Expert: Leo Lingham - 10/29/2006

Question
what are the pricing strategies used in health care.

examples of were each would be best implemented? --------------------------------------
The text above is a follow-up to ...

-----Question-----

-----------------why and how do health organizations offer new services, based on changing marketing opportunities--------------------------
The text above is a follow-up to ...

-----Question-----
How do health care organization segment the markets they serve ?   

How are health care organization's services positioned to meet the needs or requirements of its target market?

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Followup To

Question -
What are  the basic similarities and differences between profit making and non profit organizations

Why are many nonprofit organizations now turning to marketing?

How is marketing for non-profits different from marketing in for-profit companies


Answer -
Question: What are the basic similarities and differences between profit making and non profit organizations
SIMILARITIES
-vision
-mission
-objectives
-strategies
-operation  plan
-control system
-monitor  the  progress
-management  plan
-marketing  plan
-financial  plan
etc etc
==============================
DIFFERENCES
-non  profit  lacks  commercial  acumen
-non profit   lacks  commercial  sensitivity
-non  profit  lacks  business drive
-non profit  lack  motivation  for  results
-profit  seeks   achievement
etc etc
===========================================
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Why are many nonprofit organizations now turning to marketing?



The world of non-profit organizations has under gone change. Non-profit supporters are expecting the non-profit to be managed in a similar capacity as a regular business. Sound business practices are a requirement for all non-profits. Without financial profits, a non-profit cannot achieve its social mission.

Creating the proper non profit  business  plan for operating successfully and obtaining funding will include:

Executive Summary: This section covers a summary of the key points of the document including: the funding requirements, use of funds, and the social services provided.

Non-Profit Description: An outline of the services the non-profit will provide, and society benefits.

Market Plan: Just as in the private sector, social non-profits need to take a clear look at whom they are serving and describe the need in the marketplace. Also, define how your social program will be different and exist among other non-profits serving the same segment of society.

Financial Requirements: A non-profit will have financial needs supported by government grants and donors. This section of the plan will demonstrate the budget, start-up financing requirements and overall expenses.

Management Team: The non-profit will have describe its team's experiences relating to achieving its fiscal and social responsibilities.

NON  PROFIT  BUSINESS

All businesses,  whether  they are  profit  making  or  non  profit
businesses, need  a  tool or  tools  to  operate  / generate  outcome
-some  results.

The  business plan  and  the  marketing  plan  are  tools which
help  to  produce  the  outcome.

The outcome , in case of  the  profit making  business , could be
sales/ profit/customer satisfaction/ market share  etc.

The outcome, in case  of  non  profit  business, could  be
community service target levels / education service target levels,
etc.

Hence  both  have  a
-an outcome  to  achieve
-limited  resources
-operational  constraints
-community  expectations  to  meet
-generate  revenue  [ resource  development ]
-cashflow  management
etc

FOR  THE  NON  PROFIT  BUSINESS

THE  BUSINESS  PLAN  [ BOTH  SHORT TERM/MEDIUM TERM]
HELPS

-to set  up  strategic  direction
-to  set up strategic  objectives
-to  meet  community  expectations
-to develop strategic  planning
-to  develop  plans  for  resource  development  
-to develop  operating  plan
-to develop  organization plan  to  man  the services
-to develop  cash flow  plan
etc

THE  MARKETING    PLAN  [ BOTH  SHORT TERM/MEDIUM TERM]
HELPS

-to  identify the  target  people, who  needs  the  service
-to  position  the  service
-to  create  awareness  about  your  service
-to  create  a  satisfaction  among  the  community
-to  main a  two  way  communication  with  the community.
-to  identify  the  future  needs  of  the  people
-to  develop   new  services
etc

MARKETING  PLAN   is   an  element  of  the  TOTAL
BUSINESS  PLAN.
=========================================================

How is marketing for non-profits different from marketing in for-profit companies
MARKETING   OF   PROFIT
-has  a  product  or  service to  offer
-customers  get  something  in  return
-buying/selling   transaction
-motivation  to  buy/  motivation  to sell
-motivation  to make  a  profit
-results  are  seen/visible
etc

MARKETING   OF  NON-PROFIT
-is  a  community  service
-no transaction
-money  moves one  way [  from  clients  to  the  non-profit business]
-results  are  often not   communicated
-results  are  not seen / not  visible  often.
-very  limited  motivation/  that  too  of  short span.
-lacks  the  marketing  leadership  often
etc etc




regards

LEO LINGHAM







-----Answer-----
How do health care organization segment the markets they serve ?
          HEALTHCARE    TARGET   MARKETING


Market Needs should be interpreted in terms of Customer Characteristics and Buying Behaviours. Market Segments may differ in ---information, technical support, service and a host of other needs that are part of the purchase.
      WHAT ARE THE WAYS BY WHICH WE
  CAN CLASSIFY THE MARKET ?

1.Geography‑ Country
     ‑ Metro
     ‑ Region
     ‑ Postcode
2.Amount of Purchase‑ Large
     ‑ Medium
     ‑ Small
3.Frequency of Purchase‑ High
     ‑ Medium
     ‑ Low
4.Type of Purchase‑ New
     ‑ Repeat
5.Type of Intermediaries‑ Key
     ‑ Value Added
     ‑ Others
     ‑ Metro/Country
6.Type of Applications   

7. Target  Groups    - seniors
         -baby boomers
         -generation  X          
         -sportspersons
         etc etc
     

Any other classifications you can think of ?

With these characteristics in mind, you can now go through the steps involved in targeting the best opportunity.


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   HOW DO WE APPROACH THIS OPPORTUNITY ?

1.Define the total market segment and its potential ?

2..Can this market be serviced by intermediaries ?

3.Analyze the entire buyer behaviour process for this segment ?

4.Identify the specific problems, applications and needs, and concerns of  the group involved.
  Conduct a quick/random survey to determine the situation, if no other  data is available,

5 .If necessary, set up a good on‑going marketing intelligence system that
   encompasses insight and feedback from marketing field personnel.

6.Match the company's products with the preferred market segment targets.

The individual strengths of the product should meet the needs and wishes of the pre‑determined market.

7. Plan and implement the marketing strategy.

The target group that is selected will influence the strategy. With the
knowledge of the market segment/its characteristics/its behaviours, you
can make better decisions on such things as pricing, promotions etc.

8.Estimate how alternative market targets will meet your objectives. Your
evaluation is needed to predict the feasibility of achieving objectives among the
market target options.

9.Estimate the yield ‑ sales/gross profit/programme cost.

10.Implement/Evaluate

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MARKET SEGMENT
TARGET QUALIFICATIONS

To Qualify As A Market Target, A Group Of Customers Should
Meet Important Conditions




For any group regarded as a potential market target, the following questions should be asked:

Will the group satisfy our sales/profit objectives ?

Is it apt to grow ?

How stable is the market segment ?

Can we accurately measure the size and purchasing power of the target market segment ?

Will we be able to reach the target with our promotion

Do we have the resources to serve the proposed targeted market segment 2

Are the homogeneous customers within the possible segment influential ? Will their purchases cause other groups to buy the products ?

Can we identify the customers so that we can know where and how to appeal to them ?

How strong is our competition in this target market ? Are there any competitive opportunities for us ?

Many market segments will not meet the above requirements. For instance, a certain group may not have promising growth potential, yet it may offer stable and profitable business forces.



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CHECKLIST QUESTIONS FOR
TARGET SEGMENTATION

What kind of analysis is required for creative segmentation to result ?

A good, practical approach to identify differences among customers is to ask yourself questions such as:


WHAT:

Benefits does the customer seek ? Factors influence demand ? Functions does the product perform for the customer ? Are important buying criteria ? Is the basis of comparison with other products ? Risks does the customer perceive ? Services do the customers expect ?


HOW:

Do the customer buy ? Long does the buying process last ? Do customers use the product ? Does the product fit into their operation ? Much do they buy ?



WHERE:

Is the decision made to buy ? Do customers seek information about the product ? Do customers buy the product ?



WHEN:

Is the first decision to buy made ?

Is the product re‑purchased ?


WHY:

Do customers buy ?

Do customers choose one brand as opposed to another ?


WHO:

Are the occupants of segments identified by the previous questions ?

Buys our products, and why ?

Buys our competitors' products, and why ?

Several points should be kept firmly in mind when using questions such as these to facilitate target segmentation.

First, the list of questions is only suggestive;

In any given situation some questions will be more important than others or questions not contained in this list might be profitably asked.

Second, data is usually need to supply the answers;

This data can come from marketing research designed specifically to answer such questions.

Third, the answers themselves have to be related to the decision at hand.
=============================================================
Target Market
Target market for the  Healthcare Program  and  often  positioned  
to  market  as  faciltities/services/care  etc  for  the  needy.
Clinics
Community health
Dental
Emergency medicine groups
Health maintenance
Healthcare  
Hospice
Hospitals   
Nursing   
Psychiatric facilities
Rehabilitation
Surgery

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How are health care organization's services positioned to meet the needs or requirements of its target market?



Attracting a broader and larger pool of users  into the healthcare  is a marketing issue. Not merely promotion, or generating awareness of opportunities and benefits, but sound marketing.

Awareness. Effective marketing communication begins with making prospective healthcare users  aware of the opportunities and benefits of healthcare.

Creating awareness is not a simple task in today’s media-driven culture. Consumers — and especially youth, a demographic group hotly pursued by advertisers — are bombarded with promotional messages thousands of times each day.

"Breaking through the clutter" requires that the message is actually noticed by the target audience. It must command attention and be repeated until it sticks in the target’s memory.

Interest. Only a portion of people who notice a health  marketing message will actually have an interest in health . The pyramid shrinks as each level is achieved. The number of prospects declines.

Evaluation. Of those intrigued by the health  message, only some will act on their interest. This group moves into a stage of evaluation. They respond to the ad or presentation in individual ways.

The health  marketer has very little influence over how various prospects explore and evaluate the messages they receive from other sources.
Health workforce  strategists must be able to provide in-depth information to those who are exploring health  along with other  choices. Our messages must be truthful, compelling, consistent across various sources (e.g., promotional materials vs. the opinions of practicing health specialists) and easy to access.

Trial. Once an individual has reached the trial stage of the pyramid, chances are he or she has a legitimate interest in exploring health

Adoption. Those who try and like something usually buy it.

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regards

LEO LINGHAM
-----Answer-----
why and how do health organizations offer new services, based on changing marketing opportunities--------------------------
WHY
-The health organizations  regularly  conduct  market research   to
determine  the  customer  satisfaction  for  the  current services.
and  also
conduct market research   to determine  new  needs of  the  customers
who  are  experiencing  new  lifystyle  changes.

THE  DATA  FROM THE  ABOVE  RESEARCHES  REVEAL  
THE  REAL  GAPS  IN  THE  CURRENT SERVICES  AND
DEMANDS  FOR  NEW  SERVICES.
=================================================
HOW

The  health  organizations  based  on the  research   results  and
the  current/ near  future  economic/social indicators  offer
products
-which  have been  upgraded  packages
-modified   packages
-new  packages
-new services
etc etc
=========================================
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REGARDS

LEO LINGHAM  

Answer
Review the factors affecting the pricing or rate schedules of  health care agencies.
A large number of factors affect costs and thus rate structures.

The major factors include reimbursement structures with accompanying discount structures, administrative burdens, and risks.

Channel issues include bargaining power, competition, and size.

Staffing issues affect pricing and product through the provider level, productivity, and quality outcomes.

Physician and patient issues include quality concerns and choices.

These factors are  CONSIDERED  in light of overall marketing strategy and the interaction of pricing with other marketing controllables such as product, place/distribution, and promotion. Economic and accounting principles are also reviewed with consideration to understanding direct and indirect costs in order to enable negotiators to effectively price health care services.

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THE  PRICE  STRATEGIES  INCLUDE

-COST  BASED PRICING  [ BASIC  SERVICES]

-ADVANCED  PRICING   [ HOSPITAL  SERVICES]

-CONTRACT  PRICING  [ HOME SERVICES]

-TWO  LEVEL  PRICING  [ BASED  ON  QUALITY  LEVEL OF  SERVICES]
ETC ETC.

regards

LEO LINGHAM