Chapter 2 Essentials of Health Care Marketing

Strategic Planning
A process that describes the direction an organization will pursue within its chosen environment and guides the allocation of resources and efforts
Organizational Mission
The organization’s fundamental purpose for existing, as defined by its values and the customers it wishes to serve
Situation Assessment
an analysis of the organization’s environment and of the organization itself
SWOT Analysis
an examining of the strengths and weaknesses of the organization and of the opportunities and threats relevant to the organization’s future strategy
Barriers to Entry
technological, regulatory, financial, strategic, or other conditions that a company must overcome in order to pursue a business opportunity
Barriers to Exit
the costs of leaving a particular business or product line
Principal Agent Relationship
an individual gives another person the authority or power to make appropriate decisions on his or her behalf
Invisible Value
the value that a producer or provider builds into a product or service
Visible Value
the value that can be seen by a consumer in a product or a service
Evidence Management
an organized and explicit approach of presenting the organization’s capabilities to the customer
Organizational Objectives
the long term performance targets that the company hopes to achieve
Market Penetration
a strategy to increase sales of existing products and services in present markets
Market Development
a strategy of initiating sales of existing products and services in new markets
Product Development
a strategy of providing new products to existing markets
Vertical Integration
a strategy of incorporating products or services that are related to the firm’s existing activities and that have usually been developed and offered by others to the marketplace
Backward Integration
a strategy of incorporating new products and services that makes the firm its own supplier
Forward Integration
a strategy of offering new products or services that are closer to the customer than existing products or services
Diversification
a strategy of developing new products or services for new markets
Strategic Alliances
a formal arrangement with other companies to operate in a particular market
Joint Venture Businesses
a new corporate entity in which both partners have an equity position
Consolidation
a strategy of focusing a firm’s business on a smaller set of markets, products, or services
Divestment
the selling off of a business or product line
Prunes
a consolidation strategy in which a firm reduces the number of products or services that it offers to the market
Retrenchment
a consolidation strategy in which a firm withdraws from certain markets
Harvesting
a consolidation strategy in which a firm gradually withdraws support for a product until there is little or no market demand
BCG Matrix
a model based on market growth rate and relative market share for focusing company strategies in firms with multiple product lines
Market Growth Rate
the rate of sales growth in the market
Relative Market Share
the ratio of a product’s share of business within the market compared to that of its largest competitor, or the combined share of the three largest competitors
GE Matrix
a multidimensional model for focusing company strategies in firms with multiple product lines based on dimensions of market attractiveness and business strength
Five Forces Model of Industry Structure
considers factors affecting the competitive intensity within an industy
Marketing Objectives
quantitative measures of accomplishment by which the success of marketing strategies can be measured
Mass Marketing
a strategy of treating the entire market as one target market and appealing to the broadest group
Multisegment Marketing
a strategy of targeting multiple segments in the market in which a distinct marketing strategy might be developed for each group
Market Concentration Strategy
a marketing strategy in which only one segment of the market is targeted
Market Leader
the firm that has the largest share and strives to dominate the competitors in the given market
Market Challenger
a firm that confronts the market leader
Market Follower
a firm that competes in the market by following the market leader rather than by attacking it directly