Getting Personal: Scarlet Hospital’s Marketing Salvo

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The “Healthcare, Personalized” campaign is the latest Scarlet Hospital effort to communicate the value of their brand: high quality and personalized service in closer proximity than the four Salem-based major medical centers. The twin objectives are to consolidate the customer base and to convince customers from outlying areas to visit Scarlet Hospital rather than travel to Salem. The campaign involves a series of advertisements with the tagline, “Healthcare, Personalized” and with pictures of patients with a doctor to convey the Scarlet Hospital brand. This campaign emphasizes the “human connections” so vital to healthcare and differentiates Scarlet Hospital from Salem hospitals without succumbing to the population segmentations called for by some analysts (Buckley 2009; Parvatiyar and Sheth 2001; Page and Williams 2011). Most of all, personalized service speaks to a “cooperative and collaborative relationship” between customers and the Hospital, and by extension communicates a sense of community to Walnut Grove residents, customers from outlying areas, and hospital staff (de Chernatony and McEnally 1999; Parvatiyar and Sheth 2001). Finally, the “Healthcare, Personalized” campaign offers the best strategy in the short-term to counter the Salem-based major medical centers’ efforts to cast rural healthcare as somehow inferior.

This message was crafted with their market segmentation and modalities for communication in mind. Walnut Grove residents and those in outlying areas are the intended audiences. The campaign will be communicated through local newspapers, local television stations, and billboards within and on the outskirts of Walnut Grove with an emphasis on the billboards. The ads will strategically include individuals of all ages. Print ads will include color images of people behind bolded text, “Healthcare, Personalized” and Scarlet Hospital logo beneath. Television spots will include families enjoying a meal discussing their day, then the tagline will appear at the end.

Position Analysis

On the surface, Timothy Rogers’, President and Chief Executive Officer, positioned the Scarlet Hospital to cope with the increased competition. In the past, his singular objective to provide the best possible healthcare services was crucial to the development and maintenance of a loyal clientele through reputation. These relationships could prove invaluable for the future of Scarlet Hospital.

On the other hand, this exclusive focus on quality of care could prove an immediate burden to comparable and likely cheaper costs of major medical centers in Salem. The heightened competition of four medical centers undoubtedly challenges such centers to keep low prices to remain competitive. This amounts to a significant challenge for Scarlet Hospital, and requires further investigation into the average costs of both healthcare services in Salem and in the supplier costs, which are undoubtedly cheaper than that available in Walnut Grove. More needs to be learned about the competition, such as what potential services they may offer that Scarlet Hospital lacks or vice versa. A more robust and thorough study is needed.

Lessons

The “Stopping Outshopping” case study provides an invaluable example of the need to avoid complacency. Certainly, Mr. Rogers’ notion of continual improvement is important, but it is myopic. Hospitals should be concerned with their nascent or existing competitive edges. This requires a thorough grasp of the competition, supplier costs, and calls for continued improvement in both service quality and the bottom line. Second, this case study demonstrates the problematic nature of illusions of an insulated market. Market dynamics are constantly changed, and situational awareness of the competition and potential competition is absolutely critical to the viability of companies.

Market Forces

Salient models offer invaluable tools for Scarlet Hospital to better contextualize the competitive landscape and the challenges and opportunities therein. First, Porter’s Five Forces Analysis enables a framework to contextualize both the emergent competitive environment and the market forces to bear on Scarlet Hospital (Porter 2008). One significant force to be accounted for lies in the lies in suppliers. Market changes should prompt Scarlet Hospital executives to review suppliers, the current costs, and accessibility. Such a reflection prompts questions on whether Scarlet Hospital relies on any of the major medical centers for hospital supplies or services and if so, to consider alternatives?

The Strengths, Weaknesses, Opportunities, and Threats (SWOT) tool enables a better grasp as to the potential competitive edges and vulnerabilities of Scarlet Hospital. This model fleshes out opportunities for product differentiation or to distinguish Scarlet Hospital from the four major medical centers. For example, a potential strength or vulnerability lies in technological capabilities, such as MRI machines. Whether Scarlet Hospital or competitors do or do not possess such technologies needs to be factored into the strategic calculus, and the SWOT enables this calculation.

Scarlet Hospital Strategy

The Balanced Scorecard model offers value for the Scarlet Hospital strategic response insofar as the framework enables management to develop prioritized objectives, identify targets, and instruments to measure progress toward objectives. Crucially, Scarlet Hospital stands to benefit most from the holistic nature of this tool in reference to healthcare finance objectives. These financial objectives stand to drastically expand Timothy Rogers’ narrow view of the hospital objectives. By leveraging the balanced scorecard, Scarlet Hospital could suss out a better grasp of current financials across departments, internal processes and opportunities for differentiation from competition, a better sense of customers, and lastly, how Scarlet Hospital management can improve and create value through a more holistic strategy. Such a tool could provide structure, set targets, and track performance toward those objectives of customer retention and expansion.

References

Buckley, P.T. (2009) The complete guide to hospital marketing, second edition. HCPro, Inc. Marblehead, MA.

McEnally, M. & de Chernatony, L. (1999) The evolving nature of branding: Consumer and managerial considerations. Academy of Marketing Science Review, 2, 1-26.

Porter, M. (January 2008) The five competitive forces that shape strategy. Harvard Business Review, 79-93.

Page, R.A. & Williams, K.C. (Aprill 2011) Marketing to the generations. Journal of Behavioral Studies in Business, 3, 1-17.

Parvatiyar, A. & Sheth, J.N. (2001) Customer relationship management: emerging practice, process, and discipline. Journal of Economic and Social Research, 3(2), 1-34.