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).

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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 Weaknesses

o An exclusive business model fulfilling all
regulations and standards
o Mail order side of the business
o Lower prices compared to other local
pharmacies
o Experienced, skilled, trained, and customer-
oriented staff
o Agreement with giant pharmaceutical
companies in Saudi Arabia and globally
o No brand recognition and brand equity due
to start-up
o High start-up costs
o No previous experience of running a mail
order setup
o High probability of changing rules and
regulations regarding drugs and environment
o

Opportunities Threats

o Increasing trend of purchasing medicines o Rapidly increasing labour costs

through mail orders
o Existing large competitors already providing
o Increasing health issues, emerging trend of mail order facility
taking additional medications to remain fit
o Increase in external mail orders services
o Alliances with insurance companies and
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

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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

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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-customer-
oriented 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

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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