Florida National University
HSA-6163 Planning and Marketing in Health Services Administration Week 1
Critical Reflection Paper: Chapters 1& 2
Objective: To critically reflect on your understanding of the readings and your ability to apply
them to your Health care Setting.
ASSIGNMENT GUIDELINES (10%):
Students will critically analyze the readings from Chapters 1 and 2 in your textbook. This
assignment is designed to help you review, critique, and apply the readings to your Health Care
setting as well as become the foundation for all of your remaining assignments.
You need to read the article (in the additional weekly reading resources localized in the Syllabus
and also in the Lectures link) assigned for week 1 and develop a minimum of 3-page paper
reflecting your understanding and ability to apply the readings to your Health Care Setting. Each
paper must be typewritten in 12-point font and double-spaced with standard margins. Follow
APA style 7th edition format when referring to the selected articles and include a reference page.
EACH PAPER SHOULD INCLUDE THE FOLLOWING:
1. Introduction (25%) Provide a brief synopsis of the meaning (not a description) of each
Chapter and article you read, in your own words.
2. Your Critique (50%)
What is your reaction to the content of the chapters?
What did you learn about the dilemma of needs and wants?
What did you learn about Marketing Culture?
Did these Chapters change your thoughts about Disruptive and new competition? If so, how? If
not, what remained the same?
3. Conclusion (15%)
Briefly summarize your thoughts & conclusion to your critique of the articles and Chapter you
read. How did these articles and Chapters impact your thoughts on the Patient-Physician
Relationship and Turn negative moments into positives?
Evaluation will be based on how you respond to the above, in particular:
a) The clarity with which you critique the articles;
b) The depth, scope, and organization of your paper; and,
c) Your conclusions, including a description of the impact of these articles and Chapters on any
Health Care Setting.
ASSIGNMENT DUE DATE:
The assignment is to be electronically posted in the Assignments Link on Blackboard no later
than midnight on Sunday, March 5, 2023.
ASSIGNMENT RUBRICS
Assignments Guidelines
Introduction
Your Critique
Conclusion
Total
10 Points
25 Points
50 Points
15 Points
100 points
10%
25%
50%
15%
100%
ASSIGNMENT GRADING SYSTEM
A
B+
B
C+
C
D
F
Dr. G
90% – 100%
85% – 89%
80% – 84%
75% – 79%
70% – 74%
60% – 69%
50% – 59% Or less.
Chapter 1
The
Meaning of
Marketing
Chapter 1 Learning Objectives
1. Define marketing and differentiate between a
marketing-driven and nonmarketing-driven process.
2. Distinguish among marketing mix elements.
3. Delineate between health care needs and wants.
4. Understand the dimensions of the environment that
have an impact on marketing strategy.
5. Appreciate the ongoing restructuring of the health
care industry.
Learning Objective 1
• Marketing
– The meaning of marketing
– Prerequisites for marketing
– Who does marketing?
Learning Objective 2
• Marketing mix elements
– Product
– Price
– Place
– Promotion
Learning Objective 3
• Needs vs. wants in health care
– Health care professional responsibility demands
treatment of needs.
– Many consumers are seeking a professional
response to wants.
• Dilemma!?
– Need: A condition in which there is a deficiency of
something
– Want: The wish or desire for something
Learning Objective 3
• Needs vs. wants in health care (cont.)
–
Must identify “who is the customer?” in order
to uncover needs and wants.
FIGURE 1-1 The Many Hospital Markets
Evolution of Marketing
• Production era
• Sales era
• Marketing era
• Marketing concept/culture era
– Customer orientation
– Competitor orientation
– Interfunctional orientation
– Long-term focus
– Profitability
Learning Objective 4
• Environmental forces affecting marketing
– Internal and external forces
• Greater role of transparency of price
• Planning processes
– Nonmarketing driven
– Marketing driven
Learning Objective 4
• The market driven planning process
– Outside to inside to outside flow
– Market research at two points
– Service development
– Pre-testing
– Customer driven differential advantage
Learning Objective 4
• The strategic marketing process
– Stakeholders
• Customers: Patients, physicians, etc. (see Figure 1-1)
– Environment
• Regulatory
• Social
• Technological
• Economic
• Competitive
– Society
– Target market
EXHIBIT 1-1 Major Organizations in
the Health Care Environment
Learning Objective 5
• Organizing for marketing
– Product-oriented organization
• Strategic business units
– Market-oriented organization
• A matrix structure
Learning Objective 5
• Organizational marketing success
requirements
– Pressure to be market-oriented
– Capacity to be market-oriented
– A clear shared vision of the market
– Action plan to respond to market
– Clinical microsystem approach
FIGURE 1-8 Prerequisites to Marketing Success
Diamond, S.L. and Berkowitz, E.N.
Effective marketing for Health Care Providers, Journal of Medical Practice Management, Vol. 5, No. 3, pp. 198.
Learning Objective 5
• The changing health care marketplace
– Traditional industry structure
– Evolving industry structure
– Accountable health care organizations
FIGURE 1-12 The Paradigm Shift in the
ACO Environment
Summary
• Marketing is a process that involves planning and
execution of the four marketing mix variables (the 4 Ps).
• Effective marketing for health care organizations
involves the recognition of multiple customers or
markets that often have a diverse array of needs and
wants.
• A nonmarket-based approach to planning is one in which
the conception of the service begins internally.
• Marketing-based planning is an external-to-internal
process.
Summary (cont.)
• The strategic marketing process must consider the
broad macroenvironment.
– Stakeholders, environmental factors, society.
• Health care marketing planning requires identification
of the target market.
– May differ from the organization’s present customer base.
• Product-oriented organization: Services are managed
as separate strategic business units (profit centers).
Summary (cont.)
• Market-oriented organization focuses on major
markets or customer groups.
• Four prerequisites to marketing success
– Pressure, capacity, vision, actionable steps
• Shift in marketing paradigm from transactional focus
to customer retention
• Evolution of structure—three main customers of
health care industry
– Corporations, MCOs, consumers
– Accountable health care organizations
Chapter 2
Marketing Strategy
Chapter 2 Learning Objectives
1. Understand the scope of strategic marketing
planning.
2. Identify the importance and sources of a competitive
differential advantage.
3. Recognize disruptive innovations as a source of new
competitors.
4. Describe the three alternative perspectives to assist
in developing organizational strategies.
5. Understand the essential components of marketing
strategy formulation.
Introduction
• Strategic planning: A process that describes
the direction an organization will pursue
within its chosen environment and guides the
allocation of resources and efforts
Learning Objective 1
• Four steps of strategic planning process
– Define mission.
– External assessment of threats and opportunities
– Internal assessment of strengths and weaknesses
– Establish set of priorities based on organizational
objectives.
• Then, determine which strategies to pursue.
Learning Objective 1
• Step 1: Defining organization mission
– Organization’s fundamental purpose for existing
– Who the organization is, its values, and the
customers it wishes to serve
– Blueprint for management in developing business
strategies
– Must recognize what the business is and what the
customer wants.
• Avoid marketing myopia.
Learning Objective 1
• Organization mission components
– Basic product or service, primary market, and
technology for delivering product or service
– Organizational goals
• Growth, profitability, stability, nor survival
– Organizational philosophy
– Organizational self-concept
– Public image
Learning Objective 1
Map
stakeholders
Determine
stakeholder
salience
Research
stakeholder
expectations
Avoiding
Myopia
Embed
stakeholder
orientation
Engage with
stakeholders
Learning Objective 1
• Step 2: Situational assessment
– SWOT analysis: Strengths, Weaknesses,
Opportunities, Threats
– Economic, competitive, regulatory, social, and
technological changes in marketplace
– Questions
• What are the changes and trends?
• How will these changes affect the organization?
• What opportunities to these changes present?
FIGURE 2-6 Four-Cell SWOT Matrix for Producing
Clinical Guidelines in the National Health Service
Learning Objective 1
• Step 2: Situational assessment (cont.)
– Barriers to entry: Conditions that a company must
overcome in order to pursue a business opportunity
– Barriers to exit: Costs of leaving a particular
business line
Learning Objective 2
• Differential advantage
– Product, market, cost
– Based on core competencies
– Criteria
• Importance, perceived, uniqueness, sustainable
– Sources
• Product, market, cost, trust (unique to health care)
TABLE 2-1 Sources of a Differential Advantage
Learning Objective 2
• Trust
• A unique source of a differential advantage in
health care
• Principal/agent relationship
“One individual (the principal, in this case the patient)
gives the agent (the clinician) the authority or power
to make the appropriate decisions on his or her behalf.”
Learning Objective 3
• Disruptive innovations
– Cheaper
– Simpler
– Easier to access
FIGURE 2-7 The Visible and Invisible Values
Learning Objective 4
• Organizational strategy
– Broad strategies are formulated.
– Can be either growth market or consolidation
strategies
• Growth market: Organization attempts to gain more
sales from an existing business line or by penetrating
new markets.
• Consolidation: Pairing either services or markets
Learning Objective 4
• Organizational strategy (cont.)
– Growth market strategies
• Market penetration
– Increase sales of present products/services in present
markets.
• Market development
– Increase sales in new markets.
• Product development
– Introduce new products/services to present markets.
• Diversification
– Introduce new products into new markets.
Learning Objective 4
• Organizational strategy (cont.)
– Product development strategy
• Vertical integration
– Backward integration: Become own supplier.
– Forward integration: Offer new services closer to
the customer.
Learning Objective 4
• Organizational strategy (cont.)
– Diversification strategy
• Strategic alliances
– Formal arrangements with other companies to
operate in a particular market
• Joint ventures
– New corporate entities created by strategic alliances
Learning Objective 2
• Organizational strategy (cont.)
– Consolidation strategies
• Divestment
– Selling off a business or product line
• Pruning
– Reducing the number of product or service offerings
• Retrenchment
– Withdrawing from certain markets
• Harvesting
– Gradually withdrawing support from a product until
market demand is reduced or eliminated
Learning Objective 3
• Alternative models
– Boston Consulting Group matrix
• Stars, cash cows, problem children, dogs
• Based on market growth rate and market share
• Can be used to focus on broad considerations
FIGURE 2-8 BCG Matrix for Selected Pfizer
Pharmaceutical Products
Viagra
Embrel
Cash
Cows
High
Student
Lyrica
Zyvox
Stars
Lipitor
Market share
Dogs
Low
Problem
Children
Low
High
Growth potential
Data from: “Extended Quantitative Analysis – Pfizer,” EternalYield (August 24, 2014),
Learning Objective 4
• Competitive market
– Must analyze
• Existing competition
• Potential competition
– Factors affecting competitive intensity
• Threat of new entrants
• Bargaining power of suppliers
• Bargaining power or customers
• Threat of substitute products or services
Learning Objective 4
• Competitive market (cont.)
– Existing competition
• When product is relatively standardized and the
competitors are relatively numerous and similar in size.
• When cost of switching providers is relatively low
• In industries characterized by overcapacity and among
firms still in the market because of a high fixed-asset
position
Learning Objective 4
• Competitive market (cont.)
– New entrants
– Threat of substitution
– Bargaining power of suppliers
– Bargaining power of customers
Learning Objective 4
• Blue ocean strategy
– Achieve high performance in uncontested space.
– Create demand in “unknown market.”
– Most organizations follow red ocean.
– Strategy focusing on competition
Learning Objective 5
• Marketing plan
– After establishing marketing objectives, then
formulate market strategies.
Learning Objective 5
• Market strategy formulation
– Determine target market (mass market, multisegment, market concentration).
– Specify market strategy (market challenger, market
follower, market niche).
– Develop tactical plans for marketing mix.
Learning Objective 5
• Determine target market.
– Whom the organization is trying to attract
– Assess organization’s strengths, competitive
intensity for target market, cost of capturing
market share, and potential financial gain in
attracting the targeted group.
– Mass marketing (undifferentiated) or segmenting
• Multi-segment marketing
• Market concentration strategy
Learning Objective 5
• Specify market strategy.
– Market leader
– Market challenger
– Market follower
– Market niche
Learning Objective 5
• Tactical action plan
– Identifies actions to be taken regarding each
aspect of the marketing mix
– Advertising strategy, pricing strategy,
distribution issues, nature of product
– Finally, evaluate plan (discussed further in
Chapter 14).
Summary
• Marketing plans—along with finance, production,
and human resource plans—form the core elements
of an organization’s strategic plan.
• An organization’s strategic plan is guided by the
mission that defines its purpose for existing. The
mission must recognize who the customer is and what
the customer wants to buy.
• In developing strategic plans, a SWOT analysis
provides a review of internal and external factors that
can affect strategic outcomes.
Summary (cont.)
• In developing strategic plans, an organization must be
able to recognize the barriers to entry and exit for any
new service venture.
• Invisible value is the value a producer builds into its
product or service; visible value is the value that a
customer sees. Typically an organization can only
charge for visible value.
• An organization can develop a differential advantage
that is either product-based, market-based, or pricebased.
Summary (cont.)
• There are four broad growth strategies that any
organization can pursue: market development, market
penetration, product development, and diversification.
• The BCG matrix and the Five Forces Model can aid
an organization in the review of its service portfolio
relative to the external market; both models
encompass market and competitive considerations.
Summary (cont.)
• In any industry, the level of competitive intensity is
affected by the threat of new entrants, the bargaining
power of both suppliers and customers, and the threat
of substitute products and services.
• In developing a marketing plan, organizations can
pursue a mass marketing or a market concentration
strategy.
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