Custom «Positioning and Differentiation» Essay Paper Sample
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The health care sector is one of the most vibrant industries in the current world ranging from the provision of health services, health insurance schemes, and voluntary health organizations which focus on the treatment of specific ailments such as cancer, diabetes and other common diseases (Kolata, 2009). With such diversity, there are a number of organizations that are coming up due to the increasing need for the provision of medical services and other associated services that are related to medical services. This paper attempts to evaluate two health care organizations basing on their positioning and differentiation strategies. Differentiation and positioning usually involves deploying strategies that are directed towards achieving the attention of the prospective clientele. This therefore implies that different organizations have to deploy different positioning and differentiation strategies which are tailored according to the kind of services that they deliver (Plunkett, 2006). This is a significant challenge for similar organizations, especially if they are offering similar services to the public. The health care organizations under study are the Golden Rule insurance company and the American Medical Security Life insurance company.
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Differentiation usually involves the difference in perception between the organizations. It is usually a form of discrimination. Positioning on the other hand entails the ways in which the organizations are placed by the potential clients; it entails the form of ranking. Positioning and differentiation can therefore be viewed from a marketing perspective. The differentiation decisions usually determine the positioning of an organization. In the health insurance sector, positioning and differentiation is an important marketing strategy that insurance company must use in order to gain wider customer base (Plunkett, 2006).
Positioning and Differentiation Strategies of the Golden Rule Insurance Company
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The Golden Rule insurance company is one of the most known health insurance companies in the United States which focuses on provision of life and medical insurance products and services. The company boasts of long life in the history of health care insurance due to the fact that it was established in 1940. This means that the company has competitive advantage over its potential competitors in the health insurance industry. Consequently, one of the differentiation strategies that the company employs is the use competitive advantage differentiation strategy. This strategy involves the establishing and analyzing differentiation opportunities matrix. The health insurance sector is a specialized industry; the Golden Rule Insurance Company therefore makes use of more opportunities and the corresponding high benefits, which are not subjective to the market share (B. Company, 2007).
Another differentiation approach that the company uses is product differentiation. Under this category, the Golden Rule Insurance Company focuses on the concept of conformance, whereby the company ensures that it adheres to the terms and conditions that bound them with their clientele. In ensuring product differentiation, the company strategizes on using the personnel to engage in interaction with their clients (Plunkett, 2006).
Thirdly, the Golden Rule Insurance Company uses service differentiation. Services differentiation that is deployed by the company entails customer consultation and the main objective is to enhance customer satisfaction. This is evident through personal insurance schemes and personalized Medical Supplement Insurance schemes that the company offers. The company also focuses on the concept of personnel differentiation, which primarily emphasizes on their competence. The key concepts that the Golden Rule Insurance Company relies on in terms of personnel differentiation are courtesy, responsiveness and effective communication (B. Company, 2007).
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The positioning strategy that the company deploys is primarily aimed at upholding its image; with a focus on the establishment of market centered approach and the target customers. One such value proposition that the company uses is evident on its business motto: "a trusted insurance partner for 60 years". Another positioning strategy that the company deploys is the use of attribute positioning, which entails the highlighting of the features of their health insurance services and products. In fact, the company has been recognized as one of the top performers in the health insurance sector (Plunkett, 2006).
The American medical Security life Insurance company
The American medical security insurance company operates under the umbrella of PacifiCare Health Systems which is one of the largest health care organizations in the United States. The company focuses on providing health insurance products and services to persons and families too. The company mainly boasts of financial capability and effectiveness in terms of operational performance. As a matter of fact, the company prides in A-rating which is excellent. The company uses this rating and its financial viability as a positioning strategy in the health insurance sector (B. Company, 2007).
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One of the differentiation strategies that the company deploys is channel differentiation. This approach by the company is basically based on the concept of coverage. Being under the umbrella of PacifiCare Health systems which is an internationally renowned health care organization, the company therefore enjoys the performance of channel distribution in terms of enhanced expertise of the respective managers at the different locations over the United States.
The second differentiation approach that the company focuses on entails the use of image differentiation. Image differentiation plays a significant role in enhancing the value proposition of the company and attempts to provide a distinction between the company and other prospective competitors in the health insurance industry such as the Golden Rule Insurance Company.
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The positioning strategy that is deployed by the company is based on competitor positioning. The company claims to provide the best health insurance services in the United States compared to other health insurance companies. Another positioning strategy that is deployed by the American medical security life insurance company is quality positioning which is based on the principle of the best value for price. This is arguably evident through the fact they are a subsidiary of America's largest health care organization. The company also tries to deploy the use of benefit positioning through the highlighting of the advantages of their insurance products and services to their potential customer (Kolata, 2009).
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Similarities in their positioning and differentiation strategies
By virtue of the companies being competitors in the insurance industry, they are bound to share similarities in the positioning and differentiation strategies. One of the similar elements in the differentiation strategy is their emphasis on quality differentiation. Both companies deploy the use of product differentiation in terms of conformance to quality and performance. The health insurance products that are offered by both companies are usually tailored to meet the individual and families health care insurance needs which mean that each company has to make sure that their insurance products and services conform to the required quality standards in order to maintain and acquire new clients.
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Another element of similarity in the differentiation strategy is the use of competitive advantage differentiation. Both companies boast of a successful business entity; the Golden Rule boast of its long history in the insurance industry while the American medical life insurance company boasts of financial viability and its A- rating (Plunkett, 2006).
Lastly, a similarity in the positioning strategy deployed by both companies is the use of competitor positioning. Each of the companies tends to present their health insurance products and services as the best in the US, compared to other health insurance companies. The exclusive benefits that are associated with the health insurance products and services of each company are stated to outweigh other competitors.