The authors present the results of their collaboration.  Photo © Nathan Mandell

Kellogg health marketing book aimed at academics, practitioners

Professors Kotler and Shalowitz team up to create a 'tour de force'

By Ed Finkel

Kellogg Professor of Health Industry Management Joel Shalowitz '82 spoke with two of the school's graduates this summer, one of whom had just become strategic marketing director at a hospital, while the other had invented a healthcare-oriented product.

Shalowitz had a resource to offer both of them as they took the next step on their professional journeys — Strategic Marketing for Healthcare Organizations (Jossey-Bass 2008), a book he co-authored with Kellogg professor and marketing legend Philip Kotler and former classmate Robert J. Stevens '82.

The strategic marketing director wanted to know where she could find more information about handling that function within a healthcare setting, recalls Shalowitz, adding that the alum regarded the text as "exactly what I need." The other graduate, meanwhile, raised questions about how to bring healthcare innovations to market in a way that effectively targets the right customers and creates value for everyone involved.

Shalowitz had a ready reply: "Those are some of the issues we addressed in the book. Perhaps you should get a copy."

Other experts agree. Regina E. Herzlinger, the Nancy R. McPherson Professor of Business Administration at Harvard Business School, praised the text. "This outstanding book not only delineates powerful conceptual frameworks and tools but is also studded with real-life, captivating examples in organizations that range from governments to biotech firms to Web portals, that illustrate how to make it happen," she wrote, adding that the book was "a tour de force."

Kellogg School Dean Dipak C. Jain says that Kotler, the S.C. Johnson and Son Professor of International Marketing, is a preeminent marketing expert while Shalowitz has exceptional healthcare insights, creating a "best-of-two-minds" collaboration. "It's a major contribution to the literature," Jain says. "Today, there cannot be a bigger responsibility than helping create better healthcare for our citizens. As Kellogg and its graduates continue to make contributions with broad social impact, healthcare will remain among the areas where our expertise can have real value."

Kotler sees the book as a "fresh look" two decades after he and Roberta N. Clarke wrote Marketing for Healthcare Organizations, with the new text updating that work and broadening its scope. "We take a comprehensive look at the healthcare system in the United States," including a list of the 12 most deficient aspects, he says. "Here's a book that will help you run your healthcare organization better and show how we can improve healthcare in the United States."

Professor Alicia Löffler       New health program consolidates Kellogg strengths Kellogg has combined its biotechnology and health industry management programs under one umbrella, the newly named Health Enterprise Management Program. Led by Professor David Dranove, this program combines the school's longtime research strengths in health products and services. The new offering presents students with two tracks — biotechnology and medical products — both linked by an introductory course. The move reflects what is happening in the healthcare industry, says Professor Joel Shalowitz '82, who heads the products track and co-teaches the introductory course with Professor Alicia Löffler, who oversees the biotech curriculum. "Biotech and large pharma are blending so much and becoming parts of the same industry," Shalowitz notes. "They probably always have been, but the shift is even more pronounced today, as large pharmaceutical ventures are buying out biotech companies, or creating joint ventures and strategic alliances." Dean Dipak C. Jain sees the enhanced program as a way to combine the strengths of business and social entrepreneurship, something he says underpins the school's overall approach. "I truly believe that business schools ought to focus on larger problems, such as healthcare, the environment or poverty," Jain says. "Premier institutions ought to make solving these challenges a priority." Photo © Evanston Photographic Studios

The authors are not without their own opinions on that, Kotler says. "We think it's shameful to have 46 million people uncovered" by insurance, he says. "Much more needs to be done to encourage preventative medicine, rather than just curative. For that reason we mention the importance of social marketing – using marketing to get people to smoke less, eat better and exercise more."

The book also delves into the tension among what Kotler terms "the three big" aspects surrounding healthcare: access, cost and quality. It's difficult to deliver on all three, he notes, since each has an associated cost and typically requires tradeoffs.

"If we lower the cost, there will be lower quality and less access," Kotler points out. For a comparative perspective, the text spends a little time comparing the American healthcare system to those of Great Britain, Canada and other countries, Kotler says.

Meant for a broad audience of academics, students and practitioners alike, Strategic Marketing for Healthcare Organizations can be used in marketing classes or strategy classes, curricula that are combined in some business schools, Shalowitz says. "It uses a strategic approach – not only 'What is marketing?' but 'What is healthcare? Who are the major players? How do they interact?'"

Shalowitz practiced internal medicine regularly until 2004 and brings the real-world insights of a physician who has experience with patients, hospitals, medical practices, pharmaceutical companies and diagnostics. Although the book contains plenty of "how-to" information, he emphasizes that he and his co-authors tried to avoid an academic discussion in favor of making their points through many illustrative anecdotes.

"For each chapter we have an introductory story — a real-life story from the major news media. It has a lot of sidebar stories that also illustrate the point," Shalowitz says. "There are examples from hospitals, medical groups, pharmaceuticals, biotech, medical products, not-for-profits, associations — all types of organizations across the entire healthcare spectrum. If somebody is looking for a brief introduction to the healthcare field and all its aspects, the book will provide that. If readers also want to understand marketing and strategy, it will also do that."

Kotler says Strategic Marketing for Healthcare Organizations will offer readers a wealth of insights. "We think this book has the potential to take over the major share of the market. … We believe every hospital, indeed every healthcare organization, should have a copy," he says. "The text is still organized as a marketing book – and includes consideration of important fundamentals like product, price, place and promotion, as well as segmenting, targeting and positioning." In addition, he says readers will discover a lot of information about how consumers make healthcare decisions

The book explores the context in which healthcare players operate, delineating the tensions among hospital administrators, nurses and physicians, and among healthcare organizations, pharmaceutical companies and medical supply companies, Kotler says. For example, "We know that General Electric makes some of the biggest and best MRI machines," he says. "How much should hospitals pay for them? How often should they be replaced and upgraded? These actors are acting on each other to gain an advantage."

The authors also discuss how to brand a healthcare organization, emphasizing what customers see as potential strengths while working to improve the organization's weaker ones, Kotler says.

"Whether or not you plan as a brand, you are a brand," he says, noting that the book offers insights on how to integrate marketing plans across the enterprise. "For example, people think of the Mayo Clinic in a certain way and the Cleveland Clinic in another way. One of our recommendations is to find out how people regard you. … If you're not good at quick care, don't say you are good – get better at it."

Strategic Marketing for Healthcare Organizations provides a framework for helping practitioners do precisely that, and more.