MARKETING RESEARCH AND SEGMENTATION PROBLEM

Marketing Research and Segmentation Problem

Marketing Research and Segmentation Problem

Introduction

The intensely competitive health care marketplace demands that marketing evolve to a more discreet level. For many hospitals, capacity issues are no longer a threat; they are, in fact, a reality. A review of historical inpatient data for the U.S. from 1995 to 2000 indicates that as inpatient occupancy has increased, there has been a corresponding shift away from surgical cases (1.4% decrease in 1995 and 2000) in favor of less profitable medical cases (3.6% increase during the same time period). Given the increased competition for profitable business and the steadily decreasing overall margins many hospitals now face, a simple focus on patient volume will no longer suffice as a strategy to improve or even maintain appropriate levels of profitability. Rather, hospitals must take a proactive approach to managing their patient mix and filling beds with the “right” patients.

Marketing Research and Segmentation Problem

The ability to identify and target the “right” patients is dependent on the appropriate use of a segmentation system that accounts for the key drivers of consumers' health care decisions. Ten years ago, the introduction of SachsGroupsTM marked a new and unique approach to helping hospitals segment and understand the behavior and decision-making patterns of health care consumers. Building on the success of SachsGroupsTM, Solucient now offers a segmentation system that has been updated for the new millennium. By re-examining all available market data and identifying the most important and quantifiable factors that drive the consumer health care decision, Solucient was able to construct an enhanced household level and health care specific segmentation system called HouseholdView. HouseholdView captures the essence of the consumer health care decision and is based on factors that are consistent and quantifiable from market to market.

Solucient has always maintained that in order for a segmentation system to accurately predict health care utilization it must be applicable at the household level and it must segment each household based on the best predictors of utilization. HouseholdView does just this. It is a unique, life-stage segmentation system built upon household-level analysis of the key drivers of health care utilization:

?Age (of head of household)

?Marital Status

?Gender (single households only)

?Presence or absence of children

?Household Income (market adjusted)

Solucient's approach to segmentation varies significantly from that of any other system available today. While there are many segmentation systems available to help businesses distinguish among the various types of consumers of their products, none can be as accurately applied to the health care industry as HouseholdView, which was designed specifically for health care. For example, geodemographic systems such as PRIZM do a very good job of identifying neighborhoods with high concentrations of households of a certain demographic mix. However, the PRIZM Methodology is based on the premise that all households in a particular neighborhood exhibit the same or similar purchasing patterns (i.e., “birds of a feather flock together”).

While the PRIZM approach would be considered an appropriate segmentation strategy for identifying new business opportunities in the retail and financial services industries, it falls ...