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    Clinical Research Organization

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    CRO(Clinical Research Organization)

    See commentary below on:
    Bernd Schmitt's CEM(Customer Experience Management) Framework (noting facets regarding its purpose, use, and value in healthcare organizations)
    Michael Porter's Generic Strategies
    Kaplan & Norton's Balanced Scorecard four-perspective framework-(financial, customer, internal business process, and learning and growth)

    Question 1. How might the framework be used to address a marketing problem at your organization(CRO)? How could the model be improved? Ground your analysis in peer-reviewed literature.

    Question 2. After identifying one of the framework's main variables, explain how marketing practitioners could use specific questions to measure the variable. Ground your analysis in peer-reviewed literature.



    Proficiently addressing the wants and needs of customers stands as one of the greatest challenges facing healthcare marketers. Those who consistently meet and exceed customer expectations are rewarded with lasting patronage and the accompanying results of growth and prosperity. Those who fail in this regard, however, find themselves with a dwindling customer base and the accompanying results of institutional decline and, ultimately, failure.

    The discipline of marketing has made great strides over time to place the customer first in all aspects of operation. Early efforts tended to focus on issues such as production (i.e., the production concept) and sales (i.e., the sales concept), viewing customer expectations as secondary matters. As the discipline progressed, however, marketers began to understand and appreciate the role of customers in marketing, realizing that focusing attention on meeting and exceeding the wants and needs of target audiences would yield significant mutual benefits-a philosophy referred to as the marketing concept. Today, marketing efforts are clearly focused on customers, with robust initiatives in the areas of customer satisfaction (i.e., the marketing practice of meeting and, ideally, exceeding the wants and needs of customers), customer relationship management (i.e., the marketing practice of delivering personalized attention, service, and support to target audiences in an effort to establish lasting bonds with customers, ensuring their enduring patronage), and so on. Such efforts have unquestionably improved the marketing performance of healthcare organizations, but future gains will require continued innovations. One particular innovation is offered by Bernd Schmitt, who advocates that marketers embrace an approach that completely envelopes their target audiences through the design and management of comprehensive customer experiences. This innovation, illustrated in Figure 24-1, is known as the CEM (Customer Experience Management) Framework. Schmitt's CEM Framework consists of a series of five steps-analyzing the experiential world of the customer (an analysis step), building the experiential platform (a strategy step), designing the brand experience (an implementation step), structuring the customer interface (an implementation step), and engaging in continuous innovation (an implementation step)-which ultimately yields a complete and highly fulfilling customer experience. As its name suggests, the CEM Framework focuses on experience rather than the traditional pursuit of satisfaction. A customer experience is multifaceted and, if well designed and managed, yields customer satisfaction, among other benefits. Hence, the development of productive and enjoyable customer experiences affords benefits to customers that eclipse those garnered via the traditional, but more limited, pursuit of customer satisfaction. The steps of Schmitt's CEM Framework are explained as follows.


    The first step of Schmitt's CEM Framework involves the investigation and analysis of the experiential world of the customer. During this step, healthcare marketers are essentially seeking to develop an intensive knowledge of their customer base with the intention of understanding the types of experiences that their target audiences are seeking through the purchase and consumption of given goods and services. To achieve an accurate understanding of customers and the experiences they desire, healthcare marketers must ensure that they have accurately defined their target audiences. Then, they must study the meaning of their product offerings and desired characteristics of delivery from the perspective of these groups. How, for example, do customers view given healthcare entities and their products? What information requirements do customers have regarding given healthcare goods and services? What can be done to ensure that customers receiving given healthcare offerings have the most pleasing customer experience possible? Coupling the information gained from customer-oriented inquiries with information regarding competitors and their customer experience initiatives yields significant insights. Such discoveries far eclipse those gained via traditional customer satisfaction assessment approaches, such as the customer satisfaction survey. Although traditional approaches remain valuable, enhanced details that yield comprehensive profiles of customers, their wants and needs, and their experiential preferences undoubtedly improve marketing outcomes.

    The second step of Schmitt's CEM Framework involves the construction of experiential platforms for given product offerings based on discoveries identified in the previous step of the CEM Framework. Here, healthcare marketers take the information gained from customer analyses and formulate product delivery methods, known as experiential platforms, that are consistent with the experiences desired by their target audiences. Importantly, experiential platforms must be thoroughly documented; as such platforms become the blueprints for delivering customer experiences. These platforms essentially stipulate the strategy that will be implemented through the remaining steps of the CEM Framework.

    Designing the brand experience represents the third step of Schmitt's CEM Framework. Here, healthcare marketers seek to convey the essence of their experiential platforms through the development of meaningful identity related elements (e.g., logos, signage, packaging, advertisements) associated with given product offerings. Importantly, each element portraying these offerings must be formulated in a manner to convey, as richly as possible, defined experiential platforms. Conveyance of the experiences that customers can expect to receive as patrons is essential for marketing success under the CEM Framework, and branding initiatives offer immense opportunities to communicate such experiences.

    The fourth step of Schmitt's CEM Framework involves the design, development, and implementation of the infrastructure (i.e., the customer interface) that is instituted to ensure the exchange of information between organizations and their target audiences. Depending on the particular healthcare product under examination, the nature of the exchange of information can be face-to-face (e.g., a physician examining a patient, a pharmacist providing medication usage instructions to a customer) or at a distance (e.g., a postcard sent to remind a patient of a dental appointment, an email confirmation of an order placed via a retail pharmacy's Web site). The customer interface is arguably the most important element associated with the delivery of experiential platforms. This is true for all healthcare products, but it is especially relevant in the healthcare service arena where customers are completely immersed within given healthcare institutions as they receive medical attention. As with designing brands, structuring customer interfaces requires that healthcare marketers ensure that selected information exchange vehicles support the experiential platforms that were defined earlier in the CEM Framework.

    The final step of Schmitt's CEM Framework involves the continual pursuit of innovation, with healthcare marketers striving to incorporate such advancements in a manner that will not only enhance their given product offerings but also the experiences afforded to customers, courtesy of the new discoveries. New innovations in the healthcare industry can be quite varied. Some may directly pertain to healthcare product offerings (e.g., new imaging technologies, breakthrough pharmaceuticals, enhanced ambulance transportation technologies). Others may indirectly relate to healthcare goods and services (e.g., enhanced patient information systems, breakthrough leadership innovations, and improved institutional heating and air conditioning systems). Regardless of the particular innovations at hand, healthcare. marketers must ensure that they stay abreast of the latest advancements in an effort to deliver both product and experiential value to customers.

    When healthcare marketers implement the CEM Framework, they must remind themselves that their primary task is to study, design, and continually improve customer experiences within their healthcare institutions. Crafting the customer experience is the element that differentiates the CEM Framework from other customer-focused marketing initiatives. By focusing on delivering a customer experience, rather than a static event of customer satisfaction, opportunities to meet and exceed the expectations of customers are greatly enhanced. Clearly, healthcare entities that incorporate the CEM Framework are well positioned to deliver enhanced value to customers, resulting in enduring patronage and its associated benefits.

    Schmitt's CEM Framework provides healthcare marketers with an innovative formula for advancing beyond static customer satisfaction initiatives and into the dynamic realm of delivering comprehensive customer experiences that completely immerse target audiences. Clearly, the CEM Framework can assist healthcare marketers in their endeavors to proficiently address the wants and needs of their target audiences.

    Michael Porter's Five Forces Model

    The healthcare marketplace is characterized by intense competition and rivalry-elements that will only intensify as healthcare entities of all kinds vie for the opportunity to serve target markets. Those entities that can successfully navigate the complex healthcare environment will be handsomely rewarded with increased market share and prosperity. Successful navigation of this environment, of course, requires a deep understanding of marketplace competitors. All too often, however, entities view their competitive environment in an overly narrow fashion that fails to acknowledge the true depth and breadth of competitive forces in the marketplace. Competition is multidimensional, and its vastness must be clearly understood if marketing success is to be achieved. The critical task of accurately identifying the competitive elements in a market is greatly facilitated by Michael Porter's Five Forces Model. Illustrated in Figure 28-1, Porter's Five Forces Model provides useful insights into the multifaceted nature of competition. According to Porter, the nature of competition in any industry is based on five forces: existing competitors, potential entrants, substitutes, suppliers, and buyers. These forces are unique to each industry-and industry segment-and combine to determine the competitive intensity and ultimate potential of associated markets. These five forces are explained as follows.

    Existing competitors are the most obvious competitive force, jockeying for position through new product development, innovative promotional campaigns, and so on. Rivalry among existing competitors is especially intense when competitors are numerous and fairly equivalent in terms of size and power, when exit barriers are high, and when industry growth is slow resulting in struggles for market share. These characteristics are frequently
    observed in the healthcare marketplace, illustrating the intense rivalry within the industry.

    Entities that might potentially enter the market represent significant threats to existing competitors. New entrants bring new capacity and resources to the market along with desires for market share. The magnitude of the threat posed by new entrants is largely based on the particular barriers to entry that exist. Typical examples of entry barriers include capital requirements, proprietary product differences, government policy, and the market dominance and brand identity of existing competitors. Significant entry barriers yield significant protection from the threat of new entrants, while few barriers increase the competitive nature of the market. Certificates of need possessed by hospitals and patent protection possessed by pharmaceutical firms are examples of barriers that offer substantial protection in the healthcare marketplace.

    Substitutes are products that differ from particular offerings but largely, and sometimes completely, fill equivalent wants and needs. As a result, substitute offerings can greatly impact the performance of healthcare entities and even threaten their very existence. Laser vision correction could be viewed as a substitute for eyeglasses and contact lenses. The services of a chiropractor could be viewed as a substitute for the services of an orthopedic surgeon. The seriousness of the threat of substitutes is predominantly based on their performance and price characteristics. Substitutes that offer equal or better performance pose significant threats, especially when price advantages exist.

    Suppliers provide the components necessary for healthcare organizations to offer goods and services to their customers. Surgery scalpels, pharmaceuticals, hospital beds, and diagnostic imaging equipment represent just a few of the many products that healthcare entities purchase from suppliers. Without these "raw materials," healthcare entities could not function. This dependence on suppliers poses a significant threat to healthcare entities. Suppliers can raise their prices, lower the quality of the components that they provide, or simply go out of business-all situations that can yield potentially devastating effects. Suppliers are particularly powerful if they are few in number, if few substitutes exist, and if entities are not key customers.

    Porter's term buyers is equivalent to the term customers, which is better suited for the healthcare marketplace. Quite obviously, customers possess significant bargaining power over healthcare entities because their patronage ultimately determines institutional survival, growth, and prosperity. The array of customers in the healthcare marketplace is quite varied, including residents in nursing home beds, patients in hospital beds, patrons at local pharmacies, recipients of home health services, and even health insurance companies and other third-party payer entities that pay for medical services on behalf of clients. Without customers, operations cease. For this reason, marketers must ensure that all marketing efforts are customer focused. Importantly, marketers must strive to accurately assess the wants and needs of customers and serve them in a manner that will meet and exceed their expectations

    Porter's Five Forces Model is highly useful in that it clearly illustrates the multidimensional nature of marketplace competition. Its use, however, can greatly be extended through the assembly and completion of a Five Forces Worksheet. Marketers simply (1) identify the product offering to be evaluated, (2) construct the Five Forces Worksheet, as illustrated in Figure 28-2, (3) identify existing competitors, potential entrants, substitutes, suppliers, and buyers, and (4) place the identified current and potential competitors on the diagram accordingly. When completed, the Five Forces Worksheet clearly identifies all five competitive forces that entities currently face or could potentially face, as illustrated in Figure 28-3. Completion of this simple, yet highly effective, device yields considerable insights into the current and future competitive marketplace and hence serves as an essential marketing planning tool.

    By clearly illustrating the true depth and breadth of the competitive environment, Porter's Five Forces Model serves as an indispensable resource for marketers. With this information, healthcare marketers can establish strategic and tactical priorities and position their organizations to capitalize on opportunities and avoid or eliminate threats. Ideally, healthcare marketers will address each of the five forces. By properly addressing the complete competitive environment, healthcare marketers are better prepared to meet and exceed market share and related performance objectives.

    Kaplan & Norton's Balanced Scorecard

    Healthcare marketers are often called upon by their employers to provide strategic leadership within their given healthcare institutions, making strategic management one of the most important areas of study for healthcare marketers. This assignment of responsibility makes sense because, through their daily work endeavors, healthcare marketers gain an excellent understanding of their organizations from both internal and external perspectives. Such acquired insights include knowledge related to customer wants and needs, institutional capabilities, opportunities for growth, competitive elements in the environment, and so on. Strategic management requires significant efforts on the part of healthcare marketers because the focus of such matters concerns organizations in their entirety. Because such endeavors set the strategic direction for healthcare entities, marketers charged with marshaling the process must not only call upon their own knowledge resources but also the knowledge resources of interdisciplinary teams of executives and employees within their particular healthcare establishments. Given the importance of strategic management and the complexity associated with formulating, implementing, and monitoring such endeavors, healthcare marketers often look for guidance in carrying out these duties and responsibilities. This guidance can largely be found in the Balanced Scorecard, an innovative framework for strategic management that was developed by Robert Kaplan and David Norton. Illustrated in Figure 36-1, the Balanced Scorecard depicts strategic management as a four-perspective framework-financial, customer, internal business process, and learning and growth-derived from the vision and strategy of a given organization. Importantly, the Balanced Scorecard-so termed because of its balanced treatment of the included perspectives- treats strategic management as a fluid process, rather than a static event, as indicated by arrows running from one perspective to another. The elements of the Balanced Scorecard are explained as follows.

    The center element of the Balanced Scorecard identifies the vision and strategy of the healthcare entity upon which the Balanced Scorecard is based. The four perspectives of the Balanced Scorecard-financial, customer, internal business process, and learning and growth-are crafted to achieve the designated strategy, thus fulfilling the vision of the given entity.

    The financial perspective identifies the financial goals and objectives of healthcare entities. Such goals and objectives can be quite diverse, but

    typical pursuits include growth (e.g., introducing new and profitable product offerings, altering product pricing structures to maximize revenue) and productivity (e.g., reducing costs, sharing resources inter-organizationally, ensuring that assets are utilized to capacity, disposing of assets that are not generating adequate returns).

    Adapted and reprinted by permission of Harvard Business Review. Translating Vision and Strategy: Four Perspectives. From "Using the Balanced Scorecard as a Strategic Management System" by Robert S. Kaplan and David P. Norton, January-February 1996.

    Kaplan & Norton's Balanced Scorecard
    The customer perspective identifies goals and objectives associated with the target audiences of healthcare institutions. Of the many potential goals and objectives associated with customer populations, common endeavors focus on product attributes (e.g., embedding the latest customer-desired features and benefits into product offerings, enhancing product quality), customer relationships (e.g., enhancing customer satisfaction, improving customer retention, increasing market share), and image (e.g., increasing customer awareness of products in the marketplace).

    The internal business process perspective identifies goals and objectives associated with the internal efforts of healthcare entities to ensure that product offerings meet and, ideally, exceed acceptable marketplace standards. Common internal business process goals and objectives pertain to innovation (e.g., enhancing research and development endeavors) and operations (e.g., improving product delivery and distribution systems, enhancing quality assurance practices).

    The learning and growth perspective identifies goals and objectives associated with the knowledge and development resources of healthcare organizations. Typical learning and growth goals and objectives are centered on employee capabilities (e.g., enhancing employee skill sets), information systems (e.g., improving information acquisition, retrieval, and dissemination capabilities), and motivation (e.g., improving employee morale, enhancing employee satisfaction).

    Kaplan and Norton's Balanced Scorecard is highly useful in that it clearly illustrates the synergies required among various organizational elements to achieve the overall strategy and vision of associated institutions. To

    formulate a Balanced Scorecard, marketers (1) construct the Balanced Scorecard diagram, as illustrated in Figure 36-1, (2) identify the vision of the given institution, together with the strategy that will allow the vision to become a reality, placing these items in the center of the diagram accordingly, and (3) identify goals and objectives for each of the four perspectives-financial, customer, internal business process, and learning and growth-listing the items in their respective positions on the Balanced Scorecard. The resulting Balanced Scorecard is then utilized to facilitate strategic management endeavors.

    Figure 36-2 illustrates a Balanced Scorecard that was developed for a retail pharmacy. This diagram clearly demonstrates the concise information portrayal offered by this strategic management tool. Additional insights, if desired, can be gained by tying measures (i.e., appropriate methods for determining progress), targets (i.e., particular sought results based on designated measures), and initiatives (i.e., specific tactics designed to achieve targets) to each goal and objective identified in the Balanced Scorecard, allowing the diagram to serve as a road map for vision and strategy fulfillment. When preparing Balanced Scorecards, it is important for healthcare marketers to ensure that linkages exist across the four perspectives of the instrument. This practice ensures that perspectives are not viewed in isolation, hence fostering the formulation of a unified organizational strategy. It is also important to understand that the Balanced Scorecard is intended to be a fluid, rather than static, document. Usefully, it affords opportunities for healthcare marketers to productively design, implement, and monitor strategy, altering pursuits as necessary to ensure vision and strategy fulfillment. Hence, the Balanced Scorecard serves as a strategic management system. Given the broad scope of the Balanced Scorecard, it is very obvious that its success as a strategic management tool is largely based on the degree of collaboration and consensus achieved in its development. Input from multiple parties within given institutions is, therefore, essential for successful applications of the Balanced Scorecard.

    Kaplan and Norton's Balanced Scorecard provides a useful framework for designing, implementing, and monitoring the strategic pursuits of health- care organizations. With its focus on linkages among the elements that must appropriately be addressed for institutional success, the tool serves as an essential strategic management resource. Because healthcare marketers are frequently called upon to provide strategic leadership, the Balanced Scorecard remains an important resource for those engaged in marketing pursuits.

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    Solution Preview

    Question 1. How might the framework be used to address a marketing problem at your organization(CRO)? How could the model be improved? Ground your analysis in peer-reviewed literature.
    The Framework being used is Michael Porter's generic strategies. He gives three strategies along two axis namely strategic scope and strategic strength. Based on these two dimensions he has proposed three strategies namely cost leadership strategy, differentiation strategy, and focus strategy (3). The organization that we have selected is a clinical research organization. This is a service organization that gives support to pharmaceutical and technology industries. It provides outsourced pharmaceutical and biotechnology industries. It is essentially an independent contractor with the sponsor(pharmaceutical company)that assumes one or more of the obligation of sponsor. The areas of outsourcing include the experience of moving a new drug or device from its development to FDA marketing approval (4).
    There are several ways in which the service provided by clinical research organization helps the pharmaceutical organization. The drug company does not have to use its personnel in the activities that can be ...

    Solution Summary

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