For the original chapter please check:

https://www.researchgate.net/publication/341762801_Saglik_Kurumlarinda_Paza
rlama_Healthcare_Marketing

CHAPTER-2
HEALTHCARE MARKETING

Alişan BALTACI
Yüksek Ihtisas University, Vocational School of Health Services
baltacialisan@gmail.com

Cite as: Baltacı, A. (2018). Sağlık Kurumları Yönetimi. Oktay Yanık (Ed.), Sağlık
Kurumlarında Pazarlama (47-60). Ankara: SAGE Matbaacılık. ISBN: 978-605-184-
142-7

INTRODUCTION
The definition of marketing is “Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large” according to American
Marketing Association (AMA, 2017).
Another definition of marketing from Eser et.al. (2011: 6) is “Marketing is a business
function which detects unsatisfied needs and demands; estimating the possible profit of
these by measuring their size; defines the target market where it’s possible to give the
best service; specifies the best goods, services, and programs for the target markets and
intends to be consumer-oriented from every shareholder of the business”.
Centers for Disease Control and Prevention (CDC) defines healthcare marketing as
“creating, communicating, and delivering health information and interventions using
consumer-centered and science-based strategies to protect and promote the health of
diverse populations” (Bernhardt, 2006: 1).
Healthcare marketing is a globally emerging concept. Healthcare providers become
more consumer (patient) oriented and increased their level of service quality. Healthcare
services become more rational and standard by the employment of modern marketing
principles.
The Healthcare marketing approach was not accepted until the 1970s. Understanding
the benefits of marketing took some time for the healthcare industry because of its
specific structure, ethical issues, and the profile of the care healthcare demandands. On
the other hand, this situation is a result of economic change in the World in that era.
The healthcare market is getting more and more consumer and quality-oriented.

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In the past, the state was the only healthcare provider, but now the private sector also
undertakes these services intensely.
The motivation of the private sector for giving healthcare services is financial
expectations. In this case, the patient (or consumer) expectations should be satisfied
faultlessly, and that’s why healthcare providers are applying the marketing processes and
principles in their institutions.
The healthcare sector differs from others because of its idiosyncratic features. In
healthcare services, the issue is sometimes a matter of life and death, and this is the main
reason for this differentiation. When this is the case, the financial profit and loss logic
might be ignored. Under these circumstances, the decision-making process of the
healthcare service requisitioners also differs from other sectors (Thomas, 2005). The
reference effect has a significant role in patient decisions for healthcare services. The
reference effect comprises every third party promotion mechanism that directs consumers
through a healthcare provider's distribution channel (Thomas, 2005: 28). Additionally,
healthcare requisitioners usually have limited information or idea about what they really
need. In this case, defining the need is the responsibility of the service provider. Because
of this, the perceived risk level of healthcare requisitioners is high, yet their knowledge
and control of the process are limited. In some cases, the patients can’t evaluate the
quality and congruity of the service properly.
In the 1950s, healthcare marketing was seen as inconvenient and unethical by
hospital managers and doctors. In the 1960s hospitals begun implementing public
relations into their processes, but the target audience for this issue was doctors instead of
patients (Thomas, 2005). The 1970s were witnessing mass advertising from American
hospitals. In this era, American hospitals used television, radio, and billboards for their
advertisements. Their aim was convincing the patients to choose the services they offer
(Berkowitz, 1996). It’s accepted that the healthcare services marketing concept was
introduced in a conference in 1977 that organized with the sponsorship of the American
Hospital Association. The first book for healthcare services marketing was also published
in the same year. Even though the pharmaceutical manufacturers and insurance
companies begun applying the marketing activities before 1977, healthcare providers
were reluctant about that until then.
Until then, hospitals and other healthcare service providers were applying some basic
marketing principles as public relations, developing physician-patient relationships,
providing social services, and so on as healthcare service delivery activities (Thomas,

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2005). After the 1980s modern marketing approach came to the forefront with globalization,
and in the 2000s, health tourism draws attention by emerging communication infrastructure and
the fast-rising of globalization.

2.1. HEALTHCARE MARKETING MIX

Marketing components can be expressible with Marketing Mix (also known as 4Ps
of marketing) that presented by McCarthy (1960). Components of this mix are product,
price, place, and promotion. The abbreviation of 4P comes from the first letters of these
components.
2.1.1. Product
In the most general sense, a product can be defined as a good or service created by
combining a set of features (Eser et.al., 2011: 378). A consumer’s expectation from a
product is satisfying a need or want by consuming it. Diagnosis, treatment, care,
medication, or medical education can be given as examples for medical products.
Healthcare providers offer a great number of goods and services to their demandants.
The concept of product mix is a combination of the goods and services that the healthcare
provider offers to their patients (Thomas, 2005: 198). For example, while a dietitian
offers a nutrition program, the surgeon makes an operation, and the pharmacist manages
the medications in a hospital. As stated in the example, there are many different products,
and service delivery processes happen in various departments at the same time and in the
same place by different people. It must be known that the ultimate expectation of all the
patients is getting healthy again, even though they apply to various departments of the
same institution.
On the other hand, different healthcare providers may have different product mixes.
The product mix depends on the ultimate mission of the healthcare provider and the level
of the service provided by it. Thereby a product mix of a primary care physician has to be
different from a university hospital. Another reason for the product mix difference is the
content of the service. For example, the product mix of a dental clinic and a
physiotherapy center differs from the scope of the service they provide since they require
different professions and materials to rehabilitate their patients. This case also makes

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different providers choose various suppliers, distribution channels, promotion strategies,
and price policies although they all serve in the same industry. The table shows different
product mix examples for various healthcare providers.

Hospital Thermal Facility Geriatric Care Center

 Treatment service,  Accommodation  Accommodation
 Emergency services, services, services,
 Surgical procedures,  Restaurant services,  Nutrition services,
 Care services,  Healing water services,  Social support
 Intensive care services,  Gym services, services,
 Preventive health  Steam bath and massage  Psychologic support
services, services, services,
 Laborotary services,  Transportation services,  Healthcare services,
 Medical imaging  Etc.  Personal care services,
services,  Etc.
 Etc.
Tablo 1. Examples of product mix for various healthcare institutions

Although every healthcare provider has its marketing strategy based on their target
audience, grade, and type of service they provide, there is an exception. This exception is
emergency services. In emergencies, people may not be able to choose a service provider
for freewill. On the other side issue, the service provider also can not determine a target
audience in situations. Emergency services are usually given by the closest healthcare
provider as a result of an unforeseen situation. Even though having a good emergency
service infrastructure that known by the community may have a good effect on people but
designing marketing activities for emergency services is a quite hard issue since there are
so many unknown parameters.
2.1.1.1. Product Life Cycle
The product life cycle is an approach that defines the lifespan of a product by
dividing it into pieces from the development phase to vanquishing from the market.
According to that approach, there are five phases for a lifespan of a product. These phases
are product development, introduction, growth, maturity, and decline. Every phase has its
characteristic feature. The figure is a summary of these phases.

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51
 2.1.2. Price
The simplest definition of the price is the cost paid by the consumer to the seller for a
product. Consumer’s ability to pay is an important determinant for marketing. According
to Eser et.al. (2011: 453), a price is a tool that is under the control of marketing managers.
The price of the healthcare service can be paid by the patient or the state or the insurance
company or more than one of these. Payer or refunder is an important detail for marketing
discipline. If the service is refunded by a different party, the patient may act more thruster
for asking for extra services. On the other hand, if the service is funded by the patient
then, he/she may act less demanding. Price is also a communication tool. Because the
price of a product specifies who can afford to have it. Marketers send a signal by the price
that gives solid information for the consumers. This signal may pull or push the
consumers based on their spendable income for healthcare expenses.
2.1.3. Place
The place is about where the service is given. The product should be accessible to the
target audience. In some conditions, consumers have to go for the services, but sometimes
when consumers can’t access the service on their own, the services may go for the
consumers in such conditions. Ambulance and home care services can be given as
examples for this exception. Accessibility is a substantial determinant of a place for
healthcare services.
2.1.4.Promotion
Promotion is the sum of publicity and informing activities of the organization’s
healthcare services. Advertisements, souvenirs, brochures, etc. can be taken within this
scope.
Promotion is the way of communicating with current and potential consumers.
Promotion mix is the “action component” of the marketing (Thomas, 2005: 275). While
advertisements, public relations, campaigns, etc. are the conventional methods,
contemporary methods like mobile and internet-based channels are providing a more
accurate base for reaching the target audience. Eventually, the promotion mix is a
combination of these contemporary and conventional methods.

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 2.1.4.1. Publicity
Publicity is a communication method that consists of free information about an
organization, a product, and-or an idea. The producer of the information should choose
the right communication channel (Amodu, 2005: 138). Publicity can be seen as a function
of public relations.
2.1.4.2. Advertisement
Advertisement is a paid action that is applied by the competent authority on media for
positively publicizing and adopting for a good or service (Altunışık et.al., 2014). Goals
of advertisement can be defined as:
- Promoting goods, services, and organizational goals,
- Increasing the use of the goods and services by consumers,
- Reminding the organization to the target audience,
- Creating consumer loyalty,
- Informing the audiences about the new products,
- Responding to the advertisements of the competitors,
- Supporting the salesforce,
- Balancing the sales fluctuations,
- Training the consumers,
- Being in the public eye (Thomas, 2005: 278).
2.1.4.3. Personal Selling
Personal selling is the effort of the salesforce for selling the products by contacting
consumers personally. The difference between personal selling and advertisement is its
interactive nature. Personal selling happens transiently, and sellers can respond to the
consumer’s feedbacks simultaneously. This response speed is the supremacy of personal
selling. Fundamentally personal selling has three main purposes:
- Finding potential customers,
- Convincing potential customers to make them buy the offered products
and,
- Keeping current customers (Thomas, 2005: 279).
2.1.4.4. Merchandise Incentives (Sales Promotions)
Merchandise incentives are activities that organizations apply for pushing consumers
to buy more and-or salesforce or agents to sell more. For every different situation, a
different method can be applied like sales premiums, sales support, maturity, or
installment opportunities for wholesales.

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 2.1.4.5. Direct Marketing
Direct marketing is a result-oriented marketing activity that consumer has to make the
buying decision while the activity is happening. Live sales activities on TV are usually
like that. Sellers offer an attractive discount but only if the consumer buys the product
while the live event goes on. In direct marketing sales, event and consumer buying
decisions should happen simultaneously. Consumers can’t buy the product offered by the
direct marketing activity if the activity is over (or they lost a substantial advantage given
by the activity).
2.1.4.6. Integrated Marketing Communication
Even though there various marketing promotion mix components, usually these can’t
be applied solitarily. The ideal way is choosing the proper promotion methods according
to the situation and managing the process with an integrated approach. Many of these
promotion mix components can be applied together (for example advertisement + sales
promotions), and the synergy of them may increase the effectiveness of the marketing
activities.

2.2. HEALTHCARE SERVICES MARKETING and QUALITY

In the healthcare context, patients' perceptions about the service are the key indicator
for measuring service quality (Cronin and Taylor, 1992). Patients’ past experiences have
a significant effect on their healthcare provider choosing decisions (Gilbert et.al., 1992).
The match between the delivered services and patient expectations is a key component of
marketing activities. In normal conditions, consumers make their quality evaluation
simultaneously by the delivery of the service. For example, a consumer finishes the
evaluation of the service quality of a barber saloon by the end of the haircut. But in
healthcare services having the result may take longer. First, the diagnosis has to be done,
then the treatment begins, and usually, it doesn’t give an instant result, and the patient can
make an evaluation only after these phases.
Quality service delivery is a must because of the competitive structure of the
healthcare industry. Consumer satisfaction and perceived quality levels do not always
arise with the result of the service. The physical environment of the service, the
employees, or even the other patients may affect this process. According to Hyder and
Fregidou-Malama (2009), heterogeneity and tangibility may make consumers confused
about what they are consuming. On the other hand, healthcare services require some
equipment to provide the services properly.

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Physical properties using by the healthcare provider are also important determinants for
the evaluation of patients’ quality perception (Kavitha, 2012). These physical properties
may vary from EEG, EMG, or MR devices to lightening or cleanliness of the place.
Because of this, the service promise and the physical properties should be consistent.
As much as satisfying the patients' expectations, the healthcare service providers meet
patient satisfaction, achieving consumer loyalty, and keep them away from looking for
other service providers (Chao-Chan Wu, 2011). With the high level of patient (consumer)
loyalty, the healthcare service providers can build a positive brand image. A good brand
image has a positive effect on the patients’ level of satisfaction and loyalty even before
they have the service. Service quality, patient satisfaction, and brand image subjects can’t
be taken independently from the employees. Therefore employees should be informed
about these subjects, and they have to follow the corporate policies. In this way, their
attitudes and behaviors for the patients become consistent and corporately desirable
(Sirisha ve Kishore, 2014: 228).

2.3. STRATEGIC MARKETING PLAN for HEALTHCARE SERVICE

PROVIDERS

At present, there is a certain number of healthcare providers from the private sector.
These providers have to struggle with difficult competition conditions for surviving in the
market. Therefore they have to consider and build their services for their patients as
problem-solving, rehabilitating, and preventing them from health problems. Otherwise,
patients would not intend to pay for these goods and or services.
Strategic management, strategic planning, and the other components of the healthcare
services should be pieced together for implementing the modern marketing approach
properly. Taking the patients (or consumers) in the center of the healthcare services,
acting with this perspective, and managing the employees with this mentality should be a
part of the organizational mission.
2.3.1. Preparing the Main Frame of the Plan
For designing the process components as context, target audience, budget, method,
etc. should be defined properly. A strategic marketing plan is a substantial component of
the corporate strategic plan. The main corporate strategic plan should be taken into
account while preparing the strategic marketing plan.

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A strategic marketing plan uses the SWOT analysis results of the corporate strategic plan
obtained by the internal and external environment analysis results. In this phase, the
questions below should be answered:
* Where were we, where are we now, and in which way are we moving on?
* In which way do we want to march on? (Target setting)
* How should we allocate our resources for achieving our targets?
* How can we transform our plans into actions?
* Are there any differences between the plans and results? Do we need any new
plans or actions?
Healthcare services providers should consider the changes that occur in the uncontrollable
macroeconomic environment and assort with these changes:
* Demographic environment: age, sex, level of education, income, etc.
* Economic environment: income distribution, savings rate, the burden of debt,
resource allocation, etc.
* Ecologic environment: air, noise, pollution, etc.
* Technologic Environment: legal regulations about technology, emerging
innovative technologies, etc.
* Political environment: legal regulations and political tendencies for the healthcare
providers etc.
* Cultural environment: beliefs, values, norms, etc.
* On the other hand, some parameters can be controlled by the healthcare providers
such as communication channels, consumers, suppliers, etc. (Popa ve Vladoi,
2010: 766-767).
2.3.2. Market Segmentation and Defining the Target Audience
One of the most substantial components of the marketing plan is the target audience.
Organizations can’t start their business by targeting all the consumers in the market. Such
an approach can’t get success both theoretically and practically. Because of this
limitation, organizations should set consumer groups that give similar reflections.
Organizations divide their markets’ homogenously into sub-markets that consist of
consumers that have similar needs and wants (Odabasi and Baris, 2005: 61).
Organizations can focus on developing and applying their strategies with this approach.
Marketing research usually contains demographic variables (as age, sex, education
level, income, etc.) and variables of the product (as quality, consumer expectations,
attitudes for the product, etc.). After collecting the data, organizations apply qualitative

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and quantitative methods for understanding the distribution of the data and the
relationships between the variables. Organizations should consider the sustainability of
the target audience for long term service quality and profit.
2.3.3. Defining the Targets
Organizations have to define their marketing targets coherent with the general
strategic targets of the organization, realistically, achievable, measurable, and tangible.
For example: “Increasing the international patient number” is a wrong target definition.
The proper target definition can be made as “Increasing the number of international
patients 12% for the base year”. Organizations may define different targets in various
titles, but the target audience has to be the center of gravity for each title.
2.3.4. Defining the Necessary Resources
There is a cost of achieving the targets. This cost is usually defined and measured
financially. Organizations should define the radio advertisements by the total budget cost
(like increasing the radio advertisement budget 15%) in the strategic marketing plan
instead of defining them by duration (like increasing each radio advertisement's duration
2 more minutes). Organizations should consider the principles of effectiveness and
efficiency while allocating resources. Also, considering the results of the cost-benefit
analysis for balancing the resources and targets. On the other hand, organizations should
take the time as a resource too. In this case, organizations should set the strategic
marketing plan calendar in this phase, and define them on the calendar.
2.3.5. Preparing the Integrated Marketing Communication Plan
Organizations choose their communication channels according to the limits given in
budget, and the output of the cost-benefit analysis of the options. Organizations should
consider every alternative channel’s capability of reaching the target audience. After
deciding the communication channel, the message strategy has to be set.

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 2.3.6. Implementing the Marketing Plan
The implementation phase begins after defining the aims, resources, communication
channels, and inform the shareholders about the plan. Shareholders must involve in both
planning and implementation processes, and all steps should be reconciled with all the
shareholders to succeed. The strategic marketing plan should cover every shareholder’s
benefits.
For updating the plan in time, the organization must track the reactions of the target
periodically. For achieving this, the organization should define measuring criteria and
control variables well.
2.3.7. Evaluating the Marketing Plan
By the end of the implementation stage, subjects as feedbacks from the target
audience and their positive or negative attitudes on the service, the level of attainment of
the objects for each process, achieving the resource utilization targets should be taken
into evaluation. For every process the key performance indicators (KPI) should be
defined substantially, clearly, and measurable. The success of the plan can be confirmed
by these indicators.

2.4. MARKETING ETHICS for HEALTHCARE SERVICES

Marketing ethics is about implementing marketing decisions, behaviors, and

institutional code of marketing ethic standards. Marketing ethics is covering the decision
making process by operating the ethical idea in practice on it. It contains the principles
that lead the organizational norms and values. After all, marketing ethics is “Evaluating
the results of the marketing decisions, actions and results consideringly the base period
and social conditions by using the generally accepted ethical codes and standard rules”
(Torlak, 2006: 172-173).
Although the messages sent for marketing communication need to be catchy they also
have to be reliable (Solomon et.al., 2016: 217). Healthcare providers should consider the
main principle of “Primum non nocere” (first, do no harm). In this context, healthcare
providers should avoid unnecessary interventions and other medical applications. Also,
healthcare providers shouldn’t offer unrealizable pledges to their patients. It shouldn't be
forgotten that the first need of a patient is being healthy again. Patient confidentiality has
to be a priority. Healthcare providers should inform their personnel about the
organizational code of ethics, and they have to be treated ethically.
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 Eventually, the code of ethics between the healthcare providers and demandants has
to be defined clearly. These values shouldn’t be seen as confidential information of the
service provider. All the shareholders as employees, patients, suppliers, etc. have to be
informed about the organizational code of ethics. This proclaimed information would
create a multi-level ethical control mechanism that pushes the healthcare provider to
behave ethically.

References

Please check the link for references:

https://www.researchgate.net/publication/341762801_Saglik_Kurumlarinda_Pazarlama_Heal
thcare_Marketing

59
 Please check the link for references:
https://www.researchgate.net/publication/341762801_Saglik_Kurumlarinda_Pazarlama_Heal
thcare_Marketing

60