Health services organizations place and price decisions – worth 20% of the grade Overview: Your third assignment will be an analysis of the place and price decisions of a health services organization as covered in Week 5 and 6. You may use the same organization that was your focus on Written Assignment 2, or pick another health services organization with which you are familiar.

QUESTION

Written Assignment 3 – Health services organizations place and price decisions – worth 20% of the grade

Overview: Your third assignment will be an analysis of the place and price decisions of a health services organization as covered in Week 5 and 6. You may use the same organization that was your focus on Written Assignment 2, or pick another health services organization with which you are familiar. Be sure you understand the marketing concepts discussed during Weeks 5 and 6 and can apply them to your organization.

You might have to seek out some information on the organization by visiting its website, or if it is an employer interviewing someone who has knowledge of the pricing and distribution decisions. After you have completed your research, answer each of the following questions in turn following all the general guidelines or written assignments posted in the syllabus.

1. Brief overview of the organizations service/products and a description of their target market. This is important to ensure that your analysis considers the needs of the target market in evaluating their pricing and channel decisions.
2. How do you think the organization arrives at its price? Refer to the Week 6 Overview for a framework of some of the pricing considerations and discuss those that appear relevant to your organization.
3. Do you think the pricing strategy is appropriate? Can it be improved to better meet its customer’s needs?
4. Is the organization hindered or helped in their pricing decisions by government or payer restrictions. If so, how do these restrictions impact their pricing strategy?
5. What kind of value delivery network does the organization employ, e.g. horizontal or vertical, and what is their distribution strategy, e.g. exclusive, intensive or intensive? What factors influence the distribution strategies of this organization? Are they customer-focused? If possible, outline all of the channel members and what function they perform to serve the customer?
6. Can you recommend any changes to the value delivery network that would serve customer needs better?

ANSWER

Organization: XYZ Healthcare Services

Brief Overview

XYZ Healthcare Services is a leading provider of comprehensive healthcare solutions, offering a wide range of medical services and products. Their target market includes individuals of all age groups, ranging from children to seniors, who require high-quality healthcare services and products.

Price Determination

The organization arrives at its pricing through a combination of factors. Firstly, they consider the cost of delivering their services and products, including operational expenses, staffing, and equipment. Secondly, they analyze market demand and competition to ensure their pricing is competitive and aligned with industry standards. Additionally, they take into account the value they provide to customers, the perceived quality of their offerings, and the overall market positioning.

Appropriateness of Pricing Strategy

The pricing strategy of XYZ Healthcare Services appears appropriate as it considers various factors. It balances the need to cover costs and generate revenue while remaining competitive in the market. However, there is always room for improvement. XYZ Healthcare Services could enhance their pricing strategy by conducting market research to gain deeper insights into customers’ willingness to pay and adjusting their pricing tiers accordingly. They can also explore value-based pricing models that align pricing with the value delivered to customers.

Impact of Government and Payer Restrictions

Government and payer restrictions can significantly impact the pricing decisions of healthcare organizations like XYZ Healthcare Services. These restrictions often dictate reimbursement rates, coverage policies, and billing procedures. Compliance with government regulations and payer restrictions can be challenging, as they can limit the organization’s flexibility in setting prices. However, these restrictions can also provide some stability and predictability in pricing, ensuring affordability and accessibility of healthcare services to a broader population.

Value Delivery Network and Distribution Strategy

XYZ Healthcare Services employs a vertical value delivery network, involving the integration of various healthcare services and products to provide a comprehensive and seamless experience for customers. Their distribution strategy is intensive, aiming to reach a wide range of customers through multiple channels, including hospitals, clinics, pharmacies, and online platforms. Factors influencing their distribution strategies include the need to provide convenience, accessibility, and timely delivery of services. The organization collaborates with channel members such as healthcare professionals, distributors, and retail partners who play crucial roles in delivering services and products to customers.

Recommendations for Improving the Value Delivery Network

To better serve customer needs, XYZ Healthcare Services can consider a few changes to their value delivery network. Firstly, they can enhance their online presence and invest in technology to facilitate telehealth services, enabling remote consultations and virtual care options. This would improve access to healthcare for individuals in remote areas or with limited mobility. Secondly, they can strengthen partnerships with community organizations and non-profit entities to expand their reach to underserved populations and promote preventive care initiatives. Finally, they can focus on continuous improvement in supply chain management to ensure timely availability of medical products and reduce any distribution inefficiencies.

In conclusion, XYZ Healthcare Services demonstrates a thoughtful approach to pricing and channel decisions. By considering factors such as cost, market demand, competition, and value to customers, they strive to meet the needs of their target market. While their pricing strategy appears appropriate, there is always room for refinement. Additionally, they navigate government and payer restrictions that influence their pricing decisions. By utilizing a vertical value delivery network and an intensive distribution strategy, they aim to provide comprehensive healthcare solutions to their customers. Implementing recommended changes to the value delivery network can further enhance their ability to meet customer needs and improve overall service delivery.