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Tuesday, June 29, 2010

What is Your Approach to Marketing Leadership? Part 2

Marketing orientations differ across hospitals and health systems for a variety of reasons - culture, philosophy, strategy, even knowledge or understanding of the marketing discipline.  One approach is not necessarily “right” where another is “wrong” – what is important to understand is that each path requires a specific configuration of core competencies, staff capabilities, processes and investments aligned to organizational vision, strategy and business objectives in order to produce results. Misalignment occurs when management wants to achieve significant improvements in strategic growth, for example, but has a production-oriented marketing operation.

Which of the following best describes your organization's approach to marketing management?


A product-driven marketing orientation assumes that as long as a health system has excellent outcomes and a top notch safety record, business will find its way to the front door. Performance improvement, leading edge clinical technologies, physician talent and development of clinical centers of excellence are core areas of focus. Awards and recognitions (such as “Top 100” designations) reinforce the organization’s quality achievements. Physician influence trumps consumer choice. The clich├ęd expression “build it and they will come” is an entrenched belief, as it the assumption that clinical quality alone will create competitive advantage.


Sales-driven health systems primarily view marketing as a tactical tool or set of tools to drive volume to clinical services or programs. Filling beds, getting appointments, and securing contracts are primary goals. Consumer promotions, physician referral development and managed care contracting are core capabilities. The focus is on more volume for existing services. These are all good things, but a purely sales-driven organization may miss opportunities to discover new niches, create new products and lines of business, or enhance points of differentiation that grow overall revenue potential.


Market-driven organizations place greater emphasis on market research to better understand customer needs and discover market opportunities that can be addressed in unique ways. Designing and developing services, programs and access points to attract key customer segments are priorities for the marketing operation, making R&D a core competency requirement. Marketing planning is more strategic than in sales-driven organizations, encompassing segmentation and targeting, product positioning and design, pricing, promotion and channel strategies – and is a more integrated process through which value is created. Because growing overall market potential and profitability is as important as growing market share, marketers must have a strong P&L mindset.


Relationship or customer-driven organizations place significant emphasis on mass customization as a competency to create one-to-one relationships, enabled by sophisticated, enabling CRM technology that recognizes, supports and delivers customized messages, offerings and solutions for valued customers. Today, some of these capabilities are embedded in call center and CRM systems, but new advancements, such as the widespread implementation of electronic health records and growth in social media communities offer health systems unprecedented opportunity to better understand and predict the needs of patients and customers – and proactively design the marketing strategies, tactics and programs that stimulate and drive demand.

There is one more position to consider: the MARKET- DRIVING organization. Market-driving companies are those that re-set the rules of competition through value innovation – radical, disruptive moves that create new markets, transform customers into fans, and build such distinct points of competitive advantage that they are difficult to duplicate. Think Apple, which sold 1,000,000 iPads in less than 30 days from the product launch. Innovation is the core competency – and success comes from developing deep insights into core human desires, discovering unmet needs, and bringing creative, profitable ideas to market.

Who are the market-DRIVING health systems?

1 comment:

Carla J. Bryant said...

Apple is certainly a great expample of a market-driving organization. There was a great article in Fast Company recently on the "Invicible Apple: 10 Lessons from the Coolest Company". It provides good practical insight into what is behind Apple's success that I think CMO who aspires to lead a market-driving organization can learn from.
Some of the key take aways for me that I think have the most relevance to marketing were: 1. Have a strategy and stay laser focused on that strategy regardless of what's happening around you. 2. Keep things simple and don't try and do too much; better to have a few things that are incredible successful than many things that are just mediocre. 3. Everything is marketing -- design, color, packaging, shapes, sounds, people, technology, promotion -- EVERYTHING is marketing. 4. Use customer insight as inspiration not doctorine; it is difficult for people to project what they want or need based on what they currently know so don't make decisions soley on this information (this one I know for fact).

It's a quick read and I think even those that aren't Apple fans will find the perspective interesting.