Marketing Initiatives, Expenditure Effect on Organisational Performance in the South African Health Care Market
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Authors
Willie, MM.
Issue Date
2021-12
Type
Language
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Abstract
This study assessed the effects of marketing expenditure, marketing initiatives
classified by type (financial and relational) and direction (positive and negative) and
their impact on organisational performance (OP) (financial measures) in the South
African health care market. The study considered two grounded theories, being the
resource-based view and dynamic capabilities theory (DCT). Furthermore, an
empirical review of research variables identified the specific variables. The method
of analysis was a quantitative research method based on the medical scheme
population. Data sources used were expenditure data collected from the regulator
over a three-year review period. A regression analysis approach was employed to
analyse the effect of marketing initiatives on organisational performance, mainly
Hierarchical Regression analysis, due to the distribution of the outcome or
independent variables, membership adjusted marketing expenditure. A lognormal
distribution was employed to model the data. The findings revealed that marketing
effectiveness affected marketing efficiencies. This factor was statistically significant
both in terms of capabilities and positional advantage. The results also showed the
effect of adaptiveness on marketing effectiveness. Lastly, the study found that the
operating model was not a mediating factor between marketing and organisation
performance. The study recommends further reviewing the operating model
employed by medical schemes and optimising resources such as marketing
capabilities through outsourced or insourced models. The study also recommends
that medical schemes invest in insourcing some of the activities where possible. In
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instances where this is not feasible, medical schemes should develop performance
measures or contract management processes and tools to monitor the performance
of third parties who conduct marketing functions and closely align these to the
scheme’s growth strategies.