CHAPTER 17 Philip Kotler’s Segment-by-Segment Invasion Plan LEARNING OBJECTIVES After examining this chapter, readers will have the ability to: ■ Understand that all market segments, if successfully pursued, will eventually be exhausted of growth opportunities. ■ Realize the imperative of identifying not only those market segments that will be pursued in the present but also those segments that will be pursued in the future. ■ Appreciate the value and utility afforded by Philip Kotler’s Segment-by-Segment Invasion Plan as a tool for mapping current and future market segment pursuits. INTRODUCTION When progressive healthcare marketers engage in target marketing, they not only identify the market segments they wish to immediately pursue but also the market segments they might target in the future. In essence, they formulate plans that outline current and future market segment pursuits. This practice is beneficial due to the fact that all market segments, if successfully pursued, will eventually be exhausted of growth opportunities for given product offerings. By proactively identifying future market segments to pursue, marketers are better prepared to embark on a course of sustained growth. The practice of identifying future market segment pursuits is greatly facilitated through the use of Philip Kotler’s Segment-by-Segment Invasion Plan. As illustrated in Figure 17-1, the Invasion Plan consists of a vertical axis, representing product varieties, and a horizontal axis, representing customer groups. Each of the resulting cells in the matrix identifies market segments that are available to pursue, with the actual number of cells being dependent, of course, on the number of product varieties and customer groups identified. FIGURE 17-1 Kotler’s Segment-by-Segment Invasion Plan Adapted from Kotler, Philip, Marketing Management, 11th Edition, © 2003, Pg. 302. Reprinted by permission of Pearson Education, Inc., Upper Saddle River, NJ. To create an Invasion Plan, marketers simply (1) construct a matrix of sufficient size, (2) list product varieties on the vertical axis, (3) list customer groups on the horizontal axis, (4) identify, using unique hatch patterns, all of the organizations that are currently pursuing the market segments formed in the matrix, and (5) identify, using arrows, the market segments that represent desirable future pursuits for the evaluating entity. The resulting Segment-by-Segment Invasion Plan provides marketers with a concise self and competitive assessment of current market segment pursuits. It also illustrates the anticipated future market segment pursuits of the evaluating organization. OPERATIONAL MATTERS Figure 17-2 illustrates a Segment-by-Segment Invasion Plan that was developed for Madison Wellness, a physical therapy clinic. The diagram indicates that Madison Wellness is targeting the adult and senior markets for physical therapy services; Oakdale Clinic is targeting the youth market for speech therapy services; and Village Therapies is targeting the youth, adult, and senior markets for speech therapy services. FIGURE 17-2 A Physical Therapy Clinic’s Invasion Plan Constructed using design methodologies in Kotler, Philip. Marketing Management. 11th ed. Upper Saddle River, NJ: Prentice Hall, 2003. Seeking increased growth, Madison Wellness is planning to expand beyond its current physical therapy offering by first entering the occupational therapy market, targeting adults and seniors simultaneously, as indicated by the first series of arrows in Figure 17-2. If successful, Madison Wellness will later enter the speech therapy market, once again targeting both adults and seniors, as indicated by the second series of arrows in Figure 17-2. With this information, marketers at Madison Wellness have a concise portrayal of the current market segment pursuits of identified competitors. These marketers also possess a useful depiction of the market segments that Madison Wellness might pursue in the future. Beyond the depiction of current and future market segment pursuits, Kotler’s Segment-by-Segment Invasion Plan affords marketers with opportunities to formulate marketing strategies and tactics associated with their growth pursuits. Marketers can, for example, assess barriers to entry, evaluate competitors, predict competitive responses to invasions, and assess segment limitations. By proactively addressing the requirements of upcoming segment invasions, marketers increase the likelihood that their pursuits will be successful. It should be noted that marketers must ensure that their Segment-by-Segment Invasion Plans are kept strictly confidential. The element of surprise is essential for any segment invasion. If competitors gain access to this information, the element of surprise is, of course, eliminated. This allows competitors the opportunity to take preemptive actions to defend themselves against anticipated segment invasions, making invasions much more difficult or even impossible. SUMMARY Despite success in particular market segments, marketers must understand that every segment possesses growth boundaries. Therefore, if marketers and their organizations desire sustained growth, they must identify and pursue new markets and market segments—a task facilitated by Kotler’s Segment-by-Segment Invasion Plan. Usefully, this tool forces marketers to identify future market segment pursuits that will yield sustained organizational performance. EXERCISES 1. Provide a detailed account profiling Philip Kotler’s Segment-by-Segment Invasion Plan, identifying and explaining its uses and steps of development, accompanied by an appropriate illustration. Share your thoughts on the degree to which modern healthcare organizations focus on future market segment pursuits. 2. Contact an area healthcare establishment (e.g., hospital, nursing home, retail pharmacy) and arrange an informational interview with its marketing director to learn about the facility’s segmentation planning practices. Specifically, investigate the degree to which the institution has defined future segments for pursuit. Present Philip Kotler’s Segment-by-Segment Invasion Plan and ask the executive for insights regarding the value of the tool for use in his or her particular work-place. Report your findings in detail. REFERENCE Kotler, Philip. 2003. Marketing management. 11th ed. Upper Saddle River, NJ: Prentice Hall. CHAPTER 18 The Perceptual Map LEARNING OBJECTIVES After examining this chapter, readers will have the ability to: ■ Realize the importance of product positioning, the determination and assignment of appropriate and effective images for products to convey to customers. ■ Understand the necessity of monitoring consumer perceptions related to healthcare products to ensure that these offerings are perceived in the manner desired. ■ Recognize the value of the Perceptual Map as a tool for effecting better product positioning outcomes in the health-care industry. INTRODUCTION Target marketing is an essential practice involving three interrelated activities: market segmentation, targeting, and product positioning. Market segmentation is the process of dividing a market into groups (i.e., segments) of individuals who share common characteristics. When the market has been segmented, marketers engage in targeting where they select (i.e., target) attractive segments and focus their efforts on satisfying the wants and needs of these groups. After segmenting and targeting activities have been completed, marketers then position their products. Product positioning involves the determination of an appropriate and effective image for products to convey to customers. An aspirin manufacturer, for example, might wish to portray its product as an instant pain reliever, while another might emphasize the affordability of its product. A medical clinic might wish to emphasize its prestigious medical staff, while another might convey its convenient service. A hospital might wish to convey an image of technological innovation, while another might desire an image of altruistic concern for patients. When determined, marketers formulate methods to convey the desired product imagery to target markets through advertising, personal selling, sales promotion, and other means. When products have been positioned, marketers must monitor consumer perceptions related to the offerings to ensure that associated goods and services are perceived in the manner desired. A useful tool that provides guidance to marketers in this endeavor is known as the Perceptual (or Positioning) Map, which, as illustrated in Figure 18-1, consists of two intersected axes that represent different product-related attributes. When completed, a Perceptual Map demonstrates how consumers perceive products based on designated product attributes—information that is essential for the purpose of product positioning. FIGURE 18-1 The Perceptual Map To assess products using the Perceptual Map, marketers (1) identify the offerings to be evaluated, (2) construct the map diagram, as illustrated in Figure 18-1, (3) determine the product-related attributes that will compose the map’s axes, labeling the diagram accordingly, (4) gather data pertaining to the consumer perceptions of products to be evaluated, and (5) plot the coordinates of each product on the Perceptual Map. This visual representation is then analyzed to determine if product offerings are perceived in the manner desired, allowing marketers to make adjustments as necessary to elicit desired perceptions. For increased insights into consumer perceptions, marketers can add competitive products to the Perceptual Map. OPERATIONAL MATTERS FIGURE 18-2 A Medical Clinic’s Perceptual Map Figure 18-2 illustrates a Perceptual Map that was completed by a medical clinic. Here, the clinic sought to evaluate consumer perceptions regarding its medical services in relation to competitive offerings on the basis of personal service (more or less) and convenience (more or less). The diagram indicates that one clinic is perceived to offer more personal and more convenient service, three clinics—including the evaluating clinic—are perceived to offer more personal but less convenient service, four clinics are perceived to offer less personal and less convenient service, and two clinics are perceived to offer less personal but more convenient service. Of course, by examining each quadrant, more specific information can be obtained. The evaluating clinic is, for example, viewed as the most personal of the three clinics in the “more personal, less convenient” quadrant, but it is the least convenient of the three. With the information provided by the Perceptual Map, the clinic can take steps to improve the manner in which it is perceived. Because the facility was viewed negatively in the area of convenient service, the clinic might consider introducing measures to increase convenience, such as better parking and extended hours. Of course, the clinic could gain even greater insights into its operation by completing additional Perceptual Maps to view consumer perceptions regarding other product attributes. EXPLORATORY PERCEPTUAL MAPS Beyond assessing current products, Perceptual Maps are also useful for positioning new and anticipated product offerings. Figure 18-3 identifies an Exploratory Perceptual Map that was completed by a long term care corporation seeking to assess expansion opportunities in a particular community. Here, the corporation assessed the community’s existing assisted living centers based on amenities (many or few) and price (high or low). The completed Exploratory Perceptual Map indicates that three assisted living centers are perceived to offer many amenities at a high price, one center is perceived to offer few amenities at a low price, and one center is perceived to offer few amenities at a high price. With this map, the corporation has an enhanced perspective of the assisted living market in the community, which can guide it in determining how it might possibly enter the market. Notably, the diagram illustrates that a void exists in the market’s “many amenities, low price” quadrant. This void may represent an opportunity for the corporation to differentiate itself from existing competitors by establishing the community’s only assisted living center that offers many amenities at a low price. The Exploratory Perceptual Map also allows the corporation to assess various competitive approaches to assisted living. FIGURE 18-3 A Long Term Care Corporation’s Exploratory Perceptual Map OTHER POINTS It is important to remember that Perceptual Maps are only as accurate as the information that is used to complete them. In constructing these maps, some marketers simply use their own judgment regarding consumer perceptions related to the product offerings under examination. Others assemble groups consisting of members of their product management teams to discuss likely consumer perceptions, developing Perceptual Maps accordingly. Still other marketers use formal market research to construct these maps. Although Perceptual Maps remain useful even with informally collected data, the use of data derived from formal market research can greatly improve their accuracy. It is also important to remember that Perceptual Maps do indeed deal with perceptions. Consumer perceptions, of course, change over time—a fact which necessitates that marketers routinely construct and analyze Perceptual Maps in an effort to stay abreast of the latest consumer perceptions regarding product offerings. SUMMARY The Perceptual Map provides marketers with a helpful tool for understanding consumer perceptions related to product offerings. Usefully, the Perceptual Map can be employed to assess consumer perceptions related to both current and anticipated product offerings. Such information greatly assists marketers in their ongoing product positioning responsibilities, making the Perceptual Map an indispensable marketing tool. EXERCISES 1. Provide a comprehensive overview of the Perceptual Map, explaining its purpose, components, uses, and benefits, accompanied by an associated illustration. Be sure to indicate how the instrument can be used not only for current product offerings but also for potential product offerings in the marketplace. Share your views regarding how this instrument can be used to effect better product positioning outcomes in the healthcare industry. 2. Select a healthcare product of your choice for placement in your local market and envision its key features and benefits. Then, prepare an Exploratory Perceptual Map for the potential offering, selecting applicable product-related attributes for the axes and plotting all competitive products in the market on the diagram based on your views of how consumers might perceive the offerings. Provide a narrative assessing this new product offering in the context of existing competition. CHAPTER 19 Ries & Trout’s Product Ladder LEARNING OBJECTIVES After examining this chapter, readers will have the ability to: ■ Realize that healthcare marketers must direct attention to the manner in which consumers perceive their product offerings relative to those of competitors. ■ Understand that significant efforts are required to ensure that consumers view given healthcare products more favorably than competitive offerings. ■ Recognize that consumers tend to rank products in their minds. ■ Appreciate the value of Ries and Trout’s Product Ladder as a tool for visualizing and understanding the product rankings formulated by consumers. INTRODUCTION Given that marketers ultimately seek to effect exchanges with target markets, they must constantly focus on the manner in which consumers perceive their products in relation to competitive offerings. Ideally, marketers would like for their goods and services, rather than those of competitors, to be viewed most favorably by consumers. Achieving such prominent positions in the minds of consumers is a difficult task, but if attained, yields significant benefits. For insights into attaining such lofty positions in the minds of consumers, marketers frequently refer to the Product Ladder, a useful tool developed by Al Ries and Jack Trout. Illustrated in Figure 19-1, the Product Ladder consists of an outline of a human head, representing a consumer’s mind, with a ladder situated inside, representing the consumer’s rank order of brands within a particular product category. Ries and Trout developed the Product Ladder to illustrate that, given the limitations of the human mind coupled with the proliferation of available goods and services in the marketplace, consumers are forced to rank products in their minds. FIGURE 19-1 Ries & Trout’s Product Ladder From Positioning: The Battle for Your Mind, 20th anniversary ed. by Al Ries and Jack Trout. Copyright © 2001, 1981 by The McGraw-Hill Companies, Inc. Published by McGraw-Hill. Reproduced with permission of The McGraw-Hill Companies. These rankings can be depicted as a series of ladders in the minds of consumers, with each ladder representing a different product category and each step representing a different product brand. Products situated on higher steps rank higher in the minds of consumers than products situated on lower steps. Product Ladders may consist of as few as one step to many steps, although Product Ladders with seven or more steps are considered to be quite lengthy. Product Ladders are also consumer-specific—they are based on the particular views of given individuals. Some consumers may not be aware of brands within particular product categories and would, therefore, not possess associated Product Ladders. Consumers who, for example, have never had a need for surgery may not possess a Product Ladder for surgical services. When consumers develop needs for unfamiliar goods and services, however, Product Ladders form rather quickly as consumers actively solicit information regarding given product offerings through both formal and informal channels. OPERATIONAL MATTERS To assess products using the Product Ladder, marketers simply (1) identify the product category to be evaluated, (2) gather data pertaining to the consumer perceptions of product brands within the identified category, and (3) construct a Product Ladder that is representative of the findings. This visual representation is then analyzed to gain product insights. Figure 19-2 presents a series of Product Ladders illustrating a particular consumer’s perceptions regarding a variety of healthcare offerings; namely, medical centers, medical clinics, and assisted living centers. The products occupying the top rungs of these Product Ladders represent those offerings that, in their respective product categories, the consumer views as most favorable. Products at lower levels, however, are not as highly regarded by the consumer. Of course, these particular Product Ladders represent the perceptions of only one individual whose views may or may not coincide with prevailing perceptions in the market. Marketers seeking more extensive, and thus useful, perspectives of consumer perceptions would need to acquire representative samples of product rankings for given product categories from targeted consumers. The data could then be aggregated and used to construct “market representative” Product Ladders that marketers could, in turn, use to determine strategic and tactical priorities. FIGURE 19-2 A Series of Product Ladders for Health Offerings Constructed using design methodologies in Ries, Al, and Jack Trout. Positioning: The Battle for Your Mind. 20th anniversary ed. New York: McGraw-Hill, 2001. MOVING UP THE PRODUCT LADDER Marketers whose products occupy lower-level positions face an extremely difficult challenge as they pursue the top steps of Product Ladders. Although the outright dislodging of top-rung brands is usually impossible, marketers can make inroads toward these positions by relating their products to market leading offerings. A newly established medical clinic, for example, might feature in its advertisements its enhanced scope of services in relation to the market’s leading clinic. A pharmaceutical firm might tout in its advertisements that its pain reliever works faster than the leading product. Sales representatives for a durable medical equipment manufacturer might tout their product line’s enhanced durability, better warranty, and more comprehensive customer support policy relative to the market leader’s offerings. By relating lower-rung products to market leading offerings, marketers exploit consumer familiarity to leverage their own product positions. NEW PRODUCTS & THE PRODUCT LADDER It should be mentioned that when marketers introduce new-to-the-world products, those products that define entirely new product categories never before offered to the public, consumers must formulate new Product Ladders in their minds. Marketers can assist consumers in the construction of these new Product Ladders by relating totally new product offerings to existing products. Ries and Trout note that this approach was used with the introduction of the automobile, which was initially referred to as a “horseless” carriage, allowing consumers a familiar point of reference to understand and evaluate the new-to-the-world product offering. Once again, marketers exploit familiarity to gain a foothold in the minds of consumers. SUMMARY Ries and Trout’s Product Ladder provides marketers with a useful tool for understanding the manner in which consumers perceive products in relation to competitive offerings. Notably, this tool directs attention to the fact that consumers rank products in their minds, with higher rankings indicating more favorable product offerings. The useful insights generated by the Product Ladder provide great assistance to marketers in their endeavors to achieve prominent positions for their product offerings in the minds of consumers. EXERCISES 1. Define and comprehensively discuss Ries and Trout’s Product Ladder, providing insights regarding its uses, features, meaning, and value, accompanied by an appropriate illustration. Be sure to include in your discussion an overview of the instrument’s importance as a target marketing device in the healthcare industry. 2. Secure a copy of a telephone directory for a municipality of which you are familiar. Select a particular medical category (e.g., eye surgery centers, nursing homes, etc.) and view the listings provided in the directory. Then, based on your knowledge of the given establishments, construct a Product Ladder for the particular medical category. If any of the listings are unfamiliar to you, seek information about the given entities in an effort to assign them an appropriate place on the Product Ladder. Provide a brief narrative explaining your illustration. REFERENCE Ries, Al, and Jack Trout. 2001. Positioning: The battle for your mind. 20th anniversary ed. New York: McGraw-Hill. CHAPTER 20 Abraham Maslow’s Hierarchy of Needs LEARNING OBJECTIVES After examining this chapter, readers will have the ability to: ■ Understand that motivations to purchase and consume healthcare offerings are very complex and highly diverse. ■ Realize that different healthcare issues, events, and circumstances spark different motivations that require different interventions. ■ Recognize the necessity for healthcare marketers to possess an understanding of human motivation in an effort to better understand their customers. ■ Appreciate the value of Maslow’s Hierarchy of Needs as a device for understanding human motivation. INTRODUCTION Motivations to purchase and consume healthcare products are as complex and varied as the number of available goods and services in the marketplace. These motivations are fueled by an equally complex and varied array of human wants and needs, which marketers seek to address through the development and distribution of goods and services. Different healthcare issues, events, and circumstances spark different motivations that require different interventions (i.e., goods and services). Given this, it is essential for marketers to possess a thorough understanding of human motivation. One leading theory of human motivation was developed by Abraham Maslow, who theorized that all human needs can be grouped into one of five hierarchical categories—physiological, safety, social, esteem, and self-actualization—and that needs at one level will not motivate a person until needs at the preceding level have been satisfied. In other words, physiological needs must be satisfied before safety needs will become motivators, safety needs must be satisfied before social needs will become motivators, social needs must be satisfied before esteem needs will become motivators, and so on. FIGURE 20-1 Maslow’s Hierarchy of Needs From The Maslow Business Reader by Abraham H. Maslow, edited by Deborah C. Stephens. Copyright © 2000 by Ann R. Kaplan. Reprinted with permission of John Wiley & Sons, Inc. Illustrated in Figure 20-1, Maslow’s Hierarchy of Needs is depicted as a pyramid consisting of five hierarchical levels representing different categories of human needs. These categories, accompanied by healthcare industry examples, are identified as follows. PHYSIOLOGICAL NEEDS Physiological needs represent basic human needs that are required for survival, including air, food, water, and health. Life-saving interventions, such as ambulance transportation and emergency department services, provide some of the best examples of healthcare offerings that satisfy physiological needs. Other examples would include labor and delivery services for expectant mothers and well-baby checkups for infants. Without such services, medical complications are more likely to occur, possibly resulting in injury or death. Still another example would be that of radiological and chemotherapeutic interventions designed to extend the lives of patients suffering from cancer. Each of these interventions is conducted for physiological purposes. SAFETY NEEDS Safety needs represent human needs for security and protection. Health insurance is an excellent example of a healthcare product that addresses the safety and security needs of individuals. Assisted living centers also address safety needs by offering elderly individuals living accommodations that provide nursing assistance in secure environments. These products offer individuals the peace of mind of knowing that they are protected. SOCIAL NEEDS Social needs involve human needs for love, friendship, affiliation, and acceptance by others. Psychiatric therapies and medications are examples of healthcare goods and services that address the social needs of individuals. These interventions offer hope to those suffering from socially confining illnesses, such as anxiety and depression. Wheelchairs and prosthetic devices represent additional examples of healthcare products that address social needs. These product offerings enable the injured and disabled to engage society and interact more easily with others. ESTEEM NEEDS Esteem needs represent human needs for pride, prestige, and attention and recognition from others. Cosmetic surgery offers an excellent example of a medical service that addresses esteem needs. Face lifts, breast augmentation, and liposuction represent only a few of the many cosmetic procedures that individuals routinely undergo to enhance their appearance, often as a means of increasing their selfconfidence, pride in themselves, and appeal to others. SELF-ACTUALIZATION NEEDS Self-actualization needs represent human needs for personal growth and fulfillment, and the healthcare marketplace offers rich opportunities for individuals to satisfy these desires. Donations of time (through volunteerism) and money (through financial contributions) to local medical centers, nursing homes, and health-related charitable organizations are examples of healthcare marketplace opportunities that allow individuals to fulfill self-actualization needs. When individuals reach this level, they are operating at their pinnacle. OPERATIONAL MATTERS Maslow’s Hierarchy of Needs is perhaps most useful to marketers as a tool for conceptualizing the underlying wants and needs—collectively termed needs by Maslow—that drive consumption of goods and services. By possessing a better understanding of the wants and needs satisfied by particular products, the underlying associated motivations, and the hierarchical order of the corresponding needs categories, marketers are better prepared to formulate promotional campaigns and engage in ongoing product management responsibilities. Although Maslow theorized that higher-level needs will not motivate individuals until lower-level needs have been satisfied, he acknowledged that variations are possible and do occur. One could easily envision a situation where a person might decide to use his or her resources to pay for elective cosmetic surgery (i.e., an esteem need) rather than to secure an adequate health insurance policy (i.e., a safety need). This example illustrates that, among individuals, priorities often differ and may lead to unique pursuits. SUMMARY Maslow’s Hierarchy of Needs serves as a simple, yet highly effective, tool for understanding human motivation. This tool is particularly useful in the healthcare industry where motivations to consume the seemingly endless array of goods and services are driven by an equally intensive array of wants and needs. Quite obviously, marketers can greatly improve marketing results if they understand how their product offerings fit into the overall scheme of human motivation. By understanding human motivation, marketers can better devise promotional campaigns that emphasize the attributes of associated product offerings in the context of the wants and needs that drive exchange, thus increasing the likelihood of marketing success. EXERCISES 1. Provide a detailed overview of Maslow’s Hierarchy of Needs, identifying and explaining its theoretical underpinnings, structure, and features and benefits. Support this overview by drawing an illustration of the hierarchy. Be sure to discuss the model’s implications for healthcare marketing professionals and their associated institutions. 2. Select a local medical center and investigate its product offerings, making a comprehensive list of these offerings. Then, prepare a diagram identifying the five categories listed in Maslow’s Hierarchy of Needs and place the listed products in their appropriate categories. Provide an overview of your rationale for placing the products in the diagram as you did and provide details as to how you might go about marketing products in each of the identified categories. REFERENCE Maslow, Abraham H. 2000. The Maslow business reader, ed. Deborah C. Stephens. New York: Wiley. 
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