Essentials of Healthcare Marketing, 3rd Edition, Chapter 6

What is a mass marketing strategy?
A mass marketing strategy is an approach in which an organization develops its marketing mix (the four Ps) to appeal to the broadest group-the largest number of people possible.
What is the underlying rationale of a mass marketing strategy?
Everyone in the market wants the same product-delivered, priced, and promoted the same way. Or, the number of those who want a variation are so small that it is not a significant factor.
What are some distinct advantages of a mass marketing strategy?
Foremost is the cost. A mass marketing strategy for a manufactured product often eliminates retooling costs and can ensure longer production runs. Similarly, a mass marketing strategy makes sense when it is economically impractical to produce variations in the marketing mix.
What are a few limitations of a mass marketing strategy?
1. There are often large differences within a broad consumer market that do affect demand. People have different shopping patterns or work habits, which, for instance, might necessitate different clinic hours for appointments. Differing income levels require differential pricing for certain services or products.
2. A mass marketing strategy can often cause distribution problems. If a product is available at every outlet, no one particular outlet will feel it is worthwhile to push the product.
3. The major limitation to a mass marketing strategy relates to competitive considerations. A mass marketing strategy that tries to appeal to everyone leaves a company susceptible to having a group, or segment, of its customers won over by another firm that more closely tailors its marketing mix to attract that particular subgroup. It is competition that provides a strong rationale for a market segmentation strategy.
What is market segmentation? How does mass marketing strategy differ from market segmentation strategy?
Market segmentation is the process of grouping into clusters consumers who have similar wants or needs to which an organization can respond by tailoring one or more elements of the marketing mix. Whereas a mass marketing strategy can be described as bending demand to the will of supply, market segmentation has been described as the bending of supply to the will of demand.
What are the two broad categories of market segmentation strategy?
Concentration strategies & multisegment strategies
What are some distinct benefits of segmenting the market?
1. It helps the marketer to address the diversity that exists in a population. Segmentation can increase the likelihood that the four Ps of marketing (the product or service mix, pricing, promotion, and place or distribution) are addressed for a specific segment of the population and that the product or service is adopted by the target market.

2. If done appropriately, segmentation can be used to identify homogeneous concentrations of customers to whom programs or services can be marketed.

3. Segmentation helps identify the best distribution channel for a particular service or product. For example, a school system can segment its population in order to provide H1N1 vaccines to migrant farm worker children.

4. Targeted messages to a specific segment are usually more effective communication vehicles.

5. By using segmentation to focus resources to specific groups, economies of scale can usually be achieved.

6. Ideally, customer retention is increased when a particular service, program, or strategy is more closely tailored to the customer.

What is the Concentration Strategy of a segmented market?
Why would this strategy be used?
What is an advantage of Concentration Strategy for a smaller firm?
Targeting one segment of the market.
By focusing on just one market segment, a firm is able to tailor its strategy in an attempt to solidify its position in the marketplace.

One advantage of a concentration strategy for the smaller firm is that it may allow the business to target a group that may not be attractive to a larger competitor.

What is majority fallacy?
How is this a problem for Concentration Strategy?
When deciding to concentrate, organizations will sometimes focus on the largest segment of the market in the belief that it represents the greatest revenue and profit potential. Other competitors may also be attracted to this particular segment for the exact same reasons (= majority fallacy). As a result of its large size and attractiveness to competitors, the largest segment becomes competitively the most intense, and hence the least profitable one to target.
What are some limitations to Concentration Strategy?
An organization that follows a concentration strategy must be able to defend its choice of market segment. The company has no other segments upon which to spread its risk if it is unsuccessful.

Another limitation to this strategy is that a firm can develop a reputation that identifies it with just one segment of the market, making it difficult to expand its business to serve other segments. For years, Timex has been known as the manufacturer of reliable, inexpensive watches. It might be very difficult, however, for Timex to market a premium-priced watch.

What is Niche Strategy?
A niche is a very small, specialized market segment with a highly defined set of needs. A Niche Strategy targets this narrow segment with specialized products or services. For example, a clinic could be established to target only wealthy clientele, a trend with boutique medicine clinics.
What is multi-segment strategy?
Where an organization pursues several market segments with varying mixes. One approach a company can use is “Product Differentiation”, a strategy of altering one or more marketing mix elements to respond to various wants and needs of different groups.
What are two versions of Product Differentiation strategy?
In one version of product differentiation, a company can take the same product and position it differently to two different groups through different advertising campaigns or pricing. For example, the KIA automobile is positioned as an economical car for a young married couple starting out or as a fun car for the college-aged buyer.

A second strategy of product differentiation might involve taking two or more products and marketing them to multiple segments. For example, Aetna has a Web site that segments the market by state and then further refines it by life stage (e.g., new graduate, raising a family, getting married, self-employed, between jobs, retiring early). Based on the user’s selection, the Web site recommends a product based on the user’s state of residence and life stage.

Any company that follows a segmentation strategy must identify which market segments to target.

T/F: Ideally, a market segment should be as “diverse” as possible.

False. Ideally, a market segment should be as homogeneous as possible.
When selecting target market segments, what 8 criteria need to be met?
1. A good market segment should be identifiable; that is, easily profiled. The more distinctly a segment can be defined, the more efficiently a company can tailor the marketing mix.

2. Accessibility. Can a market segment be reached through distribution or promotion efforts? Do these consumers shop in a particular store, or can they be targeted through a specialized magazine or newspaper?

3. Whether its members are inclined, or likely, to buy the product or service. It may be easy to target a market segment of high-income consumers who live within a particular zip code. However, if this market segment is not inclined to purchase the service, it is useless to target the marketing mix to them.

4. A fourth concern is whether members of the market segment are able to buy the product or service. This criterion speaks to the economic resources of the market. A medical group might develop a prepaid health plan that is very customeroriented-appointments are never double-scheduled; physicians stay with patients for as long as needed to answer questions, so that the average appointment interval is 1 hour; and house calls are made upon request. The cost of the plan, however, might be 10 times that of a competing HMO. Although the product is desirable, no one can afford to enroll.

5. The market segment should be profitable to serve. Profit is not the issue for nonprofit organizations, but a market segment should be evaluated in terms of its ability to contribute to depreciation or the organization’s fund balance.

6. Desirability. An organization may choose not to serve some segments because it would be counter to its image or inconsistent with the needs or values of other groups that it services.

7. A seventh criterion that is relevant when an organization appeals to multiple segments is consistency. Are the market segments consistent with each other? Attracting diverse market segments is often difficult because one group may buy or use a product that another group considers irrelevant.

8. Availability. Competitors may already be serving the particular targeted segment, making it hard to shift customers’ loyalties.

What are a few popular segmentation techniques?
Popular segmentation techniques include sociodemographic, geographic, psychographic, usage, and cohort segmentation.
What are 3 variables of Sociodemographic Segmentation that are especially pertinent to healthcare marketing?
Age, gender, and ethnicity.
Expand on these sociodemographic segmentation variable of “Age” within healthcare marketing.
In health care marketing, age segmentation has particular relevancy. A medical group practice might develop a specific communication strategy geared to the needs of its patients’ age group. An internist might publish a brochure in a larger type size. Patients who need to make outside phone calls can use telephones with volume controls. Specialized forms could be developed to help patients remember when to take medications. The group practice might even designate one employee as the senior citizen assistance representative who, for example, could help in the filing of insurance forms.
Expand on these sociodemographic segmentation variable of “Gender” within healthcare marketing.
Expand on these sociodemographic segmentation variable of “Ethnicity” within healthcare marketing.

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