Strategic Management of Health Care Organizations
More of Market Segmentation
Eric Berkowitz is a Professor of Marketing at the University of Massachusetts and has written many textbooks on Health Care Marketing. This document summarizes concepts from his textbook, The Essentials of Health Care Marketing (Jones and Bartlett).
Market segmentation is when we identify groups of consumers who have similar needs and we focus on those needs so that we can recruit and retain customers or patients. In health care we can look at obvious segment like diagnosis (diabetes), age (geriatrics) ethnic groups (Asian Americans) and any combination. We can also look at other factors to help us recruit groups/segments. By segmenting the market, we are in a better position to understand it and apply the four “P’s” of marketing used to recruit and retain customers: product or service mix that the customer wants, price that the customer is willing to pay, promotion necessary to make the customer aware of the product or service and the place necessary to distribute the serves (how many clinics are needed to recruit and retain customers.
Segmentation can help us our organization take a mixed group of patients and make it more homogeneous and easier to serve. The South Bronx has a large number of children who are obese, diabetic and asthmatic. However, when we segment this market, we may find neighborhoods that have greater proportions of children who are just obese, or just diabetic, or just diabetic and obese. This helps us tailor the services to the specific needs (this is where epidemiological data is very helpful as market data). Our organization is in a better position to develop specific messages to potential customers that are narrow – written specifically for this group. This is known as targeted marketing.
Our organization may decide on a concentration strategy focusing our resources on one segment of the market (concentration = segmentation). It could be the largest segment in terms of the number of people affected or the smallest. Small or narrow segments of the market are known as niches. The organization can take their basic product, modify to meet the needs of potential customers (product differentiation) and go after multi-segments of the market.
So how to segment the market; there are a number of ways:
Socio-demographic factors: Age, gender ethnicity, Income
Geographic segmentation: what neighborhoods or service areas are we getting customers from or where do we want to compete
Lifestyle or social class
Usage segments the market based upon the service that is actually utilized by the market being served. Usage can be analyzed based on usage rates, type of usage (i.e. what clinical services are used based upon diagnosis/medical problem ), brand loyalty (i.e. patients who will only go to the Montefiore Medical Group clinics) and benefits (i.e. toothpaste – some want whitening, some want better mouth wash features, some want gum disease features)
Age cohorts segmentation
Depression cohort – seniors today, who have specific health care needs
World War II, came of age during the second world war, the so called greatest generation
Post War, came of age after World War II
Baby Boomers born between 1946-54 and a subgroup of “late boomers” 55-66 who have different behavior from the older cohort members
Generation X born 1966-1977
N-Gen born 1978 to 1985
Millennial born 1986 thru 2000
These groups have certain unique characteristic that make them different from each other. They also have different health care needs based upon the stage of life that they are in.
