Health Care Marketing Chapter 6

Mass Marketing
Rationale is that everyone wants the same product – delivered, priced and promoted the same way.
Pros- Cost – eliminates retooling costs and can
ensure longer production runs.
Limitations – can have a group or segment taken away by a competitor with a more tailored marketing mix and often there are large differences in the audiences that affect demand
Market segmentation
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.
Two strategies of market segmentation
Concentration Strategy – Targeting one segment of the market
Multi-segment strategy – When an organization pursues several market segments with varying mixes.
Benefits of market segmentation
1. It helps the marketer to address the diversity that exists in a population
2. It can be used to identify homogeneous concentrations of customers to whom programs or services can be marketed.
3. Helps identify the best distribution channel for a particular service or product
4. Targeted messages to a specific segment are usually more effective communication vehicles
5. Economies of scale can be achieved
6. Customer retention can be increased when a particular service, program or strategy is more closely tailored to a customer.
Majority fallacy
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.
Niche strategy
Targets a very narrow segment of the market with specialized products and services.
Product differentiation
A strategy of altering one or more marketing mix elements to respond to various wants and needs of different groups.
Criteria for selecting market segments
1. A good market segment should be identifiable
2. A good market segment should be accessible
3. Members of the segment must be inclined or likely to be the product or service
4. Members of the market segment must be able to buy the product or service (economically)
5. The segment should be profitable to serve
6. The segment must be desirable
7. Market segments must be consistent
8. The market segment must be available
Popular segmentation techniques
1. Sociodemographic – age, gender, ethnicity and income
2. Geographic
3. Psychographic – lifestyle and social class
4. usage – usage rates, type of usage, brand loyalty and benefit segmentation
5. Cohort segmentation – a group of people bound together in history by a set of events.
Heavy half consumer
A small group of consumers that account for a disproportionate amount of a product’s sales
Benefit segmentation
The grouping of people based on the benefits sought from a product.
Major cohort groups
1. Depression – between 1912 to 19212
2. World War II – between 1922 to 1927
3. Post-War – between 1928 to 1945
4. Boomers I and II – between 1946 to 1954 (leading edge boomers) and 1955 to 1965 (trailing boomers)
5. Generation X – between1966 to 1977
6. N-Gen – between 1978 to 1985
7. Millennials – Between 1986 to 2000
Segmenting business Markets
Four broad classifications
1. Demographics
2. Operating variables
3. Purchasing approaches
4. Usage requirements
Standard Industrial Classification (SIC)
A classification system where groups are organized based on their major business activity or the major service or product that firms provide.