The increasing competition that organizations are experiencing in the face of globalization and innovation as of late had resulted in them seeking to enhance their competitiveness. This has been achieved through the application of various management as well as marketing strategies. Some of those strategies are meant to enhance organizations as brands of choice through effective brand positioning. Consequently, differentiation has also become crucial as one of the key means of effectively positioning organizations relative to their competitors. In that respect, this analysis identifies UnitedHealth Group and WellPoint Inc. Group as two organizations in healthcare industry for analysis of their application of positioning and differentiation strategies. The analysis notes the best practices in positioning and differentiation strategies application as well as compares and contrasts the strategies’ application by the two organizations.
UnitedHealth Group is a parent company to various health insurance and health care service organizations. It is the second largest publicly traded US Company in health insurance providing health care services worldwide in health care consulting, specialty services and healthcare management. Serving over 75 million people globally, the organization has a large scale advantage extending across its product lines which helps it attract new hospitals in its members list and in negotiating for lower prices. The company’s service is divided into two main business lines; Health benefits and Health Services with UnitedHealth care delivering Health benefits while Optum is in charge of Health services. (UnitedHealth, 2013a)
On the other hand, WellPoint is among the largest health benefits organizations in the US. The organization has over 36 million members in its affiliated health plans as well as 67 million being served by its subsidiaries. It offers a wide range medical services and products. (WellPoint, 2013a)
Organizations are experiencing increasing changes in information technology, globalization and market competition that is changing the business landscape calling for them to implement effective positioning strategies to enhance their competitiveness. (Njuguna, 2009) Consequently, organizations are applying positioning strategies which refers to the applications they use in defining their services and products to customers’ minds against the competitors’ brands. (Karadeniz, 2009) This is due to the fact that, positioning is a key element in the modern day marketing being crucial to organizations in growing their customer base as well as the brand equity. (Manhas, 2010) In that respect, their effective positioning involves considering the target market, the difference with competitors, how the difference can be communicated to customers and the value of the difference to customers. (Manhas, 2010)
In addition, the two organizations employ positioning strategies that seek to identify and address brands’ positioning and differentiation from comparing brands, identify opportunities for potential markets to introduce new brands and reposition the existing ones as well as identifying the underserved segments that the existing brands serve. (Gwin & Gwin, 2009) The organizations also employ experiential positioning as a strategic process seeking to understand clients’ desires and needs and providing services that deliver certain experience and communicates their promises to clients in a different way from competing brands. (Padget & Mulvey, 2009)
Their positioning strategies follow the process of creation of competitive advantages, selection of the right competitive advantages and choosing a competitive positioning strategy. It also entails engaging in effective communication with the target market. (Kardeniz, 2009)
In that respect, UnitedHealth and Wellpoint position their services to customers depending on transaction factors, packaging, availability, pricing, advertisement, and benefit factors. The strategies applied also depend on composition factors defining the quality of service and their consistency. (Manhas, 2010) Positioning their brands also relies on brand communication which seeks to help clients identify the source of the brand. They use distinctive qualities of their brands as additional stimuli to the brand name including color, symbols, taglines and advertising styles. (Kotler & Keller, 2006)
The positioning strategies applied by UnitedHealth and WellPoint include:
- Positioning within the market through differentiation of a product or service. In this case, the differentiated service share attributes with the competitors’ services but are superior in the differentiated attributes.
- Positioning through the creation or establishment of a new market from the competitors, a strategy that uses differentiation attributes to give a perception about the service’s different attributes from that of competitors. (Mita & Bettman, 1989)
In this consideration, UnitedHealth Group positions itself as an organization with all connections relevant to the healthcare including that of right doctors and patients, between right patient data and physicians, between right information and consumers as well as between patients and their needed medicine. The organization has also established itself as the national exchange center for essential information entrusted with the globally largest clinical data. (UnitedHealth, 2013a)
UnitedHealth also sets itself as a leader in healthcare technology system. A good example is the organization’s Health Coverage through which it directly provides various health insurance plans for students, families and individuals aged below 64 years through Golden rule Insurance. Through this service, the organization positions itself as a preferred service provider for the target segments. (UnitedHealth, 2013a)
On the other hand, WellPoint seeks to make health care easier through improvement to their system as well as improving the clients’ health care access. The organization uses health affiliated companies and health care plans to drive innovation, empower customers as well as control health care costs positioning itself as an efficient service provider. (WellPoint, 2013a)
In a bid to establish competitive advantage, UnitedHealth and Wellpoint deliver services that provide valued features of quality, reliable delivery and flexibility. (Spencer, Joiner & Salmon, 2009) They also develop added value through remarkable differentiation to set the service apart from their competitors. Their differentiation is a component of their positioning strategies. (Barna & Chapman, 1986) In that respect, their well positioned brands through differentiation bears the qualities of being different, creative and striking. (Karadeniz, 2009)
Their products and service differentiation as a means of effectively positioning themselves has benefits in that brands have to be differentiated from the competitors’ for them to attract clients. In addition, it enhances their ability to maintain market share since more differentiated brands have loyal customers who are not much sensitive to competitors’ brands. (Ramoniuk, Sharp & Ehrenberg, 2007)
However, differentiation is dynamic in that, the porter’s generic differentiation strategy has developed to strategies including differentiation through service innovation, marketing and image management and customers’ responsiveness as ways of responding to environmental complexity. (Spencer, Joiner & Salmon, 2009) Thus organizations seek to establish their positioning through application of various types of differentiation that include service differentiation in which the service has different attributes from that of competitors, price differentiation and niche offers that establish segments which are different from the mass market. In addition, they carry out differentiation through added services by providing extra services which motivate customers as well as service differentiation through communication. (Grimm & Malschinger, 2010)
In that respect, United Health seeks to position itself through differentiation in its service provision through added service and innovation.
- An example is the Health4Me mobile application that offers consumer health information regarding benefits, registered nurses’ information as well as physicians and hospital locations.
- UnitedHealth’s cancer care is differentiated in transaction through a payment model that bundles payments to ecologists ensuring continuity of the patients care as well as improving their healthcare quality.
- UnitedHealth’s iPlan integrates health reimbursement accounts with high deductible health plans. This expands the ordinary plans to include employer group’s health savings accounts.
- United Health also has differentiated service delivery through its care coordination. This channels resources to physicians and consumers eliminating the prior authorization. (UnitedHealth, 2013a)
On the other hand, Wellpoint applies some differentiation to its service delivery with an aim of effectively positioning itself as a competitive healthcare service provider. The following are some of the differentiation strategies applied.
- Operating in an industry where physicians face the challenge of having to incorporate a huge volumes of articles and data to use in their patients’ care, WellPoint has in collaboration with IBM established the IBM Watson application program that helps doctors analyze huge volume of data and get results in less than three seconds which has enhanced the organization’s ability to deal with complex cases. (WellPoint, 2013b)
- Wellpoint also provides their clients with an online feedback tool through which they provide feedback on their experiences with physicians as well as rate their services. (WellPoint, 2013b)
- Wellpoint also provides a virtual enrolment centre which provides customers with a platform to engage the organization’s employees. Through the platform, customers can also access benefit plans, healthcare plans as well as prescriptions information. (WellPoint, 2013b)
Thus each organization seeks to position itself as a preferred health care service and benefits provider. To achieve this UnitedHealth seeks to focus on the target market’s needs of healthcare information by offering differentiated service which has more information provided as added services and through healthcare education through Optum insights. On the Other hand, Wellpoint seeks to position itself as an organization whose services are easier and effective to access. This is done through the various innovations aimed at making consumer experiences as efficient as possible. However, both organizations have some similar strategies in their focus on effective utilization of healthcare data to position themselves as efficient providers of services based on informed decisions. This is clearly visible in UnitedHealth’s utilization of its large healthcare data while WellPoint utilizes the IBM Watson application program to access and analyze large volume of healthcare data. (WellPoint, 2013b)
The analysis has demonstrated effective positioning as crucial in establishing successful brands that are capable of effectively competing in face of increasing rivalry in the healthcare industry. It has also brought out the need for firms to identify their target markets, their competitor’s brands competitiveness as well as their ability to deliver value to their target markets as a means to positions themselves favorably relative to their competitors. Differentiation has also come out as a key element of positioning strategies as it seeks to set an organization’s brand apart from the competitors through various differentiation strategies. In conclusion, UnitedHealth Group and WellPoint Group have been demonstrated to be applying some similar positioning and differentiation strategies as well as contrasting strategies in a bid to set their brands as unique compared to the competition brands. Consequently, the strategies’ application has had a significant impact with both organizations having established themselves as the brands of choice in their respective locations and being nationally ranked position one and two in terms of market share and performance.
- Barna, S. & Chapman, J. (1986). Product Positioning and Differentiation: Confused
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- Gwin, C. F. & Gwin, C. R. (2003). Product Attributes model: A Tool for Evaluating Brand Positioning. Journal of Marketing, 11(2), 30-42.
- Grimm, A. & Malschinger, A. (2010). Positioning: Differentiation Strategies. Wieselburg: Australia University of Applied Sciences.
- UnitedHealth Group. (2013a). About Us. Retrieved on 4th February 2013 from http://www.unitedhealthgroup.com/aboutus/OurApproach2.aspx
- UnitedHealth Group. (2013b). Retrieved on 4th February 2013 from http://www.unitedhealthgroup.com/aboutus/HistoryAndInnovation.aspx
- WellPoint Inc. Group. (2013a). About WellPoint. Retrieved on 4th February 2013 from http://www.wellpoint.com/AboutWellPoint/index.htm