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Advice You - Seven Ways to Use Market Segmentation at a Health Plan
Implementing marketing segmentation is never a slam dunk and health plans have more difficulty than other firms because of their regulatory environment. But the pattern of decisions is simple when they are broken into steps.
First, mark
First, mark
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
et segmentation research is needed to identify and define market segments. This process is fairly involved and is described elsewhere. (See for example the whitepapers at www.deftresearch.com.) The research helps firms decide which seg
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
entation strategy to use. These strategies may be based on purchasing behavior, consumer characteristics, lifestyle information, or other market information.
Second the team must ask, “which segment or segments does the health plan wish
Second the team must ask, “which segment or segments does the health plan wish
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
to target?”
The market research will provide objective information facilitating this decision. Most experts would agree that it is foolish to target a segment to which you do not now have a reasonably good fit (e.g. the GMC truck divisio
The market research will provide objective information facilitating this decision. Most experts would agree that it is foolish to target a segment to which you do not now have a reasonably good fit (e.g. the GMC truck divisio
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
pursuing a "green", hybrid-oriented segment).
Finally, the fun begins. Once target segments have been decided on, there are at least seven ways to use segmentation.
1. Positioning. Take health care as an example. Most health plans of
Finally, the fun begins. Once target segments have been decided on, there are at least seven ways to use segmentation.
1. Positioning. Take health care as an example. Most health plans of
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
er multiple plans where premiums and access to branded drugs and providers differ. There are segments of the market willing to trade lower premiums for more restrictions on access. But other segments are not willing to make this trade. Ma
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
rket segmentation will help companies re-position their “basic” and “premier” plans to match segments’ motivations and concerns Sticking with health care for an example, some seniors are motivated to act because of service, convenience, o
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
help with health maintenance. If segmentation is implemented, more seniors will find the right product for them.
2. New markets. Products or brands could be positioned to meet the needs of a segment the company does not now serve very w
2. New markets. Products or brands could be positioned to meet the needs of a segment the company does not now serve very w
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
ll. For example, many limited income seniors have been automatically enrolled in Medicare’s Part D plans, but they don’t have to stay there. If a health plan knows what this segment’s concerns are, it could induce them to switch.
3. Ge
3. Ge
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
graphy. Health plans have found it productive to emphasize different products and selling strategies in different geographies depending on the mix of segments in those geographies.
4. Direct marketing is all about segmentation, but it is
4. Direct marketing is all about segmentation, but it is
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
often focused narrowly on internal sales analysis. Segmentation can leverage the value of in-house data and make additional data worth the cost.
5. Advertising agencies often drive segmentation research and use it well. For example, the
5. Advertising agencies often drive segmentation research and use it well. For example, the
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
client has chosen to target the "mass affluent" as defined by some combination of assets and attitudes. Media buyers need to know the magazines this segment reads and the types of web sites and search engines they use. Copy writers will i
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
corporate the deep values of this segment into commercial scripts. Creative directors will insist that the visual imagery of advertising be consistent with what the "mass affluent" look like, talk like, and do. Account planners will conce
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
trate their research on the target segment,
using the classification tool to recruit and screen the right people.
6. Call centers. Health plans can ask segment classification questions in their response call-in customer interviews and i
6. Call centers. Health plans can ask segment classification questions in their response call-in customer interviews and i
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
their telephone enrollment interviews. The classification can help find the best plan for each caller and this will help assure better retention.
7. Channel mix. Segments may have different affinities for different distribution and sale
7. Channel mix. Segments may have different affinities for different distribution and sale
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
channels. Perhaps one segment of buyers is unreceptive to e-mail communications; another segment may never accept a personal visit but will read your
e-mail.
It is the exceptional firm, but some have literally organized themselves arou
It is the exceptional firm, but some have literally organized themselves arou
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
nd segments. In these firms, any employee can tell you who their target is, and who the target is not. If they have multiple brands, each brand is adapted to fit one segment. Brand tracking is done at the segment level. The advertising ag
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
ncy for each brand is expected to zero in on that segment in its messaging and media selection. Because some segments inherently offer higher or lower unit margins, financial expectations of the brands are adjusted accordingly. In health
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
are, one example is Wellpoint’s commercial operation organized around products and services for different segments of employers.
Conclusion
Market segmentation is a far-reaching strategy that can benefit health plan players. Once the ta
Conclusion
Market segmentation is a far-reaching strategy that can benefit health plan players. Once the ta
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
gets have been set, the firm has an opportunity to consolidate management of operations around its segmentation strategy. Every business function can be mobilized to take full advantage of the opportunities that market segmentation offers
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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