Transactional Marketing in Healthcare - Report Example

Healthcare Marketing Knowledge Assessment Name Institution Affiliation Healthcare product Transactional marketing This is a business strategy that focuses a single transaction and the emphasis is on maximizing the efficiency and volume of individual sales and not relationship development with the customer. Heart Surgery is one of the medical services that are marketing using transactional marketing strategy. For instance, when a patient with a heart problem arrives at that healthcare facility, he/she is attended to or care is delivered in accordance with set procedure. After service delivery, any post-encounter follow-up is particularly in the form of payment request (bill), or it is initiated by the patient requesting more or additional medical service (Nassab, Rajaratnam & Loh, 2011). In the healthcare perspective, transactional marketing, the goal is to have a single encounter with the patient, in the explained scenario, the patient with the heart problem is admitted at the hospital he/she is administered with the much needed care, and then he will leave after care is delivered. The patient and customer contact is episodic whereby; the patient is effectively attended to and leaves after care is delivered. Accordingly, the organizational focus is service elements, for instance, the healthcare institution will ensure that the customer receives superb medical care. Customer responsiveness in transactional marketing in healthcare is not much; little effort is given to have the customer’s point of view. Similarly, the quality criterion concern is focused on the clinical staff rather than the patient. Lastly, the time perspective is always on a short-term basis; for instance, after the heart surgery and payment for the service, the relationship will end from there. Relationship Marketing Relationship marketing is a form of marketing strategy developed from direct response marketing campaigns that emphasize customer relation and satisfaction instead of singularly focusing on sales transactions. It is the organization’s attempt to establish a long-term, cost-effective relationship with the customer for the benefit of both the customer and the organization. In healthcare for instance, it is extremely important for the service provider to maintain regular and ongoing contact with the client or patient (Nassab, Rajaratnam & Loh, 2011). For example, a healthcare organization providing pharmaceutical services has on obligation of maintaining regular and ongoing relationship with its clients. Marketing activities are accomplished form the customer’s point of view, or what the customer describes as value. Given this understanding, a pharmaceutical organization must have customer contacts including email addresses where there customers can receive updates with regard to new drugs available and to what extent they can help in improving their health. The organization must have a customer’s database to ensure that it achieves this mandate (Berkowitz, 2010). The healthcare relationship marketing criterion has a singular goal of maintaining and ongoing relationship with the provider, maintain continuous contact, customer value is the main focus and customer responsiveness is the main goal of the organization. Accordingly, the quality concern is the focus of the entire staff, and above all, the organization focuses on maintaining a long term relationship with the customer. Sins of customer service Relationship marketing in essence implies being a target of being the provider of choice; this marketing strategy has a system that ensures continued contact with customers, patients, physicians, and/or company is maintained. This marketing strategy is easier said than done in the healthcare industry where episodic contact is prevalent. The main characteristic of relationship marketing is that the focus is centered on the customer rather than the actual products or services. The customer defines value from his/her encounter with the service or product. It has been established in the cause of customer service delivery there are seven sins that are committed by the provider and they include: Apathy: this is described as a just don’t-give-a-damn attitude particularly from the service or product provider. It is an impression conveyed to the customer by the service provider particularly in terms of not caring for the customer, being extremely rude and not listening to the customer’s requests. When healthcare providers behave like this they simply drive away patients or clients thus costing the institution large amount of revenues. Brush-off: this is unwarranted actions from the service provider to drive away the customer by either “passing the buck” or brushing of the customer’s need or problem. Similarly, trying to force the customer to follow the standard procedure that automatically does not solve the problem, however, lets the service provider free without doing anything special to help solve the issue at hand. Coldness: this is a kind of chilly hostility, unfriendliness, inconsiderateness, curtness, or just being impatient with the customer. Condescension: this described as treating the customer with a patronizing attitude. This is commonly found in healthcare providing institutions where they will call the doctor as Doctor Myers but refer to a patient by his or her first name and often belittle patients (Nassab, Rajaratnam & Loh, 2011). Robotism: this is where fully mechanized employee puts every customer through the same program, using the same standard motion and slogans, and without any kind or trace of humanity. For example using a phrase like “Thank-you-have-a-nice-day-NEXT,” such employees are accustomed to giving permanent fake smile; however, one is able to recognize that the smile is not real. Rulebook: this is the act of putting the institution’s rules above customer satisfaction notwithstanding the discretion particularly on the part of the service person to make exception or even use common sense (Berkowitz, 2010). This is a common case in banking facilities, government departments; they will do everything possible to eliminate all traces of human thought as well as judgment. Such behavior in a healthcare institution will automatically compromise the organization’s operations and hence drive customers or patients away. Run-around: this is the act of service provider not being straightforward and keeps on asking the customer or patients to repeat the same request for several times. For example, “Sorry, you have to call back later.” Telecom companies are the main culprits here. Pricing Strategies Price is defined as the level of monetary reimbursement for goods and/or services; it is also regarded as referred to as the economic value that the customer provides to the producer in exchange for goods and/or services that the firm produces. It has largely been established that established price has a perceptual or positioning value for the service. For instance, higher priced goods or services are perceived to have better quality. Given these fundamental facts, pricing is a significant aspect of the marketing strategy. Initially, pricing was not a major concern in healthcare, however, as time has gone by, pricing element is challenging in healthcare like in any other traditional product and service providing industries. This is issue is extremely sophisticated in healthcare and it involves strategies like direct contracting, health savings account, fee-for-service, and managed care (Berkowitz, 2010). Healthcare providing institutions have largely embarked on competitive consideration as the main driver of healthcare pricing decision. Different firms have various pricing strategies available to consider when deciding their products or services’ prices. Important to note, healthcare providing institutions are currently using more of these because of the regulatory environment as well as due to evolving marketplaces (Nassab, Rajaratnam & Loh, 2011). The main pricing strategies used include price lining, odd pricing, one-price vs. flexible pricing, prestige pricing, leader pricing, bundled pricing, going-rate pricing, and discounts. For the purposes of selling health drinks, vitamins together with other health foods, the following pricing strategies should be used in deciding the product prices. Odd Pricing This pricing strategy dictates that products should be priced just below whole dollar amounts. The strategy is also referred to as psychological pricing where buyers may think that the product costs less (Berkowitz, 2010). The strategy also gives an impression that a discount has been offered. According to the Item budget theory, odd pricing, makes customers to think that they will buy a product or service for equal to or less than their budget (Winston, 2012). Given the scenario of health drinks, vitamins and other health foods, this pricing strategy will automatically compel customers to purchase these products. Prestige pricing This strategy is mainly used when the company wants its products to be perceived to have high quality as compared to other providers. Accordingly, it is a deliberate way of attaching high prices to items to connote uniqueness or value (Nassab, Rajaratnam & Loh, 2011). Prestige pricing strategy is in contrast with the typical demand curve. The energy drinks, food and vitamins should be priced using this strategy to make the training facility be perceived as unique and of high value. Leader pricing The strategy involves attractive pricing of a commodity and aggressively promoting it to encourage consumers to purchase it as well as other items in the line at the same time (Nassab, Rajaratnam & Loh, 2011). In the training facility, the participants will ultimately want to replenish the lost energy in the training by drinking health drinks, consuming more vitamins and above eat health foods. This pricing strategy is the best in this scenario. One-price vs. Flexible pricing One-pricing strategy is basically used an organization to charge the same price to all customers who buy the same service under the same conditions. On the other hand, flexible pricing strategy is where customers are charged different prices with regard to the negotiating abilities. Given this understanding, the training facility should use one-pricing strategy to sell its products to the users of the facility or their customers. Bundled pricing The strategy involves selling several items or service together for one total price. It is regarded as the best pricing strategy in the healthcare for occupational and industrial medicine programs. For this strategy to work, the total price of services must seem less than the sum of the individual prices. Packaged deals are used (Winston, 2012). The training facility can come up with a monthly fee for using the facility whereby customers will have to pay for all commodities and services they will use in a month. Discounts In this perspective, functional discounts are the best for the described scenario; the facility will offer discounts to health drinks, vitamins, and health foods if customers agree to use the training facility. Wheel of Retailing This is a procedure used to describe how new entrants in the retail market and evolve over time. New and different forms of retailing have always been seen to enter the market and replace and/or capture a significant percentage of the core business of the existing business entities. It is a hypothetical procedure for describing how retailers use different methods in capturing and building their market share as well as create brand value (Winston, 2012). For instance, the wheel of retailing extensively explains how retailers start at the bottom of the wheel where they offer low prices and targeting low profits and prestige but gradually progress above the ladder and start increasing prices and hence target higher profit margins and prestige. This section provides an intensive and comprehensive discussion with regard to how Pure Health Hospital will gradually develop along the Wheel of Retailing. Pure Health Hospital (PHH) is a proposed speculative healthcare service provider (Berkowitz, 2010). For instance, PHH will enter the retail healthcare market by providing general healthcare services to the general public offering basic medical care at low prices, low margins and low reputations as compared to the already established institutions. Then PHH will start inclining its healthcare activities towards caring for cancer patients; start specializing in oncology (Nassab, Rajaratnam & Loh, 2011). Due to this, PHH will start offering oncology services at higher prices, high margins as well as increase its reputation in oncology. Lastly, PHH will now strictly decide to offer only oncology and maintain its stature in the marketplace; accordingly, services will be offered at even high prices, higher profit margins, while tremendously increasing its reputation (Winston, 2012). H From the above description of PHH, its first stage on the Wheel of Retailing will be to enter the healthcare retail market by offering general healthcare service to the larger public. For instance, PHH will be a general purpose hospital equipped with basic healthcare providing facilities including maternity, pediatrics, and basic therapeutic treatments (Nassab, Rajaratnam & Loh, 2011). These services as already observed will be offered at low prices to win clients from already established healthcare institutions. Similarly, the hospital will earn low profit margins as well as have low reputation. Secondly, PHH will significantly start specializing in oncology equipping the hospital with relevant facilities dedicated towards caring for cancer patients (Winston, 2012). For this reason, PHH will start offering their oncology services at high prices thus start earning high profit margins as well as increasing its reputation in the marketplace. The third and last stage, PHH will strictly maintain its position as an oncology hospital; strengthen its position in the marketplace as an oncology hospital (Berkowitz, 2010). For this reason, PHH will even offer higher prices its oncology services, earn increased profit margins, and thus become a highly reputed hospital and above all maintain its premium status. In healthcare industry, institutional innovators and retailers are portrayed to have two major characteristics; cost containment emphasis and cyclical swings from full-service to specialty facility. In this regard, the application of the Wheel of Retailing in healthcare suggests that healthcare innovators and/or institutional innovations only occur due to the entry of low cost, limited service competitors into high cost dominated markets, and wider service institutions. References Berkowitz, E. (2010). Essentials of health care marketing, 3rd Ed. London: Jones & Bartlett Publishers Nassab, R., Rajaratnam, V., & Loh, M. (2011). Applying MBA knowledge and skills to healthcare. New York: Radcliffe Publishing Winston, W. (2012). Professional practice in health care marketing: Proceedings of the American College of Healthcare Marketing. London: Routledge Publishers Read More