Dr. Beckett is a dentist who seeks to differentiate her practice on the basis of quality. She constructs a new office and redesigns the practice to deliver high quality to her patients and to improve productivity through increased efficiency. Her knowledge and understanding for business is really limited as the classes she took in dental school only taught her of the technical side of dentistry but nothing about the business side. She had no formal training on how to run a business or understand customer needs. In her twenty two of her professional practice marketing or advertising were not necessary as her clients were recommended by her existing patients. However, current times were getting difficult due to rising cost resulting from labour laws, malpractice insurance, investment in new equipment’s and staff training for new technologies were required. Thus, her overhead expenses skyrocketed to 70-80% of her revenues excluding of her wages and office rental. Furthermore, there was a movement in the U.S. to reduce the health care costs as result the insurance companies, employers and patients were going through large health maintenance organizations (HMO’s), which sets price limits allowing doctors and dentists to only charge to a maximum amount for various procedures. Dr. Beckett, as a competitive dentist wanting to offer the highest level of dental care rather than being a low-cost provider, refused to become an HMO provider for the reimbursement rate 80-85% of what she normally charge for treatment. Dr. Beckett’s patients had to pay fees that were not covered by their insurance policics to get the quality dentistry services. For most patients the differences in the quality were not substantial and they would switch to an HMO dentist offering lower costs. Dr. Beckett being the only dentist, there were seven other employees in the dental practice. Excluding her two employees who covered front office duties, she had three chair side assistants who helped the two hygienists and Dr. Beckett with treatment procedure. Her goal and the staff ensured that no patient should be kept waiting longer than 20 minutes without being given the option to reschedule and her front office staff will relay advance messages to patients in case of delays. She currently has about 2000 patients and few more that visit her on special cases. Challenges
Most of dentists being part of health maintenance organizations, they would be charging their customers less but on the other hand, Dr. Beckett charges higher fees than her competitors for her services. She would have to justify to her patients that even though her clinic charges higher fees than competitors, the level of service quality are higher. She decided not to become an HMO provider as she felt that to provide high-quality care to her patients at these low rates were not possible. But now she can offer services that might provide better quality care but are expensive. With the changes like increased competition and reduction in healthcare cost in the market landscape; she needs to develop a formal promotional strategy to capture a wider customer base. With the promotional strategy she would be attracting more patients and to fulfil every patient need, as her and her employees would have to be better at scheduling appointments in timely manner. Target Market
Since Dr. Beckett’s treatment service is expensive comparing to her competitors, her services must be targeted for class A (upper class, elites) market who are wealthy and her patients can be either male or female of any age group. Based on consumer behaviour, researches prove that wealthy people generally do not care about the price as long as they are satisfied with the product or service they are getting. Knowing the fact that Dr. Beckett wants to offer the highest level of dental care rather than being a low-cost provider, she could not avail to after low prices.
Differentiation Strategy -...
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