Many of the prophets of Israel decried corrupt business practices and wealth that led to increased poverty and neglect. Compare the 10 Commandments of Judaism and especially Jewish et

Effective marketing tool for the marketing professionals in healthcare organization: The 4 ‘S’ model Biranchi N. Jena

Department of Health & Hospital Management, Symbiosis Institute of Health Sciences, Symbiosis International University, Pune, India

ABSTRACT Patients are becoming more demanding for the medical service delivery as organizations are continuously innovating new ways of service delivery. Irrespective of the number of services being provided, the demand for marketing support in the healthcare organization is growing. The number of hospitals with marketing department has increased by 75% in 3 years’ time, which is partly due to increased competitive pressure. With more investments in the healthcare, there is comparatively more expectation from the promoters in terms of better returns of investment and that boils down to more pressure on marketing activities of the organization. In such situation marketing associates including entry-level professionals face a daunting task to justify the growth in market share and securing higher budget for the marketing activities. To make their function more effective, a 4 ‘S’ model is devised which captures the basic marketing information like Size, Shape, Share and Soar, which every marketer need to have before any marketing planning. Since the information needed for effective marketing plans for medical services is critical, the 4 ‘S’ model brings a template- based tool to facilitate better understanding of the market and thus better strategy for the organization.

ARTICLE HISTORY Received 23 May 2017 Accepted 2 November 2017

KEYWORDS Entry-level marketing professionals; hospital marketing; 4 ‘S’ model; medical service marketing tool

Introduction

Marketing mix in hospitals and healthcare organiz- ations predispose medical needs, gain market share and increase the efficiency and effectiveness of the respective organization [1]. Adopting marketing prin- ciples in hospitals and healthcare organizations is gain- ing importance. The potential for developing new services and community program, the need for reeval- uating and redefining the target market of the organiz- ation’s service offering and the need for more accurate and comprehensive strategic planning are major con- cerns and the driving forces for the effective marketing program in the healthcare organizations [2]. Under- standing and applying the marketing way of thinking in order to raise the quality of performance of health- care organizations is becoming a necessity, which dic- tates behavior in a competitive environment [3]. Application of standard marketing principles poses different set of challenges for the healthcare organiz- ations. Due to wide variations in the request made by heterogeneous patients for a particular service becomes a serious challenge to present the benefit of the con- cerned services and make them visible and tangible in advance [4]. Public sector healthcare organizations, which mostly operate as not-for-profit organizations believe more in quality and timely delivery of services. Thus,marketingofthese serviceswere notfelt important and urgent. Off late, Academic Health Centers (AHCs)

are aggressively marketing themselves by designing new services and promoting these services more inten- sely [5]. Irrespective of the pre-requisite essentials in the organizational level, the demand for marketing sup- portinthehealthcareorganizationisgrowing.Thenum- ber of hospitals with marketing department has increased by 75% in 3 years’ time, which is partly due to increased competitive pressure [2].

Target markets in hospital marketing include patients and families, communities, doctors, medical personnel, hospital staff and charitable donors [6]. While hospitals come out with a number of services, it becomes difficult to position such services in the huge market place. If marketing planning is not designed in a well-thought manner, it may affect the quality of medical services and lead to unnecessary competition and may cause unnecessary prescription of medical services [7]. While there are a number of functional activities in the marketing of hospital ser- vices, from the organization’s perspective the analysis of target market, future need assessment of consumers is quite important for a good management strategy [8]. However, it has been a daunting task for the entry-level managers to cope of the multiple demands from differ- ent departments to provide support to market the hos- pital and healthcare organization services. Therefore, most of the activities in the healthcare organizations are reactive in nature than proactive and well planned.

© 2017 Informa UK Limited, trading as Taylor & Francis Group

CONTACT Biranchi N. Jena [email protected] Department of Health & Hospital Management, Symbiosis Institute of Health Sciences, Symbiosis International University, Pune 411004, India

INTERNATIONAL JOURNAL OF HEALTHCARE MANAGEMENT 2020, VOL. 13, NO. 3, 201–206 https://doi.org/10.1080/20479700.2017.1402423

Although it has been proven that marketing can improve satisfaction of the target market [7], the cur- rent practices in hospitals in India hardly analyses sys- tematically the target markets.

As per the 2016 State inbound report [9], 65% mar- keters reported that generating traffic and leads is the top most challenge faced by the marketers followed by proving RoI of the marketing activities (43%) and secur- ing enough budget (28%). Other issues highlighted in the report are managing website, identifying right tech- nologies, targeting content for an international audi- ence, training the team and hiring the top talent. When the marketing plans are executed without a base understanding about customers, their needs, place of service availability etc., marketing activities would not be effective and gradually the organizations have dilemma in increasing budget on marketing.

A practicing entry-level managers said that ‘Within a month, he had wedged himself into the fledgling mar- keting team’ [10] and often witnessed many definitions of marketing starting from promotion of organization’s product and services to process for creating, communi- cating and delivering the value to customers. But most often entry-level marketers hardly have a tool to under- stand where to promote, how much to promote, what to create to improve value.

A number of deliberation has been documented to improve the management of healthcare organizations including hospitals in recent years [11]. Many innova- tive tools have been introduced in the healthcare mar- keting to optimize the outcome of hospitals. The importance-performance analysis (IPA) by using phys- icians perspectives regarding performance dimensions mostly used to understand and interpret the perspec- tives of the users of services/products or patients in healthcare [12]. However, such a tool would be further strengthened with an objectivity-based hospital market information.

The existence of dual professional expertise namely medical and non-medical in the hospital sector makes it complex and its management becomes more differ- entiated than other organizations. Such complexity in the hospital sector has been described as double- headed monster by Drucker [13]. Thus, it is becoming important to define an easy way to demonstrate the functionalities of marketing professionals in the health and hospital sector.

This current paper is addressing such need for the entry-level managers and trying to bring a tool for them to make them more effective in the organization while they create value for the organization and for the customers.

Methodology

The current research paper is the outcome of the obser- vations in many hospitals in India and the class room

deliberation of marketing management for hospital services for the students of Masters of Business Admin- istration (MBA) in Health and Hospital management.

In one of the researcher’s academic visit to one healthcare organization, he had an opportunity to dis- cuss with the Head of that organization about market- ing efforts being done. He mentioned various activities like the road show, direct customer interaction, spon- soring few events on life style changes and so on. While the researcher was trying to understand the reason behind such activities and how it is linked to overall organization mission and vision, it was neither connecting to any of the core values of the organization nor was linked to any measurable outcome. This in turn creates a non-viable, non-evidence and non-con- clusive marketing budget which is limited to few activi- ties which may or may not lead to the growth of the organization.

This is the standard practice in a sizable small- and mid-level organization. When young marketing pro- fessionals enter such organizations, they become a task doer than a thought based marketer. It has been observed that many of the young health and hospital management professionals missed the appropriate way of looking to the market dynamics.

In order to make things a bit easier for the students who would start their career as entry-level manager, the researcher developed a concept on ‘4S Model of Mar- keting’. This was deliberated in the classroom of MBA students and evaluated through collection of information on various aspects of the 4S model. The model was further refined by taking informal feedback from the stakeholders of various healthcare organiz- ations including hospitals.

The model also uses various epidemiological con- cepts like prevalence rate, diagnosis rate and treatment rate and socio demographic variables like patients age, income, place of residence and other factors consider- ing the complexity in the demand of various medical services.

The 4 ‘S’ model

When a marketer starts planning of the marketing activities, most of the fresh marketers are task based contributors rather than thought based contributors. When the young and inexperienced professional go out of their management school into a healthcare organization or a corporate hospital, mostly they are into a state of confusion as their job is mostly ‘a reac- tion to a certain situation in the organization’ or ‘task assigned by the senior professionals’. They are not able to create a base on which they would prepare their marketing activities. Subsequently they develop a perception that the marketing practice in the health- care organizations are different than the theories they have learned in their management education. This in

202 B. N. JENA

turn creates hurdles for the professionals to bring a competitive advantage to the organization they work for.

The 4S model is based on the premise of under- standing the basic marketing principles. One of the major challenges in the healthcare industry is the lack of proper definition of the services of a particular organization. If it is not defined well and understood by its own employees, it becomes a daunting task to create an innovative communication platform for the service delivery. Again the service delivery model in healthcare organizations varies significantly due to socio-economic, demographic and technological fac- tors. The model tries to bring systematic way of defin- ing the service offerings and create a basic ground for the hospitals to develop the service delivery and keep doing service development vertically and horizontally.

4S model carries different attributes to understand the base market and its customers. The 4S in the model are; Size, Shape, Share and Soar.

While for the entry-level marketing professional it is important to convert the learning in the management school into practice, it is also important to synchronize with the thought process of the senior marketing associates of the organization. While the model was deliberated in few organizations by the final year healthcare management students during their summer training, it was highly appreciated and the synchroni- zation was established without much difficulty.

The model is given in Figure 1.

Size

The first S of the 4 ‘S’ model is market size. It is utmost important to quantify the market size. Most often the entry-level marketing professionals ignore such exer- cise for the medical or clinical service they work for or to promote. The sizing of the market for medical or clinical service is a bit complicated than the sizing for the other services. The patient pool sizing is critical for marketing and positioning of medical or clinical services of both acute and chronic disease. In spite of a prevalent number of 3.8 million patients for lung volume reduction surgery (LVRS) in USA, only 119 procedures were performed in the year 2008 under Medicare [14]. This is due to the lack of effective diag- nosis and other support system including the com- munication and counseling to the patients. In case of chronic disease, the rules of half indicates that of the total prevalent population, half of the people get diag- nosed and of the total diagnosed only half of them get treated [15]. This is clear that the market size, say for a diabetes treatment is not the prevalent population, but only the treated population which is a fraction of the prevalent population. However, knowing the most accurate prevalent number, diagnosis population and treated population would add a great knowledge to

the marketing activity of the respective medical or clinical service because the level of prevalence rate and diagnosis rate would impact the market size.

The template for market size is given in Figure 2. Such template can be prepared for the territory that

the organization has defined as its operational market. The operational market can be a small administrative area or it can be a state or even a country. If the organ- ization has a multi-level presence in delivery of the par- ticular medical or clinical service, the market sizing can be done at each level of the territory and then the same can be cumulated.

Service pricing in healthcare organization is widely fluctuated because of the monopolistic competitive nature of the market. Understanding the average pri- cing of such services is also important from the market- ing strategy perspective. While prioritizing the effective marketing mix elements on patients’ tendency to hos- pitals, it was found that price, services and physical assets are the top priority elements in public sector hos- pitals while services, physical assets and promotion are the top ones in private hospitals. All these elements have an impact of more than 30% in terms of patients’ tendency towards hospital marketing mix [1]. There- fore, the total value of the service concerned must be worked out or estimated through a secondary data or sample based market survey. Once this information is reflected in your market sizing template, that would provide you a great insight of the service which you are dealing with.

Shape

The shape is the second ‘S’ in the 4 ‘S’ model. Shape of the market indicates about the consumer’s location and where the service is provided. This carries a lot of importance for the marketing of healthcare services especially in developing countries. A study by IMS institute for Healthcare Informatics on healthcare access in India shows that Physical access, capability, quality of care and affordability are the four major issues in the healthcare access in India [16]. This indi- cates that on an average the components of medical services like hospital beds, doctors, nurses and pharma- cists are available by more than 70% in urban areas where as more than 70% customers are in rural areas. Again more specialized and high-end medical services like bone marrow transplant is available in metro cities where as customers are spread over metro cities, class I and II and other rural areas. Thus it would be a huge impact on the marketing exercise when a marketing activity is done without understanding the location of the customer and where the service is delivered. The template on the shape of the market would help in understanding such vital information.

The template for gathering information on shape of the market is illustrated in Figure 3.

INTERNATIONAL JOURNAL OF HEALTHCARE MANAGEMENT 203

Various epidemiological studies have demonstrated that there is a significant level of variation in the preva- lence of a disease (pre-requisite for demand of medical services) by different demographic parameters like age, gender etc. Such information also influences the mar- keting activities of any kind of medical or clinical ser- vices and thus needs to be part of the shape of the market information.

Share

The third ‘S’ in the 4 ‘S’ model is the share. Harvard Business Review (HBR) has reiterated that one of the main determinant of business profitability is market share and the return on investment is directly related to the degree of market share [17]. The report has specified that higher level of market share is an indi- cation for economies of scale, bigger market power and superior quality of management. The marketing challenge increases with higher market share as the organization demands to maintain the market share

at a higher level which may be a difficult task with the growing competition in the healthcare industry. The entry-level manager must have an in-depth under- standing on the share of a particular medical service by all the competitors operating in the market place.

The template for data collection for the market share is given in Figure 4.

Healthcare industry including hospital services, diagnostic services and allied service is emerging in most of the developing countries and thus micro indus- try information by the service providers are limited although the macro information is available. The pharmaceutical sector is an exception in terms of data availability on market share and performance of the major market players. Therefore, entry-level mar- keting professionals have to initiate an indirect esti- mation of market share or rely on market survey pertaining to the service that they handle in the organ- ization. Having such information platform would pro- vide a bigger advantage while planning for competition strategies.

Figure 2. Template for market size.

Figure 3. Template for ‘shape’ of the market.

Figure 1. The 4S model.

204 B. N. JENA

Soar

The fourth and last ‘S’ in the 4 ‘S’ model is ‘Soar’. A good market analysis will have an economy overview, which is very helpful in understanding where your cur- rent market is and where it is going [18]. Healthcare industry is growing at a rapid rate. The overall Indian healthcare market is worth around US$ 100 billion and is expected to grow to US$ 280 billion by 2020, a Compound Annual Growth Rate (CAGR) of 22.9% [19]. The industry includes sectors like hospitals, nur- sing homes, diagnostics, pharmaceuticals, healthcare information technology, medical tourism and so on. The growth would vary significantly within the sector. The key here is not only to capture the growth rate of the sector but also the growth of the services in last few years. This would help in setting up a forecasting plat- form for the marketing team and thus can influence the investment decisions of the organization. The template for data collection for market growth is given in Figure 5.

For the marketing strategy the forecasting is very crucial and critical because the strategies that a health- care organization would implement in times of rapid growth would be different during sluggish market [20]. If the industry is expected to grow rapidly, the

marketing plan would be focused on acquiring as many new customers as possible. If growth is going to be limited, the focus would have to be more on retaining customers the business already has – because his competitors will be striving to lure his customers away.

Conclusion

In the healthcare industry, the market place is becom- ing too competitive as the growth is driven by high incidence rate of non-communicable diseases, injury and other lifestyle-related complications. Over the period there is a development of consumerism in the healthcare industry which drives the demand for more marketing professionals to deliver value to the ever demanding customers. The healthcare marketing is more complicated compared to other services, as it brings the requirement of clinical information, epide- miological expertise and of course marketing knowl- edge. While the healthcare industry is more a kind of monopolistic competition, the principal- agent relationship between the patient and doctor inhibits the disclose of major information flow, on the other hand the marketers in the healthcare organization

Figure 4. Template for ‘market share’.

Figure 5. Template for ‘soar’.

INTERNATIONAL JOURNAL OF HEALTHCARE MANAGEMENT 205

would try to bring as much as information to the patients to make the decision making easy from the customer perspective. In such scenario, the entry- level marketing professional manages multiple chal- lenges during managing the marketing planning activi- ties. The 4 ‘S’ model discussed in this paper is going to add a significant value for the entry-level marketing professionals in the healthcare industry.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Dr Biranchi Jena is currently working as a professor in Health Economics and Marketing at Symbiosis University, Pune. He also consultants on performance management for healthcare projects of Tata Trust. Dr Jena is the former Director of IIHMR Bangalore and worked in senior positions in corporations like Novartis and Novo Nordisk.

ORCID

Biranchi N. Jena http://orcid.org/0000-0001-6388-2408

References

[1] Adebi G, Abedini E. Prioritizing of marketing mix elements effects on patients’ tendency to the hospital using analytic hierarchy process. Int J Healthc Manag. 2017;10(1):34–41.

[2] Fontana JP. Hospital marketing is here to stay. Hosp Top. 1984;62:12–13.

[3] Došen ĐO, Bilić V. Perceptions among Croatian sur- geons of services marketing application to health care organizations. XXI (2009), br. 2, str. 203–218, UDK 658.8:617-051, Prethodno priopćenje, Preliminary communication.

[4] Kickbusch I. Health literacy: an essential skill for the twenty-first century. Health Educ. 2008;108(2):101– 104.

[5] Souba WW, Haluck CA, Menezes MAJ. Marketing strategy: an essential component of business develop- ment for academic health centers. Am J Surg. 2001;181(2):105–114.

[6] Chang ZE. The hospital sells and public relations. Hygiene Administration Learns Publish. 1991;11 (3):7–11.

[7] Kotler PC, Clarke RN. Marketing for healthcare organ- isations. New Jersey: Prentice-Hall Inc; 1987.

[8] Chang YY. The marketing idea that hospital manage/ the marketing idea managed by hospital. J Hosp. 1986;3:34–35.

[9] Lindsay K. 7 of the top marketing challenges marketers face today. [cited 2017 Apr 18]. Available from: https:// blog.hubspot.com/blog/tabid/6307/bid/33820/5-majo r-challenges-marketers-face-and-how-to-solve-them. aspx#sm.0001ejff8mp9jdqdqns1c4qjt32vt

[10] Lessons I learned as an entry-level marketer; Ingrid Catlin. [cited 2017 May 2]. Available from: http:// www.ingrid-catlin.com/2008/10/17/13-lessons-i-learn ed-as-an-entry-level-marketer/

[11] International Journal of Healthcare Management. 2015; 8, 2016; 9 & 2017;10. [cited 2017 Oct 16]. Available from: http://www.tandfonline.com/toc/ yjhm20/9/3?nav=tocList

[12] Dixit SK. Integration of importance-performance analysis (IPA) into strategy of hospitals. Int J Healthc Manag. 2017;10(3):178–183.

[13] Cinaroglu S. Complexity in healthcare management: why does Druker describe healthcare organization as a double headed Monster? Int J Healthc Manag. 2016;9(1):11–17.

[14] Akuthota P, Litmanovich D, Zutler M, et al. An evi- dence-based estimate on the size of the potential patient pool for lung volume reduction surgery. Ann Thorac Surg. 2012;94(1):205–211. doi:10.1016/j. athoracsur.2012.03.047

[15] Smith WC, Lee AJ, Crombie IK, et al. Control of blood pressure in Scotland: the rule of halves. Br Med J. 1990;300:981–983.

[16] IMS Institute for Healthcare Informatics. Understanding healthcare access in India; What is the current state? Jun 2013. IMS Institute, NJ 07054, USA.

[17] Buzzell RD, Gale BT, Sultan RGM. Market share – a key to profitability; HBR, Jan 1975. [cited online 2017 May 2]. Available from: https://hbr.org/1975/ 01/market-share-a-key-to-profitability

[18] Nale M. The importance of a market analysis; ERE recruiting Intelligence, Oct 2007. [cited online 2017 May 2]. Available from: https://www.eremedia.com/ ere/the-importance-of-a-market-analysis/)

[19] Health Industry in India. India brand equity foun- dation; www.iebf.org [cited online 2017 May 2]. Available from: https://www.ibef.org/industry/ healthcare-india.aspx

[20] Hill B. Why is forecasting so important to the overall marketing plan? [cited online 2017 May 2]. Available from: http://yourbusiness.azcentral.com/forecasting- important-overall-marketing-plan-5846.html

206 B. N. JENA

Copyright of International Journal of Healthcare Management is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.