1. Strategic Marketing and Planning

1. 1.Strategic Marketing and Planning

2. Marketing • The process of creating, pricing, distributing, and promoting goods, services, and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment

3. Overview of Marketing • A distinct functional area • The 4 P’s: product, price, place, and promotion • An activity in the firm’s value chain • Boundaryless marketing • Market orientation (customer orientation, competitor orientation & inter-functional coordination)

4. Boundaryless Marketing • Goal is to eliminate communication barriers between marketing and other business functional areas • Properly implemented it ensures that a market orientation permeates all value creating activities

5. Goal of Marketing • Surpass the competition at the task of creating perceived value for customers • The Guide line is the value equation – Value = Benefits/Costs (Money, Time, Effort, Etc.)

6. Value Chain and Boundaryless Marketing

7. Competitive Advantage • Success over competition in industry at value creation • No longer can this be achieved at a local, regional or national scale • Achieved by integrating and leveraging operations on a worldwide scale

8. Strategic Planning for Health Care Market • Thee sweeping changes in the health care industry, of which implementation of the prospective payment system (PPS) is one, put heavy demands on hospital administrators to "manage" their portfolio of health care products and services. • The basic thrust of the prospective payment system, namely cost containment through prospective pricing and intensified competition in health care delivery, will greatly influence—if not determine outright—the "product-service portfolios" hospitals will be offering in the 1980s and beyond. Strategic concerns such as products/services that can and should be provided, resource advantages over competition, reaction of competition to decisions, and long-term survival/success all must be addressed by hospital planners in their efforts to cope with the changes demanded under the new system.

9. Health care management: Products and Services • Products and services in the health and social care organisations can be analysed in several ways. One well-known method is the product portfolio approach popularized by the Boston Consulting Group (see Jain 1981; Naylor 1983) and there are many other methods where we can apply marketing tools, techniques and models to develop strategy and to meet customers’ needs. • Marketing concepts in the health and social care are same as they are universal and applicable on any organisation regardless sector.

10. The Profitability/ Efficiency (P/E) Matrix for marketing decision making • The P/E matrix has two dimensions, an index of hospital expense and an index of LOS • The index of hospital expense is calculated by subtracting the allowable Medicare expenses corresponding to the actual hospital expenses incurred, and dividing the difference by the allowable expenses.

11. The Profitability/ Efficiency (P/E) Matrix for marketing decision making • This index indicates the extent to which the actual hospital expenses exceed the allowed Medicare expenses as a proportion of the allowable expenses. A positive (negative) index of 1.5, for instance, indicates that the actual hospital expenses incurred are 1.5 times greater than (less than) the allowable Medicare expenses.

12. Index of Length of Stay (LOS) Index in Health/Social Care • The index of LOS is calculated by subtracting the allowable Medicare length of stay corresponding to the from the actual hospital length of stay incurred, and dividing the difference by the allowable LOS

13. Index of Length of Stay (LOS) Index in Health/Social Care • A positive (negative) LOS index of 1.5, for example, indicates that the actual LOS incurred is 1.5 times greater than (less than) the allowable LOS under Medicare guidelines. Index values less than (more than) zero imply that the hospital was able to discharge the patient more efficiently (less efficiently) in comparison with the standards set by Medicare • P/E matrix and LOS index are good tools for strategic thinking and analysis in the marketing to reach a decision about which services to offer, and which products to invest in or divest of that will determine the success or failure of a given hospital.