The Mediation Effect of Service Innovation on the Relationship Between Promotional Strategies and Market Share in Medical Schemes, South Africa
DOI:
https://doi.org/10.55578/jift.2506.004Keywords:
Healthcare Funders, Market Share, Mediating Effect, Medical Schemes, Outsourcing Marketing Services, Promotional Strategies, Quantitative Analysis, Service InnovationAbstract
Orientation: The dynamic global healthcare landscape requires ongoing adaptation and innovation. Service innovation (SI) is pivotal for healthcare funders and providers, particularly in medical schemes, where it significantly enhances the effectiveness of promotional strategies (PS) and improves market share (MS).
Research Purpose: This study investigated the mediating effect of service innovation on the relationship between promotional strategies and market share in the private healthcare sector, with a focus on medical scheme beneficiaries in Gauteng, South Africa. It aimed to assess how service innovation amplified the impact of promotional strategies on market share and examined the implications of outsourcing marketing services.
Motivation for the Study: Rising complexity in the healthcare market and the need for medical schemes to attract and retain members amid growing competition drive this study. Understanding how service innovation mediates the relationship between promotional strategies and market share offers insights into optimising marketing efforts for better market penetration.
Research Approach/Design and Method: A quantitative research approach utilising a mediation analysis design was adopted. Data were collected from 260 beneficiaries of medical schemes in Gauteng, South Africa, through snowball sampling. The analysis followed the mediation framework proposed by Baron and Kenny, with additional validation conducted using STATA software, incorporating the approach developed by Zhao, Lynch, and Chen.
Main Findings: Service innovation partially mediates the relationship between promotional strategies and market share, accounting for approximately 12% of the total effect. This finding underscores service innovation's role in enhancing promotional strategies' effectiveness. It indicates that service innovation is a key explanatory mechanism through which promotional efforts contribute to the growth or retention of market share within the healthcare insurance sector.
Practical/Managerial Implications: Integrating service innovation into promotional strategies is crucial for healthcare funders and providers to improve market share. The study also underscores the importance of aligning outsourced marketing services with organisational goals to maximise effectiveness.
Contribution/Value-Add: This research provides empirical evidence on the partial mediation effect of service innovation, offering valuable insights for optimising marketing strategies and addressing challenges in outsourcing marketing services. Thus, it enhances competitive positioning in the healthcare sector.
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