Chapter 9 Marketing Strategies Chapter 9 slides for Marketing for Pharmacists, 2nd Edition.
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Transcript of Chapter 9 Marketing Strategies Chapter 9 slides for Marketing for Pharmacists, 2nd Edition.
Chapter 9Marketing Strategies
Chapter 9Marketing Strategies
Chapter 9 slides for Marketing for Pharmacists, 2nd Edition
Learning ObjectivesLearning Objectives
Describe three generic marketing strategies.Explain product life cycles and their implications
for pharmacy products and pharmacist services.Discuss product portfolio management and how
pharmacists might use it.Compare and contrast convenience strategies
used by pharmacies. Discuss the potential downside of overreliance on convenience strategies.
Define relationship marketing and explain its advantages over transactional marketing.
Suggest ways of identifying innovative products and services.
Generic Marketing Strategies
Generic Marketing Strategies
All other strategies are just
variations.
TIP Be cheaper or different.
TIP Be cheaper or different.
Three generic strategiesThree generic strategies
FocusFocus
CostCostLeadershipLeadership
DifferentiationDifferentiationNumber of
Target Markets(Scope)
Broad
Narrow
CostCost DifferentiationDifferentiation
Forms of Competitive Advantage
Focus
CostLeadership
Differentiation
•Low price•Efficiency•Broad product offering•Broad marketWal-Mart
•Higher price•Unique mix•Broad marketMedicine Shoppe
•Higher price•Unique mix,•Narrow marketIndependents
Choosing an approachChoosing an approach
No strategy is inherently better.Depends on one’s capabilities and
environmentPorter says to choose one.
Others disagree.
What differentiates you from other
pharmacists?
What differentiates you from other
pharmacists?
Product Life-Cycle Strategies
Product Life-Cycle Strategies
Products, like plants
and animals,
have a life.
TIP Don’t let your product die
an early death.
TIP Don’t let your product die
an early death.
Sales
Profits
IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline
TimeTime
Product Life CycleProduct Life Cycle
Sales
Time
Alternative Product Life CyclesAlternative Product Life Cycles
Lessons for PLCLessons for PLC
Any new idea takes time and effort to bear fruit (e.g., pharmaceutical care).
If successful, time and effort must be expended to keep them successful.
All products and innovations eventually die.
Portfolio StrategiesPortfolio Strategies
A portfolio is all
products and
services offered by a business.
TIP Consider the mix of
yourportfolio.
TIP Consider the mix of
yourportfolio.
StarsStars QuestionQuestionMarksMarks
DogsDogsCashCashCowsCows
HighHigh
High
LowLow
Low
Relative Market ShareRelative Market Share
Product SalesGrowth Rate
StarsQuestion
Marks
DogsCashCows
High
High
Low
Low
Relative Market ShareRelative Market Share
Product SalesGrowth Rate
BasicBasicDispensingDispensing
DiseaseDiseaseManagementManagement
DurableDurableMedical EquipmentMedical Equipment HomeHome
HealthcareHealthcare
OTCOTCMedicinesMedicines
HerbalHerbalMedicinesMedicines
Managing your portfolioManaging your portfolio
1. Identify your primary target markets. 2. Inventory your current service offerings. 3. Identify which of your current services
are viable with your target markets. The goal is to offer different levels of services to the target markets.
4. Identify which services you need to add or subtract to round out your service portfolio.
Convenience StrategiesConvenience Strategies
Pharmacy convenien
ce is an important factor in
pharmacy patronage.
TIP Convenience varies
among people and situations.
TIP Convenience varies
among people and situations.
The downside of convenience
The downside of convenience
Fast will soon be slow.It can be expensive.Affects professional image.
Types of convenienceTypes of convenience
Access - easy to reachSearch - easy to identify and selectPossession - easy to obtainTransaction - easy to purchase and
return
Conduct a convenience auditConduct a convenience audit
Go through a pharmacy with the eyes of customer. How easy is it toGet into and through the pharmacy?Find what you want?Get what you want?Purchase what you want?
Relationship Marketing Strategies
Relationship Marketing Strategies
The goal is to keep
customers.
TIP Loyal customers are
more profitable.
TIP Loyal customers are
more profitable.
Goal of relationship marketing (RM)
Build and maintain a base of committed, profitable customersAttractRetainEnhance
Attract business throughsales, advertising, promotion
Lose businessthrough poor service
and not meeting needs
Bucket =a companywhose goal isto be filledwith business
Bucket Theory of RMBucket Theory of RM
Benefits of RMBenefits of RM
To your patientsTo your patients Greater value and less
hassleReduces search Special needs of
customer accommodated
Customer knows what to expect
Simplifies and reduces stress of buying process
To your businessTo your business Loyal customers
Purchase moreProvide positive word
of mouth (WOM)Are less price
sensitiveCost lessAre more profitable
The $100,000 customerThe $100,000 customer
(1) $ Spent/yr by avg pt.
(2) Avg # yrs as customer
(3) Customers from WOM
(1) x (2) x (3) = Lifetime value
(1) __________
(2) __________
(3) __________
(4) __________
Do you practice RM?Do you practice RM?
Do you have formal RM strategies?Do you commit enough resources to
RM?Are existing patients given concrete
reasons to stay with you?Do you keep a database of patient
preferences, likes, and dislikes?Do you know the lifetime value of
customers?
Innovation Strategies:Innovate to differentiate.
Innovation Strategies:Innovate to differentiate.
Any change in the 4 P’s offered that customers
perceive as new.
It’s not an innovation unless someone thinks it is.
It’s not an innovation unless someone thinks it is.
Innovations can be used toInnovations can be used toFind new customers for the product (e.g., pets).
Increase usage for existing products (e.g., loyalty card).
Expand a product line (e.g., offer disease management).
Expand distribution intensity (e.g., more pharmacies).
Expand distribution over a wider geographic area.
Penetrate markets of competitors (e.g., develop a service that will draw away a competitor’s target customers).
Innovations can be used toInnovations can be used to
Find new uses for a product (e.g., baking soda).
Disruptive innovationsDisruptive innovationsTechnological innovation, product, or service that
overturns current market leaders. When customers are overserved in the market, they seek
lower cost, lower quality (but good enough) products.Substitute OTC for Rx medicine, midwife for obstetrician, ATM
pharmacy for local pharmacist.
Lower-end disruptive innovations: dominate an existing market by filling a role in a new market that the older technology could not fill (expensive physician practices competing with low-cost store clinics)
holistic medicine, 24-hour services, convenient health care.
New-market disruptive innovation: fulfills new, unmet need
Treating allergiesTreating allergies
Specialists
Family Physicians
Nurse Practitioners/Physician Assistants
Self-Care Providers
Treating allergiesTreating allergies
Specialists
Family Physicians
Nurse Practitioners/Physician Assistants
Self-Care Providers
Rx-to-OTC
Minute Clinics
Office Diagnostics
Identifying innovationsIdentifying innovations
Challenge everything.
Focus on the customer’s viewpoint.
Make things easier, faster, cheaper, better.
Tap into emotions.
New Market: Travel clinicsNew Market: Travel clinics
New Market: Pet MedicineNew Market: Pet MedicineIn the United States, $35.9 billion
was spent on pet-related products in 2005; this is increasing 5% each year.
63% of households have at least one pet.73 million dogs (32% of households)
Average vet bill $187 per year90 million cats (27% of households)
Average vet bill $147 per year
Source: Brandweek.com
Expand service intensity: specialty pharmacy
Expand service intensity: specialty pharmacy
Change the experience: holistic pharmacies
Change the experience: holistic pharmacies
Increase usage for existing products: customer relationship
management (CRM)
Increase usage for existing products: customer relationship
management (CRM)
Loyalty cards
SummarySummary
Pharmacists have traditionally relied on a limited number of marketing strategies in the marketing of their services.
This chapter presents several new strategies.
Questions?Questions?