Overview of the Naidu et al. study on educational policy reform

Finance

Overview of the Naidu et al. Study

More and more hospitals are faced with mounting pressures to control costs and improve quality improvement processes. One way in which organizations are tackling this dilemma is by utilizing relationship marketing. The growing trend of partnering with customers, supplier and other serve providers in the health care arena is largely driven by the need to reform the health care delivery system or face closure. There is a growing need to be more productive in meeting the health care needs of the population. With a growing customer demand for high quality health care services, many hospitals are seeking opportunities to engage in partnering relationships so that they can share their resources and capabilities in order to increase efficiency in the system (Naidu, Parvatiyar, Sheth, & Westgate, 1999).

Relationship marketing activities include attempts to establish, develop or maintain cooperation and collaboration with customers and other marketing providers. Relationship marketing practices can be divided into three categories: 1) programs that are aimed at customer retention, 2) programs that involve special supply and delivery arrangements with other health care providers and key suppliers, 3) relational partnering programs to leverage the resources of others (Naidu et al., 1999).

Based upon this study relationship marketing works in some areas very well and not so well in other areas. The study found that the use of databases for marketing purposes have wide ranging impact on variables such as occupancy rates, admissions per bed, net income margin, gross patient revenue per patient day and total profit margin (Naidu et al., 1999).

It was also found that hospitals that engage in cross selling of other services to regular customers found higher occupancy rates, a higher number of admissions per bed and improvement in gross revenue per patient day.

Two programs that were that were found to have no significant association with any relationship marketing practices include involving customers or suppliers for design and development and sales activities and joint product or service development with customers, suppliers, and other organizations. This is thought to be due to the fact that these types of things really do not affect the customer directly and are assumed by the patient to be taken care of behind the scenes (Naidu et al., 1999).

There were a few limitations of this study that were identified by the author. The first was that due to the fact that they study was exploratory in nature, cause and effect could not be directly established (Naidu et al., 1999). The researcher used a study method of a cross sectional survey conducted at only one point in time, which limited the ability to establish cause and effect. If an experimental study method was used it would be much easier to try and establish cause and effect in this study.

Another limitation that was identified was that a number of the hospitals used in the study were small in size (Naidu et al., 1999). This lead to many of them returning their surveys indicating that the study questions were not relevant to them. The way to get around this limitation would be to only use hospitals in the study that are medium to large in size. This would help to ensure that phenomenon being studied would be applicable and thus one would get more returns that could be used in the study.