One of the first concepts taught in Marketing 101 is the marketing mix, otherwise known as the 4 Ps of marketing. The marketing mix is symbolized by an equation (Price ≤ Product + Place + Promotion) that encompasses all the activities and tools available for developing and managing marketing action plans.
What does this equation represent? In order for a marketing strategy to be successful, the value of services received must be perceived to be greater than the price paid for a product or service. And value is embodied in the sum total of elements – positioning, product design, accessibility, customer service, clinical quality, convenience, brand, etc. – experienced or perceived by the customer. Organizations can manipulate any element of the equation to optimize marketing outcomes (sales growth, market penetration, brand preference, etc.).
The dilemma faced by many healthcare CMOs is that, historically, healthcare organizations have over-invested in the promotions end of the marketing mix at the expense of the other elements of the formula that create true customer value. And they’ll be the first to volunteer that this all too often results in under-performance for marketing investments.
Still, the best of marketing evangelists often find themselves challenged to bring operations, administrative, clinical, financial and marketing people together at the table to define and clarify the value proposition, and to orchestrate activities across the value chain to bring a competitively differentiated offering to the market.
Yet when that kind of alignment happens, the return on promotional investments soars.