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Healthcare Marketing_ History and Concepts

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Healthcare Marketing:Historyand Concepts
Chapter 1
The Origin and Evolution of Marketingin Healthcare
The History of Marketing
Phase One: Product Differentiation and theRiseof theConsumer
The History of Marketing
There aretwo primary reasons for emerging of marketing:First, consumers had to be introduced to and educated aboutthese newgoods and services.Second, the entry of new producers into themarket introduceda level of competition that was unknown in the prewar period.
The History of Marketing
Phase Two: The Role of SalesThe second stage of marketing evolution focused on sales. Many U.S.producers hadenjoyed regionalmonopolies.
The History of Marketing
Phase Three: The Rise of theCustomerShiftfrom a product orientation to aservice orientation.
Marketing in Healthcare
Stagesof HealthcareMarketingThe1950s:Hospitals and physicians, for themost part, considered marketing (read: advertising) to be inappropriate andeven unethical.The1960s:The Mediarelations in this era often consistedof answeringreporters’ questions about patients’ conditions.The1970s:Someearly attempts at advertising health services were made,and interestin marketing research was beginning to emerge. Marketing by thehealthcare establishment was officially recognized in a conference on thetopic duringthemid-1970s,sponsored by American Hospital Association (AHA).
Marketing in Healthcare
Stagesof HealthcareMarketingThe 1980s:Hospitals realized that marketingdirectly toconsumers for such services as obstetrics, cosmetic surgery, andoutpatient carecould generate revenue and enhance market share.The1990s:The consolidation of healthcare organizations into ever-larger systems resulted in the creation of larger organizations with expanded resources and more sophisticated management. Many executives entered the field from outside of healthcare, bringing a more businesslike atmosphere with them..
Why Healthcare Is Different from Other Industries
Because marketing philosophies and techniques cannot be readilytransferred fromother industries to healthcare, healthcare marketing requires itsown uniqueapproach and takes on characteristics unlike those of marketing inother industries. Marketing in healthcare is different for the following reasons:
Why Healthcare Is Different from Other Industries
The demand for many health services is relatively rare andhighly unpredictable.The end user may not be the target for the marketing campaign.The product being marketed may be highly complex and may notlend itselfto easy categorization.Not all prospective customers for a health service are considered desirable.
Why Healthcare Is Different from Other Industries
It is difficult to measure the outcome of the provision of health services.It is difficult to quantify the differences between healthcare organizations and the services they deliver.It is more of a challenge to market services than goods.
Developments Encouraging Healthcare Marketing
The following list includes some of theseimportantdevelopments:Introduction ofcompetition.Overcapacity in the hospitalindustry.Rise of theconsumer.Introduction of new services.Growth of elective procedures.
Developments Encouraging Healthcare Marketing
The following list includes some of theseimportantdevelopments:Introduction of a retailcomponent.Entry of entrepreneurs.Service-line development.Mergers and acquisitions.Need for social marketing.
Reasons Healthcare Should Be Marketed
Building awareness.Enhancing visibility or image.Improving market penetration.Increasing prestige.Attracting medical staff and employees.
Reasons Healthcare Should Be Marketed
Serving as an information resource.Influencing consumer decision making.Offsetting competitive marketing.
Healthcare Marketing Comes of Age
During the periodafter WorldWar II, the concept of marketing was unknown in healthcare.The publicrelations role was expanded over time, andcommunicationsandgovernment relationsfunctions were added.Bythe late 1970s, formalmarketing activitieswere being initiated, and advertising on the part of healthcareproviders wasbecoming common.
Healthcare Marketing Comes of Age
By the end of the 1980s, marketing was being incorporated intothe structureof healthcare organizations.Marketing was moving from the periphery ofthe organizationto the boardroom.A 2007 Society for Healthcare Strategy and MarketDevelopment (SHSMD) survey of nearly 300 hospitals found that hospital marketingdepartments averaged4.9 staff members and budgets of $1.2 million.
Key PointsUnit One
AlthoughAmerican industry accepted marketing in the 1950s, anumber offactors prevented the healthcare industry from adoptingmarketing initially.The pioneers in healthcare marketing can be traced back to the1970s, butmarketing was not widely accepted as a legitimate functionfor healthcareorganizations until much later.Early on, there were no experienced healthcare marketers, andmarketing expertshad to be imported from other industries.
Key PointsUnit One
Changesin the healthcare arena during the 1980s (particularlythe increasein competition) resulted in a surge of interest in marketing.Once health professionals accepted marketing, the fieldunderwent variousstages of growth and contraction in response tomarket developments.Initially, marketing was often equated with advertising, and organizations underwent considerable trial and error before accepting other promotional techniques.
Key PointsUnit One
By the 1990s, healthcare marketing was maturing as a field, and anew generationof hospital administrators and healthcare marketers wason board.By the turn of the twenty-first century, healthcareorganizations hadcome to consider marketing an essential function forhealthcare organizations, and marketing resources were increasingly wedto strategicplanning and development efforts.

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Healthcare Marketing_ History and Concepts