Case Study:

MARKETING UP THE WRONG TREE

Protestant Memorial Hospital (PMH), a pseudonym, is a 600-bed facility located in a medium-sized city in the southeastern United States. The hospital had historically capitalized on its affiliation with a religious denomination and had developed a reputation for providing excellent care in a loving, Christian environment.

During the 1980s, when it became obvious that the hospital was going to have to add marketing capabilities to counter its competition, PMH reluctantly sponsored tasteful, low key media advertisements that fostered its image as an organization of caring health professionals dedicated to community service.

As the need to market became more intense, PMH sought outside resources to shore up its marketing capabilities. Because few marketers in the mid-1980s had experience in healthcare, the hospital brought in marketers from other industries. These outsiders were encouraged to buy into the PMH philosophy, and the initial marketing efforts were considered successful.

PMH, like many other hospitals in the 1980s, experienced a decline in revenues and a decrease in profit margins. Also, like many of these other hospitals, PMH began exploring nontraditional sources of revenue that might serve to offset losses experienced as a result of reduced reimbursement for inpatient services. One potential service identified by PMH was commercial blood banking. The demand for the blood components supplied by a few small organizations appeared to be increasing.

During this period, AIDS had begun to emerge as a national health issue. The disease was causing a great deal of anxiety among the populace because of its devastating effects and the fact that, at the time, little was known of its origin and transmission mechanisms. In an uncharacteristic move, PMH decided that an opportunity existed to

capitalize on the apprehension of the population and capture a significant share of the blood-banking market in its service area. To this end, PMHs marketers were instructed to develop full-page advertisements for the major daily newspaper to promote PMHs blood-banking services. While it is not clear who established the parameters for the campaign, these large-print ads trumpeted the spread of AIDS and other blood-borne diseases, warned potential patients of the dangers of infected blood, and reminded donors of the need to be tested for such diseases.

In smaller print, the ads encouraged both blood donors and would be patients to rely on PMHs blood bank as a safe source of blood components. By the time the advertisement had run for a couple of weeks, an uproar was raised by the general public and PMH supporters alike. The hospital that claimed to be carrying on the healing ministry of Jesus was linking itself (in three-inch letters) to the AIDS epidemic, attempting to exploit the fears of area residents, and ultimately seeking to profit from the personal tragedy affecting many in the community.

The public outcry was such that PMH administrators not only canceled the advertisements but backed away from the commercial blood-banking initiative completely. This experience led the hospitals executive staff to redefine their marketing philosophy and rethink their headlong rush into the provision of nontraditional services that may not be in keeping with the mission of the hospital.