Essentials of Healthcare Marketing Q&A

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Question Description

1. What is the major difference between Mass Marketing strategies and Market Segmentation strategies.

2. List 3 Cohort groups and describe them briefly.

3. Describe what is the Customer Loyalty Pyramid and its 7 steps that lead from Awareness to Loyalty.

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Chapter 7 Developing Customer Loyalty Learning Objectives • Understand the concept of relationship marketing • Recognize the distinction between satisfaction and loyalty • Describe the necessary components of a value added service delivery system • Appreciate the importance and role of a recovery system 3 Learning Objective 1 • Relationship marketing – An organization’s attempt to develop a long-term, cost-effective link with a customer for the benefit of both the customer and the organization. – Shift from individual transactions to the establishment of longer term relationships • Regular, ongoing contact with patients 4 5 Learning Objective 1 • Relationship marketing – Focus on what the customer is buying, not what the organization is providing • VALUE – Empowering employees to meet customer needs – Quality focus – beyond the clinical side of service delivery 6 Learning Objective 2 • Satisfaction or Loyalty? – Organizations benchmark, depending on their measurement programs. – Must aim for more than satisfaction 7 Learning Objective 2 • The Customer Loyalty Pyramid – Progression of customer psychological movement toward loyalty • • • • • • • Awareness Interest Evaluation Trial Satisfaction Repeat purchase Loyalty 8 Learning Objective 2 • The value of loyalty – The loyal customer makes frequent and repeat purchases • Is immune from the pull of competition – Reduction in acquisition costs • 5:1 ratio – Lifetime value of customer – Referrals, word-of-mouth referral – More tolerant if there is a problem 9 Learning Objective 3 • Creating customer value – The customer defines the appropriate service quality and price level. – Customer defines the price/value relationship of the service. – This value is relative to competitive offerings. 10 Learning Objective 3 • Creating customer value (continued) – Health care service value equation • Value=Clinical quality provided+process quality-(Price + Service Acquisition Cost) • Clinical Quality Provided – technology and expertise • Process quality – the ease with which a customer can access the clinical quality 11 Learning Objective 3 • Conducting a Gap Analysis Five possible Gaps 1. Between Expectations of service quality and management perceptions of customer expectations 2. Between management perceptions of customer expectations and service quality specifications 3. Between service quality specifications and service delivery 12 FIGURE 7-3 The Sources of Service Gaps Source: Adapted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from Delivering Quality Service: Balancing Customer Perceptions and Expectations by Valerie A. Zeithaml, A. Parasuraman, Leonard L. Berry. Copyright © 1990 by The Free Press. All rights reserved. Learning Objective 3 • Conducting a Gap Analysis – Five possible Gaps continued 4. Between service delivery and external communications to customers • Promotional in nature 5. Between expected service and perceived service • • PERCEPTION IS REALITY TO OUR CUSTOMERS! Marketers set the expectations 14 Learning Objective 3 • Measuring service performance – Must meet three criteria: • Measurement tool must be managerially useful • Tool must recognize the role of customer expectations • Tool must direct action to the most relevant areas 15 Learning Objective 3 • Measuring service performance – Step 1 in developing a measurement tool is to conduct a customer audit • Use of flow charts to observe process and identify potential difficulties – Medical service blueprints – mapping processes • Moments of truth – customer contact points 16 Learning Objective 4 • Developing a Customer Recovery System – An organized system that anticipates service delivery failures or problems – Defined scripts for handling problems 17 Learning Objective 4 • Developing a Customer Recovery System – Critical components for implementation • Focused recovery training must be conducted with all employees • Recovery standards must exist • The organization must be ‘easy to complain to’ • Frontline employees must see themselves as part of the system • Employees need to believe they are a part of a qualityconscious organization. • Customer recovery paradox 18 Summary • Relationship marketing is a shift from a transactional perspective to the development of longer term loyalty. • In a transactional focus, the perspective is more on what the organization is selling; in a relationship marketing focus, it is more on what the customer values. • Satisfaction is not a sufficient goal for customer behavior; rather, the focus must be loyalty. • The customer loyalty pyramid has multiple stages: awareness, interest, evaluation, trial, repeat, satisfaction, and ultimate loyalty. 19 Summary continued • The lower levels of the customer pyramid are referred to as the promotional levels. • Loyal customers have multiple benefits in terms of reduced acquisition costs, longer term per revenue growth, more profitable to serve, able to refer others, and more willing to pay a price premium. • Loyal patients have a broader zone of tolerance or are more willing to forgive an organization’s service lapses. 20 Summary continued • Customer value equation has four variables’ clinical quality, service process quality less out of pocket cost less effort expended. • Conducting a Gap Analysis can help identify the opportunities for the delivery of customer value. • A customer contact audit or medical service blueprint is a flowchart of each step in service delivery. 21 Summary continued • A customer contact audit highlights opportunities for establishing a differential advantage. • Measuring satisfaction is a function of expectations and the importance of each point of contact. • A customer recovery system is defined script that anticipates how to react when a problem arises in service delivery. 22 Chapter 6 Market Segmentation Chapter 6 Objectives 1. Understand alternative market segmentation strategies 2. Recognize relevant criteria for selecting market segments 3. Identify alternative bases for industrial segmentation 4. Appreciate the hierarchy of segmentation alternatives Learning Objective 1 • Mass marketing – Develop marketing mix to appeal to the broadest group – Everyone in the market wants the same product delivered priced and promoted the same way. – Cost advantage – Disadvantage – people have different demands, needs, habits; genericism of strategy Learning Objective 1 • Market segmentation – Grouping into clusters consumers who have similar wants or needs to which an organization can respond by tailoring one or more elements of the marketing mix – Can be accomplished with any element of the marketing mix • Concentration strategies • Multisegment strategies Learning Objective 1 • Market segmentation – Concentration strategies • Targeting one segment • Majority fallacy • Niche strategy – very narrow segment Learning Objective 1 • Market segmentation – Multisegment Strategy • Pursue several market segments with varying mixes • Product differentiation – positioning strategy Learning Objective 1 • Market segmentation – Selecting Market Segments – criteria • • • • • • • • Identifiable Accessibility (promotion or distribution) Members are inclined to buy product/service Able to buy Profitable to serve Desirability – image of organization Consistency (with message) Availability (brand loyal elsewhere?) Learning Objective 2 • Bases for segmentation – Sociodemographic • Age, gender, ethnicity – Geographic – Psychographic • Lifestyles, social class Learning Objective 2 • Bases for segmentation continued – Usage • Usage rates – heavy half consumer – 80/20 • Type of usage – How it is used • Brand loyalty – Hard core loyal, split loyalist, switchers • Benefit segmentation Learning Objective 2 • Bases for segmentation continued – Cohort Segmentation • Group of people bound together in history by a set of events • Depression • WWII • Post-War • Boomers I and II • Generation X • N-Gen • Millenials Learning Objective 3 • Segmenting Business Markets – Demographics • Size of company, Industry type (SIC code), customer location – Operating variables • Technology, product use, customer capabilities – Purchasing approaches • Purchasing procedures, purchasing criteria – Usage segmentation Learning Objective 4 • The Heuristics of Segmentation – Health care marketers are attempting to determine if segmenting and tailoring offerings to a segment is worth the time. – Marketers want to affect the actual purchase, which is the most accurate level of market segmentation Conclusions • Health care is acting more like traditional businesses vis-à-vis market segmentation strategies. Summary • In a mass marketing strategy, the marketing mix is designed to appeal to the broadest market, while in a market segmentation approach, the marketing mix is designed to appeal to subgroups of consumers. • In following a concentration strategy of targeting only one segment, an organization should not focus only on the largest segment, because competitive intensity can render this segment the least profitable. Summary continued • In selecting from multiple market segments, there are several criteria to consider: Segments should be identifiable, accessible, inclined to buy, able to buy, profitable, desirable, consistent, and available. • Markets can be segmented sociodemographically, geographically, and psychographically by usage, and recently by cohorts. Summary continued • In selecting from multiple market segments, there are several criteria to consider: Segments should be identifiable, accessible, inclined to buy, able to buy, profitable, desirable, consistent, and available. • Markets can be segmented sociodemographically, geographically, and psychographically by usage, and recently by cohorts. Summary continued • In usage segmentation, it is important to identify the heavy half consumer who purchases a disproportionate share of a product, or cho accounts for a disproportionate amount of a service’s volume. • The important aspect of cohort segmentation is to realize that cohorts’ attitudes and value systems stay with them even as they age. Thus a health care organization must develop a strategy to respond to the market. Summary continued • Business markets can also be segmented by several criteria. The federal government has developed the SIC coding system, which is a common basis for industrial segmentation. • As corporations play an increasingly important role in health care purchases, health care organizations may need to segment them by purchase procedures or purchase criteria. Summary continued • There is a heuristic method to segmentation that moves from purely descriptive measures (demographics) to actual purchase (usage) • The ultimate purpose of segmentation is to tailor an organization’s marketing mix with the intent of positively affecting consumer behavior. If segmentation does not differentially affect this purpose, there is little value to segmenting the market on that particular criterion. ...
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Massu
School: Boston College

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Running Head: Essentials of Healthcare Marketing

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Running Head: Essentials of Healthcare Marketing

1. What is the major difference between Mass Marketing strategies and Market
Segmentation strategies?
The marketing mix of Mass Marketing strategies is designed to attract a broad range of
customers in the market whereas, in market segmentation strategies, the marketing mix is
designed to at...

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