Marketing strategy for Children's Hospital of Philadelphia's pediatric imaging facility

¶ … Children's Hospital of Philadelphia (CHOP) has recently constructed an ultramodern pediatric imaging facility. The healthcare facility exclusively focuses its improved services on children's imaging. In this paper, we present a marketing approach that covers computed Tomography (CT), fluoroscopy, General radiology (X-Ray), Magnetic resonance Imaging (MRI), Nuclear Medicine as well as ultrasound. The work includes an assessment of both the internal as well as external environment which is important in allowing us to determine the full advantage associated with the CHOP brand, the strategic location of the facility as well as the purchase of the new and improved equipment to warrant the integrated marketing strategy. The approach is however, threatened by the existence of another major hospital within Philadelphia that also offers pediatric imaging services. This risk will however be mitigated by CHOP's approach of focusing on pediatric imaging at an affordable price. Pediatric imaging is to form CHOP's niche market. The marketing strategy includes a detailed description of the product, the pricing of the product, the promotional strategy, as part of the marketing mix as well as the revenue projection for 2011.A recommendation on how to implement the marketing strategy is also provided.

The challenge

The Children's Hospital of Philadelphia (CHOP) started its operations in 1855 and is proud to be the pioneering hospital in the United States to be exclusively devoted to the caring for sick children. The hospital is noted to be the birthplace of several medical firsts in the field of pediatric medicine. The hospital has made several medical discovering as well as innovations through its research institute that have helped in the improvement of the level of pediatric healthcare which in turn has helped save several lives. The institution has recently constructed an ultramodern pediatric imaging facility within its compound. The center is to provide efficient, affordable as well as on-site interpretation of advanced radiologic studies on computed Tomography (CT), fluoroscopy, General radiology (X-Ray), Magnetic resonance Imaging (MRI), Nuclear Medicine as well as ultrasound. The facility is located at the Main Hospital, Specialty Care Center, King of Prussia. The facility is conveniently located at the Main Hospital in West Philadelphia in order to cater for the in-house patients as well as patients who have been referred from other hospitals. The challenge for CHOPs is to provide an improved pediatric imaging service that is far more superior to the ones that already exist in the facility and the entire state.

Situational Analysis

A situational analysis helps in the examination of the internal as well as external factors that plays part in day-to-day running of a given company. These factors have been pointed out to influence the way a company performs as well as the choices that it needs to make in regard to its marketing strategy.

In this paper, we present an in-depth analysis of the hospital's goals, external and internal characteristics as well as its place in the competitive marketplace. A proper understanding of these elements is important for us to come up with better ways of achieving the organizational goals. The company's strengths and objectives are also to be evaluated in order to help it in realizing the set aims and objectives. The company's current market share is also to be evaluated in order to use the results in the determination of how aggressive the marketing strategy is to be.

The situational analysis will involve the profiling of all the potential clients in order to ensure that the services that are offered are done so with the right amount of commitment. A competitor analysis is also to be conducted in order to help in determining the organization's external environment. The competitors are to be analyzed in regard to their feasibility of any form of intrusion using the RWW (Real Win Worth) screen. Also to be analyzed is the organization's market position, its strengths as well as weaknesses. A Political, Economic, Social, and Technological (PEST) as well as Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis is to be carried out in order to determine the nature of the company's operating environment. Kotler et al. (2010) in their book the strategic marketing for various healthcare organization pointed out that a SWOT analysis is one of the best methods that is employed in the assessment of a company's environment in order to determine its strengths, weaknesses, opportunities and threats. The analysis of an organization's strength and weaknesses reveals the company's internal environment while the opportunities and threats reveal its external environment. An organization's internal and external environment was indicated by Brassington & Pettitt (2005) to have a great influence on its marketing activities.

External environment analysis

The analysis of the external environment involves the analysis of opportunities and threats. The hospital needs to identify the major threats as well as opportunities that it faces it in its daily operations. The main objective of the analysis is to initiate developments that in the long run would have a great impact on the operations of the firm. The opportunities as well as threats must make a great consideration of the economic environment, market, demographic changes, technology, channel pressure, competition as well as politics among others as pointed out by Kotler et al. (2005). It is worth noting that the opportunities and threats have a tendency of focusing on the present and future while applying an outward and yet strategic view of the options and developments. Brassington & Pettitt (2005) indicated that many opportunities as well as many threats emanates from the marketing environment whenever there are subtle or great shifts in the demographic as well as social factors.

Organizational culture

Organizational culture is defined by Schein (1992) as a "A pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration" that have worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems"

The organizational culture at Children's Hospital of Philadelphia (CHOP) is very positive s a result of its long history as a pioneer children's hospital in the nation. The health care center is a center for clinical as well as academic excellence. The parents/clients as well as employees view the hospital as a pioneer and leader in pediatric care. They view it as a place with an ever increasing quest for quality as well as excellence in pediatric care. This is indeed embed in the organizational culture.

Strengths

The healthcare facility has been around since 1885 and has therefore established itself as a center of clinical and research excellence. This makes it a strong brand

The new imaging center will rely on most of the clients who have been to the old pediatric image center.

The new image center will employ most of the employees from the old facility

CHOP is dedicated to the acquisition of the latest equipment for pediatric imaging.

The new imaging center will make use of the expertise and management from the old pediatric imaging facility belonging to the same institution

Weaknesses

The employment of the previous employee from the old facility means that there is very little efficiency since most of them are not very familiar with the improved and new technology that is found in the state of the art facility.

There is a need for the facility to be run by a new set of qualified employee which will need more funding

There is need to dedicate s funds towards the training of the existing employees on how to use the new systems

The process of merging the network infrastructure of the old facility to the new one needs a lot of money and efforts

Transitioning from the old system to the new system would take quite some time.

The fact that CHOP is a teaching and referral hospital makes it a little bit more expensive than its competitors.

Customer analysis

The medical facility will be build to primarily serve patients from Philadelphia, PA. According to the 2000, U.S. Census, Philadelphia had a children under five population of 98,161which accounted for about 6.47% of the total population (U.S. Census, 2000). CHOP is however noted to have a total of 430 beds (CHOP,2011). About 40% of the bed spaces are located to the cardiac, neonatal, intensive care as well as pediatric care. The hospital admits close to 15,000 pediatric patients on a yearly basis. An excess of 600 are attended to in the outpatient and emergency departments yearly. The customers to the healthcare facility could be in-house patients who are admitted there are those who are referred from the other healthcare facilities within Philadelphia as well as those from other states.

PEST Analysis

Political/Legal

The hospital has two large competing hospital (Nemours/Alfred I. DuPont Hospital for children, Wilmington and St. Christopher's Hospital for Children ) that offers it a lot of competition in regard to the degree of pediatric care as well as pediatric imaging in particular

The local physicians also prefer to refer patients to the competing institution on an equal measure

All of the imaging equipment must be ACR accredited

The facility must be regularly inspected by the Pennsylvania Department of Health

Economic

A good number of patients have insurance

A large number of people in the community are wealthy

The high rate of unemployment is affecting the average income of the population

Social

There is a large number of children from Philadelphia and beyond to accommodate a children-specific imaging facility

CHOP will keep most of its staff from the old imaging facility because they already fostered a good relationship with the patients

Technological

CHOP will use the latest software and hardware in their CT scanners

The latest equipment for ultrasound will be used

The latest equipment for MRI will be acquired

Staff will be taught on the usage of these latest gadgets in the provision of pediatric imaging services

Market share

CHOP controls close to 57% of the total pediatric imaging services in Philadelphian the rest is take controlled by Nemours/Alfred I. DuPont Hospital for children, Wilmington and St. Christopher's Hospital for Children.

Competitor analysis

R-W-W Screen

It is real?

Is the service real?

Yes, the children-specific imaging center is a necessity in every state

Can We win?

Can the service product be termed as highly competitive?

Yes. As a result of the preexisting customer base from the old facility

Can the company be competitive?

Yes. CHOP is one of the oldest and most popular children's hospital and research center in the nation

Is it worth doing?

Will the product be highly profitable considering the risks involved?

Yes

Does the process of launching the imaging facility make any strategic sense?

Yes (Because most hospitals in the nations to have the capacity to run such an ultra-modern imaging facility)

Market position

There are two major pediatric hospitals (Nemours/Alfred I. DuPont Hospital for children, Wilmington and St. Christopher's Hospital for Children) that have full-service pediatric imaging facilities. Some of these competing facilities also have research centers that are involved in pediatric care.

Strengths

CHOP pediatric imaging facility is located conveniently in West Philadelphia and is accessible to all residents of Philadelphia.

The areas physicians like working with CHOP due to its good relationship with staff and other professionals

Weaknesses.

The competing children' hospital lacks the technology, marketing, physicians, management as well as the financial resources of CHOP.

Market segmentation

The market segment for the Children's Hospital of Philadelphia is a function of the imaging modality. The facility will target physicians from within a Philadelphia as well as cities outside of Pennsylvania. The facility will use its influence as a pioneering pediatric health institution to convince local physicians to refer patients to The Children's Hospital of Philadelphia instead of Nemours/Alfred I. DuPont Hospital for children, Wilmington and St. Christopher's Hospital for Children.

Short & Long-Term Projections

Projection of Percentage Revenue

% of Revenue,2011

% of Revenue,2012

% of Revenue,2013

CT

43

40

45

Fluoroscopy

5

4

2

X-Ray

15

18

19

MRI

26

30

29

Nuclear medicine

4

4

2

Ultrasound

7

4

3

Total

Marketing strategy

The marketing strategy to be adopted by CHOP is based on the principle of four Ps of product, price, place and promotion.

The alternative marketing strategies

The alternative marketing strategies include;

Keeping the existing infrastructure and equipment and then merely upgrading it.

Replacing the existing equipment. This would have very minimal impact on promoting CHOP as it might be viewed as a usual maintenance exercise.

Product

The products that are to be addressed in this marketing strategy includes; computed Tomography (CT), fluoroscopy, General radiology (X-Ray), Magnetic resonance Imaging (MRI), Nuclear Medicine as well as ultrasound. These services are offered under the Children's Hospital of Philadelphia brand with the help of physicians who are affiliated directly with CHOP. The focus of all of these products is pediatric imaging

Price

The pricing of the pediatric imaging services are set by CHOPS. The only way that they can increase their profitability is through increasing the number of clients / patients. A 15% discount is to be offered to all patients who opt to pay in cash during the time of their examination

Place

The new facility is to be centrally located in West Philadelphia for ease of accessibility

Promotion

Business cards will be used

Introductory letters will be sent two months prior to the opening of the new pediatric imaging facility

Appointment cards will also be used

Specially designed script cards will be order within two months before opening of the facility

Post cards containing staff pictures will be designed

Fax covers will be used to market the organization

Open house invitation will be conducted about 8 months after opening of the facility