Kootenai Medical Center is a 246-bed community-owned hospital offering medical-surgical treatment along with cardiology, oncology, behavioral health, rehabilitation and women and children services (About us, 2012). It has consistently garnered recognition for care quality and community value as part of the top 100 hospitals for seven straight years in the areas of “financial viability and capital reinvestment, cost structures, patient charge structures, and quality of performance” (Community report, 2011, p.3). For the past eight years, the facility was also given the Avatar Award for consistently exceeding the expectations of patients. It further achieved, for the second consecutive year, the Magnet status for nursing excellence (Community report, 2011).
The facility is situated in the city of Coeur d’Alene which, according to the U.S. Census Bureau, has an estimated population of 44,962 with a racial composition of 91.1% White, 4.3% Hispanic, 2.8% biracial, 1.2% Native American, 0.8 Asian, 0.4% Black and 0.1% Pacific Islander (Couer d’ Aline, 2011). Using the PRIZM database snapshots as a secondary data source, there are 5 common segments associated with the community: family thrifts, hometown retired, mobility blues, park bench seniors and sunset city blues (Zip code, 2011). Family thrifts are large households consisting of parents within the 25-44 age range. In contrast, the mobility blues segment consists of the below 55-years-old middle-aged without children. Park bench seniors and the sunset city blues segment are aged 55 years or older while the hometown retired are aged 65 years and older (Zip code, 2013). These last 3 segments are retired and living as widows or couples.
Except for the sunset city blues segment which is categorized as central-city and lower middle class in terms of urban and social status, all other segments are considered second-city with low to downscale social status. Their incomes are less than $30,000 with a mean income of $22,993 (Zip code, 2013; Couer d’ Aline, 2011). Majority of members of the 5 consumer segments hold or have held service and blue collar jobs which explains their modest to extremely modest income and lifestyles. For instance, they are noted to shop at Walgreens which offers a variety of discounts. Educational attainments tend to be from high school graduate to a few semesters of college, the latter primarily noted among the family thrifts and the mobility blues (Zip code, 2013).
The family thrifts and mobility blues segments tend to reside in working class or inner-city type neighborhoods characterized as having mixed-income affordable housing and apartments for renters while some live in mobile homes (Zip code, 2013). Among the older adult segments, only park bench seniors are likely to be renting. The hometown retired and sunset city blues are largely homeowners with the latter mostly living in houses build pre-1958 (Zip code, 2013). All segments are composed of Whites, Blacks, Hispanics or biracial people except for sunset city blues which is composed only of Whites and Blacks.
Owing to their income, all segments except for sunset city blues have rather low-key sustaining lifestyles. The mostly retired segments of older adults live sedentary, home-centered lives characterized by viewing television, reading newspapers and lifestyle magazines, listening to the radio or engaging in crafts such as gardening or woodworking with materials ordered through the mail (Zip code, 2013; Kootenai County, 2011). They actively participate in social activities held by fraternal organizations or veterans clubs. The sunset city blues seniors can afford going to restaurants for dinner, engage in leisure and recreation and purchase goods through QVC televised shopping (Zip code, 2013). The middle-aged mobility blues are associated with outdoor sports, movies, fast food and cheaper cars. Family thrifts are interested in games and sports, buying children’s toys, watching television and listening to the radio (Sample demographics, 2012; Zip code, 2013).
With the Kootenai county population consisting of mostly economically-challenged segments, they are highly likely to be survivors rather than innovators based on the VALS framework (Survivors, 2012). Survivors tend to have a limited focus, specifically on meeting basic needs such as safety and security rather than fulfilling desires. For this reason, they do not have the drive to excel in the areas of ideals, achievement and self-expression (Berkowitz, 2011). With limited resources available for adequate adjustment, they hold the belief that change is happening faster than they can cope with (Survivors, 2012). They embody the very modest end of the market and are very cautious as consumers. However, they exhibit brand loyalty especially when offered discounts for favorite products (Survivors, 2012).
Market segmentation is defined as “dividing customers into segments and tailoring the marketing mix for targeted segments to improve customer satisfaction and achieve maximum efficiency” (Liu, Kiang, & Brusco, 2012, p.10292). Two ways that segmentation can be done is through descriptive market segmentation and predictive market segmentation. Descriptive segmentation divides the market based on common demographic characteristics such as age and income. The Coeur d’Alene market can be divided into the mature consumers or those aged 55 years and over and the young with ages below 55 years old (Moschis & Friend, 2008). By income, the market can be divided into lower class/downscale and lower middle class.
On the other hand, predictive segmentation divides the market not only based on homogeneity but also on predicted response as may be indicated by behavior data (Liu, Kiang, & Brusco, 2012). For instance, mature consumers are associated with “predictable utilization and reimbursement for most hospital and physician services” which makes it relatively easier to approximate the expected profit from their consumption of health care services (Moschis & Friend, 2008, p.8).
A profile of top market segments in Couer d’Aline provides an understanding of the perceptions and expectations of consumers regarding hospital services and their decision to utilize such services. Low income consumers tend to view the health facility as the sole source of health care because of its not-for-profit and community-owned status. As consumers are cautious with their spending, they will have greater comfort using the facility because it is oriented to service and offers affordable care. They will be satisfied having their basic health needs met and will not likely seek care from private for-profit hospitals where services are more expensive but have the ability to fulfill their desires.
Moreover, the mature segment of the market is noted to have a high concern for their health given the prevalence of comorbid chronic illnesses (Moschis & Friend, 2008) and for this reason will place high value on the cardiology, oncology, rehabilitative, surgery and medical services the hospital is able to provide. Loyalty to the facility can be elicited by offering free medical transportation, health screenings and other services to supplement basic health care. Overall, consumer perception of the facility is likely to be very positive with services that are adapted to the lifestyles, preferences, needs and purchasing capacity of the various consumer segments (Martin, 2011).
Producing an accurate demographic and psychographic picture relies on an equally accurate collection and interpretation of data (Berkowitz, 2011). The profile generated above is more or less accurate because there is consistency between the two main data sources, the U.S. Census Bureau and the PRIZM database, in terms of income, ethnicity and educational attainment data. However, the absence of some data from the US Census Bureau prevents validation of all the PRIZM demographic information. Further, there is consistency in many of the lifestyle characteristics reported in the PRIZM snapshots and the VALS framework. Certain data are noted to be complementary as well but since the PRIZM database is primarily designed to aid in the marketing of non-health products, further information such as health status and culture-based health care preferences from primary data collection techniques are needed.
About us (2012). Retrieved from http://www.kootenaihealth.org/site/c.dkLSK7OPLnKaE/b.8238335/k.84BD/About_K ootenai.htm#.UTAhcKL-KE8
Berkowitz, E.N. (2011). Essentials of Health Care Marketing (3rd ed.). Sudbury, MA: Jones and Bartlett Learning.
Community report 2011 (2012). Retrieved from http://www.kootenaihealth.org/site/c.dkLSK7OPLnKaE/b.8238335/k.84BD/About_K ootenai.htm#.UTAhcKL-KE8
Couer d’ Aline City, Idaho (2011). Retrieved from http://quickfacts.census.gov/qfd/states/16/1616750.html
Liu, Y., Kiang, M., & Brusco, M. (2012). A unified framework for market segmentation and its applications. Expert Systems with Application, 39(1), 10292-10302.
Martin, G. (2011). The importance of marketing segmentation. American Journal of Business Education, 4(6), 15-18.
Moschis, G.P., & Friend, S.B. (2008). Segmenting the preferences and usage patterns of the mature consumer health-care market. International Journal of Pharmaceutical and Healthcare, 2(1), 7-21.
Sample demographics and behaviors (2012). Retrieved from http://www.strategicbusinessinsights.com/vals/demobehav.shtml
Survivors (2012). Retrieved from http://www.strategicbusinessinsights.com/vals/ustypes/survivors.shtml
Zip code look-up (2013). Retrieved from http://www.claritas.com/MyBestSegments/Default.jsp?ID=20&menuOption=ziplooku p&pageName=ZIP%2BCode%2BLookup#