7 Managing Marketing Activities Thomas Northcut/Digital Vision/Thinkstock Marketing is too important to be left to the marketing department. —David Packard Learning Objectives After reading this chapter, you should be able to do the following: • Define marketing and explain how the marketing concept is patient centered in HCOs. • Discuss the relationship between organizational planning and marketing planning with regard to objectives and strategies throughout the planning levels. • Name the three basic marketing strategies that can be used under the product/market approach to market- ing strategy development, identify two other approaches to marketing strategy development, and list four factors influencing the strategy selection. • Discuss how the four strategic elements of the marketing mix become marketing tactics for implementing the selected marketing strategy. • Identify two basic types of organizational structures for managing marketing activities. • Explain how ethical issues in marketing relate to marketing decisions, and provide examples of ethical issues facing healthcare providers. Section 7.1What Is Marketing? Introduction This chapter provides an overview of marketing, the relationship between marketing plan- ning and overall organizational planning, basic marketing strategies, and approaches to orga- nizing marketing activities in an HCO. This chapter also includes a discussion of the ethical decision-making process in marketing and lays the groundwork for later chapters on the mar- keting process and its role in HCOs. 7.1 What Is Marketing? The marketing of HCOs is a relatively recent phenomenon. It was as late as 1977 that the American Hospital Association held its first convocation on marketing. Much of the early mar- keting efforts by hospitals were aimed toward the recruitment and retention of physicians. Many physicians remained skeptical of marketing to patients and believed it was unprofes- sional. However, as healthcare has become more complex and expensive, HCOs and individual healthcare providers have seen the need to better communicate to patients the value of their services (MacStravic, 1994). Over the last two decades, the discussion of marketing in HCOs has evolved from whether it was even appropriate for HCOs to use marketing to give the organization a competitive advantage and “tell its story.” But what is meant by the term marketing? Various definitions of marketing have evolved over the years, but one that appears to be fairly complete is as follows: Marketing directs those activities that involve the creation and distribu- tion of products and services to identified market segments. Several key words in this defini- tion need further explanation. First, what is meant by the words marketing directs. This is a managerial perspective rather than a residual perspective, which is concerned only with what has to be done to get goods and services to customers. A managerial pers.

1. 7 Managing Marketing Activities
Thomas Northcut/Digital Vision/Thinkstock
Marketing is too important to be left to the marketing
department.
—David Packard
Learning Objectives
After reading this chapter, you should be able to do the
following:
• Define marketing and explain how the marketing concept
is patient centered in HCOs.
• Discuss the relationship between organizational planning
and marketing planning with regard to objectives
and strategies throughout the planning levels.
• Name the three basic marketing strategies that can be used
under the product/market approach to market-
ing strategy development, identify two other approaches to
marketing strategy development, and list four
factors influencing the strategy selection.
• Discuss how the four strategic elements of the marketing
mix become marketing tactics for implementing
the selected marketing strategy.
• Identify two basic types of organizational structures for
managing marketing activities.

2. • Explain how ethical issues in marketing relate to
marketing decisions, and provide examples of ethical
issues facing healthcare providers.
Section 7.1What Is Marketing?
Introduction
This chapter provides an overview of marketing, the
relationship between marketing plan-
ning and overall organizational planning, basic marketing
strategies, and approaches to orga-
nizing marketing activities in an HCO. This chapter also
includes a discussion of the ethical
decision-making process in marketing and lays the groundwork
for later chapters on the mar-
keting process and its role in HCOs.
7.1 What Is Marketing?
The marketing of HCOs is a relatively recent phenomenon. It
was as late as 1977 that the
American Hospital Association held its first convocation on
marketing. Much of the early mar-
keting efforts by hospitals were aimed toward the recruitment
and retention of physicians.
Many physicians remained skeptical of marketing to patients
and believed it was unprofes-
sional. However, as healthcare has become more complex and
expensive, HCOs and individual
healthcare providers have seen the need to better communicate
to patients the value of their
services (MacStravic, 1994).
Over the last two decades, the discussion of marketing in HCOs

3. has evolved from whether
it was even appropriate for HCOs to use marketing to give the
organization a competitive
advantage and “tell its story.” But what is meant by the term
marketing?
Various definitions of marketing have evolved over the years,
but one that appears to be fairly
complete is as follows: Marketing directs those activities that
involve the creation and distribu-
tion of products and services to identified market segments.
Several key words in this defini-
tion need further explanation. First, what is meant by the words
marketing directs. This is a
managerial perspective rather than a residual perspective, which
is concerned only with
what has to be done to get goods and services to customers. A
managerial perspective is one
that is proactive, customer oriented, and aligned with the firm’s
overall strategy. In contrast, a
residual perspective is one that is reactive and only deals with
needs as they arise. Thus, mar-
keting is not just a group of activities but, more specifically,
activities that are controlled in
their execution to attain identifiable objectives. Second,
marketing involves the performance
of specific activities or functions. These functions constitute the
work or substance of what
marketing is all about. To be involved in marketing means to be
involved in the planning,
execution, and control of these activities.
Third, marketing involves both the creation and distribution of
goods and services.
Although the service is actually created by the operating
function, marketing personnel are

4. very much concerned not only about the way goods are created
and services are performed
but also the way customers utilize goods and services.
Marketing needs to have a vital role in
the creation as well as the distribution of goods and services. In
fact, a well-conceived service
or good makes the rest of the marketing tasks easier to perform.
Finally, marketing’s concern with customers, and meeting a
need in the marketplace, is
patient centered in an HCO. However, marketing is particularly
concerned with customers
preselected by management as the market segment(s) on which
the organization will con-
centrate. Thus, specific customers with their specific needs
become the focal point of market-
ing activities.
Section 7.2The Marketing Concept
7.2 The Marketing Concept
The marketing concept is a business orientation that focuses on
satisfying customers’ needs
at acceptable levels of revenue and costs. In for-profit
organizations, acceptable levels of rev-
enue and costs are defined in terms of a target return on
investment, while in not-for-profit
organizations the focus is achieving a balance between revenues
and costs.
Organizations that have a true marketing orientation focus on
addressing the needs and
wants of one or more targeted segments of the market. However,
managers with marketing

5. titles may apply other business philosophies that, in reality, do
not reflect authentic market-
ing thought. Table 7.1 shows three different business
orientations that have been used as
the operating philosophies behind management decision-making
(Stevens, Loudon, Wrenn,
& Mansfield, 2006). The term dominant in the table identifies
the core objective, which gives
the orientation its name. Present means that the orientation
includes that objective, but does
not use it as the centrally controlling goal in orienting the
manager’s thoughts about his or
her company, its services, or its customers. Not pertinent means
that objective has no rel-
evance, pertinence, or connection with the orientation
described. This table makes it clear
that the service and selling orientations are internally driven.
Put simply, managers using
these orientations determine what they want to dictate to the
market. The last orientation—
marketing—contains the elements of an outside-in, market-
driven, or customer-oriented
philosophy, which stresses discovery of market opportunities,
marketplace input regarding
the organization’s claim of a competitive advantage, and the
integration of effort across all
aspects of the organization to deliver quality and customer
satisfaction.
Table 7.1: Possible organizational orientations
Service
orientation
Selling
orientation

6. Marketing
orientation
Desire to capitalize on syner-
gies and efficiencies in operating
processes
Dominant Present Present
Attention to designing acceptable
levels of quality services
Not Pertinent Present Present
Dedicated resources to stimulating
interest and desire for increasing
revenues
Not Pertinent Dominant Present
Focus on identifying and satisfying
needs and wants of customers
Not Pertinent Not Pertinent Dominant
Considering the short- and long-
term effects of actions on custom-
ers and on society
Not Pertinent Not Pertinent Dominant
HCOs have been concerned with the delivery of a satisfactory
level of patient services for
decades. Most services, including healthcare services, are
intangible. That is, they cannot be

7. touched or held before being purchased. Additionally, the
delivery of a service is dependent
on the ability of the service provider. As service providers are
human, the quality of service
varies from patient to patient.
Section 7.2The Marketing Concept
Traditional strategies in healthcare for overcoming these
limitations include improving the
appearance of physical facilities, projecting competence, and
employing empathetic per-
sonnel (Stevens et al., 2006). However, these strategies have
been shown to be inadequate,
as healthcare has become more expensive and complex, from
both the providers’ and the
patients’ perspectives (Merlino & Raman, 2013).
According to Michael Porter and Thomas Lee, “the overarching
goals for providers . . . must
be improving value for patients, where value is defined as the
health outcomes achieved that
matter to patients relative to the cost of achieving those
outcomes” (Porter & Lee, 2013, p.
52). The implied message for HCOs is not just to put together
procedures to help patients
navigate the system, but to fundamentally change the system.
The marketing orientation is particularly well suited to dealing
with the internal and exter-
nal environmental forces currently facing healthcare managers.
Marketing includes all of the
positive contributions of the service and selling philosophies,
but it adds concern for the long-

8. term effects of the organization’s actions and services on its
customers, as well as the desire
to consider the effects of the organization’s actions on society
at large. Putting the marketing-
orientation philosophy into practice requires a planning
procedure that transforms the exter-
nal consumer orientation into marketing activities.
Thus, the marketing orientation holds that the only social and
economic justification for the
existence of a business enterprise is this: the satisfaction of
customer needs, either at a profit
or at acceptable levels of revenues and costs, and with due
diligence for the long-run wel-
fare of the customer and society. A firm’s existence is justified
socially in meeting customer
needs—directly through the provision of goods and services,
and indirectly through being
a good citizen of its operating environment. In healthcare,
meeting customer needs means
being a patient-centered organization. Thus, everyone in an
HCO is concerned with patient
care, including nonmedical employees. In the U.S. economy, the
marketing-orientation philos-
ophy is exactly why organizations were given the right by
society to own and use resources to
produce goods and services. A firm finds economic justification
by making a profit or generat-
ing enough revenue to cover costs. Profit or breakeven for
nonprofit organizations rewards
the stakeholders’ investment in the organization and supports
the continued availability of
funds. Customer needs become the focus of firms that operate
under the marketing-orienta-
tion philosophy.

9. Traditionally, medical providers have seen their role as healers
who provide a valuable social
service. Costs have been secondary. The need for economic
justification has created tension
for many healthcare providers. However, providers cannot just
continue to increase fee-for-
service. Many physicians lose money on Medicare and Medicaid
patients but have been able
to make up the difference from the uninsured and commercial
insurance patients. With more
patients now covered by governmental programs and with
commercial insurers’ and employ-
ers’ emphasis on costs, those days are over (Porter & Lee,
2013).
Section 7.3The Organizational Planning and Marketing Planning
Connection
Administrators and other healthcare providers who have adopted
the marketing-orientation
philosophy must continually survey the environment to detect
changes in consumer needs,
or other related variables, that warrant the altering of their
marketing activities. Revenues,
in effect, become votes to help management judge the
effectiveness of its efforts in meeting
market needs compared to those of competitors; and profits or
breakeven serve to judge the
efficiency of management in this attempt. Putting the
marketing-orientation philosophy into
practice requires effective management of the marketing
process.
7.3 The Organizational Planning and

10. Marketing Planning Connection
The strategic planning process described in the first six chapters
of this textbook has con-
centrated on the organization’s overall strategic plan. The
development of that overarch-
ing strategic plan precedes the development of the strategic
marketing plan, as well as
the annual or operating marketing plan. The strategic marketing
plan contains the over-
all approaches to marketing within an HCO, and the annual or
operating marketing plan
spells out the details of what is to be done on a day-to-day,
week-to-week, and month-to-
month basis to translate the major strategies into specific
actions, responsibilities, and time
schedules.
Both the strategic marketing and the annual operational
marketing plans must be consistent
with the organization’s overall strategic plan. Although
marketing plans are more detailed and
cover only the marketing functions, the marketing planning
process involves steps similar to
the strategic planning process at the organization level. These
steps usually involve including
a detailed analysis of the company’s situation, setting specific
objectives, developing strategy,
implementing strategy, and evaluating and controlling strategy.
The details of the marketing
planning process are discussed in Chapter 8.
The relationship between the organization’s strategic plan,
strategic marketing plan, and
annual operational marketing plan is shown in Figure 7.1
(Loudon, Stevens, & Wrenn, 2005).

11. Note the connection of both objectives and strategies from the
organization’s strategic plan
to the organization’s strategic marketing plan and, finally, its
annual or operating marketing
plan. This approach to planning ensures that consistency is
maintained between what is done
on a weekly or monthly basis and the organization’s overall
marketing strategy. The stra-
tegic marketing plan is devised from and in turn supports the
organization’s strategic plan.
Section 7.3The Organizational Planning and Marketing Planning
Connection
Figure 7.1: Organizational and marketing plan relationships
Connecting an organization’s objectives and strategies ensures
that the entire plan maintains
consistency between current actions and the overall marketing
strategy.
f07.01_MHA 626.ai
Operating marketing plan strategy
Operating marketing plan objective—year 1
Overall Marketing strategies
Marketing objective—5 year
Organization strategy
Organization objective

12. Increase networking effort to increase referrals.
Launch promotional campaign, showing expertise of
staff and remodeled facilities.
Achieve a 2% reduction in operating costs.
Focus on increasing volume of existing services to
reduce costs per unit and achieve economies of scale.
Increase usage rate among existing patients by 10%
over the next 5 years.
Increase usage rate among existing patients by 5%
by the end of the year.
Use market penetration strategies to achieve increased
volume in years 1 and 2, and focus on market
development in years 3–5.
Operating
marketing plan
Strategic
marketing plan
Organization-
level plan
Source: Loudon, D., Stevens, R., & Wrenn, B. (2005).
Marketing management: Text and cases. The Haworth Press,
Inc., p. 126.
Figure 7.2 provides an industry-specific example of how
objectives and strategy should be
consistent throughout the planning levels (Stevens et al., 2006).

13. Pharmaceutical firm Eli Lilly
and Company chose the service leadership value discipline to
provide strategic direction at
the organization level. Servant leaders are those who want to
lead because they want to serve
first. The servant leader ensures that other people’s highest
priority needs are being served
(Greenleaf, 2002). The organization-level objective is general in
nature and consistent with
Section 7.3The Organizational Planning and Marketing Planning
Connection
the value discipline. At the strategic marketing level, this
organization’s strategic direction is
focused in one instance on objectives and strategies for its
nonnarcotic analgesic line. The
leading product in the line, Darvon, will be going off-patent
during the year. The objective of
maintaining a high market share in this market would be
impossible, given the influx of new
generic competitors for Darvon, unless new patent-protected
products can be introduced and
physician prescribing habits changed so that an increasing
number of prescriptions will be
written for the new drug. This new product-entry strategy is an
embodiment of the service
leadership organization value discipline.
Figure 7.2: Eli Lilly Pharmaceutical Company
In this industry-specific example, the objectives and the
strategies are consistent throughout the
different levels.

14. f07.02_MHA 626.ai
Organization Level
Objective: Maintain product leadership in each market.
Strategy: Adopt a product leadership value approach.
Strategic Marketing Level
Objective: Maintain a market share of the nonnarcotic analgesic
market of 80 percent
over the next five years.
Strategy: Introduce new products to take place of products when
they lose patent
protection.
Operating Level
Objective: Call on physicians to detail our more advanced
analgesic with more
efficacy and fewer side effects; call on pharmacists to leave
order blanks at sale prices.
Strategy: Product line extension and aggressive pricing.
Source: Stevens, R., Loudon, D., Wrenn, B., & Mansfield, P.
(2006). The marketing planning guide. The Haworth Press, Inc.,
p. 248.
At the operating level, one of several objectives deals with
tactical implementation of the
product line extension and aggressive pricing strategy. The
objective here is to get the word to

15. the physicians that a new and improved product, Darvocet, is
now available with advantages
over Darvon, so they should change their prescribing to write
for the new drug. Simultane-
ously, tactics include making detail calls to pharmacists to let
them know that Darvon is now
discounted 30%. If successful, this sale should cause the
pharmacists to stock up on Darvon,
so that prescriptions written for it will be filled with the Lilly
product and not some generic
equivalent. While the pharmacists reduce their Darvon
inventory, the objective effects a
change: physicians prescribing to Darvocet. Hence, there is a
consistency between objectives
and strategies among the three levels, and within any particular
level. It should also be noted
that these objectives and strategies are only a sample of what
would be set for sales volume,
Section 7.4Marketing Strategy
growth, share, percentage of prescriptions written for new
versus old products, and so forth.
Finally, it is important that objectives set in functional areas
other than marketing (finance,
R&D, and so forth) support the overall organization strategy to
pursue service leadership.
7.4 Marketing Strategy
Like management itself, marketing strategy development is both
a science and an art, a prod-
uct of both logic and creativity. The scientific aspect deals with
assembling and allocating the
resources necessary to achieve a company’s marketing

16. objectives by emphasizing opportuni-
ties, costs, and time. The art of strategy is mainly concerned
with the use of resources, includ-
ing motivation of the workforce, sensitivity to the environment,
and ability to readjust to the
counterstrategies of competitors.
Marketing strategies provide direction for marketing efforts.
Alternate strategies are courses
of action managers evaluate before committing to the specific
course of action outlined in the
marketing plan. Thus, strategy links objectives and results.
Strategy is the answer to one of
the basic questions posed in a marketing plan: How are we
going to get there?
The development of a marketing strategy usually encompasses a
two-step process: (a) identi-
fication of the target market (discussed in detail in Chapter 8);
and (b) creation of a market-
ing mix aimed at satisfying the needs of that target market
(discussed in detail in Chapters
9–11). The marketing strategy used by a company is the result
of the blending together of
various marketing elements. These elements, which are known
as the four Ps of marketing,
consist of (a) the product/service to be offered to buyers; (b) the
distribution of products
to various outlets, referred to as place; (c) the promotion or
communications to prospective
customers, using various promotional techniques; and (d) the
price charged for the product
or service. The term marketing mix describes these various
elements. Therefore, marketing
strategy development may be viewed as developing a marketing
mix aimed at satisfying the

17. needs of selected market segments and accomplishing specific
marketing objectives.
As Figure 7.3 shows, marketing-mix decisions are made with a
particular market segment in
mind. Marketing effort is targeted at the selected segments
through blending the elements
of the marketing mix into a cohesive strategy aimed at
satisfying those specific segments. An
organization targeting several segments must develop an overall
marketing program, which
includes all of its marketing activities.
The development of alternate marketing strategies can be
viewed in many ways, but three
approaches will be discussed in this chapter. First, there is the
overall way a firm approaches
the markets it is attempting to serve. Second, there is one firm’s
strategy in relation to com-
petitive strategies. The third approach deals with the position of
a product or firm in relation
to competitive offerings.
Section 7.4Marketing Strategy
Figure 7.3: The marketing mix and target markets
Marketing activities, usually a blend of different elements,
target the specific market identified by the
organization.
f07.03_MHA 626.ai
Selected

18. Target
Markets
Product/Service:
Features
Quality
Branding
Place:
Location
Satellite facilities
Physical attributes
Promotion:
Advertising
Sales promotion
Publicity
Social media
Price:
Fee structure
Payment options
Payment terms
Product/Market-Oriented Strategies
The product/market approach to strategy development is
illustrated in Table 7.2. Three
approaches can be used under this strategy development
concept. Undifferentiated strat-
egy basically offers one product aimed at all market segments.
Even if differences in market
segments are recognized, these differences are not incorporated
into the firm’s marketing
activities. Ford Motor Company used such a strategy in its early
days when its only model

19. was the Model T. As Henry Ford might have said, “You can
have any color you want, as long as
it’s black.”
An undifferentiated strategy only works when there is little or
no competition. New com-
petitors that enter the market, using a differentiated strategy or
a concentrated strategy, soon
begin to erode the market share of an undifferentiated strategist.
For example, a hospital with
an undifferentiated strategy advertises its image, rather than
specific services. The goal is to
Section 7.4Marketing Strategy
convince patients to use the hospital when they need care, even
if it is just a one-time sale.
As hospitals have become savvier in their marketing efforts,
they have begun to develop dif-
ferent service features, such as heart health, newborn care, and
behavioral health. These new
marketing approaches are effective against the one-size-fits-all
message that many hospitals
initially adopted.
Table 7.2a: Undifferentiated hospital marketing
Image Image Image
Image Image Image
Image Image Image
Table 7.2b: Segmentation, or differentiated, hospital marketing

20. Newborn care Cancer treatment Heart health
Sports medicine Digestive health Radiology
Neuroscience Rehabilitation Women’s health
Table 7.2c: Concentrated, or focused, hospital marketing
Behavioral health
A firm using a segmentation marketing strategy recognizes
differences in the needs of each
market segment and responds by developing a unique marketing
mix for each segment pur-
sued. Of course, not all segments have to be pursued, but at
least two are required to use the
term segmentation strategy. When a company develops mixes
aimed at different segments,
it can also be referred to as a market segmentation strategy. A
firm using this approach usu-
ally offers a wide variety of products to meet the needs of
customers in many segments.
Focused marketing strategies pinpoint one segment of the
market and concentrate all their
efforts on that one segment. A financial firm specializing in
mergers and acquisitions would
use this strategy as would firms specializing in financing new
ventures. Firms using this
strategy option develop a distinctive competence for doing one
thing well. Focused market-
ing strategies are based on finding growth segments with unique
requirements the firm can
meet. The vision of Cancer Treatment Centers of America to be
“the premier center for heal-

21. ing and hope” for cancer patients is an example of a focused
marketing strategy based on
unique end-user needs.
The basic difference between the segmentation marketing
strategy and the focused market-
ing strategy is the number of segments the firm attempts to
serve. Firms following a focused
strategy target their efforts on one segment only. The factors
that influence the choice of a
particular marketing strategy will be discussed in another
section of this chapter.
Baylor Medical Center at McKinney in McKinney, Texas is
following a segmentation marketing
strategy. This full-service hospital offers advanced treatment
for many medical specialties,
including cancer care, digestive diseases, emergency care, heart
and vascular, imaging and
Section 7.4Marketing Strategy
radiology, neuroscience, orthopedics, rehabilitation and
physical therapy, transplant services,
and women’s health (Baylor Health Care System, 2013).
A focused marketing strategy concentrates on one segment of
the market and directs all of its
efforts to that one segment. For example, St. Jude Children’s
Research Hospital in Memphis,
Tennessee treats children with cancer and other catastrophic
diseases and seeks to advance
cures for pediatric catastrophic diseases through research (St.
Jude Children’s Research Hos-

22. pital, 2013). Brentwood Hospital in Shreveport, Louisiana is a
psychiatric hospital that pro-
vides treatment for chemical dependency and other behavioral
health disorders (Brentwood
Hospital, 2013). A psychologist who accepts only cash-paying
clients is also adopting a focused
marketing strategy. By refusing to take insurance benefits, the
psychologist ensures that no
record is kept by insurance companies to label the client or
patient as mentally unstable.
Competitive Marketing Strategies
Another approach to strategy development employs competitive
marketing strategies cur-
rently used in the market. Table 7.3 classifies the strategies that
may be used by a company
based on its market position. Market position is defined in terms
of one firm’s share of the
total market and its relation to competitors in the industry.
Table 7.3 identifies four market
positions and some possible strategies for each (Kotler, 1980).
Table 7.3: Competitive marketing strategies
Market position Possible strategies
Market leader
Firm acknowledged as the leader, with
the largest market share of the relevant
market.
1. Expand total market: Develop new uses, new users,
or
more usage by existing customers.
2. Protect market share: Use innovative

23. marketing tactics or
retaliate against challengers.
Market challenger
Second, third, or fourth firm in market
share. May be quite large, though smaller
in a relevant market than the market
leader.
1. Direct attack strategy: Meet leader head-on
with aggres-
sive promotion and/or prices.
2. Backdoor strategy: Go around leader options
through
innovative strategy.
3. Guppy strategy: Increase market share by
going after
smaller firms.
Market follower
A firm that chooses not to challenge
the leader and is content with market
conditions.
1. Copy leader: Match as closely as
possible leader’s strategy
without directly challenging.
2. Coping strategy: Adjust to strategies of both
leader and
challenger without direct confrontation.
Market nicher
A smaller firm that operates in a geo-

24. graphic or client niche without directly
clashing with competitors. Specialization
is the key to its success.
1. Geographic niche: Specializeby offering quick
response to
customers.
2. Product niche: Offer products that are unique
to the cus-
tomers served.
Market leaders are the recognized leaders that have the largest
market share of the relevant
market. Although their position of dominance may be widely
recognized, their success may
be constantly challenged by other firms. The strategies that are
used by market leaders focus
on expanding their own control of the market while warding off
or countering the activities of
Section 7.4Marketing Strategy
aggressive competitors. The market leader’s strategy becomes
the pivot around which other
competitors adjust their own strategies.
Market challengers are the firms that are constantly trying to
increase their market share
in head-on competition with the leader, attacking the leader at
its weak points or merging
with smaller competitors. Market challengers are usually large
firms in terms of revenues and
profits, and they may be even more profitable than the leader.

25. The challenger usually tries to
identify weaknesses in the market leader’s strategy and either
confronts or goes around the
leader, or concentrates its efforts on taking over smaller firms.
Pepsi’s challenge of Coke’s
leadership position clearly demonstrates how the challenger’s
strategy can affect the strate-
gies of other competitors. The New Coke, which was closer in
taste to that of Pepsi than Clas-
sic Coke, was clearly a competitive strategy response.
Market followers and nichers adjust to the strategies of the
market leader and challenger
without making challenges. Nichers usually try to specialize
geographically or by products
offered, and basically avoid direct confrontation with other
competitors. The followers simply
copy the leader’s strategy or adjust their strategy to cope with
both the leader’s and the chal-
lengers’ strategies, without calling attention to their own
activities. For example, The Coo-
per Institute in Dallas, Texas targets well-to-do executives and
other high-income individuals
(for example, former President George W. Bush) for preventive
care. The institute provides
physicals, colonoscopy services, dermatology screening, and
nutrition and exercise counsel-
ing. The Cooper Institute is not contracted as a provider with
any insurance company and
does not accept Medicare (The Cooper Institute, 2013). Thus,
competitive strategies must be
considered in developing the marketing strategy for a firm
where established markets are at
stake. A company must strive to develop a marketing strategy
that will give it a competitive
advantage and provide long-run profitability.

26. Positioning Strategies
Positioning strategies usually evolve when there are several
well-defined competitors with
fairly unambiguous images. This situation permits placement of
a firm or a new product rela-
tive to existing firms or products or, in some instances, the
repositioning of a firm or product.
The firm or product is positioned in the market based on
customers’ needs and the firm’s own
distinctive competencies, that is, what the firm does well.
For firms that have gone through the strategic planning process,
this positioning approach is
an extension of the work done in answering such questions as
What kind of firm are we? and
What kind of firm do we want to become? Such a strategy
encourages the firm to focus on what
it does best relative to other competing firms and clearly
defined client markets.
The positioning of healthcare will increase in importance with
the implementation of the
Affordable Care Act. HCOs will need to position themselves in
terms of service level and inte-
gration of care. For example, the positioning strategy of
Northwest Hospital in Randallstown,
Maryland is to highlight the variety of outpatient services it
offers. Patients are able to receive
many tests and medical procedures without being admitted to
the hospital. The positioning
map shown in Figure 7.4 demonstrates such an approach for day
care services for adults
(Ginter, Duncan, & Swayne, 2013).

27. Section 7.4Marketing Strategy
Adult day centers are places that care recipients with
Alzheimer’s or other dementias can go
to during the day. The care recipients participate in activities
and their attendance at the day
center allows their caregivers to run errands or tend to other
family needs. These centers
vary in price and, accordingly, the activities offered to
differentiate their services.
Figure 7.4: Positioning of adult daycare services
The activities and prices for a facility depend on the needs of its
care recipients.
f07.04_MHA 626.ai
Low price
High price
Few
activities
Many
activities
• Adult Day Stay
• Encore
Care
• Friend’s
Place

28. • New Horizons
• Comfort
Care
• Agape
Care
• Omni
Care
Source: Adapted from Ginter, P. (2013) The Strategic
management of healthcare organizations, John Wiley & Sons:
Hoboken, N. J.
Factors Influencing the Strategy Selected
At least four factors influence the choice of the strategy
selected by a firm: (a) corporate strat-
egy and resources, (b) the firm’s distinctive competencies, (c)
the stage of the product’s mar-
ket and the stage of the product’s life cycle, and (d) competitive
strategies. There is no single
strategy that will always prove successful. Instead, the strategy
chosen must be the one that
is best for the firm, given the nature of these four factors. A
firm’s resources, for example, may
limit the company to a relatively low position in the market, and
a niche strategy may be the
only feasible alternative to follow. The firm may even be an
innovator in terms of product ideas
but not have the financial, marketing, or personnel resources to
compete for the mass market.

29. Section 7.5Transition from Strategy to Tactics
The marketing strategy must be derived from the corporate
strategy. If the corporate strategy
is focused on diversification through funds generated by a
specific product or product line,
then the strategy used for the product must be one that generates
maximum cash flow. If the
firm wants to harvest a product, then the marketing strategy
must reflect the need to generate
short-term cash and eventual elimination through reduced
research, promotion, and so forth.
Also, the organization’s value discipline provides a context
within which the strategy should
fall. For example, it would be inconsistent for a firm whose
business is grounded in customer
intimacy to pursue a strategy that reflects a desire to be a low-
cost, one-size-fits-all producer.
The distinctive competencies of the company have a direct
bearing on the strategy selected.
Distinctive skills and experience in marketing, production, or
finance influence strategy
choice. These distinctive competencies are the basis of targeting
marketing efforts and devel-
oping a competitive advantage.
Two additional factors that influence strategy selection are the
product’s life cycle stage and
competitive strategies. The influence of competitive marketing
strategies was discussed ear-
lier in this chapter (see Table 7.3). The firm’s or specific
product’s stage in its life cycle also
distinctly influences strategy. For example, a firm whose market
share has eroded over time
because it failed to alter its marketing strategy may need to take

30. an aggressive, turnaround
strategy stance. Repositioning the firm by introducing new
products or going after new mar-
kets would be pivotal for its turnaround strategy. Chapter 10
discusses the product life cycle
in more detail.
As the product and its market go through cyclical stages, many
alterations in the firm’s mar-
keting strategy may become necessary to adjust to the growth or
decline in the size of the
market and the entrance or departure of competitors. The
evolving stages of the market
require commensurate adjustments to marketing strategy. Note
the many strategy-element
changes that may need to be made by a firm to remain
competitive in the market. The selected
marketing strategy must be given sufficient time to be
implemented and affect consumers,
but an obviously ineffective strategy should be changed. Still,
resistance to change, in many
companies, is a common phenomenon.
7.5 Transition from Strategy to Tactics
Once the marketing strategy is selected, specific marketing
activities—usually called market-
ing tactics—must be created to implement the marketing
strategy. Turning the strategic ele-
ments of the marketing mix into tactics is not an easy task and
requires detailed knowledge
of each of the mix elements. Discussions follow for each of
these marketing elements, which
include (a) product/service, (b) place, (c) promotion, and (d)
price/fees.
Product/Service

31. Moving from a product-positioning statement to a tangible
product that delivers customer
satisfaction in accordance with the positioning strategy and at a
profit to the company is not
easily accomplished. Positioning involves determining how the
firm’s product or service is
perceived by the customer in relation to the firm’s competition.
Such a strategy encourages
Section 7.5Transition from Strategy to Tactics
the HCO to focus on what it does best relative to competing
HCOs and clearly defined patient
markets (Stevens et al., 2006). The design team must not lose
sight of the product strategy,
while applying a high degree of creative and technical skill to
their tasks. They must under-
stand not only the strategic needs affecting the product’s design
before the sale, but also the
entire product use or consumption experience in order to make
the product as user-friendly
as possible. Follow-up services must also be considered. For
example, at Cleveland Clinic, it
was found that patients who were ordered to have no food or
drink before a procedure would
go hungry all day, if the procedure was delayed, because staff
failed to follow up with the
attending physician (Merlino & Raman, 2013).
Decisions about product quality, the provision of services,
market-entry timing, scheduling,
follow-up services, and many other issues must be made. All of
these decisions should be
influenced by how they affect the delivery of customer value

32. and the correct tactical imple-
mentation of the selected marketing strategy.
An HCO should never lose sight of its product strategy, which
indicates where its competitive
advantage lies when it engages in the myriad acts required of
the exchange process with new,
existing, or potential customers.
Place
In terms of distribution tactics, value is defined not simply by
physical access to the service
but also by quality of performance, including procedural follow-
ups and medication. All of
these functions play a role in implementing the positioning
strategy and must be seen as
parts of a whole strategy instead of autonomous tasks. Likewise,
accessibility—the type and
number of locations—plays a major role in positioning the
product in the minds of target-
market consumers.
Promotion
Many models exist for selecting promotional media to maximize
reach and frequency objec-
tives for a given audience at a given budget. However, in this
area, models are never a perfect
substitute for managerial judgment. Promotional tactics involve
the actual presentation of
communication messages to target-audience members. These
messages must be formulated
to be the most effective means possible of presenting the
essence of the positioning strategy
to potential customers. Many examples exist of companies with
a sound positioning strategy,
which self-destructed at the implementation stage because the

33. chosen advertising approach
was totally unsuited to conveying the image they wished to
project. Promotions, materi-
als, special-event marketing, displays, collateral material, and
all other forms of promotion
should likewise be carefully designed to support the tactical
implementation of the position-
ing strategy. Possible competitive reactions to promotional
efforts should also be considered
when choosing tactics. Coherence with marketing strategy is as
important with staff interac-
tions as it is with the other promotional elements, training, and
support materials; addition-
ally, reward systems must be considered with the overall
strategy. Some special events, such
as opening a new location, may require the services of event
planners to ensure that all ele-
ments are coordinated. If there is going to be a groundbreaking
ceremony with the traditional
“shovel picture,” then someone has to bring a shovel.
Section 7.5Transition from Strategy to Tactics
Price/Fees
Implementation issues with respect to pricing may pertain to fee
mandates and third-party
reimbursements and deductibles. Policies established in these
areas are, in essence, the
implementation of a pricing plan that acknowledges the
necessity of adjustments to price
to fit market and cost conditions. Other price implementation
issues include initiating price
increases and responding to changes in competitors’ prices.

34. As costs rise, organizations feel the pressure to initiate price
increases. The following types of
price adjustments are commonly used by HCOs:
• Collecting deductibles upfront for some services. This
tactic may seem simple, but it is
complicated by situations where patients have more than one
form of insurance and
the deductibles are large. It may be necessary to offer payment
plans in some cases.
The most important aspect of this price adjustment is
communicating to patients
about the policy or the change in policy.
• Unbundling of goods and services. The fees for the
service are maintained, but ser-
vices that were previously included, such as X-rays, are now
priced separately.
• Reducing discounts. Policy changes might be initiated that
preclude offering dis-
counts (Kotler, 1980).
A company’s reaction to a change in price by a competitor also
affects pricing implementa-
tion. Market leaders, in particular, must determine how they
will react to a drop in price by
major competitors. Several options, which include the
following, are available:
• Maintain price. The market leader may decide to maintain
its price without losing
customers it wishes to retain. This strategy can be risky in some
circumstances, but
it avoids giving the competitor confidence that price changes
will not be challenged.

35. • Raise perceived quality. Another option is to maintain
price but improve the prod-
uct’s perceived value by strengthening the product, services, or
communication
messages.
• Reduce price. A market leader might decide to lower its
price in response to the
competitor. This tactic is commonly motivated by a belief that
buyers primarily make
their purchase decisions on the basis of price, and that a failure
to lower a price will
result in an unacceptable decline in market share. However,
quality should be main-
tained, even if the price is lowered.
• Increase price and improve quality. By establishing an
elite image as the “best” in
the market, a company believes it can better capture the share of
the market that
comprises customers who are motivated by that image. Some
firms pursuing this
strategy simultaneously launch a less expensive “fighting
brand,” which is intended
to compete against the lower-cost competitor.
Any price-implementation actions should be governed by the
objectives a company sets
for its price decisions. These objectives must be clearly
communicated to patients to avoid
misunderstanding.
Section 7.6Organizational Designs for Marketing

36. 7.6 Organizational Designs for Marketing
Organizing marketing refers to the process of developing a
structure to accommodate and
assign responsibility for managing marketing activities.
Organizing may be defined simply as
a process that includes the following:
1. Determining what must be done to achieve a given set of
objectives.
2. Dividing the necessary activities into segments small enough
so that each can be
performed by one person.
3. Providing a means of coordination to ensure that no effort is
wasted and that the
members of the organization do not get in each other’s way.
Organization design should produce a structure of task-and-
authority relationships that
enhance the firm’s ability to accomplish its stated marketing
objectives. The end result of the
process is usually represented by an organizational chart that
shows individuals’ positions
and their formal relationships of authority. When detailed job
descriptions, which specify
duties and responsibilities, are prepared for each position, the
foundations for the manage-
rial system have been laid. If current job descriptions do not list
the development of strategic
and annual marketing plans, the job description should be
rewritten to state the individual’s
responsibility toward that task. This, of course, does not mean
that each manager would indi-
vidually carry out all the activities necessary to develop a plan,

37. only that he or she is respon-
sible for seeing that a plan is prepared or providing input for it.
The organizational structure reveals the relationships between
activities, authority, and
responsibility at a given time within the organization. The
nature of a firm’s organization
greatly influences not only who will be responsible for
marketing planning but also how
much assistance the planner can expect from others in the
organization.
Two basic types of organizational structures are (a) the line
organization and (b) the line
and staff organization. The distinction between these two
organizations is the separation
of planning from operating tasks in the line-and-staff approach.
The line organization is the
simplest organizational structure and will be described first.
In a line organization, authority flows directly from the chief
executive to the first subordi-
nate, then to the second, and so forth. Few, if any, specialists
are present in the line organiza-
tion, and planning and operating activities are usually
performed by the same individual. The
chief executive might do all the planning for all areas and
maintain primary authority and
responsibility for all areas. This type of organizational structure
is depicted in Figure 7.5.
In the marketing line organization, the marketing manager is
responsible for planning and for
the operations in marketing. The sales supervisor and
distribution supervisor carry out the
manager’s plans through supervision of other employees.

38. Although this type of organization
may be successful for small organizations, its usefulness in
larger, more complex situations is
limited. Effectiveness of the line organization depends on
division of effort, and this is exactly
what staff positions provide. Staff personnel are added to help
the line personnel perform the
various functions carried on in an organization, especially
planning. A marketing manager in
a line organization must not only develop plans but also carry
them out. This means less time
is available for planning because the manager is involved in the
organization’s operations.
Good planning procedures can still be used under these
conditions, especially if there are only
Section 7.6Organizational Designs for Marketing
a few services and customers. However, the analysis section of
the plan usually will not be as
thorough simply because the manager has less time and fewer
resources.
Figure 7.5: Marketing line organization structure
The marketing manager is responsible for the planning and
operations in each marketing area.
f07.05_MHA 626.ai
Marketing Manager
Advertising Public Relations Provider Relations Payer Relations

39. Social Media Patient Relations Wellness Center Contracting
The line and staff organization, depicted in Figure 7.6,
illustrates the addition of staff special-
ists to the organization. This approach permits separation of
planning and operating activi-
ties, which in turn means more time and resources available for
marketing planning.
Figure 7.6: Marketing line and staff organizational structure
Specialized staff can help the organization’s overall efforts by
providing assistance in their areas
of expertise.
f07.05_MHA 626.ai
Marketing Manager
Advertising Public Relations
Planning
Director
Media
Specialist
Provider Relations Payer Relations
Social Media Patient Relations Wellness Center Contracting
Section 7.7The Ethical Orientation of Marketing Decisions
The marketing planning effort that results from this

40. organizational design should be more
thorough. Figure 7.6 shows the addition of staff positions at
both the headquarters and
regional level. This makes staff specialists available to
coordinate overall company efforts
in their areas of specialization at the headquarters level, and
also takes into consideration
regional differences that warrant additional specialization by
geographical area. Of course,
there are many other ways for staff personnel to be
specialized—by services, customer type,
channel of distribution, and so forth. A wide variety of potential
organizational structures can
be adapted to a specific organization’s needs.
7.7 The Ethical Orientation of Marketing Decisions
In recent years, leaders have focused attention on creating an
organizational environment
with a high concern for ethics. Ethics are principles of right or
good conduct, or a body of
such principles. Ethical issues in marketing can be categorized
by type into one of two areas:
issues pertaining to individual marketing decisions and those
related to collective marketing
decisions. Ethical issues arising from individual marketing
decisions are those that lead to
unethical practices, although they may help the company.
Ethical issues arising from collec-
tive marketing decisions result in no ethical infraction in and of
themselves, but they do con-
tribute to problems in combination with similar decisions over
time or by other marketers.
The adverse impact of packaging on the environment might be
an example of such a collective
marketing decision.

41. The American Marketing Association has developed ethical
standards of behavior for its
members through the use of a code of ethics, a portion of which
follows. Not only are general
areas covered, such as honesty and fairness, but specific
attention is devoted to the marketing
mix variables.
Numerous ethical issues have surfaced in recent years that apply
specifically to healthcare.
Some, such as patient referrals, have been addressed through
legislation. For example, physi-
cians may not refer a patient to entities in which they or any
family member have a financial
interest.
Another issue is patient privacy. The Health Insurance
Portability and Accountability Act (U.S.
Department of Health & Human Services, 2014) addresses this
issue. Physicians and other
care providers, as well as nonmedical personnel, are prohibited
by this act from unlawfully
disclosing patient information.
Other, more complex ethical issues also face healthcare
providers. Examples include deter-
mining how long to maintain life-support systems for brain-dead
patients, determining how
long to maintain a life-support system for a brain-dead patient
who is pregnant with a viable
fetus, deciding who should make end-of-life decisions for
patients, and granting hospital priv-
ileges to physicians who perform abortions.

42. Section 7.7The Ethical Orientation of Marketing Decisions
T H E A M E R I C A N M A R K E T I N G A S S O C I A T
I O N
C O D E O F E T H I C S
Honesty and Fairness
Marketers shall uphold and advance the integrity, honor and
dignity of the marketing
profession by:
1. Being honest in serving consumers, clients, employees,
suppliers, distributors, and
the public;
2. Not knowingly participating in conf lict of interest without
prior notice to all parties
involved; and
3. Establishing equitable fee schedules including the payment or
receipt of usual, cus-
tomary and/or legal compensation for marketing exchanges.
Rights and Duties of Parties in the Marketing Exchange Process
Participants in the marketing exchange process should be able
to expect that
1. Products and services offered are safe and fit for their
intended uses;
2. Communications about offered services and services are not
deceptive;
3. All parties intend to discharge their obligations, financial and
otherwise, in good

43. faith; and
4. Appropriate internal methods exist for equitable adjustment
and/or redress of griev-
ances concerning purchases.
It is understood that the above would include, but is not limited
to, the following
responsibilities of the marketer:
In the area of service development and management:
• disclosure of all substantial risks associated with service
or service usage;
• identification of any service component substitution that
might materially change the
service or impact on the buyer’s purchase decision;
• identification of extra cost-added features.
In the area of promotions:
• avoidance of false and misleading advertising;
• rejection of high-pressure manipulations, or misleading
sales tactics;
• avoidance of sales promotions that use deception or
manipulation.
In the area of distribution:
• not manipulating the availability of a service for the
purpose of exploitation;
• not using coercion in the marketing channel;
• not exerting undue inf luence over the reseller’s choice to
handle a service.

44. In the area of pricing:
• not engaging in price fixing;
• not practicing predatory pricing;
• disclosing the full price associated with any purchase.
(continued)
Section 7.7The Ethical Orientation of Marketing Decisions
In the area of marketing research:
• prohibiting selling or fundraising under the guise of
conducting research;
• maintaining research integrity by avoiding
misrepresentation and omission of perti-
nent research data;
• treating outside clients and suppliers fairly.
Organizational Relationships
Marketers should be aware of how their behavior may influence
or impact the behavior of
others in organizational relationships. They should not demand,
encourage or apply coercion
to obtain unethical behavior in their relationships with others,
such as employees, suppliers,
or customers.
Source: Adapted from the American Marketing Association,
Statement of Ethics
https://www.ama.org/AboutAMA/Pages/Statement-of-
Ethics.aspx

45. The growth and impact of the Internet on marketing activities
has prompted the American
Marketing Association’s development of a code of ethics
dealing specifically with the use of
the Internet as a marketing tool. As shown in the following
statements, the code focuses on
privacy, ownership, and access to infrastructure. These are the
key areas of concern for ethi-
cal standards of conducting marketing or marketing research on
the Internet.
A M E R I C A N M A R K E T I N G A S S O C I A T I O N
C O D E O F
E T H I C S F O R M A R K E T I N G O N T H E I N T E R
N E T
General Responsibilities
Internet marketers must assess the risks and take responsibility
for the consequences of
their activities. Internet marketers’ professional conduct must
be guided by:
• Support of professional ethics to avoid harm by protecting
the rights of privacy, owner-
ship and access.
• Adherence to all applicable laws and regulations with no
use of Internet marketing that
would be illegal, if conducted by mail, telephone, fax or other
media.
• Awareness of changes in regulations related to Internet
marketing.
• Effective communication to organizational members on

46. risks and policies related to
Internet marketing, when appropriate.
• Organizational commitment to ethical Internet practices
communicated to employees,
customers and relevant stakeholders.
Privacy
Information collected from customers should be confidential
and used only for expressed
purposes. All data, especially confidential customer data,
should be safeguarded against
unauthorized access. The expressed wishes of others should be
respected with regard to
the receipt of unsolicited e-mail messages.
(continued)
https://www.ama.org/AboutAMA/Pages/Statement-of-
Ethics.aspx
Summary & Resources
Ownership
Information obtained from the Internet sources should be
properly authorized and docu-
mented. Information ownership should be safeguarded and
respected. Marketers should
respect the integrity and ownership of computer and network
systems.
Access

47. Marketers should treat access to accounts, passwords, and other
information as confiden-
tial, and only examine or disclose content when authorized by a
responsible party. The
integrity of others’ information systems should be respected
with regard to placement of
information, advertising or messages.
Source: Adapted from the American Marketing Association
https://www.ama.org/search/pages/results.aspx?k=ethics
Summary & Resources
Chapter Summary
This chapter introduced the concept of marketing and discussed
how HCOs can design effec-
tive marketing programs. Additionally, basic marketing
strategies were described, along
with the organizational structures necessary to put these
strategies in place. Lastly, ethical
decision-making, as it relates to healthcare, was discussed.
Key Points
1. It is important to understand what marketing is. While there
are many definitions of
marketing (including that of the American Marketing
Association at www.market-
ingpower.com/AboutAMA/Pages/Definitionofmarketing.aspx),
we will use this defi-
nition: Marketing directs those activities that involve the
creation and distribution
of products and services to identified market segments. Key to
an understanding of
this definition are the following statements:

48. • Marketing is a managerial function directed by executives.
• Marketing involves specific activities.
• Marketing is involved in both the creation and distribution
of products and
services.
• Marketing is concerned with satisfying customer needs.
2. While it is important to satisfy customer needs and wants, it
is also critical to do so
at an acceptable level of revenue and costs. Marketing with this
in mind is known
as the marketing concept. For-profit and not-for-profit
institutions similarly need to
satisfy customer needs and wants. The for-profit institution,
however, needs to gen-
erate enough profit to attract investors, while the not-for-profit
institution requires
a positive cash flow to remain viable.
https://www.ama.org/search/pages/results.aspx?k=ethics
http://www.marketingpower.com/AboutAMA/Pages/Definitionof
marketing.aspx
http://www.marketingpower.com/AboutAMA/Pages/Definitionof
marketing.aspx
Summary & Resources
3. An HCO can follow three basic orientations in its
organizational function. The first of
these is a service orientation, where the dominant desire is to
capitalize on efficiency
in the operating process. While this approach helps control
costs, it does not address

49. quality, revenues, customer needs and wants, or the firm’s
benefit to society.
The second basicorientation that an HCO can
follow in its organizational func-
tion is a selling orientation. Here, the dominant factor is to
increase revenues by
stimulating interest in the product or service. Secondary factors
include controlling
costs and providing quality. However, sales of existing products
or services are more
important than actually addressing customer needs with
specifically designed prod-
ucts and services.
The most preferable of thesethreeorientations is
the marketing orientation.
With this orientation in practice at an HCO, marketing costs are
controlled, quality
is addressed, and increasing revenues is important. The
dominant factors, however,
are identifying and addressing customer needs while
considering the effect of the
HCO’s product and services on both customers and society at
large.
4. HCO executives first develop the firm’s overall strategic
plan. Once this plan is in
place, the strategic marketing plan is developed so that it
conforms to the strategic
plan. Following the strategic marketing plan is the annual
operational marketing
plan. Annual operational marketing plans spell out the details of
what is to be done,
when, and by whom. By deciding on the overall strategic plan
first, the HCO can
ensure that the direction of the marketing efforts indicated in
the strategic market-

50. ing plan and the activities directed by the annual operational
marketing plan are
consistent with the direction of the overall strategic plan.
5. Marketing strategies provide the direction to marketing
efforts. Three basic mar-
keting strategies are in use: undifferentiated strategy,
segmentation strategy, and
focused marketing strategy. Undifferentiated strategy offers one
or a few products
or services aimed at all market segments. This type of strategy
works best when
there is little or no competition.
A segmentation strategy recognizes differences
in the needs of each market
segment and responds with products or services developed for
each segment pur-
sued. While not all segments will be pursued, at least two are
required to be consid-
ered a segmentation strategy.
Focused marketing strategies pinpoint one segment of
the market and focus all
efforts on that segment. An example is a hospital that
specializes in emergency and
acute care.
6. Marketing tactics are the activities required to implement the
chosen strategy.
Turning the strategic elements of the marketing mix into tactics
is not an easy task
and requires detailed knowledge of each of the mix elements.
Specific product,
place, promotion, and price decisions must be aligned with the
overall strategy and
planned in great detail to avoid failures. Some special events,
such as opening a new

51. location, may require the services of event planners to ensure
that all elements are
coordinated.
7. Organizing marketing refers to the process of developing a
structure to accom-
modate and assign responsibilities for managing marketing
activities. Two basic
organizational structures exist: (a) the line organization, and (b)
the line and staff
organization.
a. In a line organization, authority flows from the
chiefexecutive to the first sub-
ordinate, then to the second and so forth. In a line organization,
the person
responsible for planning marketing is also responsible for
marketing operations.
Summary & Resources
b. A line and staff organization adds staff specialists to the
organization. In this
type of structure, planning is done by line employees and
carried out by staff
specialists.
8. Ethics are principles of right or good conduct. In marketing,
ethics can be broadly
categorized into two areas: ethical issues connected to
individual marketing deci-
sions and ethical issues pertaining to collective marketing
decisions. Individual
marketing decisions are those that—though they can benefit the

52. HCO—may lead
to unethical practices. Collective marketing decisions do not
result in an unethical
act but may contribute to problems in combination with similar
decisions by other
HCOs. For example, bionic body parts are now available that
replicate the part of
the body they replace, an invaluable aid to people who have
been disabled through
injury. However, does this present a challenge to ethical limits?
Can it be right to
replicate an entire human body?
Key Terms
concern with customers Understanding
the needs and wants of target markets.
creation and distribution of goods and
services In HCOs, the service is actually cre-
ated by the operating function, but market-
ers are involved to make sure the product or
service meets patient needs.
ethics Principles of right or good conduct,
or a body of such principles.
focused strategy A marketing strategy that
concentrates on a marketing segment and
competes with rivals based on a lower price
or some other form of differentiation.
line and staff organization A form of
organization that adds staff specialists to
the organizational structure. This approach
permits separation of planning and operat-
ing activities.

53. line organization A form of organiza-
tion in which authority flows directly from
the chief executive to the first subordinate,
then to the second, and so forth. Few, if any,
specialists or support staff are present in the
line organization, resulting in planning and
operating activities being performed by the
same person.
managerial perspective A perspective that
is proactive, customer oriented, and aligned
with the firm’s overall strategy.
market segment(s) An aggregation, in
healthcare, for example, of patients with
similar characteristics, such as diabetics,
heart patients, children, geriatrics, and so
forth.
marketing Directs those activities that
involve the creation and distribution of
products and services to identified market
segments.
marketing concept A business orientation
that focuses on satisfying customers’ needs
at acceptable levels of revenue and costs.
marketing mix A combination of the four
strategic marketing elements—product,
place (distribution), promotion, and price—
to satisfy the needs of the market selected in
the marketing strategy process.
marketing strategy A strategic plan for

54. selecting a particular target market and then
satisfying customers in that market through
the marketing mix.
Summary & Resources
marketing tactics Specific actions taken to
execute a marketing strategy.
operating marketing plan A plan that
spells out the details of what is to be done
on a day-to-day, week-to-week, or month-
to-month basis to translate an organiza-
tion’s major strategies into specific actions,
responsibilities, and time schedules.
positioning The placement of a firm or
a new product/service, relative to exist-
ing firms or products, in the mind of the
consumer.
product life cycle The progression of a
product through various stages from intro-
duction to decline. The stages of the product
life cycle are introduction, growth, maturity,
and decline.
residual perspective A perspective that is
reactive and only deals with needs as they
arise.
segmentation strategy A strategy that
aggregates consumer groups with similar
characteristics and common interests.

55. strategic marketing The overall approach
to marketing within an HCO.
strategic marketing plan A plan that con-
tains the organization’s overall approaches
to marketing. The strategic marketing plan
is always aligned with the HCO’s overall
strategic plan.
undifferentiated strategy A strategy that
concentrates on producing a single product
that is marketed to all customers.
Critical Thinking Questions
1. How can an HCO implement the marketing concept into its
organization?
2. Explain the relationship between the strategic plan and the
marketing plan.
3. How could a dental organization implement a focused
marketing strategy?
Running Head: ASSESSING CLIENT FAMILY 1
ASSESSING CLIENT FAMILY 6
Assessing Client Family
A comprehensive family assessment entails a practice that
continuously tend to enlighten the process of decision making
via the identification, consideration as well as weighing the
dynamic which impact children and their families. The families

56. are known to be the security of the children as well as attention
givers. In that case, the comprehensive family assessment is
done in order to know the welfare of children and their families
during circumstances such as their safety issues, dangers of
future treatment, capacity of parent protectiveness and during
the compromise of a child’s well-being. In short, it is used to
gather information that will aid in finding out where a particular
problem comes arises from.
Demographic information: The patient’s lives with his two
parents together with his brother. They are of Hispanic origin
and both his parents were raised by their biological parents. His
brother is six years old and the patient eight.
Presenting problem: A social worker visited their home and was
not satisfied with the living conditions of the patient and his
family. The social worker believes that the environment is not
conducive for child growth
History or present illness: The patient was diagnosed with a
severe case of typhoid which captured the attention of the social
worker. The condition of their home was not at all as required
hence the cases needed intervention.
Past psychiatric history: The patient had no psychiatric history.
None of his family member had the condition as well.
Medical history: The patient has been known to be healthy for a
long time. He never had any serious issues when it comes to his
health.
Substance use history: I assessed the parents of the patient and
found out that the child had not had any experience with drugs,
but the mother admitted taking alcohol when she was pregnant.
But she claims it was neither for long nor repeatedly. However,
the father is a smoker, but he does not smoke inside the house.
Developmental history: There is no evidence of any
developmental problems noted in the Hernandez family. The
parents and kids appeared well nourished. The kids are observed
playing with toys within their developmental stage.
Family psychiatric history: There were no cases of psychiatric
conditions in the family, from their parents to the great

57. grandparents of the patient.
Psychosocial history: The parents reported that they are
hardworking and providing for their family is their priority;
they appeared to have a healthy spouse relationship. The couple
tends to have a mutual understanding of themselves. The patient
and his brother normally play together and sometimes even with
their neighbor’s children.
History of abuse and/or trauma: The patient as his brother had
no signs of abuse or trauma. However, the father claimed he
was brought up with strict parents that would punish them
harshly. They came to the U.S and they believe that that is not
necessary whatsoever.
Review of systems:
Physical assessment: There is no evidence of physical
abnormality. Their children seemed within the specified stage of
development and there is no signal of mishandling or negligence
noted. Their behavior and appearance are within their average
age; they are well-groomed and healthy. The couple is also well
groomed and well nourished.
Mental status exam: The parents and their children are capable
of speaking English fluently; they know their rights and they
know that they have to care for their children in the best
possible way. They are also aware that if the government
realized negligence then they may lose their children.
Differential diagnosis: The patient who was diagnosed with
typhoid was taken to hospital and is undergoing treatment. The
case was investigated, and it was found out that he had
contacted the disease from the school he was attending. The
parents took good care of the patient and his brother.
Case formulation: The two parents are immigrants in the U.S.,
and they came to find greener pastures. The parents are not in
any way solely responsible for the contraction of the disease by
their child, and because they took him to the hospital, and he is
being treated it means that they are responsible. There parenting

58. style is also commendable because the patient and his brother
are well behaved, smart, and healthy.
Treatment plan: I recommend that the patient continue with his
medication without fail, and this will be the responsibility if the
parents. They will ensure that the medicines are taken every day
and in time, just as the doctor prescribed. They should also
ensure that they eat healthy and have access to clean drinking
water.
2nd son
1st Son
References
American Psychiatric Association. (2013). Diagnostic and
statistical manual of mental disorders (5th ed.). Washington,
DC: Author.
Paniagua, F. A. (2018). ICD-10 versus DSM-5 on Cultural
Issues. SAGE Journal, 1–14.
https://doi.org/10.1177/2158244018756165
Valdez, J. N. (2012). Psychotherapy with bicultural Hispanic
clients. Psychotherapy Theory Research & Practice, 37(3), 240-
246. https://doi.org/10.1037/h0087712}
Wheeler, K. (Ed.). (2014). Psychotherapy for the advanced
practice psychiatric nurse: A how-to guide for evidence-based
practice. New York, NY: Springer.
Running head: HERNANDEZ FAMILY ASSESSMENT
1
HERNANDEZ FAMILY ASSESSMENT
6
Hernandez Family Assessment
The purpose of this paper is to complete a comprehensive

59. assessment of the Hernandez family by addressing all
information possible from the videos presented in this week’s
module.
Part 1: Comprehensive Client Family Assessment
Demographic information
Juan Hernandez Senior, a 27-year-old Latino man, married to
Elena Hernandez, a 25-year-old Latino woman, and have two
sons, Juan Jr., 8-years-old and Alberto 6-years-old.
Presenting problem
The Administration for Children Services (ACS) referred the
family for allegations of child abuse.
History of present illness
Mr. and Mrs. Hernandez are questioning why they are here.
They are “punishing the children the way we were when we
were their age”. Mr. Hernandez discusses how his father would
make him hold encyclopedias for “hours” when he did not obey
his father. They both express they are good parents, and
everything they do is to better the children’s lives.
Past psychiatric
The style of punishment has been passed down from Mr. and
Mrs. Hernandez parents. Both describe punishment by their
parents as “misery”.
Needs to be added to
Medical history
Needs to be added to
Substance use history
Needs to be added to
Development history
There appear to be no developmental delays in any member of
the family at this time
Needs to be added to
Family psychiatric history
Mr. and Mrs. Hernandez appear to be very concerned about the
reason for the referral. They seem to care genuinely for their
children. In discussing their upbringing, there doesn’t seem to
be a family history of mental illness.

60. Psychosocial history
Mr. Hernandez appears to be the primary source of income, per
the discussion of overtime and the inconvenience of having to
attend meetings.
History of abuse/trauma
Juan Jr has reported no other form of abuse except for the type
of punishment of holding encyclopedias.
Review of Systems:
Needs to be added to
Physical assessment
All members of the family appear to be in good health.
Needs to be added to
Mental status exam
All members of the family are appropriately dressed and well
groomed. The sons are playing together appropriately. Mr. and
Mrs. Hernandez’s speech is clear and appropriate. Mr.
Hernandez is visibly upset about the ACS claims. Mr. and Mrs.
Hernandez appears at this time to be mentally stable with no
abnormal thought processes, insight, or judgment.
Differential diagnosis
V62.4 – Target of (Perceived) adverse discrimination or
persecution (APA, 2013)
The therapist expresses concerns that there may be
evidence of discrimination committed by the ACS worker using
the term “Mexicans” when discussing the case. The Hernandez
case could be a valid concern and should be discussed further
between supervisors.
Diagnosis
V61.20 – Parent-Child Relational Problem (APA, 2013)
Juan Sr admitting to disciplining Juan Jr. in maybe an
inappropriate manner supports the diagnosis. Although there is
no physical abuse, the mental consequences of using book
holding as a punishment could lead to Juan Jr. avoiding books
in school. This avoidance could lead to poor performance in
school later on.
Case formation

61. ACS has referred this family for investigation of abuse by
the father (Mr. Hernandez) for possible inappropriate
punishment of son (Juan Jr.). Both parents appear to be very
concerned about this accusation and express their concerns and
frustrations appropriately. Both sons are present and appear to
be interacting appropriately without aggression. Mr. Hernandez
discusses attending parenting class as an inconvenience by
having to miss overtime, which is essential to provide for his
family. Mrs. Hernandez expresses concerns about keeping the
family together. Both agree to ACS recommendations of
attending parenting classes.
Treatment Goals
Goals:
Teach safe and effective discipline skills
Teach age appropriate behavior
Teach managing of frustrations
Treatment strategy/interventions:
Positive Parenting Program and family therapy can assist with
attaining set goals for this family.
Estimated completion: 12 weeks

62. Part 2: Family Genogram
References
American Psychiatric Association. (2013). Diagnostic and
statistical manual of mental disorders (5th ed.). Washington,
DC: Author.