Week 7 Discussion
Review the article,
Effective Marketing Tool for the Marketing Professionals in Healthcare Organization: The 4 ‘S’ Model.
Are there any elements from this article you believe you will implement in your own marketing plan in next week’s assignment? Why or why not?
Effective marketing tool for the marketing professionals in healthcare
organization:
Biranchi N. Jena
Department of Health & Hospital Management, Symbiosis Institute of Health Sciences, Symbiosis International University, Pune, India
ABSTRACT
Patients are becoming more demanding for the medical service delivery as organizations are
continuously innovating new ways of service delivery. Irrespective of the number of services
being provided, the demand for marketing support in the healthcare organization is
growing. The number of hospitals with marketing department has increased by 75% in 3
years’ time, which is partly due to increased competitive pressure. With more investments in
the healthcare, there is comparatively more expectation from the promoters in terms of
better returns of investment and that boils down to more pressure on marketing activities of
the organization. In such situation marketing associates including entry-level professionals
face a daunting task to justify the growth in market share and securing higher budget for
the marketing activities. To make their function more effective, a 4 ‘S’ model is devised
which captures the basic marketing information like Size, Shape, Share and Soar, which every
marketer need to have before any marketing planning. Since the information needed for
effective marketing plans for medical services is critical, the 4 ‘S’ model brings a template-
based tool to facilitate better understanding of the market and thus better strategy for the
organization.
ARTICLE HISTORY
Received 23 May 2017
Accepted 2 November 2017
KEYWORDS
Entry-level marketing
professionals; hospital
marketing; 4 ‘S’ model;
medical service marketing
tool
Marketing mix in hospitals and healthcare organiz-
ations predispose medical needs, gain market share
and increase the efficiency and effectiveness of the
respective organization [1]. Adopting marketing prin-
ciples in hospitals and healthcare organizations is gain-
ing importance. The potential for developing new
services and community program, the need for reeval-
uating and redefining the target market of the organiz-
ation’s service offering and the need for more accurate
and comprehensive strategic planning are major con-
cerns and the driving forces for the effective marketing
program in the healthcare organizations [2]. Under-
standing and applying the marketing way of thinking
in order to raise the quality of performance of health-
care organizations is becoming a necessity, which dic-
tates behavior in a competitive environment [3].
Application of standard marketing principles poses
different set of challenges for the healthcare organiz-
ations. Due to wide variations in the request made by
heterogeneous patients for a particular service becomes
a serious challenge to present the benefit of the con-
cerned services and make them visible and tangible in
advance [4]. Public sector healthcare organizations,
which mostly operate as not-for-profit organizations
believe more in quality and timely delivery of services.
Thus,marketingofthese serviceswere notfelt important
and urgent. Off late, Academic Health Centers (AHCs)
are aggressively marketing themselves by designing
new services and promoting these services more inten-
sely [5]. Irrespective of the pre-requisite essentials in
the organizational level, the demand for marketing sup-
portinthehealthcareorganizationisgrowing.Thenum-
ber of hospitals with marketing department has
increased by 75% in 3 years’ time, which is partly due
to increased competitive pressure [2].
Target markets in hospital marketing include
patients and families, communities, doctors, medical
personnel, hospital staff and charitable donors [6].
While hospitals come out with a number of services,
it becomes difficult to position such services in the
huge market place. If marketing planning is not
designed in a well-thought manner, it may affect the
quality of medical services and lead to unnecessary
competition and may cause unnecessary prescription
of medical services [7]. While there are a number of
functional activities in the marketing of hospital ser-
vices, from the organization’s perspective the analysis
of target market, future need assessment of consumers
is quite important for a good management strategy [8].
However, it has been a daunting task for the entry-level
managers to cope of the multiple demands from differ-
ent departments to provide support to market the hos-
pital and healthcare organization services. Therefore,
most of the activities in the healthcare organizations
are reactive in nature than proactive and well planned.
© 2017 Informa UK Limited, trading as Taylor & Francis Group
CONTACT Biranchi N. Jena biranchijena@hotmail.com Department of Health & Hospital Management, Symbiosis Institute of Health Sciences,
Symbiosis International University, Pune 411004, India
INTERNATIONAL JOURNAL OF HEALTHCARE MANAGEMENT
2020, VOL. 13, NO. 3, 201–206
https://doi.org/10.1080/20479700.2017.1402423
http://crossmark.crossref.org/dialog/?doi=10.1080/20479700.2017.1402423&domain=pdf
http://orcid.org/0000-0001-6388-2408
mailto:biranchijena@hotmail.com
http://www.tandfonline.com
Although it has been proven that marketing can
improve satisfaction of the target market [7], the cur-
rent practices in hospitals in India hardly analyses sys-
tematically the target markets.
As per the 2016 State inbound report [9], 65% mar-
keters reported that generating traffic and leads is the
top most challenge faced by the marketers followed by
proving RoI of the marketing activities (43%) and secur-
ing enough budget (28%). Other issues highlighted in
the report are managing website, identifying right tech-
nologies, targeting content for an international audi-
ence, training the team and hiring the top talent.
When the marketing plans are executed without a
base understanding about customers, their needs,
place of service availability etc., marketing activities
would not be effective and gradually the organizations
have dilemma in increasing budget on marketing.
A practicing entry-level managers said that ‘Within
a month, he had wedged himself into the fledgling mar-
keting team’ [10] and often witnessed many definitions
of marketing starting from promotion of organization’s
product and services to process for creating, communi-
cating and delivering the value to customers. But most
often entry-level marketers hardly have a tool to under-
stand where to promote, how much to promote, what
to create to improve value.
A number of deliberation has been documented to
improve the management of healthcare organizations
including hospitals in recent years [11]. Many innova-
tive tools have been introduced in the healthcare mar-
keting to optimize the outcome of hospitals. The
importance-performance analysis (IPA) by using phys-
icians perspectives regarding performance dimensions
mostly used to understand and interpret the perspec-
tives of the users of services/products or patients in
healthcare [12]. However, such a tool would be further
strengthened with an objectivity-based hospital market
information.
The existence of dual professional expertise namely
medical and non-medical in the hospital sector makes
it complex and its management becomes more differ-
entiated than other organizations. Such complexity in
the hospital sector has been described as double-
headed monster by Drucker [13]. Thus, it is becoming
important to define an easy way to demonstrate the
functionalities of marketing professionals in the health
and hospital sector.
This current paper is addressing such need for the
entry-level managers and trying to bring a tool for
them to make them more effective in the organization
while they create value for the organization and for the
customers.
The current research paper is the outcome of the obser-
vations in many hospitals in India and the class room
deliberation of marketing management for hospital
services for the students of Masters of Business Admin-
istration (MBA) in Health and Hospital management.
In one of the researcher’s academic visit to one
healthcare organization, he had an opportunity to dis-
cuss with the Head of that organization about market-
ing efforts being done. He mentioned various activities
like the road show, direct customer interaction, spon-
soring few events on life style changes and so on.
While the researcher was trying to understand the
reason behind such activities and how it is linked to
overall organization mission and vision, it was neither
connecting to any of the core values of the organization
nor was linked to any measurable outcome. This in
turn creates a non-viable, non-evidence and non-con-
clusive marketing budget which is limited to few activi-
ties which may or may not lead to the growth of the
organization.
This is the standard practice in a sizable small- and
mid-level organization. When young marketing pro-
fessionals enter such organizations, they become a
task doer than a thought based marketer. It has been
observed that many of the young health and hospital
management professionals missed the appropriate
way of looking to the market dynamics.
In order to make things a bit easier for the students
who would start their career as entry-level manager, the
researcher developed a concept on ‘4S Model of Mar-
keting’. This was deliberated in the classroom of
MBA students and evaluated through collection of
information on various aspects of the 4S model. The
model was further refined by taking informal feedback
from the stakeholders of various healthcare organiz-
ations including hospitals.
The model also uses various epidemiological con-
cepts like prevalence rate, diagnosis rate and treatment
rate and socio demographic variables like patients age,
income, place of residence and other factors consider-
ing the complexity in the demand of various medical
services.
The 4 ‘S’ model
When a marketer starts planning of the marketing
activities, most of the fresh marketers are task based
contributors rather than thought based contributors.
When the young and inexperienced professional go
out of their management school into a healthcare
organization or a corporate hospital, mostly they are
into a state of confusion as their job is mostly ‘a reac-
tion to a certain situation in the organization’ or ‘task
assigned by the senior professionals’. They are not
able to create a base on which they would prepare
their marketing activities. Subsequently they develop
a perception that the marketing practice in the health-
care organizations are different than the theories they
have learned in their management education. This in
202 B. N. JENA
turn creates hurdles for the professionals to bring a
competitive advantage to the organization they work
for.
The 4S model is based on the premise of under-
standing the basic marketing principles. One of the
major challenges in the healthcare industry is the lack
of proper definition of the services of a particular
organization. If it is not defined well and understood
by its own employees, it becomes a daunting task to
create an innovative communication platform for the
service delivery. Again the service delivery model in
healthcare organizations varies significantly due to
socio-economic, demographic and technological fac-
tors. The model tries to bring systematic way of defin-
ing the service offerings and create a basic ground for
the hospitals to develop the service delivery and keep
doing service development vertically and horizontally.
4S model carries different attributes to understand
the base market and its customers. The 4S in the
model are; Size, Shape, Share and Soar.
While for the entry-level marketing professional it is
important to convert the learning in the management
school into practice, it is also important to synchronize
with the thought process of the senior marketing
associates of the organization. While the model was
deliberated in few organizations by the final year
healthcare management students during their summer
training, it was highly appreciated and the synchroni-
zation was established without much difficulty.
The model is given in Figure 1.
Size
The first S of the 4 ‘S’ model is market size. It is utmost
important to quantify the market size. Most often the
entry-level marketing professionals ignore such exer-
cise for the medical or clinical service they work for
or to promote. The sizing of the market for medical
or clinical service is a bit complicated than the sizing
for the other services. The patient pool sizing is critical
for marketing and positioning of medical or clinical
services of both acute and chronic disease. In spite of
a prevalent number of 3.8 million patients for lung
volume reduction surgery (LVRS) in USA, only 119
procedures were performed in the year 2008 under
Medicare [14]. This is due to the lack of effective diag-
nosis and other support system including the com-
munication and counseling to the patients. In case of
chronic disease, the rules of half indicates that of the
total prevalent population, half of the people get diag-
nosed and of the total diagnosed only half of them get
treated [15]. This is clear that the market size, say for a
diabetes treatment is not the prevalent population, but
only the treated population which is a fraction of the
prevalent population. However, knowing the most
accurate prevalent number, diagnosis population and
treated population would add a great knowledge to
the marketing activity of the respective medical or
clinical service because the level of prevalence rate
and diagnosis rate would impact the market size.
The template for market size is given in Figure 2.
Such template can be prepared for the territory that
the organization has defined as its operational market.
The operational market can be a small administrative
area or it can be a state or even a country. If the organ-
ization has a multi-level presence in delivery of the par-
ticular medical or clinical service, the market sizing can
be done at each level of the territory and then the same
can be cumulated.
Service pricing in healthcare organization is widely
fluctuated because of the monopolistic competitive
nature of the market. Understanding the average pri-
cing of such services is also important from the market-
ing strategy perspective. While prioritizing the effective
marketing mix elements on patients’ tendency to hos-
pitals, it was found that price, services and physical
assets are the top priority elements in public sector hos-
pitals while services, physical assets and promotion are
the top ones in private hospitals. All these elements
have an impact of more than 30% in terms of patients’
tendency towards hospital marketing mix [1]. There-
fore, the total value of the service concerned must be
worked out or estimated through a secondary data or
sample based market survey. Once this information is
reflected in your market sizing template, that would
provide you a great insight of the service which you
are dealing with.
Shape
The shape is the second ‘S’ in the 4 ‘S’ model. Shape of
the market indicates about the consumer’s location and
where the service is provided. This carries a lot of
importance for the marketing of healthcare services
especially in developing countries. A study by IMS
institute for Healthcare Informatics on healthcare
access in India shows that Physical access, capability,
quality of care and affordability are the four major
issues in the healthcare access in India [16]. This indi-
cates that on an average the components of medical
services like hospital beds, doctors, nurses and pharma-
cists are available by more than 70% in urban areas
where as more than 70% customers are in rural areas.
Again more specialized and high-end medical services
like bone marrow transplant is available in metro cities
where as customers are spread over metro cities, class I
and II and other rural areas. Thus it would be a huge
impact on the marketing exercise when a marketing
activity is done without understanding the location of
the customer and where the service is delivered. The
template on the shape of the market would help in
understanding such vital information.
The template for gathering information on shape of
the market is illustrated in Figure 3.
INTERNATIONAL JOURNAL OF HEALTHCARE MANAGEMENT 203
Various epidemiological studies have demonstrated
that there is a significant level of variation in the preva-
lence of a disease (pre-requisite for demand of medical
services) by different demographic parameters like age,
gender etc. Such information also influences the mar-
keting activities of any kind of medical or clinical ser-
vices and thus needs to be part of the shape of the
market information.
Share
The third ‘S’ in the 4 ‘S’ model is the share. Harvard
Business Review (HBR) has reiterated that one of the
main determinant of business profitability is market
share and the return on investment is directly related
to the degree of market share [17]. The report has
specified that higher level of market share is an indi-
cation for economies of scale, bigger market power
and superior quality of management. The marketing
challenge increases with higher market share as the
organization demands to maintain the market share
at a higher level which may be a difficult task with
the growing competition in the healthcare industry.
The entry-level manager must have an in-depth under-
standing on the share of a particular medical service by
all the competitors operating in the market place.
The template for data collection for the market share
is given in Figure 4.
Healthcare industry including hospital services,
diagnostic services and allied service is emerging in
most of the developing countries and thus micro indus-
try information by the service providers are limited
although the macro information is available. The
pharmaceutical sector is an exception in terms of
data availability on market share and performance of
the major market players. Therefore, entry-level mar-
keting professionals have to initiate an indirect esti-
mation of market share or rely on market survey
pertaining to the service that they handle in the organ-
ization. Having such information platform would pro-
vide a bigger advantage while planning for competition
strategies.
Figure 2. Template for market size.
Figure 3. Template for ‘shape’ of the market.
Figure 1. The 4S model.
204 B. N. JENA
Soar
The fourth and last ‘S’ in the 4 ‘S’ model is ‘Soar’. A
good market analysis will have an economy overview,
which is very helpful in understanding where your cur-
rent market is and where it is going [18]. Healthcare
industry is growing at a rapid rate. The overall Indian
healthcare market is worth around US$ 100 billion
and is expected to grow to US$ 280 billion by 2020, a
Compound Annual Growth Rate (CAGR) of 22.9%
[19]. The industry includes sectors like hospitals, nur-
sing homes, diagnostics, pharmaceuticals, healthcare
information technology, medical tourism and so on.
The growth would vary significantly within the sector.
The key here is not only to capture the growth rate of
the sector but also the growth of the services in last few
years. This would help in setting up a forecasting plat-
form for the marketing team and thus can influence the
investment decisions of the organization. The template
for data collection for market growth is given in
Figure 5.
For the marketing strategy the forecasting is very
crucial and critical because the strategies that a health-
care organization would implement in times of rapid
growth would be different during sluggish market
[20]. If the industry is expected to grow rapidly, the
marketing plan would be focused on acquiring as
many new customers as possible. If growth is going
to be limited, the focus would have to be more on
retaining customers the business already has – because
his competitors will be striving to lure his customers
away.
In the healthcare industry, the market place is becom-
ing too competitive as the growth is driven by high
incidence rate of non-communicable diseases, injury
and other lifestyle-related complications. Over the
period there is a development of consumerism in the
healthcare industry which drives the demand for
more marketing professionals to deliver value to the
ever demanding customers. The healthcare marketing
is more complicated compared to other services, as it
brings the requirement of clinical information, epide-
miological expertise and of course marketing knowl-
edge. While the healthcare industry is more a kind of
monopolistic competition, the principal- agent
relationship between the patient and doctor inhibits
the disclose of major information flow, on the other
hand the marketers in the healthcare organization
Figure 4. Template for ‘market share’.
Figure 5. Template for ‘soar’.
INTERNATIONAL JOURNAL OF HEALTHCARE MANAGEMENT 205
would try to bring as much as information to the
patients to make the decision making easy from the
customer perspective. In such scenario, the entry-
level marketing professional manages multiple chal-
lenges during managing the marketing planning activi-
ties. The 4 ‘S’ model discussed in this paper is going to
add a significant value for the entry-level marketing
professionals in the healthcare industry.
No potential conflict of interest was reported by the author.
Dr Biranchi Jena is currently working as a professor in
Health Economics and Marketing at Symbiosis University,
Pune. He also consultants on performance management
for healthcare projects of Tata Trust. Dr Jena is the former
Director of IIHMR Bangalore and worked in senior positions
in corporations like Novartis and Novo Nordisk.
Biranchi N. Jena http://orcid.org/0000-0001-6388-2408
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- Abstract
Introduction
Methodology
The 4 ‘S’ model
Size
Shape
Share
Soar
Conclusion
Disclosure statement
Notes on contributor
ORCID
References