Healthcare and Pricing, Essay Example

One of the components of 4Ps in marketing is Price (Lake)which means healthcare marketers have to choose a pricing strategy that takes into account the characteristics of their targeted market segments and also help them achieve their marketing objectives. Pricing is important because it not only decides the market size as well as the quality of service that may be provided by healthcare companies but also determines the organizational profitability. Pricing is usually positively related to the quality of service but different customer groups are sensitive to prices to various degrees. Thus, the healthcare marketers have to find the right balance between their quality objectives and their pricing strategies, after taking into account the characteristics of their targeted market segments.

Pricing is also important because it determines the competitiveness of the firm in a climate of intense competition. In addition to the competition, consumers also have more information resources at their disposal and have become smarter regarding the pricing strategies present in the healthcare sector (Mathews, 2009). Similarly, other external forces such as government and insurance companies also influence healthcare marketers’ operations, thus, the pricing strategy has to take into account the influence of these external factors to ensure profitability.

Pricing strategy also reflects organization’s mission. Low pricing structure and average quality may indicate preference for volume while high pricing structure and high quality may indicate commitment to thehighest standards of patient care. Thus, pricing strategy is also important because it determines the extent to which an organization is able to achieve its strategic objectives.

References

Lake, L. (n.d.). Developing Your Marketing Mix. Retrieved November 3, 2012, from http://marketing.about.com/od/marketingplanandstrategy/a/marketingmix.htm

Mathews, A. W. (2009, October 28). Lifting the Veil on Pricing for Health Care. Retrieved November 3, 2012, from http://online.wsj.com/article/SB10001424052748704222704574499623333862720.html