Strategic Hybrid Orientation between
Market Orientation and Brand Orientation
in an International Healthcare Setting
Dennis Wijnberg
Student number: S2148226 / B5068802
Dissertation Advanced International Business Management & Marketing
Dual Award
December 2016
Supervisors:
ABSTRACT
The implementation of market mechanisms within the public healthcare sector urges hospitals to take the customer into account by adopting marketing and branding practices from the private sector. In order to utilize these marketing and branding practices more efficiently, a market- or brand orientation can be adopted. An organization’s orientation is the backbone of what is guiding and influencing marketing priorities. Previous literature primarily addresses the market- and brand orientation concepts separately, without considering the possible synergies that may arise from using both orientations simultaneously. The strategic hybrid orientation concept does take the interaction between market- and brand orientation into account, however empirical research regarding this concept has been lacking.
This study empirically investigates a hybrid form of market- and brand orientation in a healthcare context. The findings indicate that that a brand and market hybrid type is prevailing in UK and Dutch hospitals and that a strategic hybrid orientation is seen as relevant in the healthcare sector. Furthermore, synergies are apparent between brand- and market orientation, both on the strategic as well as the operational level. A framework for implementation of a strategic hybrid orientation within a healthcare setting is provided for managers and contributes to the literature by presenting academics with guiding tools to investigate this hybrid type further.
Keywords: Market Orientation – Brand orientation – Strategic Hybrid Orientation – International – Healthcare sector – Marketing – Strategy
Word count: 14.047
ACKNOWLEDGEMENTS
1. INTRODUCTION
The public healthcare sector is in a state of change. In 2016, care will begin to shift into the palms of consumer’s hands, helping to drive down costs, increase access and fulfil the public’s desire for ‘anywhere, anytime’ monitoring, diagnosis and treatment. Moreover, in an increasingly consumer-centric industry, competition is on the rise. Due to technology and shifts in financial incentives, public healthcare is moving towards the use of marketing tools in order to differentiate themselves from the competition (PwC, 2015).
Nowadays, hospitals and other healthcare providers need to think about which patients to attract and how to attract them. The core of marketing within healthcare is first of all to have a clear brand identity and secondly, to truly satisfy the patient’s needs and wants (Shipley, 2014). In order to fulfil both objectives, healthcare organizations can engage in strategic orientations. An organization’s strategic orientation is the backbone of what is guiding, influencing and constituting marketing priorities, aims, strategies and performance (Noble et al., 2002). Based on the literature review, the most notable strategic orientations for healthcare providers to consider are market orientation, brand orientation or preferably, a combination of the two.
customer experience. Therefore, both orientations may positively influence performance.
However, most of the literature investigates market orientation and brand orientation in isolation and does not consider the synergies between them. For example, in the view of market – and brand orientation as each other’s opposites, market orientation takes the market (customer) over resources (brand), while brand orientation proceeds from resources (brand) over market (customer) (Urde & Koch, 2014). Hence, this standpoint views market – and brand orientation as distinct and separate orientations. An exception is Urde et al. (2013), who argue that an organization’s approach can be market-oriented or brand-oriented, but is more realistically a combination of the two. The Urde et al. (2013) proposed strategic hybrid orientation between market- and brand orientation is conceptual, with scope for further development. This study empirically builds on the conceptualisation by Urde et al. (2013). In order to do so, the following research questions have been formulated:
RQ1: Are hospitals in the UK and the Netherlands more market-oriented or more brand-oriented?
RQ2: Are there any synergies between market orientation and brand orientation in a healthcare setting?
RQ3: How should a strategic hybrid orientation between market- and brand-orientation be implemented in a healthcare setting?
1.1 Relevance of this study
This study contributes to the literature by empirically investigating a hybrid form of market- and brand orientation in a healthcare context. Previous literature has addressed market and brand orientation as distinct concepts, without considering the synergies between them (Gromark & Melin, 2013; Noble et al., 2002; van der Veen & Tielen, 2016). The major contribution of this paper is the consideration that different marketing and branding capabilities are needed and can be synergistically combined within a healthcare setting.
For managers, this study provides direction in a changing industry by urging them to make choices regarding the brand identity of the healthcare organization without losing their touch with healthcare’s most important stakeholder: the patient. Given the implementation of market mechanism and digitization trend within both the UK and Dutch healthcare sector, adopting a holistic approach to the market- and brand orientation concepts can provide a market advantage.
1.2 Disposition
2. LITERATURE REVIEW
2.1 Market Orientation
Market orientation is a classical concept in marketing and has attracted a significant amount of academic and practitioner interest. Narver & Slater (1990), Kohli & Jaworski (1990) and Shapiro (1988) are seminal writers on the subject. Market orientation has two distinct perspectives, namely a cultural and a behavioural perspective. The cultural perspective of market orientation refers to the mindset and culture of an organization, while the behavioural perspective of market orientation represents concrete instruments, tools and behaviours that focus on the satisfaction of individual and changing customer needs and wants (Shapiro, 1988; Urde et al., 2013).
According to Narver & Slater (1990), the driving force behind market orientation is the desire to create superior value for customers and attain sustainable competitive advantage. They distinguish three major dimensions, namely customer orientation, competitor orientation and inter-functional coordination. Customer orientation and competitor orientation include all of the activities involved in generating market intelligence about customers and competitors and disseminating this information throughout the organization. Inter-functional coordination is necessary for communicating and coordinating the gathered information between functional departments within the organization.
Moreover, Kohli & Jaworski (1990) conducted 64 field interviews with managers in diverse functions and organizations in four US cities and define market orientation as “the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness”. Consequently, they consider market orientation to comprise of intelligence generation, intelligence dissemination, and responsiveness. When taking a closer look to other definitions of market orientation, the customer concept is also very central (Raju et al., 2000; Urde et al., 2013; Connor, T, 2007).
Within the public sector, NPM has been the dominant paradigm since the 1990s in the United States, Australia and Western Europe (Simonet, 2013). This paradigm has the basic assumption that the public sector can be improved by importing management principles from the private sector (Hood, 1991; Pollit, 2007). NPM can be characterized by putting a great emphasis on performance, the implementation of market mechanisms and customer orientation in the public sector (Pollitt, 2007). This means that the public sector should be looked upon from a market and customer perspective (Denhardt & Denhardt, 2000). This also implies treating healthcare patients as if they are customers who have needs that must be met as effectively as possible (Wendt, 2009). Therefore, following the NPM management stream, medical institutions like hospitals have made the shift towards a more customer-focused approach (PwC, 2012).
However, while the public sector has adopted this customer-focused approach since the 1990s, both the UK and Dutch public healthcare sector have implemented NPM (and market orientation) later on, in 2000 and 2006 respectively. Under Tony Blair, the British prime minister at the time, the UK launched a reform plan in 2000 for the National Health Service (NHS), which is one of the world’s largest publicly funded healthcare services. Also known as the patient choice policy, the aim of this policy was for hospitals to be more commercial like (Beecham, 2000). In 2006, the Dutch government introduced reforms to the healthcare system designed to provide health insurers a more prominent role (Tunstall, 2016). Both the reforms in the UK and the Netherlands are based on the same reasoning, which is explained in the next section.
Market Mechanisms in the Dutch Healthcare Sector
patients and only the GPs have the ability to refer patients on to more specialized healthcare services, which is referred to as secondary care (hospital-based care) and tertiary care (specialist hospitals) (Tunstall, 2016).
Michael Porter is considered to be one of the most influential experts in the area of management and further developed the ‘managed competition’ concept by Enthoven (1978) (Porter, 2006). According to Porter (2006), the reasoning behind introducing market mechanisms in the healthcare sector is the following: first, competition stimulates the allocation of the available resources (labour, financial and human capital) as efficiently as possible. Secondly, competition stimulates to operate as cost efficiently as possible. And third, competition stimulates innovation since competitive pressures force organizations to constantly search for new products and better ways to serve their customers (Porter, 2006).
Figure 1. Market mechanism and specialization within healthcare
Market Mechanisms in the UK Healthcare Sector
In 2000, the UK launched a 10-year reform plan for the NHS to cut waiting lists and drive up performance (Thorlby & Maybin, 2007). This reform plan introduced gradual changes in the NHS that have led to a greater shift towards local rather than central decision making, removal of barriers between primary and secondary care and stronger emphasis on patient choice (Grosios et al. 2010). This resulted in ‘managed competition’ between healthcare providers as described in Figure 1 and a more patient-centric focus of consumer-driven healthcare (Robinson, 2005). In NHS funded care, patients are entitled (where possible) to choose between different types of care and providers of their care (NHS, 2013). Moreover, in England, people can pay privately for plastic surgery and other care and choose between a multitude of providers using free market principles (The Health Foundation, 2011).
in three main groups: commissioning, healthcare services and monitoring & regulation. First, commissioning involves deciding what services a population is likely to need and ensuring that there is provision of these services. Clinical Commissioning Groups (CCGs) control the planning and purchasing of secondary healthcare services (hospitals & community services) for local populations. Currently, there are 211 CCGs, each serving a median population of 250,000 people. CCGs are clinically led local organizations that know the areas in which they are working, and are therefore able to commission services that are specifically required by the population that they serve (NHS, 2014). Highly specialist services and primary care are being commissioned by NHS England nationally (see Figure 2).
Figure 2. Financial flows of the UK healthcare system
has been commissioned by CCGs (Grosios et al., 2010). This stimulates competition since money follows the patient, so the more patients receive treatment, the more financial compensation you receive as a hospital.
Lastly, the NHS has a separate organization under its wing called NHS Elect. As part of the NHS, NHS Elect provides healthcare providers with support regarding strategy development, customer care & patient experience and marketing & branding activities. The existence of NHS Elect indicates that hospitals in the UK are actively using marketing and branding strategies in order to improve GP referrals, give their reputation a boost, enhance the customer experience and reduce costs. From a marketing and branding perspective, both the Dutch and UK healthcare system urges healthcare providers to differentiate themselves from the competition by stimulating market mechanisms within the healthcare sector. Therefore, marketing and branding activities are important for both Dutch and UK hospitals. Despite the differences in funding and financial flows, both the UK and Dutch healthcare structure are similar in terms of ‘managed competition’ (Figure 1, p. 9) and patient choice. In both systems market mechanism are apparent and patient choice is promoted.
Market Orientation – The Criticism
While the implementation of market mechanisms in both the UK and Dutch healthcare sector has led healthcare providers to follow a more market-oriented approach, market orientation has been criticized in a healthcare context as well (Wendt, 2009). The problem of market mechanisms in healthcare systems is that there is no natural price mechanism to slow down demand. For both the patient as well as the healthcare provider it is more advantageous to receive/provide more healthcare (Porter, 2006). One way to reinforce the price – and cost mechanisms is by increasing the transparency in the costs of healthcare. Nowadays, the consumer patient has no insights in the costs of healthcare and changing this will create a better price- and cost consciousness (Crawford et al., 2002).
2.2 Brand Orientation
The brand orientation concept was introduced at the beginning of the 1990s by Frans Melin & Mats Urde (Urde, 1994). Researchers describe this concept as a new approach to brands that focuses on brands as resources and strategic hubs (Melin, 1997; Urde, 1994, 1999). Nowadays, brands play an increasingly important role because customers interact with brands in all ways and at all times. Purchase decisions are more and more driven by brand recognition, loyalty and the coherence of the experience provided (Keller, 2012). Organizations that follow a brand orientation see the brand as a strategic platform that has the possibility to transform an organization from a faceless bureaucracy to a company that is attractive to work for or deal with. Specifically, brand orientation is defined as “an approach in which the processes of the organization revolve around the creation, development and protection of brand identity in an on-going interaction with target customers with the aim of achieving lasting competitive advantages in the form of brands” (Urde, 1999, p. 117). Brand identity summarizes the vision, key beliefs, core values and extended values of a product, service or organization (Aaker, 1996; Kapferer, 2012; Urde, 2003).
Like market orientation, brand orientation also has two distinct perspectives. The cultural perspective emphasizes a certain type of corporate culture or mindset of an organization. It is suggested that the way of relating to brands and the organization’s brand competence are prerequisites of brand development (Urde, 1999). The core of brand orientation as a mindset is customer satisfaction within the limits of the core brand identity. Secondly, the behavioural perspective of brand orientation includes the importance accorded to the internal guiding tools of the brand identity (mission, vision and values). Important brand oriented behaviours are the idea of ‘living the brand’ (de Chernatony, 2010; Mitchell, 2002), corporate identity and corporate design (Birkigt & Stadler, 2002), integrated marketing communications (Cornelissen, 2000; Ewing & Napoli, 2005) and employer branding (Barrow & Mosley, 2005).
perceptions of the organization, that is, its image and its reputation. While market orientation takes an outside-in approach, brand orientation takes an inside-out approach. A cohesive brand strategy creates a solid platform when organizations utilize and combine all its strategic resources to create a strong brand identity, which can be communicated and hopefully conceived by stakeholders as positive and unique (Urde, 1999; Dahlqvist & Melin, 2010). From a customer perspective, this may lead to a better and more positive perception of the healthcare provider, but also provides the customer with a tool for evaluation and in turn makes it easier to demand accountability (Gromark & Melin, 2013).
From a healthcare provider’s perspective, a major benefit of developing a strong brand is greater attraction and trust. Attraction is generated when a brand is considered interesting and relevant for an individual or society in general (Gromark & Melin, 2013). Therefore, to be accepted, an organization must be active and powerful, and be perceived as special in some way (Button & Dukerich, 1991; Suchman, 1995). The trust placed in a organization is something which develops over time and which is affected by an organization’s stability, leadership, competence and ability to solve problems (Greyser, 2009). Furthermore, Wong and Merilees (2007, 2008) found that brand orientation increases performance with regards to awareness, loyalty, image and reputation as well as making firms better performers in obtaining their strategic objectives. Another reason for brand development is greater revenue generation (Hood & Henderson, 2005). The attraction and trust generally ensures that more customers are attracted to this healthcare provider, which generates more revenue that can be reinvested in the organization. Lastly, in the longer term, a brand orientation can lead to portray the organization as an attractive employer, which would result in attracting and retaining the best medical professionals.
The Corporate Brand Identity Matrix (CBIM framework)
2013a). All these characteristics of corporate brands can be aligned with characteristics of a hospital brand as well. Similar to corporate brand organizations, hospitals have multiple customer and non-customer stakeholders, offer a variety of complex and different services and have their own culture that is an essential part of the brand. Therefore, this framework provides excellent opportunities for empirical testing in a healthcare environment. The structured entity provides three different categories divided into internal, external and internal/external (see Figure 4)
Figure 4. The Corporate Brand Identity Matrix.
Internal
to the implementation of market mechanism, the culture within a hospital needs to shift towards a more customer-focused attitude, adopting a market orientation. Third, competences encompass an organization’s capabilities and processes (Leavy, 2003). These are important for every organization; however, within healthcare this is crucial given the life and death decisive decisions that have to be made every day.
External
The second category, the external part, takes a ‘receiver’ perspective from the stakeholders to the organization (Urde, 2013). The external components consists of ‘position’, ‘value proposition’ and ‘relationships’. To start with positioning, academics and practitioners consider positioning to be one of the key elements in marketing, branding and strategy (Aaker, 1996; Kapferer, 2012; Keller, 2012; Porter, 1996; Riezebos & van der Grinten, 2011). Kapferer (2012) encapsulates his view of positioning by providing the answers to four essential questions:
1. For whom? (segmentation) 2. In which market? (target market)
3. Promising what? (key elements of the brand core)
4. Proven by what? (evidence supporting the value proposition)
Internal/External
2.3 Strategic hybrid orientation between market and brand
orientation
Inspired by Urde’s et al. (2013) article about the interaction between market and brand orientation, this study investigates the advancement of bridging market orientation and brand orientation in the healthcare sector. For healthcare organizations, both market orientation and brand orientation are important to consider (Shipley, 2014). In a brand-oriented organization, brand identity takes precedence over customers’ needs and wants, whereas in a market orientation these are focal points (Gromark & Melin, 2013). In practice, the organization needs to both carefully listen to its customers’ needs and wants, while also determine its own brand identity. Market and brand orientation are interlinked through the argument that customer orientation is central in both orientations (Reid et. al, 2005) and the reasoning that a brand cannot be developed without a proper understanding of customers’ needs and wants (Laukkanen et. al., 2011). Thus, finding a balance between these two orientations will be crucial to long-term survival (Urde et al., 2013).
Figure 3. The market- and brand oriented approaches
Positioning – finding a balance
distinctive place in the minds of the target market”. Kotler’s definition is a prime example of market-oriented positioning.
On the other hand, brand-oriented positioning is all about satisfying needs and wants that occurs within the boundaries of the brand’s identity, influenced by the organization’s mission, vision and values (Urde & Koch, 2014). With such an approach, an organization may choose not to perform certain activities since it is not in line with the brand’s identity. Table 1 provides an overview of the differences between market-oriented – and brand-oriented positioning. To conclude the discussion of market –and brand orientation, it is emphasized that both approaches are distinct, but synergistic. An organization’s approach can be market-oriented or brand-oriented, but is more realistically a combination of the two.
2.4 The healthcare context: An overview
This section provides on overview of the characteristics and trends within the healthcare sector. These characteristics and trends can largely influence marketing and branding practices and are therefore important to consider. Furthermore, an overview of hospitals within the UK and the Netherlands is provided in order to have a clear view on the relationships between private and public players in the healthcare marketplace.
Characteristics of the healthcare sector
High involvement
First and foremost, healthcare is about the health of patients, which brings along a very high involvement of patients. Healthcare as a ‘product category’ is thus important for the consumer patient and it all starts with a high quality of clinical services. However, research conducted by PwC (2012) indicates that besides high clinical quality, customer retention is also for a large part explained by creating repeatable, memorable experiences that match the customers’ needs and wants. Because of the information asymmetry between the doctor and the patient, the patient usually expects the doctor to deliver on the clinical quality of treatment. This makes improvement and refinement of the customer experience within the clinical pathway all the more important. Similarly, medical staff attitude defines six out of ten healthcare experiences, rendering attitude twice as important as in the banking or hospitality industries (PwC, 2012). Empathy of medical staff thus matters because of the personal nature of medical visits, where patients often feel more vulnerable.
The customer has a problem
High risks involved
Healthcare processes are particularly risk-sensitive since one mistake might have large consequences (PwC, 2012). This can be amplified by social media, which largely affects customer perceptions in the 21st
century.
A large number of stakeholders
Within healthcare there are multiple stakeholders to identify. Especially in a hospital, appealing to each and every stakeholder and involving them in decisions and the processes through which decisions are made are becoming increasingly important in healthcare (Culyer, 2005). The most important stakeholders for a hospital in the Dutch healthcare system are patients, insurers and the government. For a UK-based hospital these are patients, CCG’s and the government.
Trends in the healthcare sector
Digitization
the US, there already exists a market with professional health agents that help patients in finding the healthcare information that is applicable to their needs (PwC, 2015).
Public and private hospitals in the UK and the Netherlands
3. METHODOLOGY
3.1 Research philosophy
Ontology
To address the relationship to the research philosophy and how it is practiced in this study, ontological considerations have been made. Questions of social ontology are concerned with the nature of social entities. The central point of orientation involves whether social entities have a reality external to social actors (positivistic approach) or whether social constructions have been built up from the perceptions and actions of social actors (social constructionist approach) (Bryman & Bell, 2011). Since this study takes a qualitative approach to marketing and branding practices within a healthcare environment, the method is interpretative and grounded in reality which is not objective but socially constructed and given meaning by the managers under study. The standpoint of this study is thus that of social constructionism. Social constructionism is a way of gathering data that is natural rather than artificial (Easterby-Smith et al., 2008). Since the investigation of a strategic hybrid orientation is an interpretive process, the social constructionism standpoint makes it easier to adjust to new ideas and issues and contribute to the theory-building approach.
Epistemology
3.2 Research questions
To investigate the strategic hybrid orientation concept in a healthcare setting, the following research questions have been formulated:
RQ1: Are hospitals in the UK and the Netherlands more market-oriented or more brand-oriented?
RQ2: Are there any synergies between market orientation and brand orientation in a healthcare setting?
RQ3: How should a strategic hybrid orientation between market- and brand-orientation be implemented in a healthcare setting?
3.2 Research design
Due to a lack of previous empirical work and appropriate frameworks of a strategic hybrid orientation within the healthcare sector, this study uses exploratory case research as the methodological approach (Yin, 2009). Case study research allows for exploration of areas where research and theory are at their early, formative stages (Bensabat et al., 1987). As this study seeks to find the interaction between market- and brand orientation by truly understanding the strategic aims that lay inside the organization, qualitative case research is the dominant method for a deeper understanding of the hybrid orientation concept (Easterby-Smith et al., 2008). As the research consists of 7 cases and 2 expert interviews, it will take the form of a multiple case-study analysis. The main argument in favour of the multiple-case study is that it improves theory-building (Bryman & Bell, 2011). By comparing two or more cases, the researcher is in a better position to establish the circumstances in which a theory will or will not hold (Eisenhardt, 1989). Moreover, the comparison itself suggests concepts that are relevant to an emerging theory.
This study focuses on the public healthcare in the UK and the Netherlands and more specifically on hospital care. Both of these systems are particularly interesting given that the Netherlands use a mixture of public and private provision, while in the UK healthcare is mainly provided publicly and financed by general taxation. Moreover, in 2015, the Netherlands were ranked number 1 by the Euro Health Consumer Index (EHCI), which compares healthcare systems in Europe, retaining its top position for the fifth year in a row. According to this same EHCI index, the UK were ranked 14th
, mainly due to poor accessibility (EHCI, 2015). As this may have consequences for the marketing and branding practices, it provides for an interesting comparison and an excellent research environment for conducting this study.
Interview protocol
empirical results (Bryman & Bell, 2011). Based on the evaluation of previous work in the literature review, the interview questions have been deduced from multiple sources of the market orientation construct (see Appendix A). The market orientation construct has been divided into three dimensions, namely customer orientation, competitor orientation and inter-functional coordination. Secondly, the brand orientation construct has been measured by making use of the CBIM framework of Urde (2013) as explained in the literature review section (see Appendix A).
In line with research by M’zungu et al. (2015), an organization can be either brand and market oriented or market and brand oriented. The italicised and non-italicised descriptors denote the primary and secondary of each hybrid type, respectively. Since the synergies between market- and brand orientation are expected to be apparent on both the strategic as well as an operational level of healthcare processes, the strategic hybrid orientation has been operationalized in this way.
Lastly, the healthcare context specificities are related to the characteristics and trends that are specific to the public healthcare context as discussed in the literature review.
3.3 Data collection
A semi-structured, in-depth interview technique (Rao & Perry, 2003) with marketing managers, familiar with the strategic and operational aspects of the hospitals, was the primary data collection method. A semi-structured interview is a managed verbal exchange (Ritchie & Lewis, 2003), which provides reliable, comparable qualitative data. A possible downside of semi-structured interviews is that interviewer bias may be applicable, whereby the interviewer influences the responses of the interviewee. As the researcher is enrolled in a master program that has a focus on marketing and branding courses, the researcher may be convinced that marketing practices are significantly important for a hospital. In order to address this issue and prevent tunnel vision, a critical analysis of all aspects of inquiry has been made by the researcher. By adopting a comparative case methodology, cases were critically assessed and compared to overcome the temptation to jump to easy conclusions. Moreover, to improve credibility of the research, 6 out of 9 interviews have been conducted through face-to-face interaction. Face-to-face interaction is the fullest condition of acquiring social knowledge since social cues such as voice, intonation and body language can provide extra information on the issue raised (Bryman & Bell, 2011). The remaining 3 interviews were conducted by telephone. Telephone interviews provide wide geographical access and although social cues are reduced, voice and intonation remain, which still contribute to reliable findings (Opdenakker, 2006).
marketing consultants. Their membership package includes specialist consultancy services, workshops and marketing & branding support to healthcare providers across the UK. The expertise of the marketing managers within the NHS Elect provides excellent data regarding marketing and branding activities across UK hospitals.
A total of 9 interviews were conducted with healthcare marketing managers to get to know more about the strategic hybrid orientation concept in healthcare processes and discuss opportunities for improvement. Out of the 9 cases, 7 interviewees were marketing managers within Dutch hospitals. All hospitals under study treat more than 15.000 patients per year. In order to obtain a wider view of marketing practices within hospitals, 2 additional expert interviews were conducted, one in the Netherlands and one in the UK. These 2 expert interviewees were marketing consultants with extended expertise in the healthcare sector. In order to keep it transparent, all interviewees will be named marketing manager (hospital interviewees) or marketing consultant (expert interviewees) in the findings.
3.4 Data analysis, coding & research ethics
For the data analysis, topic coding has been performed as the main coding strategy by using within-case and cross-case analyses. Topic coding consists of summarizing in a word or short phrase the basic topic of a passage of qualitative data. To clarify, Tesch (1990, p.119) differentiates that “it is important that these [codes] are identifications of the topic, not abbreviations of the content. The topic is what is talked or written about. The content is the substance of the message”. The within-case analysis serves to address the first research question: Are hospitals in the UK and the Netherlands more market-oriented or brand-oriented? In the within-case analysis, cases were allocated to the brand and market hybrid or to the market and brand hybrid. Secondly, a cross-case analysis was performed to identify ‘within-group similarities as well as intergroup differences’ (Eisenhardt, 1989 p. 540). This was performed in order to answer the second and third research questions, whether there are synergies between the market-and brand orientation and how a strategic hybrid orientation should be implemented in a healthcare setting. Interviews have been conducted according to a predetermined interview-guide (see Appendix A), and have been recorded, transcribed and analysed.
Table 3. Code tree
Validity
To ensure the validity of this study, a number of criteria were adopted. First, face validity was enhanced by pre-testing the interview guide. One healthcare manager was asked for several suggestions for improvement, which led to the removal of questions relating to the capacity and financial performance of the hospitals, since this data could be gathered from the year reports of the hospitals under study. Secondly, descriptive validity has been enhanced by checking the accuracy of interview transcripts against the actual audio recordings prior to data analysis. Thirdly, in order to minimise self-reporting bias due to impression management (Eisenhardt & Graebner, 2007), the respondent have not been informed about the strategic hybrid orientation, but only about the market orientation and brand orientation concepts.
Reliability
adopted by the original researcher. However, by clearly explaining the research design and data collection methods, this study tries to be as transparent as possible. By clearly stating the research process of selecting the cases, formulating the interview guide and analysing the data, the adoption of this research strategy for future researchers is facilitated.
Research Ethics
Research ethics primarily deals with the interaction between researchers and the participants under study. In general, research must be designed in such a way that a respondent does not suffer physical harm, discomfort, pain, embarrassment or loss of privacy (Blumberg et al., 2011). Therefore, all interviewees have signed an informed consent form stating that participation is voluntary, that the interviewee remains the right to decline to answer any question and that the interview will be recorded. In order to ensure that the privacy of interviewees is guaranteed, names of healthcare organizations or healthcare managers have been disguised, except for NHS Elect, which provided their explicit consent to using their organization name. Lastly, the interviewed healthcare managers can benefit from this study since the findings of this study are distributed to all interviewees, which provides an incentive to participate.
4. FINDINGS
4.1 Within-case analysis
The within-case analysis serves to address the first research question:
RQ1: Are hospitals in the Netherlands and the UK more market-oriented or more brand-oriented?
As indicated in the methodology section, a hospital can either be market and brand oriented or brand and market oriented. The market and brand oriented hybrid manifests when there is a primary external strategic focus to satisfy customers and a secondary internal strategic focus by using internal branding tools to foster a customer-oriented culture Conversely, the brand and market oriented hybrid type results when there is a primary internal strategic focus, that is, developing a strong brand identity guiding the organization’s activities (brand orientation) and a secondary external strategic focus, that is, to satisfy customers (market orientation) (M’Zungu et al., 2015). Each case was allocated to one hybrid type, with no other strategic orientation found (Table 4, p. 49).
executives in the NHS that are really marketers in their thinking. ” (Marketing consultant, NHS Elect). Moreover, the brand orientation construct is represented much better during the interviews than the market orientation construct. As stated by the marketing manager of hospital B: “Our hospital and most of the hospitals that I know are much more in the brand-oriented construct than the market oriented construct. We have, as do many hospitals, a clear brand identity with its own brand values, brand promises and brand policies. We [as a hospital] often forget to ask ourselves the question: What did the patient actually want? In the past, the customers’ needs and wants were often skipped because the patient was coming to the hospital regardless. However, we now really have to think about which patients to target. The market oriented construct is thus becoming more important given the 2006 policy change by the government.” In the past, hospitals did not take the customers’ needs and wants into account in their organizational strategy since there was simply no explicit need for it. Patients that lived in close proximity to the hospital were visiting the hospital either way. The implementation of market mechanism has altered this situation, but this process is only slowly developing: “In my experience, only around 10% of our customers even considers visiting another hospital. The other 90% follows the GP referral. So the self-conscious patient is not yet there, but that is probably a matter of time” (Marketing manager, hospital B).
x, but the customer needs to feel this. Thirdly, profiling is taking the bigger brand story of your hospital and translate this in an attractive communication strategy”.
Also the mindset of staff is still very much inside-out: “Marketing in a hospital is not self-evident and still in its early stages. “The medical staff is focused on the process of curing the patients and is not focused on getting patients in. What is interesting though, is that the margins of a hospital are very thin. So although only 10% of the patients make a conscious choice of which hospitals to visit, it is very relevant and important that you attract them and that they choose for you” (Strategic marketing manager, hospital C). The most important reason for the inside-out mentality of medical staff is due to the fact that marketing is still a young profession within hospitals and that the need for a customer-focused and outward facing marketing mindset was not there in the recent past. Market mechanisms and the changing relationship between the medical professional and the consumer patient are altering this (Marketing managers of hospital A, B, C, D, E, F and G). The marketing manager in a hospital needs to take a critical look at the hospital portfolio, make choices in this regard and profile these choices towards the customer. In this way, the added value and relevance of visiting the hospital is becoming more explicitly clear. All the marketing managers under study confirm these developments and anticipate on them.
4.2 Cross-case analysis
The cross-case analysis involved searching for patterns of meaning across the cases to identify ‘within-group similarities as well as intergroup differences’ (Eisenhardt, 1989 p. 540). The cross-case analysis addresses the second and third research questions, namely:
RQ2 Are there any synergies between market- and brand orientation in a healthcare setting?
RQ3 How should a strategic hybrid orientation between market- and brand-orientation be implemented in a healthcare setting?
The cross-case analysis has the following structure: first, the findings regarding the brand identity of a hospital and the customers’ needs and wants in a healthcare setting are presented. The brand identity and customers’ needs and wants then determine the organizational strategy with a primary internal strategic focus (brand orientation) and a secondary external strategic focus (market orientation). Thereafter, the implementation process of the organizational strategy is given. Lastly, the digitization within healthcare processes is addressed.
Brand Identity
To specifically address the brand identity of a hospital in the brand and market orientation hybrid type, a closer look is taken towards the internal elements of the CBIM framework. The mindset (culture), what you are good at (competences) and what engages and motivates you (mission and vision) as an organization are internally defined and determine the brand identity.
Culture
hospital would invest in a marketing department internally, while budgets from the government are decreasing” (marketing consultant, NHS Elect). For this reason, UK hospitals do not have a marketing department or marketing manager internally. This is surprising given the fact that the UK government has implemented the patient choice policy 16 years ago in 2000 in order to develop a customer-focus within UK hospitals. Continuing: “A marketing, outward facing mindset depends on the presence of marketing or business managers. Lots of hospitals went through so much cost cutting that they quite often strip out management roles. What you notice is that clinical teams perform marketing activities which a) they are not professionally trained for and b) they have got no help” (marketing consultant, NHS Elect). Alternatively, hospitals in the Netherlands do have a strategic marketing manager internally that can help the different hospital departments with their marketing issues. Because of marketing managers’ presence, findings in the Netherlands suggest that the word ‘marketing’ in a healthcare context is generally more accepted: “For medical staff, the word ‘marketing’ does not have a stigma to it. There are misunderstandings linking marketing to PR and advertising, however, medical professionals generally understand the added value when you explain that marketing is about truly understanding the human behind the patient. When you do this in a good way, medical professionals will go along with you since everyone really does have a hart for the patient”(marketing consultant, organization H).
Competences
communication strategy for the labour market. For instance, we interview doctors that already work for us and ask them why this hospital provides such a great work environment. We use a lot of social media like YouTube, Facebook and LinkedIn to reach out to the best doctors in the field” (marketing manager, specialist hospital G).
Mission and vision
Lastly, all hospitals have defined a similar mission and vision, which is curing people in the best possible way by focusing on providing excellent clinical quality while also contributing to a memorable customer experience (marketing managers of hospital A, B, C, D, E and F). In order to realise this mission & vision, besides focusing on clinical outcomes like quality and safety, it is thus also crucial to take customers’ needs and wants into account.
Customers’ needs and wants
With regards to consumers’ needs and wants, the market orientation concept and the value proposition & relationship concepts of the CBIM framework have been analysed.
Value proposition
The value proposition should appeal to consumers in such a way that it creates a positive relationship between the customer and the brand (Urde, 2013). In a healthcare context, the value proposition should thus provide the customer with a memorable customer experience. “Customers usually expect the doctor to deliver on the clinical quality of treatment, meaning that customers prioritize augmented products like waiting times, the empathy of medical staff and the accessibility of the hospital” (Marketing manager, hospital F).
executing business processes. Mostly companies in the private sector follow an operational excellence strategy by narrowing product lines and having a high expertise in the chosen areas of focus (Marketing consultant, organization H). Customer intimacy has a strong, relationship driven customer focus. All ‘general’ hospitals in the UK and the Netherlands focus on customer intimacy in their marketing strategy in order to improve patient experience (Marketing managers of hospitals A, B, C, D, E and F; Marketing consultant, NHS Elect). The emphasis on the customer indicates a secondary external strategic focus of market orientation.
Furthermore, as indicated in the within-case analysis, 90% of customers generally follow GP referral. The strategy of a hospital should therefore take all stakeholders into account: in the Netherlands these are patients, GPs and insurers and in the UK these are patients, GPs and CCG’s. As the strategic marketing manager of hospital D states: “It is thus essential to monitor all stakeholders and identify their problems and issues. Thereafter, we [as a hospital] need to define what we would like to accomplish with each different stakeholder”.
Relationships
Secondly, looking at the ‘relationship’ element of the CBIM framework, the customer focus is also visible. All hospitals under study prioritize the sympathy of medical staff towards the patient. However, customers’ needs and wants also need to match the staff’s needs and wants. “Designing clinical services that is fantastic for staff, but the customer dislikes it, is not desirable. Other the hand, when your staff needs to bends over backwards for the customer and dislike working there, you have a problem as well. Therefore, the two need to be merged” (marketing consultant, NHS Elect). The marketing manager of hospital D also underwrites this difficulty: “The difference in priorities between patients and the doctor is sometimes difficult to manage. While the doctor and the hospital intrinsically want to invest in quality and safety outcomes, the customer prioritizes the augmented products within the hospital”.
Organizational Strategy
oriented hybrid, both the brand identity as well as customers’ needs and wants formulate the strategic directions that guide the marketing priorities and internal processes within the hospital (Marketing consultant, organization H). These strategic decisions should answer the question: where do you [as a hospital] want to be particularly specialized in and what do you want to be known for?
Positioning
In order to obtain a distinct brand image within the consumers’ mind, you need to specialize as a hospital (Marketing consultant, organization H). Differentiation by following a brand oriented positioning strategy can be beneficial in two ways: first “One of the advantages of specialization is that the hospital can generate more revenue, especially when customers and insurers recognize that you have an expertise in one particular area. Moreover, you get a more diverse mix of patients in that area, whereby you can extent your knowledge. This in turn attracts more doctors and research opportunities, which keeps extending your expertise in that area even more” (Marketing manager, hospital D). Secondly, another important effect is that: “A brand orientation leads to a clear direction within the organization since the brand is the ultimate summary of your strategy. In order to execute and implement strategic directions, internal communication is extremely important. The brand consistently reminds the medical staff who you [as a hospital] are and why you exist, which makes the brand a means of reaching your goals. Because of the internal guidance that a brand can provide, it is meaningful to follow a brand orientation.”
of organization H states: “competition disciplines and forces a hospital to think what is truly important to the customer”.
However, following a brand-oriented differentiation strategy is specifically difficult since the day-to-day operations within a hospital are already very complex and difficult to manage: “Within healthcare, everyone is used to doing everything better: they are focused on clinical quality marks and on conforming to different norms. Clinical quality within the Netherlands is high everywhere, so in order for you to be distinctive and prominent you really need to be extremely good in one or two areas in order for people to notice you” (Marketing consultant, organization H). Therefore, the findings indicate that only a few hospitals in the Netherlands have obtained a specific position within the healthcare marketplace and that specialization is to a large extent not taking place.
Implementation process
In order to execute the organizational strategy with a primary brand oriented focus and a secondary customer focus, the implementation process is important to consider. The strategy implementation sheds light on the internal branding tools that foster a customer-oriented culture.
Customer orientation, personality and competences
doing live webchats every week. One gynaecologist said to me when making a little video to put on YouTube: “I have never learned media communications skills or presenting skills”. This needs to be developed since these maternity units are increasingly going to be on the marketing frontline of their services.” (Marketing consultant, NHS Elect). Thus, in order for the medical professional to develop a customized approach to healthcare, developing service skills is vital. This same development is also visible in the Netherlands. A number of interviewees in the Netherlands indicated that their hospitals are also developing specific maternity units that are more customer-focused than other clinical services (Marketing managers of hospitals A, B, C and G).
Moreover, the changing relationship between the doctor and the patient is also taken into account. The marketing manager of hospital A categorized patients according to the diversity in roles that the patient can adopt: “The classical patient follows instructions and fully trust the medical professional. The patient as a client wishes to be fully informed and wants to establish the clinical pathway in consultation with the medical professional. Lastly, the patient as director shows a lot of initiative, actively collects information and makes his own choices. E-health solutions are important here as well.” The ‘patient participation’ concept is gaining track within healthcare as well (Marketing managers of hospital A, E and F). This concept uses the specific experience of patients within healthcare processes to improve research, management and the quality of healthcare (Marketing manager, hospital A).
Another effective tool that is used by a majority of the hospitals under study is the customer journey (Marketing managers hospital A, B, C, D and F). A customer journey is a graphic display of the total customer experience across all touch points between the customer and the service processes within the organization (Johnston & Kong, 2011). The marketing manager of hospital A discusses the effectiveness of the customer journeys: “ The customer journeys have accelerated the will to act. 60% of the ideas that came out of the customer journey have been implemented within two months. The most important change is the change in mindset of medical staff. By taking a different view across different departments and by critically assessing the customer side of the service, medical staff now has a better understanding of the customer.” The customer journeys are adopted within UK hospitals as well (Marketing consultant, NHS Elect). Furthermore, the marketing manager of hospital E emphasizes to focus on outcome-based care. Outcome-based care are standardized clinical services, which have been performed that often that the outcomes are to a large extent certain. This provides the hospital with the opportunity to communicate promises to customers on the outcome of a surgery before the surgery takes place (Marketing manager hospital E).
Market trends, competitor orientation and inter-functional coordination Looking beyond the customer to market trends and competitor orientation, differences between hospitals are visible as well. Most hospitals conduct market research into the healthcare marketplace (hospitals A, B, D, F and G). However, as the marketing manager of hospital A states: “A big part of the data that we use for analysing the marketplace are not up-to-date and are very complex to interpret. Moreover, in the private sector market shares are analysed every week, while here we [the hospital] do it every few months”. The hospitals that do not make use of market data are determining their decision-making on the experience and expertise of medical professionals, although these hospitals intend to make the shift towards market data usage as well (Marketing managers hospitals C and E).
communicating and coordinating the gathered customer and market information between functional departments within the organization. As explained by the marketing manager of hospital A: “In a hospital the different departments are grouped according to their specialized areas, which creates different silos. This results in ‘silo-thinking’, meaning that the customer journey is not taken into account. As a patient, you have contact with multiple departments and not with one deparment only”. To address this siloed nature of care, hospitals are making use of coordinated-care teams (hospitals A, B, C, D, E F and G). “The hospital takes a multi-disciplinary approach to healthcare by identifying the medical specialties that are needed to treat different ailments. Coordinated care adapts to the patient as information between medical professionals is continuously exchanged and updated.” Secondly, cost cutting has a profound influence on the possibilities to perform marketing and branding activities. As the marketing consultant of NHS Elect explains: “Due to the cost cutting in public services, hospitals are feeling that they are not being rewarded for providing excellent customer experiences. Therefore, the marketing budget within a hospital is decreasing”. Specifically in the UK healthcare system, hospitals in the public sector are all operating under the NHS mother brand, which makes it even more difficult to differentiate in the marketplace (Marketing consultant, NHS). The cost cutting in public services is also noticed among Dutch hospitals: “When everything needs to be focused on customer service, investments are unavoidable. However, since healthcare is for a large part financed by the public, austerity is connected to the culture in a hospital as well. This creates a barrier for making large investments in marketing and branding activities.”
Expression
have a disaster team that makes sure that every case is extensively examined and that all the rules are accordingly dealt with. This is vital given the fact that one badly handled case can be disastrous for your reputation” (Marketing manager, hospital D)
Digitization
Now that the organizational strategy and the implementation process have been discussed, an important trend within healthcare is addressed. The digitization of healthcare processes provides the patient with more personalized care. For instance, technology is taking over certain check-up procedures like measuring blood pressure, which makes hospital visitation redundant. The hospitals under study all acknowledge these technological developments and state that it will have a big impact on the business model and financial flows of a hospital in the future (Hospitals A, B, C, D, E, F and G). In order to anticipate on this, hospitals B, C, D and F are implementing multiple projects regarding medical technology and telemedicine. Digital tools can improve the communication to the customer, for instance by providing screens in the reception area in order to check-in (Marketing consultant, NHS Elect). On the short term the impact is yet not that significant since the adoption rate of care technologies is still low (Marketing manager hospital B) Moreover, a hospital needs to alter routines and ways of working, which takes time (Marketing managers hospital A, B, E and F).
Furthermore, from a customer perspective, the availability of information can provide more transparency regarding quality of care and customer experience. In the UK, the NHS collects all the customer experience outcomes and publishes these findings on their website. Moreover, there are two other websites that measure patient opinion and patient experience, which patients actively use (Marketing consultant, NHS Elect). The Netherlands have a website that rates hospitals based on customer experience as well.
implemented in a healthcare setting, a summary of the findings is presented in Table 4.
5. DISCUSSION
The primary objective of this study was to take a holistic approach to market- and brand orientation by empirically investigating the strategic hybrid orientation concept in a healthcare setting. Specifically, this study adopted an exploratory and theory-building approach by distinguishing between one dominant and another less dominant orientation. The findings indicate that the brand and market hybrid type is prevailing in UK and Dutch hospitals and that a strategic hybrid orientation is seen as relevant in the healthcare sector.
Moreover, the implementation of a strategic hybrid orientation has been examined in detail. On a strategic level, hospitals are internally focused, mainly because of the deeply held convictions that the patients will visit the hospital regardless of any marketing and branding activities. However, the implementation of market mechanism has altered this by urging hospitals to take the customer into account. The findings suggest that the reasoning of Porter (2006) as represented in Figure 1 (p. 9) holds in both the UK and Dutch healthcare sector. Hospitals that are to a larger extent exposed to competition are more specialized in certain areas due to competitive pressures. The strategic decisions guiding the specialization process are both based on the brand identity of the hospital as well as the customers’ needs and wants.
healthcare and found that the essence of the brand identity should be communicated internally to develop emotional buy-in. Other evidence suggests that employees who have a better understanding of the brand promise more effectively deliver this towards the customer (Punjaisri & Wilson, 2007).
On an operational level, the implementation of the brand – and market orientation hybrid primarily focuses on internal brand management processes that foster a customer-oriented culture. The main barriers in implementing such an internal brand strategy are the siloed nature of care and the cost cutting and austerity mindset within the UK and Dutch public healthcare. Coordinated care teams are promising in overcoming the silo-thinking and the resourcefulness of marketing managers can result in better cost-efficiency ratios. Additionally, the marketing managers under study indicate that customer journeys and social media strategies are important branding tools for hospitals.
On top of competitive forces, current trends of digitization and a more demanding customer put pressure on the business model of a hospital as well. Health systems should re-examine long-term capital investments in light of virtual medicine (PwC, 2015). Since the future patient is no longer physically visiting the hospital, decentralized investments and partnership with third parties have to be established in order to cope with this development. However, digitization provides opportunities as well. Because of telemedicine, medical staff can more efficiently focus on the patients that really need care instead of performing unnecessary treatments. Furthermore, availability of information on the demand side of the patient results in more transparency, which makes it easier for patients to differentiate between healthcare providers. This in turn leads to a market advantage for hospitals that are performing well and are more relevant to the customer and can be reinforced by following a brand and market orientation hybrid strategy,
product by desiring a good customer service. The adoption of a strategic hybrid orientation concept can help managers in bridging these two interests by making specific strategic decisions that serve both the quality of care and simultaneously improving the relevance for customers.
5.1 Limitations
As most studies, this research is subject to limitations. With respect to generalizability, the scope of the findings is restricted. Due to time limitation, the scope of the research has been limited to 7 cases in the Netherlands and 2 expert interviews of which one in the UK and one in the Netherlands, which lowers the generalizability. A second limitation is that the findings may be influenced by the subjectivity of the researcher. In order to address this issue and prevent tunnel vision, the researcher has adopted a critical mindset throughout the interviews. Furthermore, given that most of the questions in the interview guide are deduced from previous literature, the issue of subjectivity is lowered. However, the researcher cannot guarantee the objectivity of this research.
5.2 Future Research
6. CONCLUSION
6.1 Theoretical Implications
Concluding, this study contributes to the emerging literature on a strategic hybrid orientation between market – and brand orientation. It fills the gap in the literature by adopting a synergistic approach to the interaction between these two concepts in a public healthcare context, which has not been considered before. The paper builds on the conceptualization by Urde (2013) and empirically addresses the presence of a market – and brand orientation interaction within Dutch and UK hospitals. The findings show that this synergistic approach is seen as relevant in a healthcare context, both on a strategic as well as an operational level. The development of a framework for a strategic hybrid orientation provides academics with guiding tools in investigating this hybrid type in more detail. In summary, the major contribution of this paper is the consideration that different marketing and branding capabilities are needed and can be synergistically combined within a healthcare setting.
6.2 Managerial Implications
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