Pharmacy Marketing Plan [PDF]

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Pharmacy Business Plan

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Table of Contents

Executive Summary...................................................................................................................2 1. Introduction............................................................................................................................3 1.1 Overall Aim......................................................................................................................3 1.2 Products / Services...........................................................................................................3 1.3 Key success factors..........................................................................................................3 2. Situational Analysis................................................................................................................3 2.1 Market Needs...................................................................................................................4 2.2 Market Trends..................................................................................................................4 2.3 Market Growth.................................................................................................................5 2.4 SWOT Analysis................................................................................................................5 2.5 Competitor Analysis.........................................................................................................6 3. Marketing Strategy.................................................................................................................6 3.1 Aims and Objectives........................................................................................................6 3.2 Marketing Research.........................................................................................................7 3.3 Marketing Mix.................................................................................................................7 3.4 Target Markets..................................................................................................................8 3.5 Positioning Strategy.........................................................................................................8 4. Monitoring and Controlling...................................................................................................9 References..................................................................................................................................9

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Executive Summary The Makkah Discount Pharmacy (MDP) offers low price medicines to local customers at store and remote customers through mail order. The pharmacy aims to increase its sales through sound marketing strategies in order to increase repeated customers. MDP also aims to improve awareness in customers through marketing campaigns. The store intends to decrease its cost of operations by eliminating unnecessary services for customers by introducing self-pay service at store. As the trend of mail orders is increasing so the pharmacy wants to utilise this opportunity to obtain economies of scale by selling large amount of drugs to remote customers with less labour required per order. It is believed that the pharmacy will get enormous support from pharmaceutical and insurance companies that will save massive amount of money which will result in an increase in profitability. The market share of MDP will be increased by employing a number of marketing strategies which include: market research, marketing mix, targeting, and positioning strategies.

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Pharmacy Marketing Plan 1. Introduction 1.1 Overall Aim In this report, a marketing plan of a newly opened store in a busy area of Makkah is presented. This store’s name is “Makkah Discount Pharmacy (MDP)” which aims to sell medicines and other pharmaceutical products at discounted prices as compared to other pharmacies in town.

1.2 Products / Services The MDP has a wide product line which covers prescription drugs, supplements, medical instruments, energy products, and a few varieties of herbal products. Both original and alternative medication products are available in the pharmacy. The store’s planning is to reduce product prices by increasing operating efficiencies and by introducing self pay services at store. The customer needs to send prescription in mail, email, or fax to the pharmacy and after the completion of the payment process through debit or credit card, the order will be dispatched to the customer through local post office. After the success of the store, the self-delivery service can also be started in future. The self-pay option will also be provided to the customer at the store.

1.3 Key success factors The discounted offers from pharmaceutical and insurance companies will save enormous cost to MDP and this factor will increase the profitability. In addition, lower overhead and a decrease in operating costs will also significantly contribute to the profitability level. The market share of the pharmacy will be intensified by increasing numbers through various marketing techniques. A superior level of customer service will increase the repeated customers as well as referrals.

2. Situational Analysis A situational analysis indicates the collection and evaluation of data that links with internal and external forces that may influence the performance of the organisation (Ferrell, 2012). 3

The MDP has just started and gives more importance to proper marketing strategy to achieve short-term goals and long-term targets. The pharmacy has a variety of medical products and medicines that customers can pickup from the store or can be delivered to them through mail order. The pharmacy believes that it can attract many customers quickly due to the lower prices and fast delivery services.

2.1 Market Needs The MDP seeks to accomplish the following goals which are set according to the market needs criteria described by Boone (2012) by keeping in mind the needs of the potential customers. Selection: MDP will offer a variety of original and generic alternative medication products Pricing: The pharmacy will set the prices of its products less than the other local pharmacies Customer service: The pharmacy will give high importance to customer service and quick delivery of product to its customers. The company seeks to exceed the customer expectations in order to ensure to again serve them and their referrals. Accessibility: The products will be available on store and also can be delivered to the customers at home with minimal delivery charges.

2.2 Market Trends The trends in pharmacy market are changing worldwide (Ernst and Young, 2013) and Saudi Arabia is not an exception. The government, doctors, insurance companies, and environmental agencies are putting continuous pressures on pharmaceutical companies about the low price, quality, and potential side effects of the drugs. Over the past two decades, a prevalent consolidation has been done to achieve cost effectiveness of medical products (Ventola, 2008). The MDP embraces all laws and regulations from government and other authorise agencies especially in terms of low price and environment through its dual service such as mail order and pickup from store.

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2.3 Market Growth The universal pharmaceutical sector is one of the largest industries in the world and growing rapidly as well. The growth of pharmaceutical industry cannot be underestimated. The industry growth is attributed to many internal and external factors such as government support, environmental protection, service capability, outsourcing, and cost effectiveness (Bhattacharya, 2009). But on the other hand, some factors are also hindering its growth. These factors include: rapidly increasing labour costs, increasing rivalry, and changing international rules and regulations. The pharmaceutical industry in Saudi Arabia is growing very fast as government is taking critical steps to improve the quality of hospitals and providing low price and quality drugs to end-customer. The government is also helping all medical stakeholders to support its initiatives (Saudi Gazette, 2013).

2.4 SWOT Analysis The SWOT analysis of MPD is available in table 1 below where the strengths, weaknesses, opportunities, and threats to the pharmacy are highlighted clearly. Strengths o

Weaknesses

An exclusive business model fulfilling all

o

regulations and standards

No brand recognition and brand equity due to start-up

o

Mail order side of the business

o

High start-up costs

o

Lower prices compared to other local

o

No previous experience of running a mail

pharmacies o

order setup

Experienced, skilled, trained, and customer-

o

oriented staff o

High probability of changing rules and regulations regarding drugs and environment

Agreement with giant pharmaceutical

o

companies in Saudi Arabia and globally Opportunities o

Threats

Increasing trend of purchasing medicines through mail orders

o

Rapidly increasing labour costs

o

Existing large competitors already providing

Increasing health issues, emerging trend of

mail order facility

taking additional medications to remain fit o

o

Alliances with insurance companies and

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o

Increase in external mail orders services

o

Regulatory legislations that may limit the

mail order pharmacies

mail order pharmaceutical industry o

Special events such as Hajj, Eid, and other holidays that may delay the process of mail order

2.5 Competitor Analysis The pharmacy market is highly competitive in Saudi Arabia. The main competitors of MDP are chain pharmacies, local pharmacies, online pharmacies, mail order pharmacies, and international pharmacies. The chain pharmacies offer more discounted products through the economies of scale (Chisholm-Burns et al. 2013). Several chain pharmacies have their personalised service and save the data of the customer as a record of purchases. Therefore, they maintain the history of the customer for their own records as well as for the well-being of the customers (Parvis, 2002). The local pharmacies on the other hand exist where customers physically visit for purchasing prescribed medicines. These pharmacies are even more highly personalised because most of them are well-aware of their regular customers. However, they charge high prices to them and thus achieve more profitability. Online and mail order pharmacies offer similar services as MDP. International pharmacies market their products internationally through internet, TV advertisement, and through social media platforms (Navarro, 2009). But they target specific customer segments such as women, children, senior citizens, body builders etc.

3. Marketing Strategy A marketing strategy is that allows an organisation to concentrate on its optimal resource and future prospects to increase profitability and achieve sustainable competitive advantage (Farrell, 2012).

3.1 Aims and Objectives The key aim of MDP is to offer discounted prices to local customers and introducing mail order service to remote customers. The pharmacy sets three marketing objectives to achieve success in the short and long run. They are as follows:   

A 7% quarterly increase in repeated customers A 8% annual decrease in customer acquisition cost Improve customer awareness on constant basis through marketing strategies 6

3.2 Marketing Research Before starting and implementing the marketing plan, many focus group meetings will be arranged to increase the understanding of the market and to know the target customers. Knowing the target customers is extremely important before starting any business anywhere in the world (Pride and Ferrell, 2011). This is more important in case of Saudi customers because it is not easy to attract local customers because of their faithfulness to existing companies. It is believed that these focus groups will provide useful information and insights about the target customers. Additionally, MDP will conduct a survey about purchasing drugs from traditional pharmacies and to know to what extent they perceive the role of online pharmacies. Developing a comprehensive, clear, and ethical survey is paramount to make sure that data collected through questionnaires will be relevant and accurate (Belk, 2007). The survey will be developed by involving CEO as he is experienced, skilled, and have lots of knowledge of local market. It is believed the survey will indicate the benefits and obstacles in introducing a new pharmacy in the local area with distinctive facility of mail order. Another source of marketing research will be random street interviews people. The general questions about the use of drugs will be asked from people to come to know about their needs and expectations. Altogether, the market research will provide pharmacy owner an overall idea about efforts he needs to do for the success of the pharmacy (Pride and Ferrell, 2011).

3.3 Marketing Mix The marketing mix of MDP is composed of product, pricing, distribution advertisement, and advertising and promotion (Bhattacharya, 2009). Each element is described as follows: Products: The products includes: prescription drugs, supplements, medical instruments, energy products, and a limited variety of herbal products. Pricing: The pharmacy will compete with its rivals on the basis of discounted prices. Distribution: The products will be directly distributed locally and throughout Makkah and Saudi Arabia. No outsourcing company will be employed but the services of post office will be the key part in distributing products to remote customers.

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Promotion: The promotional strategy will be based on target advertisements. Banners, TV channels, local newspapers & magazines, newsletters, and pamphlets will be the promotional instruments.

3.4 Target Markets The MDP will adopt dissimilar marketing strategy for the group of two different market segments such as walk-in customers and mail order customers. The pharmacy will target walk-in regular and potential customers through paper advertisements, banners, and posters. The advertisement in English in surrounding areas of Holly places will be highly beneficial for the company for attracting foreigners who come for Umra and Hajj. These marketing strategies with discounted offers will increase the visibility of the pharmacy. In this era when the prices of the pharmacy products are increasing rapidly, it is believed that discounted offers from MPD will appeal many local customers to buy drugs from it. The second target customers will be mail order customers who will be targeted through magazines, newspapers, television ads, and local community services in area. In addition, distributing newsletters to crowd and dropping pamphlets in residential areas will increase the popularity of the pharmacy.

3.5 Positioning Strategy The MDP will position itself as a premier mail order pharmacy which is self-customeroriented in the Kingdom of Saudi Arabia. The pharmacy will provide a reason for good selection, greater service, and discounted prices as compared to traditional pharmacies. The pricing will provide the company a competitive edge. Normally, competing with giant competitors on basis of just price is not a sustainable practice (Boone, 2012). Unlike other traditional pharmacies in Makkah, MDP will be capable of reducing operational costs and therefore, the pharmacy will attempt to reduce its cost structures and also compromise on little profit margins in the first year of its establishment. One technique to cut cost is to employ a single pharmacist by fulfilling the rules and regulations. As soon the pharmacy will get popular then the services of more pharmacists will be considered. The MDP is also fully capable of maintaining industry margins by using the other operating efficiencies. With a medium-sized store on a street and having a bulk of business through mail order will significantly decrease the operating costs. Finally, due to the presence of 8

pharmacist, the MDP is not required to hold the patients hands when they buy prescribed medicines. The pharmacy customers are in majority who are well-informed and take regular medicines and also have some awareness of the side-effects of medicines in case of over usage. Despite the consequences, MDP will give each customer a print out with necessary information on it about how to consume the product in case of general medicines with no prescriptions.

4. Monitoring and Controlling The basic aim of a marketing plan is to provide a rough estimate to MDP. The pharmacy will monitor following areas to have control over its performance. These areas include monthly, quarterly, and annual revenues and expenditures; repeating customers, and customer satisfaction by taking the opinions of customers through complaint and suggestions boxes in the store.

References Belk, R.W. (2007). Handbook of Qualitative Research Methods in Marketing. Edward Elgar Publishing Bhattacharya, C. (2009). Services marketing. Excel Books India Boone, L.E. (2012). Contemporary Marketing. 16th edition, Cengage Learning Chisholm-Burns, M.A., Vaillancourt, A.M. and Shepherd, M. (2013). Pharmacy Management, Leadership, Marketing, and Finance. Jones & Bartlett Publishers Ernst and Young (2013). The shifting pharmaceutical industry landscape. January 2013. Ferrell, O.C. (2012). Marketing Strategy Text and Cases. 6th edition, Cengage Learning Parvis, E.N. (2002). The Pharmaceutical Industry: Access and Outlook. Nova Publishers Navarro, R.P. (2009). Managed care pharmacy practice. 2nd edition, Jones & Bartlett Publishers Pride, W.M. and Ferrell, O.C. (2011). Marketing. Cengage Learning Saudi Gazette (2013). KSA leads GCC pharmaceutical sector growth. April 01, 2013 Ventola, C.L. (2008). Challenges in evaluating and standardizing medical devices in healthcare facilities. A Peer-Reviewed Journal for Care and Hospital Formulary Management. 33(6), pp. 348–359

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