The General Business Situation
The market analysis presented is for a health care organization, Elderly Kin’s Home, which will offer full-time care services to the elderly population in Kings County. In the past, families used to take elderly relatives to their homes to recuperate and receive home-based care.
However, over the recent past, due to financial constraints, families can no longer afford to care for their elderly parents at home leaving this responsibility to humanitarian and faith-based organizations that have a limited capacity to provide these services.
This has contributed to a rise in demand for home health care services. Besides, the elderly population is projected to increase as the ‘baby boomers’ generation approaches 65 years (Canon & Stanley, 1990), which is the target market for this organization. Moreover, women, who traditionally cared for the elderly have taken up corporate careers, leaving the seniors with no home-based assistance.
Strengths and Weaknesses
Elderly Kin’s services will be based on the organization’s four core strengths. First, Kin’s will treat its clients with respect and dignity. Second, the home will involve the elderly patients in decision-making regarding their treatment and accommodation plans. Third, the patients, once admitted, will become part of a wide community of seniors who support one another psychologically and socially.
Fourth, Kin’s will hire skilled caregivers who will offer quality care to clients. Thus, one of the major strengths of Kin’s will be its patient-focused approach. While other providers differentiate their services based on price, Kin’s will focus on the physical and emotional needs of its elderly clients.
Kin’s will also offer psychosocial support to the clients’ families. In this regard, Elderly Kin’s will reduce anxiety and stress and thus, give the families peace of mind by assuring them that their elderly relatives are in safe hands. Nonetheless, Kin’s will face many challenges in providing elderly care services.
Among the potential challenges is the unwillingness of health insurers to cover the care costs of clients living in the facility. This will lock out clients with low incomes who cannot afford assisted care services. In addition, the facility, being a start-up, will have a low bed capacity and thus, will not admit many patients. This will also affect its client retention rate.
Opportunities and Threats
Since the elderly population is projected to rise, the potential clientele for Kin’s is likely to increase. Currently, the marketing strategies employed by most industry players revolve around pricing of home care services. Using common media, they market their services as affordable and reliable. Kin’s will focus its marketing strategy on patient needs.
In this way, Kin’s will have an opportunity to expand its market by targeting residents in the neighborhood (living within a one-hour drive), elderly people who need care and families whose relatives are aged 65 years and above. Marketing will be done via online media and word of mouth.
Nursing homes are often associated with stigma. It is believed that only frail and invalid clients seek assisted care in elderly homes. Moreover, there is a misconception that the facilities are homes for people nearing the end-of-life stage.
Thus, social stigmas and misconceptions are major threats to the success of Kin’s nursing home. In addition, chronic conditions associated with old age, such as Alzheimer’s disease and diabetes require costly specialized care, which the home will not be able to offer.
Industry Trends
The shortage of nurses and other professionals in elderly care organizations has led to a sharp rise in costs of elderly home services. Thus, currently, this line of business is experiencing a boom, as more families bring their relatives to elderly homes for assisted nursing care. However, competition has greatly increased, as more providers enter the nursing home industry.
Statistics indicate that over 12.9% of Americans are aged above 65 years and in need of assisted care (Kronenfeld, 2002). It is projected that the demand for home care services will continue to grow, as the number of elderly people (baby boomers) continues to rise.
Therefore, the goal of the Elderly Kin’s Home is to position itself as the facility of choice for the elderly population in Kings County. The proportion of the elderly population (65 years and above) in the county is 11.5%.
Although most families provide for their elder kin, a large proportion of the elderly in this county still need care services. Furthermore, it is expected that over 80% of Kin’s clients will afford full time care. In this regard, Kin’s predicts a 5% business growth over the next two years.
Direct and Indirect Competition
As already indicated, competition in this line of business is stiff. Currently, there are 71 nursing homes licensed to offer elderly care services within Kings County. These will be the direct competitors of Kin’s home services. They offer low cost services, which clients are more likely to choose when seeking for assisted living care. Nonetheless, Kin’s will market itself as a facility that offers quality services in a homelike environment.
Three nursing homes within Kings County will compete directly with Kin’s home. Rockwell, Hills Gate, and Clarke, which are the main facilities offering nursing home services. However, according to the latest inspection reports, they lack adequate nursing staff and bed capacity, and have low quality services.
Indirect competition will mainly come from non-profit and faith-based organizations in the area. These facilities are adequately staffed, affordable, and provide specialized care to patients with neurological disorders.
Moreover, non-profit homes often have relatively large bed capacities and thus, can admit more patients. Overall, it is expected that the homes run by non-profit and faith-based organizations will offer stiffer competition to Elderly Kin’s than those owned by direct competitors.
Organizational Mission and Goals
Kin’s Home intends to position itself as the facility of choice for clients seeking assisted care services. This goal is integral to Kin’s mission. According to Wilmshurst and Mackay (2002), a quality mission statement conveys an organization’s central purpose, goals, and activities. It should indicate what the organization intends to achieve now and in the long-term.
Kin’s mission is to develop its capacity to offer quality and patient-focused services that will enable it to become a market leader in assisted home care for the elderly in Kings County. The facility plans to promote itself as a home that offers holistic care to clients and their families. Its objectives are as follows:
- To position itself as the home that offers the highest nurse staffing hours per day (6 hours compared to the industry average of 4.2)
- To expand Kin’s bed capacity to a sizeable level of 200 beds up from the current 60
- To offer specialized care to patients with chronic conditions such as Alzheimer’s disease, hypertension, and diabetes
- To reduce the stigma associated with elderly nursing homes by providing clients with holistic resident care in a homelike environment
Marketing Strategy
The success in achieving the set objectives will depend on how well Kin’s home will market its products. An effective marketing strategy should target a particular market segment. Target marketing helps an organization to “identify its current and future customers, and competitors” (Canon & Stanley, 1990, p. 17).
Kin’s marketing strategy will focus on elderly clients in the neighborhoods, family members living with aged individuals, and residents discharged to recuperate at home. Its marketing activities will mainly involve the use of online media and the word of mouth.
Many stigmas and misconceptions exist regarding nursing homes. It is often believed that nursing homes are akin to hospitals that care for patients nearing end-of-life stage. In this view, Kin’s home will market itself as a place that provides patient-focused daily care in a homelike environment. Kin’s will also offer a sense of community to its clients.
Clients who come to Kin’s home will become part of a larger community of individuals who will learn together and support one another. Often, clients face a dilemma when deciding whether to take full-time or part-time care. Kin’s staff will advise potential clients accordingly in order to enable them to make sound decisions.
Therefore, Kin’s home will market itself as a place that embraces the client-oriented model, which is different from the hospital-care approach used by the competitors. In this way, clients will be able to differentiate Kin’s services from those offered by its competitors.
The facility, being a proprietary organization, will invest in advanced equipment to ensure quality services for its customers. It will inform potential clients of its advanced technology, including electronic medical records, which the clients’ families can access online.
Target Customers
Kin’s home will target people who need assisted living care. These include elderly individuals above the age of 65 living with their families or alone. Due to old age and age-related illnesses, elderly individuals cannot care for themselves. They need assisted care from siblings, daughters, sons, or relatives. However, work-related constraints make it difficult to care for elderly parents at home.
In this regard, Kin’s target customers will comprise of families living with an elderly person, people aged above 65 years, and individuals in need of assisted living care. The primary target market will be the community living within a one-hour drive from the facility.
Marketing Mix
A marketing mix combines the different forces of the market environment to create a positive response for a new product or brand (Wilmshurst & Mackay, 2002). It comprises of the ‘4 Ps’, which are the key parameters of the target market. These factors influence a firm’s marketing decision.
Product – refers to the goods or services that an organization offers for sale. Kin’s Home, as a well-known brand, will offer assisted home care services to elderly clients in Kings County. The facility will offer client-centered care in a setting similar to the home environment.
It will pride itself in providing quality services due to its high staffing levels and adequate bed capacity. It will also promote a sense of community in order to foster learning and social support for all clients. It will construct scalable premises to facilitate movement throughout the facility.
Pricing – describes the price decisions and strategy an organization uses to penetrate the market. Kin’s will price its services at a lower rate than those offered by competitors. This will make Kin’s services affordable to people who need elderly care services. This will also enable it to attract clients from the other providers and enhance customer retention, which will facilitate business growth.
The organization will construct scalable premises to reduce staffing levels and operational costs, especially during low business seasons. Uniform prices will be charged to all clients. However, low-income clients will be allowed to pay through the Prospective Payment System (PPS) (Coddington, Fischer, & Moore, 2001).
Promotion/Advertising – It entails marketing communication approaches to inform and persuade customers to purchase a product or service. Kin’s will invest in public relations and publicity to create a positive response from its target market. It will use a pull promotional strategy to create customer loyalty among the elderly population as a home of choice, which will translate into increased market share. Promotion will mainly involve online media and word of mouth.
Distribution – The facility will be situated at a strategic location within Kings County. This will allow seniors living within a one-hour driving distance to receive part-time services. Families will also be able to visit their loved ones in the facility and receive regular updates regarding their physical and social wellbeing.
The facility will operate within the local settings. This will allow the elderly community members to access its services. Furthermore, the location will help Kin’s reduce transportation costs and increase its market presence.
Summary
Kin’s home will be located near major hospitals in Kings county to target elderly patients in need of holistic care and assisted living in a homelike environment. Other target clients will be the elderly persons who are under the care of their families. A patient-focused business model will be used by this start-up. It is expected that this model will enable the facility to become a market leader in the elderly nursing sector.
References
Canon, D. & Stanley, C. (1990). Marketing Planning in Small Enterprises: a Model and some Empirical Evidence. Journal of Consumer Marketing, 7(3), pp. 5-14.
Coddington, D., Fischer, E. & Moore, K. (2001). Strategies for the New Health Marketplace: Managing the Convergence of Consumerism and Technology. San Francisco: Jossey-Bass.
Kronenfeld, J. (2002). Health Care Policy: Issues and Trends. Westport, Ct : Praeger.
Wilmshurst, J. & Mackay, A. (2002). The Fundamentals and Practice of marketing. Oxford: Butterworth-Heinemann.