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Promotion and pricing in competitive markets
Hospital & Health Services Administration
|July 9, 1987
Summary
Healthcare managers can use this framework to assess competitive pricing and promotional strategies. It evaluates competitor financial strength and potential profit to guide strategic decisions in an increasingly competitive market.
Area of Science:
- Health Care Management
- Business Strategy
- Health Economics
Background:
- Increasing competition within the healthcare industry necessitates strategic evaluation of market positioning.
- Traditional business models require adaptation to the unique dynamics of healthcare services.
Purpose of the Study:
- To provide a conceptual framework for healthcare managers.
- To evaluate the relative desirability of competitive pricing or promotional policies.
- To offer tools for strategic decision-making in competitive healthcare markets.
Main Methods:
- Defining competitive pricing and promotional decisions.
- Identifying key factors: competitor financial strength and potential marginal profit.
- Describing methods for measuring and assessing these financial factors.
Main Results:
- A structured approach to evaluating competitive actions is presented.
- The framework links competitor financial health and profit potential to policy desirability.
- Methods for quantifying key strategic variables are detailed.
Conclusions:
- The proposed framework offers valuable insights for healthcare managers.
- It provides a practical approach to navigating competitive pricing and promotions.
- The concepts are timely and relevant for the evolving healthcare landscape.