Executive Summary

The purpose of this report is to assess and justify the need for a hospital to deploy service marketing skills as part its overall management effort. This report also identifies and critically examines approaches to overcoming possible barriers to implementing a marketing orientated approach in a not-for-profit organisation such as a hospital.

Not-for-profit organisations operate in an increasingly competitive environment both in terms of trying to attract funding and satisfying the needs of all of their various stakeholders. In this sense the need for service marketing skills is greater than ever. Scepticism exists amongst healthcare professionals as to the value of marketing and hospitals face other barriers to the introduction of a more marketing orientated approach. These can be overcome by the measurement of the effectiveness of marketing through the reporting back of results. Additionally hospital marketers need to use the simplest language possible when communicating internally about any marketing activity.

It is also the responsibility of senior hospital managers to ensure that marketing becomes the property of every customer facing employee. To facilitate this process this report also proposes that an internal newsletter be produced as part of an internal marketing campaign designed to foster, and build good employee relationships between the NHS Trust management and other employees.

1.0 Introduction

The NHS ‘internal' market in England was introduced some twenty years ago in order to encourage a ‘market-driven' environment for patient care . The objective was for the NHS to reduce waiting lists and costs and increase efficiency, quality of care, and response times for patients. One of the key elements of the reforms has been the introduction of patient choice in terms of which hospital treats them. Research has shown that this reform has largely been successful with 89% of those patients offered a choice being able to go to the hospital of their choosing (Brereton et al, 2010).

The Department of Health gave the green light to hospitals to advertise their services in 2006 when it said that the NHS needed to give ‘reliable information' to help inform patient choice (BBC News Website, 2006). Also concerns over the possible negative impact of patient choice on patient numbers have led some hospitals to adopt marketing techniques in order to attract patients. However, to date, patients have not generally exercised their right to choose and where they have, numbers have varied widely depending on geographic location (Brereton et al, 2010).

This competitive healthcare market has certainly been responsible for the development of a more commercially orientated environment within NHS hospitals. This has been corroborated in a study carried out by Dr. Mariana Fotaki (1999) who found that attitudes amongst providers have changed to such a degree that they have become more ‘customer service' focussed. In 2006, Dr Gill Morgan, chief executive of the NHS Confederation, stated that she believed that providing information on everything from the results of operations to car parking was a crucial element of enabling patient choice (BBC News Website, 2006). However, from the perspective of patients and GP's, hospitals may have provided more general information on their services but have singularly failed to provide sufficient and unbiased information on quality and performance (Coulter et al, 2005).

2.0The Need for Service Marketing Skills

There are a number of tangible benefits for not-for-profit organisations in acquiring and developing service marketing skills. Adrian Sargeant (2009) sees these as:

  • Helping to attract additional financial resources.
  • Increasing the level of adoption of the services provided.
  • Improving customer satisfaction in those services.

The Chartered Institute of Marketing (2008) believes that if marketing is used effectively it can be instrumental in reducing costs by enabling hospitals to segment their customers into clearly identifiable groups which have specific and quantifiable needs. By doing this, hospitals are able to allocate funds where they are most required and, at the same time, reduce unnecessary spending. Patients will also be able to have a bigger say in the development of hospital services as marketing disciplines will encourage all hospital staff to solicit, and listen to, patient feedback.

The general not-for-profit marketplace is increasingly competitive with many organisations fighting for their share of funding. The United Bristol Healthcare NHS Trust has ‘foundation' status and, consequently, has more freedom than standard NHS hospital trusts in the way it manages its ‘business' and its finances. In this sense, the application of marketing techniques is even more of a critical issue than for non-foundation status hospital trusts.

The marketing of services in the not-for-profit sector is based on the same general principles of marketing as with any organisation, However, there are special additional considerations that apply. The Chartered Institute of Marketing defines marketing as ‘the management process responsible for identifying, anticipating and satisfying customer requirements profitably' (Chartered Institute of Marketing website, 2010). Whilst this is a succinct and all embracing definition the role of marketing for a hospital might more usefully be defined thus:

Marketing is the management function that most explicitly links an organization to its external environment - not only to its current and prospective clients but also to its funding sources and other relevant constituencies'. (Lovelock, C.H. et al, 1988, page 10).

In the context of a hospital, the ‘other constituencies' referred to would include employees, suppliers, education and training partners such as local universities, G.P.'s and Government. All of these groups are important and legitimate audiences for hospitals to target. There will be some messages that are common to all the audiences, for example a hospital's mission and values. However, each distinct audience will also require additional customised messages, for example local universities will be particularly interested in the hospital's research and development programme. The communications process within the marketing of a hospital is complex and specialist and therefore requires trained marketing practioners for its planning, implementation and effectiveness monitoring.

The marketing mix for most commercial organisations comprises the classic four ‘P's' i.e. Product, Price, Place and Promotion. However, for service orientated organisations like hospitals there are an additional three ‘P's' to consider namely: People, Process and Physical evidence (Crane, F.C., 1992).

People- because hospital services are produced and consumed at the same time, it is the people who deliver these services that have the ability to critically influence customer experiences and perceptions. Indeed, the ‘Six rules of marketing within the NHS' , originally conceived by Brian Edwards, at that time the General Manager of Trent Regional Health Authority, were all centred around people (both staff and patients) and their ability to influence the nature and quality of services (Chartered Institute of Marketing, 2008).

Process - this covers everything that impacts on the delivery of the service by the hospital and the acquisition of the service by the customer.

Physical evidence - this is the environment in which the service is delivered to the customer and includes any physical commodities that facilitate the delivery and the communication of that service to customers. Physical evidence can be an important visual ‘hook' for customers. For example, they may form perceptions about the likely quality of a hospital's service delivery from the condition of its facilities and the appearance of its staff.

This added complexity of the marketing mix is a further justification for the need for specialist service marketing skills to be adopted by the Trust.

3.0 Barriers and Solutions to Introducing a Marketing Orientated Approach

There is undoubtedly scepticism remains about the value of marketing for hospitals. When interviewed by the BBC's ‘Breakfast' programme in November 2006, Dr Laurence Buckman of the British Medical Association said:

‘Patients want money to be spent on their health care, not on advertising to doctors so that the hospital makes more money. The health service is not about making money, it's about delivering care to patients' (BBC Breakfast, 2006).

There are a number of other barriers to introducing a marketing orientated approach in not-for-profit organisations such as a hospital (Thomas R.K., 2008):

  • Few healthcare managers and administrators have been trained in marketing and many believe that a marketing orientated approach to the running of hospitals will result in the relegation of clinical priorities and opinions at the expense of generating cost-efficient funding.
  • There is a lack of industry data and marketing information and resources within most hospital management structures.
  • Marketing depends on clear definitions of the products to be marketed. Hospital products are not always easy to define. For example, a healthcare manager in a hospital may struggle to define exactly what a ‘quality of patient care' means.
  • It is impossible for some hospital products to be delivered profitably. Accident and emergency, for example, is a mandatory product but will never be a profitable one regardless of how effectively it is marketed.
  • Very often the hospital has no control which patients they treat as many are referred by their local GP and, consequently, marketing may be viewed as an inappropriate tool for attracting new patients.
  • Some hospital products, for example surgery procedures, involve a number of different but interdependent services. While these services may be seen as quite distinct from each other by hospital administrators and financial managers, it is likely that patients will see them as a mix of services that go together to form a whole i.e. ‘patient care'.

One of the key factors that will help to overcome the possible barriers to implementing a marketing orientated approach will be to demonstrate that such an approach is effective. The Chartered Institute of Marketing (2009) has produced a white paper on marketing in the NHS, which explores how marketers can ensure they are delivering value for money. It has developed specific measurement tools and techniques that show how marketing can generate a return on investment for NHS hospitals. This will enable healthcare marketers to produce metrics that prove the cost of marketing is less than the gain. As well as communicating and selling this concept to their colleagues, healthcare marketers in hospitals should ensure that they do not surround the practise of marketing with mystique and impenetrable jargon rather they should be open about what they do and communicate in plain and simple language (Thorp, D. 2009).

The issue of data availability will also be partly solved by the actual act of measuring the success of marketing activity. However, information about the perception of the hospitals products will largely have to be gathered from patients themselves. Marketers will also have to develop their knowledge of the market through an understanding of what their competitors are doing and by forming closer relationships with GP's and other key stakeholders.

Further justification for the introduction of marketing techniques can also be evidenced by the fact that a number of NHS Trust hospitals have already implemented, or are in the process of implementing, a marketing strategy. For example, the Mid Yorkshire Hospitals NHS Trust Board (2009) was formally requested to endorse a marketing strategy proposed by its Director of Corporate affairs in March 2009 .

4.0 The Case for an Internal News Letter

The internal market of employees has long been recognised by marketing theorists as an important target market of any organisation's marketing activity (Morgan, R.M. et al, 1994). Also, for marketing to truly benefit a service based organisation it must not be ‘owned' solely by the marketing department but rather it needs to permeate all staff especially those in ‘customer' facing roles. There is a need, therefore, to ensure effective internal communication of the marketing philosophy and activities as an integral part of the overall shift of the Trust towards a marketing orientated organisation. This will encourage clinicians, managers and administrators to work together in order to create a more unified organisation with a focus on the needs of the patient. (Chartered Institute of Marketing, 2008)

The production and distribution of an internal newsletter will enable all staff to be informed about the value of marketing to the organisation and will help, as part of an ongoing internal marketing campaign, to overcome the barriers identified in part 3 above. It will also enable detailed evidence to be presented that clearly demonstrates the accountability of the marketing function and how it intends to produce, measure and communicate results to justify expenditure.

In terms of content, the newsletter will also contain articles from independent third parties in the form of academics and practising exponents of marketing together with case studies of successful marketing campaigns for the not-for-profit sector generally, and for NHS Trusts in particular. Staff will be given a clear idea of their role in the overall marketing of the Trust and its services and they will have the opportunity to provide feedback through a confidential email post box. It is recommended that the newsletter be produced in four-colour process and A4 format with six pages

5.0 Conclusion

In conclusion it can be seen that the introduction of a marketing orientated approach to hospital management can secure real benefits in terms of the attraction of funds, the enhancement of the quality of services delivered to patients and the improvement of relationships with key target audiences or stakeholders in the organisation.

The key element of the marketing mix for a hospital is undoubtedly its people who have a pivotal role to play in not only delivering the service but also channelling their own and their patient's feedback into the system to help develop services for the future.

6.0. Recommendations

It is recommended that a fully costed proposal be prepared for the recruitment of a senior healthcare marketing professional. Following recruitment this individual should be tasked with preparing a marketing plan with all proposed activities fully costed and showing a demonstrable return on investment.

The internal marketing campaign, in the form of the proposed newsletter, should begin immediately using the resources of the existing communications team within the Trust (United Bristol Healthcare Trust website, 2010). The first newsletter can contain a synopsis of this report together with an outline of the proposed way forward for marketing within the Trust. Again, all employees should be encouraged to provide feedback on the proposal.

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