Competition, Marketing Mix, and Pricing
Professor Charmaine Rhames
June 3, 2013
Today, most people purchase health care insurance through their employers. Since the rise of the Obamacare and other global insurance companies have made their way to the market people are now choosing individual insurance company. Some insurance companies may offer individual or family policies or even student policies, but finding the best policies and provider depends on how well the marketers use the marketing strategies as well as the marketing mix. Cigna is a medical group which was started back in 1968 by nine internal medicine physician in a small office. “Now 38 years later, this medical group has grown from one small office to one of the Valley’s largest multispecialty health care providers.” Cigna offers many products and services to their customers, such as medical, dental, disability, life and accidental insurance. This insurance also offers other subsidizes products and services to customers which include supplemental care meaning a nurse or aide would come by to provide care for a customer of some type, this is call personal care. Behavior health meaning either counseling or medication will be involved. Customers have a choice of what pharmacy to use for medication refills and pick up. All customer with Cigna are authorized at least one visit to the Optometrist every two years for exams and glasses. Marketing mix is based on price not the factor that decides whether the customer will buy a policy or not. Products needed by Cigna can be obtained from other companies therefore it is very important for Cigna marketers to promote their insurance hoping the customer will believe the insurance is the best. Cigna uses large companies to obtain most of their customers, their maybe a few individual policies as stated earlier, due to the way the policy is set up the policy is geared toward large companies. Choosing the right policy for the right customer is a very important element in the marketing mix. “For marketing purposes communication of the products and services contribute to persuasion process to encourage customers to avail themselves to products of Cigna.” Branding and advertisement are two of the key characteristics which Cigna use to help promote their products and services. Branding will create an image of the product and advertisement persuades the customer to purchase the insurance policy. Cigna will use a pricing decision which is aimed at affirming a marketing segment. “Marketing segment is to divide a market by strategy directed at gaining a major portion of sales to a subgroup in a category, rather than a more limited one.” Different market structures are mostly compared by the number of competing firms and the extent of entry barriers. A perfect competition organization has no entry barriers with a lot of different firms. This means it has a larger number of competitors than expected; each firm will have a smaller amount of the market share. The right competition structure has no single firm that will controls neither the market nor its pricing. Another important aspect of a prefect competition structure would be that another firm would sell the same exact product. Keep in mind that new insurance companies can come and go as they please, because there are no barriers for new firms to enter the market. Companies can choose many ways to set prices, skimming price strategy where a company sets a higher price than normal and a penetrating price where low initial price is set. “Pricing strategy makes up the marketing mix, the price of a product should reflect the need of a product to give is needed.” One of the biggest advantages of Cigna’s individual health insurance policy is the different prices listed for the customer to choose from. Not all health care insurance offers the different choices most offer the same choices nothing to choose from. Customers...
References: Kotler, P., Shalowitz, J., & Stevens, R. J. (2008). Strategic marketing for health care organizations: Building a customer-driven health system. San Francisco: Jossey-Bass.
Marshall, B. (2013, May 1). Cigna Health Insurance. Retrieved June 3, 2013, from http://www.healthplanone.com/healthinsurancecarriers/cigna/
Unknown (2009, December). Welcome to Web Books Publishing. Retrieved June 3, 2013, from http://www.web-books.com/
Please join StudyMode to read the full document