Fundamentals of Community-Based Managed Care: A Field Guide

An Introduction to
Marketing and Branding
By Andres Terech
A community-based organization, like any
other company, must learn how to compete
in a marketplace and manage its brand.

ommunity-based organizations (CBO), as well ics. Sometimes this works, but generally by sub­
as other institutions and companies, can suc­ optimizing and misusing the organization’s two
ceed only if they have customers (i.e., patients, critical and scarce resources: money and time.
users, clients, payers—including the healthcare Additionally, because regulations, competitors,
sector—or consumers) interested in purchasing partners, and consumers’ needs change con­
or contracting for CBOs’ products and services. stantly, the “how” and the “why” need to be con­
Acquiring and retaining customers, and growing stantly reviewed and the marketing strategies
customer engagement, rests on marketing. adjusted accordingly.
CBOs seeking to take advantage of the oppor­
tunities created by healthcare reform need an Understanding the Market
effective marketing strategy. A marketing strat­ The first step in the process intends to answer
egy consists of three steps: understand the mar­ questions such as: W hat business does our orga­
ket, choose a strategy, and execute it. The first two nization want to be in? W ith whom would we
steps are, to a large degree, abstract and intellec­ be competing? Can we add value? Is there an
tual: they require analysis and discussion. Only opportunity?
when an organization knows first why it wants This step involves the “5 Cs model,” which
to compete in the marketplace, and second, how consists of assessing consumers (including medi­
it wants to compete in the marketplace is it pru­ cal sector partners), company (CBO), competitors,
dent to invest money in the execution. context, and collaborators. The analysis always
Many organizations jump straight to invest­ starts by identifying which consumers’ needs
ment and execution: they create services, build and desires the company will attempt to satisfy.
brands, develop advertising campaigns, decide A CBO might want to focus on medical partners’
on prices and promotions, and set partnerships desire to provide nutrition, caregiver support, or
without a deep analysis of the market’s dynam­ transportation for high-need, high-risk individu-

■+ABSTRACT W ith o u t custom ers, there is no business. This article outlines a three-step m arketing
strategy fra m e w o rk to help com m unity-based organizations (CBO) understand the m arket in w hich
they com pete, id e n tify how to create value, build a unique brand positioning, and develop a service th a t
people w ant to use and to pay for. | key words: marketing strategy, segmentation, targeting, positioning,
marketing mix, branding

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GENERATIONS - Journal o f the American Society on Aging

als. Not having a clear purpose or trying to sat­ process is typically referred to by the acronym
isfy all possible needs limits the CBO’s ability to STP (or, segmentation, targeting, positioning).
understand and serve its customers.
It is then crucial to consider what skills, S e g m e n ta tio n
knowledge, or capabilities the company must Segmentation consists of grouping consumers
possess in order to satisfy those consumers’ based on the similarities and differences in their
desires. For instance, a CBO created with the preferences. In the CBO transportation service
right social intentions and motivations but lack­ example given above, some individuals may pre­
ing a competitive advantage relative to other fer paratransit, others might like ride-sharing.
local institutions will find it very challenging to Some may need flexibility to allow a caregiver
thrive and sustain the business in the long term. to accompany them and others will use public
Thus, it is important to identify what other par- transit. These preferences may also be in con­
flict with the approach to providing transporta­
tion that the payer (i.e., the healthcare entity)
A m a r k e t in g s t r a te g y has th re e s tep s :
is able or willing to pay for. If only one type of
u n d e rs ta n d th e m a r k e t, choose a transportation service were to exist, some needs
s tr a te g y , a n d e x e c u te th e s tra te g y . and preferences would go unfulfilled. Not un­
derstanding the different parties’ wants and
ties are competing with the company in trying treat-ing them all equally will lead to an unpro­
to satisfy the same consumer needs and desires, ductive use of marketing resources and, often,
and to learn about competitors’ strengths and to failure.
weaknesses (e.g., competitors’ brand awareness, Effective segmentation maximizes the intra­
financial resources, prices, partners, staffing, group similarities and, at the same time, maxi­
etc.). For example, using paratransit to and from mizes the differences between groups. It is for
medical facilities might compete not only with this reason that demographic characteristics
other CBOs, but also with a good public trans­ are typically used as a segmentation criterion
portation network and even a medical provider (e.g., you are either young or old, or an enrollee
of virtual visits. in a Medicare Advantage [MA] or Special Needs
The context (i.e., economic, technological, Plan [SNP]). Yet demographic characteristics
sociocultural, regulatory, and physical environ­ are seldom the best criterion by which to assess
ments) in which the company operates can limit business potential; a person might have differ­
what is possible. Because most organizations do ent preferences for transportation services, but
not work in isolation, but instead partner with dif­ not merely because he or she is tall or short,
ferent collaborators (e.g., local governments), it is rich or poor, or a purchaser of services (MA or
also crucial to study whether or not collaborators SNP). Though more difficult to do, segmenting
can help support the marketing to consumers. based on hard-to-measure criteria, such as ben­
efits sought, lifestyle, or loyalty, generally leads
C h o o s in g a S tr a te g y to groups of individuals who share similar pref­
Not all persons, partners, or consumers want the erences and responsiveness toward a marketing
exact same product or service, so a sound market­ strategy. This, in turn, leads to a more effective
ing strategy must segment all potential buyers and efficient use of marketing resources.
based on the differences in what they want, decide An important consequence of segmenting the
which segments to target, and show how to posi­ market is the realization that not all segments
tion the organization relative to the other compet­ are a good fit for the organization. Some will
itors or substitutes available in the market. This be too difficult to attract, others might not have

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 Fundamentals of Community-Based Managed Care: A Field Guide

enough loyalty, while others may want things tioning statement may be “For those people who
the organization cannot offer. need extra assistance and prompts in their door-
to-door transportation service, our organiza­
Targeting tion is the only paratransit company that trains
Choosing which segments to target requires that drivers to help all kind of patients in need. Over
organizations have a deep understanding of their the past 20 years, we have worked with doc­
capabilities and cost structures. Basic economic tors, nurses and psychologists to developing a
analyses such as cost-to-serve, margins, break­ proprietary training program.” This position­
even, and customer lifetime value are critical. ing specifically identifies the target segment, the
It also is important to understand the degree to competitor set, what makes this particular CBO
which the segments fit with the organization’s unique, and why the target segment will believe
goals and mission. It is possible, for example, in their claim.
that a particular segment is not economically
attractive, but it is necessary for building a brand 'A so u n d m a r k e tin g s tr a te g y m u s t
image or to learn a skill needed to serve other
s e g m e n t a ll p o t e n t ia l b u yers.'
more lucrative segments. A case in point would
be CBOs that serve pro bono patients for specific Clear and unique positioning reduces cus­
reasons other than economic attractiveness. tomer acquisition costs and aligns the organiza­
When deciding which segments to target, tion actions and investments. Good positioning
organizations also should consider a segment’s can also refine the market potential by pushing
competitive intensity. Some segments are under­ away those customers who do not value the ben­
served, making it easier to acquire customers. In efits offered, and who might become too expen­
others, competitors might be willing to defend sive to serve.
their market shares, even at a loss. The intended positioning is developed in the
organization’s boardroom; but the actual posi­
Positioning tioning resides in consumers’ minds. Execut­
Once a target segment has been selected, the ing the marketing strategy links the two. Many
fundamental question is how to position the times, after a correct analysis of the 5 Cs and
organization’s offering in a way that, relative SPT, organizations fail to execute. A famous
to other competitors, buyers perceive it as example of this is the 1985 launch of the New
unique and valuable. Individuals and families Coke (Keller, 1998).
make choices based on their perceptions of the
intrinsic value of a product or service, while Executing th e Strategy
healthcare entities might be concerned with the The last step focuses on transforming ideas into
organization’s ability to reduce medical costs. reality, and considers the following practical
As the saying goes, “In marketing, perception is questions:
reality.” Therefore, it is essential that an organi­ V What characteristics should the service have?
zation understands and measures how purchas­ V How should the organization deliver the
ers perceive the value it brings to the market. service?
Again referring back to the transportation V What should the organization’s partners do?
service example, if the selected target segment V How much should the organization charge
comprises mainly individuals in need of para- and who should pay for it?
transit, they may have cognitive or functional V How should the organization raise aware­
limitations that require additional support and a ness about its service?
door-to-door service. Thus, an illustrative posi­ A central part of execution is deciding what

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G E N E R A T IO N S - J o u r n a l o f t h e A m e r i c a n S o c ie t y o n A g in g

specific attributes (tangible and intangible) the

product or service will have in order to deliver
the expected benefits. For instance, will the
driver have an app to connect with riders, will
the van be wheelchair-friendly, will it pick up at
set times or on demand, will it wait at the doc­
tor’s office or will a return pickup time need to
be scheduled?
Next, the organization must decide what
type of promotion or communication campaigns
it will conduct to create awareness of its exis­
tence and highlight unique and valued bene­
fits and, of course, also to generate referrals. In
many cases, an organization needs to co-locate
staff to new areas or places to reach the target
group. Other important decisions are what price
to charge for the service, who will pay for it, and
if any financing will be offered.
These four decisions (product, promotion, benefits. Because of its abstract nature, a brand
place, and price) are known as the marketing is built through developing associations, by con­
mix, or the 4 Ps (McCarthy, 1960). When it necting or linking the organization’s name or
comes to services, a fifth “P” generally is added logo with images and meanings residing in a
consumers’ mind. These associations are rein­
'One o f th e m o s t im p o r t a n t in ta n g ib le forced or weakened by the rest of the marketing
mix and change over time.
a t t r ib u t e s o f e v e ry p r o d u c t a n d One of the biggest challenges in building and
s e rv ic e is th e b ra n d .' managing a brand is that brand associations and
image are built not only by the organization, but
to the marketing mix elements: people. Services, also are created by purchasers of the services (as
as opposed to products, are produced, delivered, well as by people who do not use the services)
and consumed in the same moment and, in that through word of mouth and social media posts.
event, the performance, attitude, and knowledge The brand image and meaning also are affected
of the service delivery team significantly influ­ by competitors’ communication actions; pop
ence the satisfaction of those who are receiving culture reflected in movies, TV shows, or books;
the service. influential people, such as experts; specialized
One of the most important intangible attri­ online and printed publications; and by mem­
butes of every product and service is the brand. bers of the service delivery team. Brand percep­
A brand could be defined as a “name, term, tions need to be monitored continuously and
design, symbol, or any other feature that identi­ managed actively.
fies one seller’s good or service as distinct from
those of other sellers” (American Marketing Conclusion
Association, 2014). In practical terms, a brand CBOs are no different from any company or
is the carrier of the promise an organization organization, whether they are for-profit or not-
makes to its users, partners, and buyers to con­ for-profit: CBOs also need to acquire and retain
sistently deliver a specific set of features and customers. They must take a systematic approach

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 Fundamentals of Community-Based Managed Care: A Field Guide

to developing a marketing strategy and to shaping develop appropriate value propositions for each
their brand identity. The crucial consideration in customer segment.
crafting a marketing strategy is to identify buyers’ Marketing and branding are not one-time
preferences and needs and what features drive activities. CBOs will need to regularly assess
value for buyers. their brand perceptions and to update their
In most instances, a CBO will have dual cus­ marketing strategy as the marketplace environ­
tomers—the person receiving the service and the ment ev o lv es.;^
entity that funds the purchase of those services.
Each customer segment will adopt its own per­ Andres Terech, Ph.D., is an adjunct associate
spective about how it values the service being professor of Marketing at the UCLA Anderson School
offered. The STP framework will help CBOs to of Management in Los Angeles.

R eferences

American Marketing Association. Keller, K. 1998. Strategic Brand McCarthy, E. J. 1960. Basic Mar­
2014. “Dictionary.” Management, Building, Measuring, keting: A Managerial Approach.
goo.gl/P3PMZe. Retrieved and Managing Brand Equity. Upper Homewood, IL: Irwin.
September 27,2017. Saddle River, NJ: Prentice Hall.

Photo credits Pg 15 ®iStockphoto/monkeybusinessimages

Pg 21 ® iStockphoto/alphaspirit

Pg 28 ®iStockphoto/Tommy Lee Walker

Pg 38 ®iStockphoto/Kuzmik_A

Pg 48 ®iStockphoto/Iamnee

Pg 59 ®iStockphoto/sanjeri

Pg 71 ®iStockphoto/Ivan Bajic

Pg 75 ®iStockphoto/PeopleImages

Volume 42 ■N um ber 1 49
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