Royal Melbourne Hospital is characterized by this aspect because of its research which focuses mainly on its clients (RMH, 2014). 2. Competitive orientation. Usually an organization collects this information by the use of market research, customer focus groups and surveys with potential customers to classify needs, preferences and competitors’ threat and opportunities (Kotler & Keller, 2006). For Royal Melbourne Hospital to be recognized for its good reputation in research, the hospital had gathered some intelligence about their competitors and what customer wants. 3. Inter-functional orientation Royal Melbourne Hospital coordinates and employs its resources in a way that create value for its clients. The health facility employs qualified staff, doctors and nurses who are able to provide quality service (RMH, 2014). The hospital also has advanced machines for diagnosis of various diseases. RMH (2014) states that teamwork and coordination of different hospital departments are how client value targets are realized. 4. Long-term Focus Royal Melbourne Hospital uses research to achieve long-term focus to add value, invest in appropriate and long term service and remain relevant in the market. 5. Profitability Royal Melbourne Hospital has been profitable due to its reputation as one of the leading referral hospitals in Australia (RMH, 2014. This implies that its services are widely recognized all over Australia. The health facility has many customers and is able to make profits that meet its long expenses. 4.0 VALS (Values, Attitudes and Lifestyles) Understanding the consumer’s values, attitude and lifestyle are important in marketing. VALS framework strengthens demographic classifications by describing the strongest psychological determinants of consumer behavior (Kotler & Keller, 2006). People tend to buy products depending on the level of motivation and the buying power. VAL’s frameworks are segmented into eight different ideals such as Innovators, Thinkers, Believers, Achievers, Strivers, Experiencers, Makers and Survivors (Kotler & Keller, 2006). How these groups of customers would interact with hospital staff These groups of people have different ideals, therefore, when seeking to interact with people depending on their ideals. For instance, when seeking treatment in a healthcare setting, innovators will be willing to pay for the best treatment (Richard, 2008). As such, they would want to be treated by the best doctor and be booked in the best rooms and be given quality services. Motivators like a good lifestyle because they are motivated by high income (Kotler & Keller, 2006). In this case, they would like to take charge when interacting with healthcare practioners. Another type of consumers is thinkers. These people interact by asking questions about the treatment only to confirm because they are informed about the services the hospital offers. Berkowitz (2010) argues that Thinkers have high income, but can only buy decision which deems fit. In their interaction, they ask many questions so as to make good decisions. Believer’s types of clients do not have much income, therefore in their interaction, they tend to be loyal and conservative in their discussion (Berkowitz, 2010). Achievers are one of the types of consumers who are hard to deal with when it comes to medical provision because they have high-resource and are motivated by their achievement. In their interaction, they tend to control the discussion while asking many questions (Berkowitz, 2010). Strivers are the best to handle when it comes to medical provision. They like listening to get the best advice. They are always hopeful in their interactions and discussions. Just like motivators, experiencers are also high-resource consumers who want the best for themselves (Kotler & Keller, 2006). In healthcare settings, experiencers inquire for the best treatment and pay for it without much bargaining. They have a positive attitude towards life. Another group of consumers is the markers. This is a group of low-resource who believe that what the doctors and nurses are providing is the best. Lastly, there are survivors. Just as the name suggests. They are humble because they feel inferior when inferior (Richard & Calhoun, 2007, p.16). How healthcare practioner would treat these groups individually Just as mentioned before, one must handle these types of customers depending on their ideals. Berkowitz (2010) asserts that Innovator tends to have higher income and will spend money without bargaining. When handling both innovators and thinker, it is wise to recommend for innovators the expensive medications and best room while providing average medications though effective for thinkers. When handling achievers versus believers one must know that these groups have different levels of income. Innovators like to be treated with a lot of respect more than any other person, while thinker like professionalism. On achievers versus believers, I would be more open and in details about medication with achievers while being conservative with believers as they tend to be (Berkowitz, 2010). Other groups that one can handle different when inquiring for hospital services are experiencers versus markers. Berkowitz (2010) argues that Experiencers are young and motivated by self-expression, and are not afraid to ask hard questions. Just like experiencers, markers are also motivated by the self-expression, the difference is that experiencers have high income and are willing to pay much for their medical expenses compared to markers who have low income (Berkowitz, 2010). For this reason, I will treat Experiencers like young people and maybe give them young doctors to handle their medication. Other crops of groups that can draw attention when interacting with are innovators versus survivors. The two groups are the opposite of each other. Kotler & Keller (2006) maintain that while innovators will seek the best medical attention and want to dictate what they want while survivors are constrained by low income and will go with what the doctors recommends. In such a case, treat innovators with respect and provide them with the most expensive medicine. On the other hand, recommend for survivors cheap but effective medication. Conclusion Marketing has changed in the previous 40 years in the healthcare industry. Prohibition of marketing in the healthcare sector that was in the 1970s was eliminated and this created a wider interest this industry. Allowing marketing enabled people to understand that health care is not just about making life better, but it is also just like any other business where managers have to create their brand awareness. Then again, to create a large customer base, research plays a very important role to ensure that the healthcare facility remains the choice of most people. In light of doing this, the managers must segment customers according to their groups, ideals and incomes so as to create products that can satisfy every individuals needs. References Berkowitz, E.N. (2010). Essentials of Health Care Marketing, 3 edn. London: Jones & Bartlett Learning. Gapp, R. & Merrilees, B. (2006). Important factors to consider when using internal branding as a management strategy: A healthcare case study. Journal of Brand Management, 14(1/2), 162-176. Herzlinger, R. (2006). Why Innovation in Health Care is So Hard. Harvard Business Review 84(5): 58-66). Kotler, P & Keller, K.L. (2006). Marketing Management, 12th edn. Upper Saddle River, NJ: Pearson Education. RMH. (2014). About the Royal Melbourne Hospital. Retrieved 12th Feb. 2014, http://www.rmh.mh.org.au/about-the-rmh/w1/i1001182/ Richard, K.T. & Calhoun, M. (2007). Marketing Matters: A Guide for Healthcare Executives, Chicago: Health Administration Press. Richard, K.T. (2008). Health Services Marketing: A Practitioner’s Guide. London: Springer Science. Writepass. (2012). Strategic and SWOT Analysis of GlaxoSmithKline (GSK) plc. Retrieved 12th Feb. 2014, http://writepass.com/journal/2012/10/strategic-and-swot-analysis-of- glaxosmithkline-gsk-plc/ Read More