INSTRUCTOR’S MANUAL
ESSENTIALS OF HEALTH CARE MARKETING
5TH EDITION
CHAPTER NO. 01: THE MEANING OF MARKETING
ANSWERS TO END-OF-CHAPTER QUESTIONS
1. Several prerequisites are necessary for marketing to occur. Identify each prerequisite in the
following examples: (a) a medical group offering an after-hours telemedicine service for
primary care, (b) a consumer seeking physical therapy, and (c) a company choosing health
coverage for its employees.
For marketing to occur, the prerequisites are: two or more parties with unsatisfied needs; a
desire or ability to meet those needs; something to exchange between the two parties; a means
of communicating.
In these examples, then:
(a) A medical group offering after-hours telemedicine service for primary care. The two parties
are the medical group that wants to offer a telemedicine primary care service and the potential
patients who want access to a primary care consult without having to go into a PCP’s office.
The exchange involves the clinician’s expertise by way of telemedicine and the patient’s
insurance coverage, if available, or by direct payment by credit card transaction.
(b) Consumer seeking physical therapy. The two parties are the consumer with physical
therapy needs and the therapist who wants to make people healthy and earn a return for this
labor; the desire of the patient is to restore health, and the desire of the therapist is to earn an
income by making people healthy. The patient will exchange money for the physical therapist’s
knowledge and skill. The means of communicating is either an advertisement or a visit to the
therapist’s office.
(c) Company choosing health coverage. The two parties are usually the company and the
insurance firm; the desire for the company is to cover its employees’ health care needs, and
the desire for the insurance firm is to gain the business. The exchange is the premium dollar
covering each employee for the insurance coverage. The means of communicating is usually a
sales call from the insurance company.
,2. At a recent hospital planning meeting, the marketing director reports on consumer interest
in a women’s health center. Hearing strong interest, the planning committee endorses the
concept. A group of clinicians is charged with developing the program. The program opened
a clinic for scheduled primary care, obstetrical and gynecological visits, with appointment
hours established from 9:00 a.m. until 4:30 on Mondays, Tuesdays, Thursdays, and Fridays.
Wednesday appointments are available until noon for physicians to be able to attend to the
teaching obligations at the academic medical center. The women’s health center also scheduled
a series of health education programs through the fall; the fees for these programs were set
from between $25 to $100 depending on the speaker and the number of sessions.
Upon introduction, market response did not meet expectations. A senior physician complained,
saying, “What went wrong? We did the survey.” Explain the possible reasons for this
program’s disappointing market response.
The problem with the women’s health center was that the market planning process was not
fully implemented. The hospital marketing director conducted a study to determine interest,
but the concept was then translated without any additional pre-testing. The hours established
were convenient to the practitioners rather than the market. Many women work full-time
outside the home in increasing numbers, and as a result, the hours of the clinic make it
increasingly difficult to access the clinic. Wednesday appointments were only until noon.
There are no extended hours, nor are there any evening hours or telemedicine appointments.
No testing of the pricing of the program fees was conducted. As a result, the service was most
likely configured the way the health care professionals within the hospital thought it should be
rather than designed to meet the consumer’s wants.
3. The marketing director of a hospital has met with the chief medical officer of the hospital’s
newly hired occupational and industrial medical director. This program is the hospital’s first
new venture into attempting to appeal directly to employers in the business community in the
metropolitan area of the medium-sized midwestern city, which has a relatively large base of
manufacturing companies. The community has always been a part of the supply chain of
companies to auto manufacturers in producing parts for cars such as plastic components,
batteries, and, increasingly, components for dashboards. In this initial meeting, the chief
medical officer, who received her own MBA degree, said, “Since I first got hired, I’ve been
,thinking of one important question. Who do we reach out to first? This is a great business
community. Unions are still strong here. Business is strong. There are lots of opportunities for
this service.” Provide a list of all the potential target markets and prioritize the list with a
rationale for the CMO.
In developing this new occupational and industrial medicine program, there are several
potential target markets to reach out to and consider in the marketing of this program. Some of
these target markets will be the ultimate customers or users of the program, and others will be
involved in deciding whether the program from this particular provider organization will be
offered to whatever company decides to offer the program.
• Employees should be targeted to understand what benefits and range of services are
offered in such a program.
• Union leaders should understand the services.
• Human resource directors may well be involved in the decision process. Medical
officers are often part of a large company and need to be targeted.
• Chief finance officers should understand the money that can be potentially saved by
the benefits offered in contracting with such a program.
• Chambers of commerce would be an important constituency to identify to communicate
benefits.
• Owners and senior executives of companies may also be involved as a target market.
If this is a new program never offered to employees in the area before, the potential
benefits are not well known as a value to their company employees or as a cost savings
for their firm in keeping their employees productive and healthy.
4. In developing the new pediatric sports medicine program (described in question 3), what are
some of the uncontrollable environmental factors to consider? This group practices in a large
metropolitan area. There are two large health care systems that in recent years have begun to
employ their own physicians in a large practice.
There are some major environmental, uncontrollable factors that could affect this program.
Demographics are an obvious issue. A declining birth rate or an aging population affects any
aspect of the pediatric medical business. There might be some technology that could
dramatically affect the way in which problems are treated. Competitive factors might be an
, issue if the pediatric sports medicine niche looks attractive. Now that the two large health care
systems have hired their own physicians, that could significantly affect the referrals as well as
lead to a new competing group or two competing groups in the marketplace. Finally, one must
recognize that under health care reform, there always looms a change with reimbursement.
5. A major concern for many health care professionals is the belief that marketing “creates”
needs. Explain the complexity of this issue. Assume you have been invited to be at a conference
and participate in a debate regarding this subject. The session chair has not told you which side
of the debate you will be presenting. Prepare each side of the argument.
A major concern among many health care professionals is not that marketing functions to meet
the needs of consumers, but rather that marketing creates needs. For example, there is concern
that advertisements displaying thin models create the need among consumers to diet to reach
an unattainable standard. Health care professionals are also concerned about the nutritional
intake of consumers, but their concern is more for overall health rather than for appearance.
Yet from a marketing perspective, it is important to recognize that what the consumer wants
can often be delivered by what is truly needed. If positioning a weight-reduction program to
improve appearance gains consumers, but the program is medically appropriate and sound—
ultimately the consumer’s real health need (good nutrition) will be met.
The concern has been raised that marketing creates needs. Endless promotion to consumers
leads not so much to education but to convincing consumers that what they want is in fact what
they need. It is a sales strategy that leads to consumption. The focus is on purchase regardless
of value.
6. After reviewing the volume of subscribers to the managed care plan, the executive director
is dismayed. Projected enrollment is far below the forecasted level for the targeted time period.
ESSENTIALS OF HEALTH CARE MARKETING
5TH EDITION
CHAPTER NO. 01: THE MEANING OF MARKETING
ANSWERS TO END-OF-CHAPTER QUESTIONS
1. Several prerequisites are necessary for marketing to occur. Identify each prerequisite in the
following examples: (a) a medical group offering an after-hours telemedicine service for
primary care, (b) a consumer seeking physical therapy, and (c) a company choosing health
coverage for its employees.
For marketing to occur, the prerequisites are: two or more parties with unsatisfied needs; a
desire or ability to meet those needs; something to exchange between the two parties; a means
of communicating.
In these examples, then:
(a) A medical group offering after-hours telemedicine service for primary care. The two parties
are the medical group that wants to offer a telemedicine primary care service and the potential
patients who want access to a primary care consult without having to go into a PCP’s office.
The exchange involves the clinician’s expertise by way of telemedicine and the patient’s
insurance coverage, if available, or by direct payment by credit card transaction.
(b) Consumer seeking physical therapy. The two parties are the consumer with physical
therapy needs and the therapist who wants to make people healthy and earn a return for this
labor; the desire of the patient is to restore health, and the desire of the therapist is to earn an
income by making people healthy. The patient will exchange money for the physical therapist’s
knowledge and skill. The means of communicating is either an advertisement or a visit to the
therapist’s office.
(c) Company choosing health coverage. The two parties are usually the company and the
insurance firm; the desire for the company is to cover its employees’ health care needs, and
the desire for the insurance firm is to gain the business. The exchange is the premium dollar
covering each employee for the insurance coverage. The means of communicating is usually a
sales call from the insurance company.
,2. At a recent hospital planning meeting, the marketing director reports on consumer interest
in a women’s health center. Hearing strong interest, the planning committee endorses the
concept. A group of clinicians is charged with developing the program. The program opened
a clinic for scheduled primary care, obstetrical and gynecological visits, with appointment
hours established from 9:00 a.m. until 4:30 on Mondays, Tuesdays, Thursdays, and Fridays.
Wednesday appointments are available until noon for physicians to be able to attend to the
teaching obligations at the academic medical center. The women’s health center also scheduled
a series of health education programs through the fall; the fees for these programs were set
from between $25 to $100 depending on the speaker and the number of sessions.
Upon introduction, market response did not meet expectations. A senior physician complained,
saying, “What went wrong? We did the survey.” Explain the possible reasons for this
program’s disappointing market response.
The problem with the women’s health center was that the market planning process was not
fully implemented. The hospital marketing director conducted a study to determine interest,
but the concept was then translated without any additional pre-testing. The hours established
were convenient to the practitioners rather than the market. Many women work full-time
outside the home in increasing numbers, and as a result, the hours of the clinic make it
increasingly difficult to access the clinic. Wednesday appointments were only until noon.
There are no extended hours, nor are there any evening hours or telemedicine appointments.
No testing of the pricing of the program fees was conducted. As a result, the service was most
likely configured the way the health care professionals within the hospital thought it should be
rather than designed to meet the consumer’s wants.
3. The marketing director of a hospital has met with the chief medical officer of the hospital’s
newly hired occupational and industrial medical director. This program is the hospital’s first
new venture into attempting to appeal directly to employers in the business community in the
metropolitan area of the medium-sized midwestern city, which has a relatively large base of
manufacturing companies. The community has always been a part of the supply chain of
companies to auto manufacturers in producing parts for cars such as plastic components,
batteries, and, increasingly, components for dashboards. In this initial meeting, the chief
medical officer, who received her own MBA degree, said, “Since I first got hired, I’ve been
,thinking of one important question. Who do we reach out to first? This is a great business
community. Unions are still strong here. Business is strong. There are lots of opportunities for
this service.” Provide a list of all the potential target markets and prioritize the list with a
rationale for the CMO.
In developing this new occupational and industrial medicine program, there are several
potential target markets to reach out to and consider in the marketing of this program. Some of
these target markets will be the ultimate customers or users of the program, and others will be
involved in deciding whether the program from this particular provider organization will be
offered to whatever company decides to offer the program.
• Employees should be targeted to understand what benefits and range of services are
offered in such a program.
• Union leaders should understand the services.
• Human resource directors may well be involved in the decision process. Medical
officers are often part of a large company and need to be targeted.
• Chief finance officers should understand the money that can be potentially saved by
the benefits offered in contracting with such a program.
• Chambers of commerce would be an important constituency to identify to communicate
benefits.
• Owners and senior executives of companies may also be involved as a target market.
If this is a new program never offered to employees in the area before, the potential
benefits are not well known as a value to their company employees or as a cost savings
for their firm in keeping their employees productive and healthy.
4. In developing the new pediatric sports medicine program (described in question 3), what are
some of the uncontrollable environmental factors to consider? This group practices in a large
metropolitan area. There are two large health care systems that in recent years have begun to
employ their own physicians in a large practice.
There are some major environmental, uncontrollable factors that could affect this program.
Demographics are an obvious issue. A declining birth rate or an aging population affects any
aspect of the pediatric medical business. There might be some technology that could
dramatically affect the way in which problems are treated. Competitive factors might be an
, issue if the pediatric sports medicine niche looks attractive. Now that the two large health care
systems have hired their own physicians, that could significantly affect the referrals as well as
lead to a new competing group or two competing groups in the marketplace. Finally, one must
recognize that under health care reform, there always looms a change with reimbursement.
5. A major concern for many health care professionals is the belief that marketing “creates”
needs. Explain the complexity of this issue. Assume you have been invited to be at a conference
and participate in a debate regarding this subject. The session chair has not told you which side
of the debate you will be presenting. Prepare each side of the argument.
A major concern among many health care professionals is not that marketing functions to meet
the needs of consumers, but rather that marketing creates needs. For example, there is concern
that advertisements displaying thin models create the need among consumers to diet to reach
an unattainable standard. Health care professionals are also concerned about the nutritional
intake of consumers, but their concern is more for overall health rather than for appearance.
Yet from a marketing perspective, it is important to recognize that what the consumer wants
can often be delivered by what is truly needed. If positioning a weight-reduction program to
improve appearance gains consumers, but the program is medically appropriate and sound—
ultimately the consumer’s real health need (good nutrition) will be met.
The concern has been raised that marketing creates needs. Endless promotion to consumers
leads not so much to education but to convincing consumers that what they want is in fact what
they need. It is a sales strategy that leads to consumption. The focus is on purchase regardless
of value.
6. After reviewing the volume of subscribers to the managed care plan, the executive director
is dismayed. Projected enrollment is far below the forecasted level for the targeted time period.
