HCS 472 Week 2 The External Marketing Environment and Target Market Example

Four Thousand Births a Year and Three Kinds of Families: The External Marketing Environment and Target Market for a New Suburban Birth Center

[Student Name]

University of Phoenix

HCS/472: Marketing in the Health Care Industry

Week 2 Assignment

[Instructor Name]

[Date]

The county, its birth counts, its competitors and its families are composites written for a model paper; national data and outcomes research come from the sources listed.

A composite nonprofit birth center, founded by three certified nurse-midwives, will open in a suburban county next year. Last week's paper traced how health care marketing evolved; this week the founders need to understand the market they are entering and decide whom to serve first. This paper analyzes the external environment, factor by factor, and then segments the market and selects a target.

Market Size

The county records about 4,200 births a year. Midwives estimate that roughly two thirds of pregnancies are low risk at the start of care and could be eligible for birth center care, though some will develop conditions requiring hospital care. The center's capacity, three birth rooms and four midwives, supports about 250 births a year when mature. A realistic second-year goal is 200 births, about 5% of the county total.

Demographic Factors

Most births in the county are to people aged 25 to 39. The county's population is growing as young families move from the nearby city for housing, and a third of residents are Hispanic, many of whom prefer Spanish for health care conversations. Household incomes vary widely between the older suburbs and newer developments.

National Trends

Out-of-hospital birth remains a small but growing choice. National birth certificate data put out-of-hospital births at roughly one in every 62 by 2017, and births in birth centers had more than doubled since 2004 (MacDorman & Declercq, 2019). Growth suggests unmet demand, but it also means many families have never considered a birth center.

Competition

Two hospitals serve the county. The larger has a busy labor unit with a cesarean rate near the state average and has advertised private rooms and a newborn intensive care unit. The smaller hospital, nine minutes from the center's site, has a midwifery group that attends hospital births and will be the center's transfer partner. One home birth midwife practices in the county. The hospitals compete on safety and amenities; the center will compete on continuity with midwives, fewer interventions and a home-like setting.

Payers

Coverage shapes who can choose the center. Federal law requires Medicaid to cover services at licensed freestanding birth centers, which matters because Medicaid covers a large share of births in the county. Commercial plans vary: two large employers' plans include the center in network; one does not yet. Self-pay families need a clear package price. The center will seek contracts with every major plan before opening.

Regulation

The state licenses birth centers and sets rules for eligibility, staffing, transfer agreements and equipment. The center also plans national accreditation. Rules on who is eligible, such as excluding prior cesareans or twin pregnancies, define the market as much as demand does.

Technology and Social Trends

Families search online for birth options, read reviews, follow midwives on social media and join local parent groups. Many want fewer interventions and a say in their birth, while also wanting quick access to a hospital if needed. Clear information about transfer is essential, and families increasingly expect to book a tour online rather than by phone.

What the Evidence Allows the Center to Say

Marketing claims must match evidence. Stapleton et al. (2013) followed 15,574 women who planned birth center births and found a 6% cesarean rate, with most transfers nonemergent. Alliman et al. (2019), studying birth centers in a federal program serving Medicaid beneficiaries, reported low birthweight of 3.28%, preterm birth of 4.42% and primary cesarean birth of 8.56%, better than national benchmarks. The center can truthfully say that birth center care, for low-risk families, is associated with fewer cesareans; it cannot promise any family a particular birth.

Segment One: First-Time Planners

First-time parents who research extensively, value natural birth and read reviews. They are easy to reach online but anxious about safety and need reassurance about transfer.

Segment Two: Second-Birth Families

Families expecting a second child after a hospital birth they found more medical than they wanted: an unexpected induction, separation from the baby or care from strangers. They know what they want to avoid, trust peers and are often referred by friends.

Segment Three: Medicaid-Covered Families

Families covered by Medicaid, including many Spanish-speaking families, who value continuity and personal care but may not know birth centers are covered or exist. Reaching them requires partnerships with clinics and community organizations.

Environmental Threats

The scan also surfaced threats the center cannot control. The larger hospital could open its own midwife-led birth suite, matching the center's model inside a hospital building. A state proposal to tighten birth center eligibility rules would shrink the eligible market. And a malpractice insurance market with few carriers willing to cover birth centers could raise costs sharply. None of these stops the plan, but each will be monitored, and the relationship with the smaller hospital's midwives reduces the first risk.

Choosing the Target

The founders chose second-birth families as the primary target and Medicaid-covered families as a secondary target tied to the center's mission. Second-birth families have the clearest need and fewest safety doubts, since they have given birth before, and they are likely to recommend the center to others. Medicaid-covered families align with the nonprofit mission and the research showing strong outcomes in that population, but reaching them takes time and partners, so the effort starts now for year two. First-time planners will be served but not targeted with paid promotion.

Reaching the Target

Second-birth families can be reached through pediatric offices, parent groups, online searches for vaginal birth after a previous hospital birth and word of mouth. Medicaid-covered families can be reached through the health department's prenatal program and community health workers.

Conclusion

The external environment offers a growing but unfamiliar service in a county with steady births, strong hospital competitors, coverage that varies by plan and families who search online. Segmenting eligible families by need and behavior points to second-birth families as the primary target, with Medicaid-covered families as a mission-driven secondary target. Next week, those choices will shape the center's marketing strategy.

References

Alliman, J., Stapleton, S. R., Wright, J., Bauer, K., Slider, K., & Jolles, D. (2019). Strong Start in birth centers: Socio-demographic characteristics, care processes, and outcomes for mothers and newborns. Birth, 46(2), 234-243. https://doi.org/10.1111/birt.12433

MacDorman, M. F., & Declercq, E. (2019). Trends and state variations in out-of-hospital births in the United States, 2004-2017. Birth, 46(2), 279-288. https://doi.org/10.1111/birt.12411

Stapleton, S. R., Osborne, C., & Illuzzi, J. (2013). Outcomes of care in birth centers: Demonstration of a durable model. Journal of Midwifery & Women's Health, 58(1), 3-14. https://doi.org/10.1111/jmwh.12003