Healthcare Market Segmentation

Updated: Aug 23





For decades, digital transformation has made enormous changes in our customer behavior and market segmentation. We can not look back at the past with few products and more accessible choices. To exist in the competitive market, the brand has to make an effort to appeal to prospects and differentiate its products from the opponent firm's products. This race forces manufacturers and service providers to develop and innovate more unique products than existing ones.


On the business side, their abilities to meet the market's demand are also different because of the potential of capacity and expertise. Therefore, instead of spreading their effort to serve the entire need of the market, each business needs to identify themselves as a part of the market that helps them provide the best service as well as receive the most profit.


The companies across industries use market segmentation to group their customers based on their similarities to dig into the key factors affecting their behavior - motivation, demand, requirement. Market segmentation reflects the evolution from a product-driven company to a customer-driven company.


The first step of market segmentation?


In deciding how to form your segmentation, you need to "crack the code" of healthcare customer behavior, figure out who has the most consumption of your product, and implement this data. If you want to form the segmentation that fit your organization and gain effective outcomes, you should seriously define the answer coming from your business's trait for 5 questions:

  1. Application Method: What method should be used to segment the market?

  2. Size Of The Opportunity: How large is the market segmentation which you focus on?

  3. Segment Growth: What is the future potential of this segmentation? Will it have an upswing or downturn trend?

  4. Capabilities to serve (Cost): How much expenditure to approach this segmentation in the long run? And does your healthcare business afford this budget?

  5. Strength vs. Competitors: What level of your business compare to the opponent in this segmentation?

Not to avoid but manage the business's risk, you need to harmonize the 5 things above as much as possible considerably. For sure, you don't want to bet on the company's destiny and also your team, so when you form your customer segmentations, you also have to analyze your opponents to avoid falling into illusion and ambiguity. "Know your enemy and know yourself, then you can fight a hundred battles without disasters" - Sun Tzu.


From a practical perspective, understanding your current clients will be the best way to start. When your business is segmenting the product's market and planning a marketing strategy, one important thing the company should be noticed that the data must be carefully analyzed and filtered through the funnel model, then the information at the bottom or hidden deep inside is the most valuable, determining the key of success for your business in the future. However, possessing helpful information will be costly and may overprice the company's financial ability. Big enterprises have this advantage at the starting point, but Small and Medium Enterprises can look for the stepwise approach by learning about their clients and identifying trends within their customer source. You can initially interview those clients and your sales team - to get a second perspective. Your organization's data, supported by data existing in your marketing platforms, will clarify and consolidate the current situation. Then, the buyer persona will gradually form from this stage.

4 Type of Market Segmentation:


There are many various kinds of market segmentation you can consider. For the most fundamental, you can define more niche segments by 4 main methods to establishing the target market:

  1. Demographic Segmentation

  2. Behavior Segmentation

  3. Geographic Segmentation

  4. Psychographic Segmentation


4 Benefits of Market Segmentation:

  1. Patient Engagement: Understanding how someone interacts with your brand and products will be helpful for your marketing strategy. Analyzing your healthcare system data to separate information about the patients' behavior and attitudes is an intelligent way to foster engagement and advance your patient-center services.

  2. Healthcare Marketing: Instead of seeking a one-size-fits-all approach to healthcare marketing, you should segment your market to achieve the most effective results. The more you understand your customer references through market segmentation, the more you tailor your massaging to those consumers in a receptive manner. This saves you both time and costs in the long run.

  3. Service distribution: Splitting up your targeting market based on their location will help you dig into their demands and allow you to send out location-specific advertisements. It enables you to customize your key message based on regional diversity in language, interests, norms, and other attributes as well as differing needs of people in different regions.

  4. New product and service development: When you divide your patients into different marketing segments, you can determine how individual patients respond to certain care models and healthcare plans. This allows you to choose areas where you currently fall short, and you can consider your business's strengths and weaknesses to fill in the gaps to help meet their needs.

Source: World Association of Research Professionals: https://warc.com/ (2003)

ASCENT Administrator Support Community for ENT: https://ascentblog.org (2019)

Business wire: https://businesswire.com (2019)