Strategic Marketing For Health Care Organizations

THE AUTHORS Philip Kotler is the S.C. Johnson Distinguished Professor of International Marketing at Northwestern University's Kellogg School of Management and the author of more than thirty books. Joel Shalowitz is Professor of Health Industry Management and director of the Health Industry Management Program at the Kellogg School of Management and Professor of Medicine and Preventive Medicine, Feinberg School of Medicine, Northwestern University. Robert J. Stevens is president of Health Centric Marketing in Durham, North Carolina and an Adjunct Professor at the School of Public Health at the University of North Carolina at Chapel Hill.

Tables, Figures, and Exhibits xi


Preface xv


Acknowledgments xvii


The Authors xix


Part One


One: The Role of Marketing in Health Care Organizations 3


Overview: Marketing is Pervasive in Health Care 4


The Elements of Marketing Thought 6


Two: Defining the Health Care System and Its Trade-Offs 13


Overview: Defining a Health Care System 15


A Framework for Understanding Health Care Systems 16


Strategic Choice Model for Organizations and Health Care Systems 25


Strategic Implications for Health Care 29


Three: The Health Care Industry and Marketing Environment 41


Overview: The U.S. Health Care System Needs Improvement 43


Defining a Well-Designed Health Care System 45


Major Participants in the Health Care System 48


Key Managed Care Trends 56


Dynamic Relations among Health Care Stakeholders 71


The Changing Health Care Environment 73


Four: Determinants of the Utilization of Health Care Services 85


Overview: Why People Seek Health Care 86


Multiple Factors Influence Health-Seeking Behavior 95


Local (Small Area) Variations 104


Part Two


Five: Strategy and Market Planning 109


Overview: Defining the Organization’s Purpose and Mission 111


Strategic Planning 111


Marketing Strategies 135


Reassessment of Mission Statement 139


Strategic Alliances 141


Marketing Planning 141


Six: How Health Care Buyers Make Choices 145


Overview: Key Psychological Processes 147


The Buying Decision Process: The Five-Stage Model 155


Organizational Buying and Decision Making 163


Seven: Using Market Information Systems and Marketing Research 177


Overview: The Need for Market Information 179


The Components of a Modern Marketing Information System 180


Internal Records System 181


Health Care Services: The Clinical and Financial Systems 182


Health Care Products: The Order-to-Payment Cycle 182


The Marketing Intelligence System (MIS) 182


Marketing Research System 188


The Path Model: Understanding the Health Care Consumer 197


Marketing Decision Support System 201


Developing a Marketing Research Plan: Application and Example 203


Forecasting and Demand Measurement 206


Appendix: Secondary-Data Sources 213


Eight: Market Segmentation, Targeting, Positioning, and Competition 217


Overview: Market Segmentation 219


Segmentation of Consumer Markets 222


Market Targeting 231


Market Positioning 235


Competitive Forces and Competitors 245


Part Three


Nine: Shaping and Managing Product and Service Offerings 261


Overview: Distinguishing Product Types and Levels 263


The Nature of Services 266


Viewing the Product Mix 271


Managing Product Lines 272


Ten: Developing and Branding New Offerings 281


Overview: The New Offering Development Process 283


Building the Brand 296


Managing the Stages of the Product Life Cycle 304


Building, Maintaining, and Terminating a Brand 313


Eleven: Pricing Strategies and Decisions in Health Care 317


Overview: Understanding Pricing 318


Consumer Payers 320


Government Payers 341


Private Payers 344


Twelve: Designing and Managing Health Care Marketing Channels 351


Overview: Marketing Channels and Value Networks 353


The Role of Marketing Channels 356


Channel Functions and Flows 358


Channel Levels 360


Service Sector Channels 360


Channel-Design Decisions 361


Identifying Major Channel Alternatives 362


Evaluating the Major Alternatives 364


Channel-Management Decisions 365


Modifying Channel Arrangements 368


Channel Dynamics 369


Legal and Ethical Issues in Channel Relations 373


Thirteen: Designing and Managing Integrated Marketing Communications 375


Overview: The Role of Marketing Communications 377


Marketing Communications and Brand Equity 378


Communications Process Models 380


Developing Effective Communications 382


Advertising 397


Sales Promotion 411


Public Relations and Publicity 414


Events and Experiences 418


Factors in Setting the Marketing Communications Mix 423


Measuring the Communications Results 424


Managing the Integrated Marketing Communications Process 424


Coordinating Media 425


Implementing Integrated Marketing Communications 425


Fourteen: Personal Marketing Communications: Word-of-Mouth, Sales, and Direct Marketing 429


Overview: Personal Communication Channels 431


Word-of-Mouth Marketing 433


Designing the Sales Force 441


Health Care Sales to Hospitals and Physicians 454


Direct Marketing 458


Part Four


Fifteen: Organizing, Implementing, and Controlling Marketing 471


Overview: Organizing for Marketing 474


Helping the Hospital Become Patient-Oriented 477


Marketing Implementation 478


Evaluation and Control 479


Glossary 491


Notes 511


Index 531