The Marketing Mix: Product, Price, Place, Promotion, Explained

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The Marketing Mix: Product, Price, Place, Promotion

Healthcare Organization and Management · Chapter 15: Healthcare Marketing: Strategy and the Marketing MixSection 15.2 · lesson 91 of 1059 min · free with a free account

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In this lesson

Product, price, place, promotion, and the extended service mix in health care.

  • Describe the four Ps and the three service extensions of people, process, and physical evidence
  • Distinguish a service's core, expected, and augmented product layers
  • Explain the difference between a charge, a negotiated rate, and an out-of-pocket cost
  • Check a marketing mix for consistency between its elements

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Transcript

Everything said in the video, section by section (1,218 words). Read along, or search it.

Opening Case

A Promise the Booking Screen Broke

Larkfield's outpatient physical therapy clinic launches a campaign with one promise: physical therapy that fits your workday. Six weeks in, inquiries are healthy. But most people who start to book an appointment never finish. The booking data show the pattern. People reach the booking screen, see only weekday daytime slots, and leave. One part of the plan promised what another part couldn't deliver. Which part? And how do you catch that before launch?

Definition

Four Controllable Decisions

The marketing mix is a set of controllable decisions. Through them, a service delivers its position to a chosen segment. The classic four are product, price, place and promotion, grouped that way by E. Jerome McCarthy in nineteen sixty. Segmentation and positioning analyze the situation. The mix is what the organization actually does about it. The value isn't in the four labels. It's the demand that all four are decided on purpose, and checked against one another.

Product

Core, Expected, and Augmented Layers

Product, in a service, is the service itself plus everything around it that the patient experiences. Think of it in three layers. The core product is the benefit sought. For physical therapy, that's getting back to work, or up the stairs, without pain. The expected product is what patients assume without being told: a licensed therapist, privacy, a clean room, a record kept. The augmented product goes beyond expectation, and that's where a difference can live. A written home exercise plan, a named contact, parking that doesn't eat the time saved.

Common Mistakes

Two Product Errors

Two errors follow. One: advertising expected features, like licensed therapists, as if they were special. Patients read that as a hospital unsure what it offers. Two: letting the augmented layer wear away under cost pressure, while the ads still promise it. Even deciding which activities to group as one service line is a product decision, because it sets what patients are asked to choose between.

Price

Three Numbers for One Visit

Price is the element least like its commercial cousin. The same therapy visit has three different numbers. The charge is what the hospital lists. The negotiated rate is what a payer agreed by contract to pay. The out-of-pocket cost is what the patient actually pays. Only the third feels like a price to the patient. And two people getting identical care can pay very different amounts.

Price Transparency

Federal Rules on Charges and Estimates

Federal rules have changed the picture. Since January twenty twenty-one, hospitals must post a machine-readable file of their standard charges, and show shoppable services in a consumer-friendly way. Since January twenty twenty-two, the No Surprises Act has generally required good faith estimates for uninsured and self-pay patients, and limited certain surprise bills. States add their own rules, so never describe a state rule to staff as if it applied everywhere. So price information is out there whether you mention it or not. Explaining it clearly is now part of the service.

Quick Check

Quoting a Patient's MRI Cost

Quick check. A patient's knee M R I has a listed charge of twenty-four hundred dollars. His insurer's negotiated rate is nine hundred. He's met his deductible and pays twenty percent coinsurance. What should the desk quote him? Pause, and decide. One hundred eighty dollars: twenty percent of the nine-hundred-dollar negotiated rate. That's his out-of-pocket cost. The charge is tempting, because it's the published number. But no insured patient pays the charge, and quoting it would scare him off care he can afford.

Place

Access Often Decides the Choice

Place, in health care, means access: where the service is, when it's open, how long the wait is, how booking works, and whether there's a digital route. Access often decides the choice. Patients can't judge technical quality, and they assume a common standard, so they choose on what they can judge. An excellent clinic with an eleven-week wait loses to an adequate one with a slot on Thursday, for a large class of problems. That can look like rewarding the wrong thing. It's still how people choose, so treat access as a design problem, not a preference to correct.

Promotion

Message Discipline and Legal Limits

Promotion covers the channels: the website, messages to current patients, referring practices, community events, news coverage you earn, and paid ads. Two disciplines apply. Message discipline first: every message makes a promise, and a promise the service can't keep costs more than it gains. Then the limits. Federal law bans unfair or deceptive advertising. Professional bodies set standards for describing services and results. And HIPAA governs anything said about an identifiable patient. Outcome claims need evidence as strong as the claim. Claims that name other providers carry legal and reputational risk. A later lesson takes up the ethics in depth.

Extended Mix

People, Process, and Physical Evidence

A service is produced and used at the same moment, and it can't be inspected before you buy. So in nineteen eighty-one, Bernard Booms and Mary Jo Bitner added three elements. People: the staff whose conduct is part of the service. In health care, the contact with staff is often all a patient can evaluate. Process: how the service is delivered, from booking and arrival to the wait, the visit and the follow-up. Patients experience the process as the product. Physical evidence: the tangible signals standing in for what can't be seen. The waiting area, clear written material, a readable summary at the end. These three often weigh more than the original four. When patients can't judge the core, they judge these. Yet they're the ones most often waved off as operational detail.

Quick Check

An Automatic Recall for Missed Sessions

Quick check. Larkfield's cardiac rehab program adds an automatic recall. When a patient misses two sessions, the system schedules a callback. Which mix element did that decision change: promotion, process, or people? Pause, and decide. Process. The recall is part of how the service is delivered over time, and patients feel it as part of the care. Promotion is tempting, because a call goes out. But it isn't selling anything new. It keeps an existing patient's treatment on track.

Consistency Check

Elements That Cannot Both Be True

Back to the physical therapy clinic. A mix only works if its elements support one another. The check is simple. State each element in one sentence, line the sentences up, and look for any pair that can't both be true. Here, promotion promises therapy that fits your workday. Place offers weekdays, eight to four thirty. And process confirms it: there are no evening slots to book. Patients hit the contradiction at the booking step, the moment of highest expectation. And they conclude the hospital doesn't know its own service. Inconsistency does more damage than silence.

The Honest Fix

Change the Promise, Then Cost the Change

Evening hours need another receptionist, a roster change, and a staffing decision above the clinic manager. That takes time. So the honest fix starts with the message. Change the promise to what the clinic really offers: an appointment within the same week. Then take evening hours to the operations meeting as a costed proposal, with the abandoned-booking data attached. And remember that every element costs money, often every year. A mix is a budget request. An element nobody funded hasn't really been decided. Attach a measure to each element when you decide it. Then the result is judged against what you expected, not explained away later.

Key Takeaways

A Mix Checked Against Itself

To recap. The mix is a set of decisions, checked against one another. Product has core, expected and augmented layers. Price has three numbers, and patients feel only the out-of-pocket one. Place is access, and people, process and physical evidence carry extra weight in health care. And a mix whose promotion promises what place can't deliver is worse than silence.

About Healthcare Organization and Management at UPI Study

Healthcare Organization and Management (Health 302) is a self-paced online course of 105 video lessons in 18 chapters, from health systems and the law to ethics, leadership, teams, strategy, informatics, finance, quality, human resources, marketing and evidence-based practice. It carries a NCCRS credit recommendation for 3 semester credits.

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How hospitals and clinics are runHealthcare Organization and Management covers how care organizations are led and run: health law and ethics, leadership and teams, strategic planning, health informatics, budgets, quality improvement, staffing and marketing. It is a core course in healthcare administration and health management degrees.
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Universities that work with NCCRS

Healthcare Organization and Management carries a NCCRS credit recommendation. These universities work with NCCRS; some are UPI Study's signed partners. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

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FAQ

Questions students ask us

About The Marketing Mix: Product, Price, Place, Promotion

What are the 4 Ps of the marketing mix in health care?
The four Ps are product, price, place, and promotion, grouped by E. Jerome McCarthy in 1960. In health care, product is the service plus everything the patient experiences around it, price includes charges, negotiated rates, and out-of-pocket costs, place means access such as location, hours, and wait times, and promotion covers communication channels. All four should be decided on purpose and checked against one another.
What are the 7 Ps of services marketing?
The 7 Ps add people, process, and physical evidence to the original four, an extension proposed by Bernard Booms and Mary Jo Bitner in 1981. People are staff whose conduct is part of the service, process is how care is delivered from booking to follow-up, and physical evidence is tangible signals such as the waiting area and written materials. Patients often judge these when they cannot judge clinical quality.
What is the difference between a hospital's charge, negotiated rate, and out-of-pocket cost?
The charge is the hospital's listed price, the negotiated rate is what a payer agreed by contract to pay, and the out-of-pocket cost is what the patient actually pays. For example, if an insurer's negotiated rate for an MRI is $900 and a patient who has met the deductible owes 20 percent coinsurance, the patient pays $180, not the listed charge.
Why does an inconsistent marketing mix hurt a healthcare service?
An inconsistent mix lets one element promise what another cannot deliver, such as advertising therapy that fits your workday while offering only weekday daytime appointments. Patients discover the contradiction at the booking step, the moment of highest expectation, and conclude the organization does not know its own service. A simple check is to state each element in one sentence and look for any pair that cannot both be true.

About the Healthcare Organization and Management course

How many college credits is Healthcare Organization and Management?
Healthcare Organization and Management (Health 302) carries a NCCRS credit recommendation for 3 semester credits. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.
How much does Healthcare Organization and Management cost and what is included?
$250, paid once, with lifetime access: all 105 video lessons, a practice quiz after each, the graded work and final exam, and an official transcript when you finish. Students who want several courses choose UPI Study PRO instead.
Which universities accept UPI Study credits?
UPI Study has signed partner agreements with universities such as Thomas Edison State University, University of the People and Charter Oak State College, and works with universities such as Penn State, SNHU and SUNY. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities. Use "Find my college" on this page to check yours.
How long does Healthcare Organization and Management take?
It is self-paced with no deadlines. The 105 lessons total about 17 hours of video; most students add reading and practice time and finish in a few weeks to a few months, on their own schedule.
How are the exams done?
Quizzes and assignments are online in the course. The final exam is taken online with proctoring; a person on the UPI Study team checks assignments, usually within two days.
How do my credits reach my college?
When the course shows 100% complete, request the official transcript from your dashboard. It is sent to the college you name, and you can send it to more than one. Check your college first with "Find my college" on this page, or ask Athena.

Ready for the full course? Earn 3 credits in Healthcare Organization and Management.

105 video lessons, a quiz after each one, and the graded work that earns the credit. Recommended for credit by NCCRS.

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