People’s needs and necessities vary, and, other things being equal, an organization that offers a service better suited to the customer’s individual needs will be more competitive. With this in mind, it should not come as a surprise that market segmentation, which refers to identifying specific groups to approach in the target market, is a common concept in many industries. Yet when it comes to healthcare, this approach offers benefits that go beyond business performance and overall competitiveness. Market segmentation is crucial in healthcare because it is essential for addressed service delivery and also promotes patient-centered healthcare.
To begin with, healthcare is one of the industries in which service delivery depends on the target population’s demographic characteristics directly. For example, a book publisher may view young women as a premier consumer segment for romance novels, but nothing prevents middle-aged men from reading these novels and being moved by them just as much. In such industries, market segmentation is a guide but not a definite delineation because there are no strict objective factors preventing non-target groups from consuming goods or services originally intended for other groups. However, in healthcare, the delivery of goods and services is directly dependent on the functioning of the customer’s organism: a medication useful for a grown-up man with a specific condition will be harmful to a healthy four-year-old. This is why consumer market segmentation that focuses on demographic factors as opposed to mere interest in one or another type of service is absolutely essential in healthcare (Oztekin, 2018). The benefit it offers is tying service marketing and delivery to the crucial factors that lie at the core of healthcare to a much greater degree than in most other industries.
Apart from that, market segmentation also has the benefit of moving healthcare in a desirable direction. Today, healthcare service delivery is moving toward patient-centered care (Swenson et al., 2018). It means that patients gradually become more active participants in managing and improving their health as opposed to passively receiving treatment from medical professionals. However, an efficient transition toward patient-centered healthcare requires knowledge of the patient’s lifestyles, habits, and preferences. Without it, it would hardly be possible “to encourage and support consumer engagement in healthcare are important for health care organizations” (Swenson et al., 2018, p. 2). Market segmentation, which allows identifying distinct groups among the overall target population for any given healthcare service, is a perfect fit to approach this task. Apart from giving healthcare providers an important insight into the needs of the serviced populations, it also provides data for the development of new approaches that would enhance and promote patient-centered care. This benefit is yet another reason to utilize market segmentation for the promotion of more efficient practices and methods that would help make healthcare more efficient.
As one can see, there are substantial benefits to market segmentation in healthcare, the most notable ones being its correspondence to the industry’s nature and its potential to promote patient-centered care. On the one hand, market segmentation is crucial because healthcare depends on correctly identifying target groups more than most industries. On the other hand, analyzing the customers’ lifestyles and preferences is an important component of the gradual transition to patient-centered healthcare that is currently taking place. As such, market segmentation in healthcare is both a method to improve the efficiency of service delivery in any given organization and a way to move the industry into the future.
References
Oztekin, A. (2018). Creating a marketing strategy in healthcare industry: A holistic data analytic approach. Annals of Operations Research, 270(1), 361–382.
Swenson, E. R., Bastian, N. D., & Nembhard, H. B. (2018). Healthcare market segmentation and data mining: A systematic review. Health Marketing Quarterly, 35(3), 1-23.