Running Head: HEALTHCARE MARKETING 1

Business 311

Introduction to Healthcare Administration

Healthcare Marketing

Group 1

Connie Grimes, Serena Smith, Mathew Mueller, Lakeesha Davis-Wilson

June 20, 2016

Respectfully submitted to: Dr. Pamela Kelly

Running Head: HEALTHCARE MARKETING 1

Abstract

The purpose of this paper is to develop a better understanding of the healthcare market. It has

taken some time for healthcare organizations to get current in marketing their health care

organizations. After going over a brief history of marketing efforts in healthcare, his paper

will point out the importance of the healthcare market using more modern technology as well

as being more consumer-driven. This paper also looks to examine social marketing and other

marketing strategies to make healthcare organizations more valuable and productive in future

marketing efforts.
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Introduction
Health industry is one of the largest and fastest growing sectors of the world economy.

Consuming more than 10% of GDP in most developed countries, the health industry forms a

significant part of the economies of developed countries (Schansberg, 2014). An analysis of

the specifics of the health industry revealed six major forces affecting the growth prospects,

namely the rapid aging of the population in all developed and many developing countries; a

growing labor shortage of middle and junior managers; the introduction of new medical

procedures; development and implementation of new treatment technologies; the health

industry market globalization; and the increasing role of government policy (Lovett-Scott and

Prather, 2012). “Marketing is a management orientation centered on customer satisfaction

and an organizational function that is integrally related to the entire organization's mission,

objectives, and resources” (Buchbinder & Shanks, 2012 p.109). The key for healthcare

organizations to be successful in their marketing strategies begins with having a holistic

understanding of why marketing is important, what it offers and how consumers find it

beneficial. Healthcare marketing strategies must be consumer focused, socially acceptable,

and innovative all while remaining competitive and adapting to a constantly changing world.

What is Health Care Marketing?

To understand health care marketing, we must first have a general understanding of

marketing as a whole. According to the American Marketing Association, marketing is the

activities and processes for creating, communication delivering, and exchanging offerings

that have value for customers, clients, partners, and society at large (Rooney, 2009).

Marketing is broad and multifaceted requiring more than one technique in order for the it to

be successful. It involves relationship-building methods that grow quickly as technology

evolves. Healthcare marketing builds on the definition on marketing, relating traditional

processes and activities to the health care field. Healthcare marketing may seem simple but it
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has its own challenges that can make the field complicated, expensive and also frightening

(Rooney, 2009).

The History and Changes of Healthcare Marketing

While today ads for different hospitals and health care organizations can be seen all

over most major cities, this hasn’t always been the case. Buchbinder and Shanks (2012)

describe a time in the 1970’s and 1980’s where marketing health care was rarely done, if done

at all (Buchbinder, 2012, p.98). According to Robert Tamilia (2009), marketing theories and

techniques can be found as far back as the middle age, and while literature in the United

States about marketing in most businesses can be found from the late 1930’s, literature

regarding marketing in healthcare organizations really didn’t come about until the late 1970’s

(Tamilia, 2009). As pointed out by Moran and Baum, for the longest time the only marketing

that healthcare organizations used was using an emblem such as the caduceus or a lab coat to

signify doctors or physicians (Moran, 2012). As minimal as it may seem, for many would be

patients, it was just as simple as going to the closest hospital rather than picking the best or

most attractive hospital.

In the late 1970’s some of the reasons to market health care organizations were being

introduced such as; more patient awareness in choosing provider, improving the image of a

health care organization and how it leads to developing a reputation or a brand, the

importance of attracting a higher skilled workforce, and improving their chances in a growing

competitive market (Thomas, 2008, p. 8-9). Even by 1990 reasons can be given for the lack

of marketing in healthcare such as; managers viewing it as a hoax, previous attempts not

working, and managers only starting to experiment with marketing (Buchbinder, 2012, p. 99).

However now, in today’s market, healthcare organizations must rely marketing to

acquire patients and hopefully retain them. Thomas points out that one of the things that has
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made marketing in health care so different from other industries is that health care

organizations seek to reach out to people who aren’t even the ones who end up paying for the

services rendered. Insurance companies and other government organizations end up paying

for the medical services received in most cases, making it important to also market to them as

well as the would be patients (Thomas, 2008, p. 6-7). Citizens of America today can drive a

busy highway or interstate and see floods of hospital advertising, this on top of the new and

improved roles of health care organizational career recruiting provide just a few examples of

how far the marketing industry has come within the last forty years (Lefebvre, 2013, p. 126-

143).

Consumer- Driven Healthcare Marketing

The major difference between conventional and consumer-driven health care marketing

strategies is the focus on the consumer. The new focus on customer wants, needs and

expectations has driven the rise in consumer-driven healthcare marketing. This new approach

to marketing recognizes the participants’ role in the delivery of care and the promotion of

health education and wellness (Rooney, 2009). At the beginning of the twenty-first century,

changes in profitability, customer loyalty, quality of care, and market dominance created a

need for healthcare organization to install a formal marketing function. The introduction of

the Internet and access to a plethora of information also had a way of forcing these

organizations to change the way they had previous marketed their services.

Social Marketing
Developed by Philip Kotler, this type of marketing is very similar to consumer-driven

marketing. Its aim is not only to ensure that the business is profitable, but also to make sure

that the society is growing and well. Social marketing is a process that applies marketing

principles and techniques to create, communicate, and deliver value in order to influence
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target audience behaviors that benefit society (Aras, 2011). Social marketing has also been

used to increase the use of influenza vaccinations amongst healthcare organization employees

in Rhode Island (Marshal, Linda, & Fulton, 2010). In contrast to social marketing, cause

related marketing links a for-profit company and its offerings to a societal issue with the goal

of building brands equity and increasing profits (Buchbinder & Shanks, 2012). For example,

Go Red for Women is the American Heart Association's national movement to end heart

disease and stroke in women.

Marketing Strategies
The marketing strategy is defined as the set of principles, policies and procedures guiding

the firm to its target market. The strategy is based on budget, marketing-mix, and the

distribution procedures. There are also five stages required to implement a marketing

strategy:

Marketing is advertisements, promotions and advertising

Marketing is when you smile and have a friendly atmosphere
Marketing is innovation
Marketing is market positioning
Marketing is analysis, planning, and control (Coculescu, et.al, 2015).

Healthcare organizations realized that they had to revamp their marketing strategies in order

to stay competitive. An important task for any medical organization is the way it manages and

promotes the benefits of the services they provide (Coculescu, Coculescu, Radu, Petrescu, &

Purcarea, 2015). The strategy must target practical problems that can be fixed with a clear

and concise action plan. Previously, the marketing strategy consisted of “four P’s; product,

price, place and promotion. Once the strategy was revamped, the number of criterion

increased to seven now including, physical evidence, participants and process. The change in

the criterion is an example of how the strategy had to be reevaluated so that the focus could

be shifted to consumers. In order to implement the marketing strategy, management must

ensure that the relationships between various departments actually work, stimulate activities
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of the staff, create information systems, and control the administrative processes (Coculescu,

et.al, 2015).

Banking Industry

Both hospitals and banks have attempted to reinvent their image by renovating their

office building into sophisticated spaces in recent years. Healthcare organizations have the

opportunity to capitalize on data for marketing gain. Banks were forced to use their data as a

tool based on a federal mandate. One way to infuse a new marketing strategy for the health

care industry is to incorporate the organization’s messages of mission, goodwill, and

community service with outcome data to make the advertising initiatives believable, evidence

based and valuable to the consumer (Rooney, 2009).

Airline Industry

Southwest Airlines was one of the first airline companies to streamline the process of

consumer satisfaction online. This is comparative to health care organizations providing

consumers with surveys to understand what works and what doesn’t work. For example, after

a recent trip the emergency room, I received a survey in the mail asking me about my entire

experience. Another example of implementing customer satisfaction could be by updating the

appointment-setting process by using sophisticated software for their websites (Rooney,

2009).

Healthcare Marketing Online

Currently, under the conditions of implementation of the elements of a market

economy in health, the emergence of competition, rising costs, a growing number of health

care organizations begin to show interest in marketing. The introduction of the concept of

marketing in the health care system is predetermined by the fact that currently there are state,

municipal and private sectors, and a health insurance system, which contributes to the

emergence of elements of market relations, formed (Berkowitz, 2010).

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Digital marketing is new stage in the evolution of product promotion. In the

healthcare industry, application of digital technologies covers many directions, namely clinic

researches, communication through social media, promotion of mobile medical applications,

etc. Digital marketing, a pillar in other businesses for years, becomes more widespread and

refined in healthcare, however, still gaps far after the digital marketing approaches and

methods of other businesses. Healthcare institutions use quite limited amount of social media

and mobile, and just 33% perceive a mobile strategy as vital. Websites, social media and

online advertising are the most popular online tools for promotion of medical services among

hospitals. Facebook and Google AdWords are widely used online advertising tools in

healthcare business. The greatest three problems/obstacles for healthcare digital marketing

intentions include money, feed storage and managing modification. Healthcare marketers are

expectant concerning further budgets, with more than 80% supposing their marketing funds

in 2017 to either grow or remain stable (Greystone.Net, 2015).

Advertising in network has got very big popularity, thus, according to forecasts by

2017, the expenses for such announcements will exceed even costs for the advertising on TV

(Greystone.Net, 2015). The tendency to allocate on social advertising the greatest part of the

budget will be the crucial for marketers. Facebook Messenger can be used as alternative or

additional tool to e-mail marketing, which is used for instant communication. A number of

marketers consider personalization as one of the most important functions in future

marketing. Pay Per Click advertising will be personalized that gives marketers the necessity

to use new opportunities, for example Customer Match from Google AdWords (Schansberg,

2014; Greystone.Net, 2015).

Thus, the use of marketing in health care contributes to optimization of medical

facilities, which helps health care facilities most efficiently plan their activities. Marketing

makes it possible to predict turnover, study health care needs of the market, and the use of
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market research makes it possible to determine which services will be in demand at the

consumer, how much the consumer is willing to pay for it, and whether he/she is willing to

pay at all or not. Social marketing demonstrates its ability to enhance the effectiveness of the

changes in society (Greenberg & Kates, 2013). In general, it can be said that the user is

becoming more sophisticated, and therefore to promote a brand or product it is important to

constantly invent something new. As an example, the share of mobile internet increased, and

the importance of videos, the number of users of social networks, and of the entertainment

also increased; they have turned into a full-fledged advertising tool.

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References

Aras, R. (2011). Social marketing in healthcare. Australasian Medical Journal, 418-424.

Berkowitz, E. N. (2010). Essentials of Health Care Marketing. Burlington: Jones & Bartlett

Learning.

Coculescu, B. I., Coculescu, E. C., Radu, A., Petrescu, L., & Purcarea, V. L. (2015). Market

policy as an innovative element of marketing in the Romanian healthcare services - an

approach focused on the patient. Journal of Medicine & Life, 440-443.

Greenberg, E. and Kates, A. (2013). Strategic Digital Marketing: Top Digital Experts Share

the Formula for Tangible Returns on Your Marketing Investment. New York:

McGraw-Hill Education.

Greystone.Net (2015). The State of Digital Marketing in Healthcare in 2015. Retrieved from

http://ehealthcarestrategy.com/wp-content/uploads/2015/12/the-state-of-digital-

marketing-in-healthcare-in-2015.pdf [Accessed: 19 June 2016]

Lefebvre, R. C. (2013). Social marketing and social change: strategies and tools for health,

well-being, and the environment. Jossey-Bass Publishing. San Francisco, CA.

Lovett-Scott, M. and Prather, F. (2012). Global Health Systems. Burlington: Jones & Bartlett

Publishers.

Marshal, R. J., L. M.-M., & Fulton, J. P. (2010). Increasing Annual Influenza Vaccinations

Among Healthcare Workers in Rhode island: A Social Marketing Approach. Medicine

& Health Rhode Island, 271-278.

Moran, M. E., M.D., & Baum, N. H., M.D. (2012). Marketing and medicine: A questionable
mix. The Journal of Medical Practice Management: MPM, 28(1), 33-36.

Rooney, K. (2009). Consumer-Driven Healthcare Marketing: Using the Web to Get Up Close

and Personal. Journal of Healthcare Management, 242-251.

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Schansberg, D. E. (2014). The Economics of Health Care and Health Insurance, The

Independent Review, 18(3), p. 401-420.

Tamilia, R. D. (2009). An overview of the history of marketing thought. Journal of Historical

Research in Marketing, 1(2), 346-360.

Thomas, R. K. (2008). Health Services Marketing: A Practitioner’s Guide. P. 1-10. Springer

Science and Business Media. New York City, New York.