Marketing plan for Oak Pharmacy
1. Terms of Reference
Oak pharmacy is a family run, independent pharmacy business which started in 1970 in Essex. It provides the traditional dispensing and advisory services to the local community. It also sells a few selection of health and beauty products and also sells some general sales and over the counter medicines. Oak pharmacy is situated in a community where there is 1 hospital, 3 general practitioners (GP) surgeries, 10 pharmacies (including a supermarket chain and a hundred hour pharmacy). The population in the community is diverse, with 66% Caucasian, 20% Asian and 14% Black. The population generally is well educated and most are working class. Over 50% of the population is over 50 years of age. The supermarket chain pharmacy and the 100 hour pharmacy just opened recently. The sales and the number of prescription dispensed began to reduce. Oak pharmacy also offer some extra services, but these are rarely taken up due to lack of advertising. Oak pharmacy needs to offer pharmacy services that will be able to compete with the nearby competitors. To achieve this, a marketing plan was developed. The market was evaluated by considering both the microenvironment and the macroenvironment. SWOT analysis was performed to identify major competitive advantages of Oak pharmacy as compared with the weakness and to be able to identify opportunities and threats and be able to use this to its advantage. Marketing mix was designed to be able to meet the marketing objectives of Oak pharmacy via targeting the right people and offering them what they need. 2. Executive summary
The Oak pharmacy is an independent pharmacy business whose retail business has reduced recently due to intense competition. The external and internal marketing audit was performed to be able to analyse the business strengths, weaknesses, opportunities and threats (SWOT). • Strengths - having an independent pharmacist prescriber and having loyal customers • Weaknesses - May need to remodel pharmacy for space for new services. The staff will need improved knowledge on herbal and nutritional medicines.
Opportunities . The local doctors’ surgery wants to develop some presence in diabetes to compete. Government policies also limit profitability of independent pharmacies. Economic factors: Taxation and interest rate changes will have an influence on the profit of the business. the highest possible quality to both healthcare professionals and members of the public. since the Government dictates the amount paid for pharmaceutical products and services.
New target markets are developed and products /services are offered to these target Markets identified based on the SWOT market analysis performed. 100 hour pharmacy. All these may influence
. and nutritional shop nearby. SWOT was used to work on a plan of action to improve marketing performance 3. which may make the hospital sector more attractive to work than the independent pharmacies. favouring the bigger chains. External Marketing audit Business Mission The Oak pharmacy’s mission is to provide Pharmaceutical and health care at
External environment of a business is divided into the macroenvironment and the microenvironment.The local population consist of large number of people with cardiovascular and diabetes diagnosis. changing ethnic population. 4. The macroenvironment of Oak pharmacy is illustrated by the following PESTLE analysis: Political factor: Agenda for change in the National Health Service (NHS). Changes to budget allocation (allocations for health) may mean provision of many clinical services in the pharmacy for little remuneration Social factors: Increased ageing population. Increased unemployment may mean less cash flow. Threats – Supermarket chains pharmacy. customers desiring their chemists to be closer to home (convenience).
bringing in their prescriptions and shopping in the same place) Technological factor: Implementation of central Information Technology systems. smoking cessation services etc.the kind of service to be offered to the customers. The Government is reducing the cost paid for various products and services offered by the pharmacies. The market trend is towards cost effectiveness. NICE guidelines will also influence what medicines to prescribe for what condition and this may influence the kind of stock held at the pharmacy. This may increase cash flow/ profit as the number of customers requiring emergency asthma pumps may increase. competitors. Customers are moving towards a one stop shopping (i. as it may mean opportunities for specialised services for that group.e. blood pressure monitoring. which brand of medicines to be supplied on a prescription etc. Over 50% are on more than one medication for long term illnesses (poly-pharmacy). therefore suppliers/ distributors are under pressure to cut costs. which will state the minimum service required. Over 50% of potential customers are >50 years of age. It can also mean requirement of investment in equipments for the pharmacy business. The market for Oak pharmacy consists of people living within the local areas. distributors and suppliers. Legal factors: The Independent pharmacy contracts with the NHS. hence ability to offer patient counselling service more accurately. customers. male females and children. Although it enables fast access to up to date medical information on patients. modernisation of patient care pathways. Environmental factor: Pollution may cause increase in asthma cases.
The microenvironment of Oak pharmacy consists of the market. medication usage reviews. Most are working middle class people and are economically conscious and are always on the look out for good deals. There are a few nursing homes in the area who require extra pharmacy services like prescription delivery. the minimum opening hours.
As there is increased ageing population.
Figure 1: Five Forces Model Competitive rivalry among current competitors – High Supermarket chain pharmacies are able to sell over the counter (OTC) medicines cheaper due greater purchasing power. Tesco. The competitors for Oak pharmacy include supermarket chain pharmacies e. Customers are also more sensitive to price deals which will be greater in the supermarket chain pharmacies and online pharmacies Bargaining power of suppliers – Low
. The micro environment can also be described using the five forces model. who are able to obtain better prices for their products due to economies of scale.High Buyers are not able to differentiate between the services offered by different pharmacies. Other local pharmacies which may be closer to some customers or offer more personalised services and 100 hours pharmacies who open for longer hours. they become more dependent on Medications as people want to live longer and more comfortably. Bargaining power of buyers . Boots chemist.g. who offer convenience ordering of medicines from the comfort of ones home and also cheaper products due to reduced overheads. Internet pharmacies.
of Oak Pharmacy Limited. The company’s core competencies a wide range of product and services targeting over 50s and also having an experience pharmacist manager who is also an independent prescriber. Most of its product and services are targeted for over 50s.5million pounds Strategic Issues Analysis The marketing objectives of Oak Pharmacy is to increase the customers on repeat Prescription records by 5% each quarter. The estimated sales in 2006 was 1. Oak pharmacy dispense medicinal product on National Health Service prescription. Operating Results Oak Pharmacy is an Essex based family owned pharmacy business started in 1970. to increase profitability and to achieve 20% growth in the next year.6mile radius. Prescription can be dispensed and some other product bought at the pharmacy can be delivered to the customer. Threats of substitute .Low There are barriers to entry into pharmacy business in UK. when they can drop in at their local pharmacy for their prescriptions. To create increased customer awareness of services offered. The prices for over the counter medicines are higher than that of supermarket Internal Marketing Audit This provides an insight into various activities and overall performance
. 5. This means that customers may not need to make an appointment to see their doctor. Licence to open a pharmacy or supermarket pharmacy is only granted if no other pharmacies within 1. sell over the counter medicines and health and beauty products.There are any suppliers in the industry New entrants into industry .Low Only herbal medicines are available as substitute and many customers will not be willing to substitute. The company has a competitive advantage of offering a local delivery service to customers.
Patients go to the pharmacy for medicinal products.
6. Promotion is mainly by advertising on shop windows and direct marketing. Oak Pharmacy is strategically positioned very close to the doctors’ surgery. Marketing Mix Effectiveness Oak Pharmacy provides a range of products and services including over the counter medicines. as the Government pays for them. Patients who are unable to visit the pharmacy are offered delivery service. blood pressure and blood glucose monitoring. Most of the services are provided free of charge. hence good reputation among local doctors 2) Staff who are highly trained and customer attentive 3) Pharmacist manager is an independent prescriber. but Oak pharmacy offers more pharmaceutical services tailored towards customers needs. medication usage review. hence patients do not have to wait for appointment for minor ailments with doctors Weaknesses 1) Limited experience in delivering other services 2) May need to remodel the pharmacy so as to create space for new clinical services 3) Staff will need to improve their knowledge on herbal and nutritional supplements
. health and beauty products. repeat prescription.
SWOT Analysis Strengths 1) Has loyal customers due to high quality of service.pharmacy chain. prescription collection and delivery services. Over the counter and health and beauty product are slightly more expensive than competition . but customers are receiving personalised service. excellent clinical skills and knowledge.
Marketing Objectives There are two types of marketing objectives. Strategic Thrust The objectives in terms of service to provide and for which market is explained below.
Existing market Market penetration Existing Products • Encourage customers to opt for repeat prescription ordering/dispensing Improve reputation as customer focused
New/related market Market development • Providing the BP monitoring.Opportunities 1) Large population with cardiovascular diagnosis 2) Doctor’s surgery does not have diabetic service and wants to develop some presence in diabetes to compete 3) Large number of people with diabetes and asthma 4) Constant growth in number of people taking medication
Threats 1) Supermarket pharmacy chain are putting pressure on the independent pharmacy business 2) Short of pharmacist in the community sector (since agenda for change and pharmacist are moving into hospital sector) 3) Nutrition shop has just opened nearby
Table 1: Strengths. opportunities and threats (SWOT) analysis 7. The Ansoff Matrix is a way of looking at growth opportunities. weaknesses. medication usage review service etc at the doctors’ surgery
8. Core Strategy
Target Market(s) 1. Competitor Targets The main competitors of Oak Pharmacy are the supermarket chain pharmacies.New/related Product development Products • Health lifestyle advice • Advice/ supply of emergency contraception • Offering cholesterol testing service
Enter new market • • New service for customers with cardiovascular problems Running a diabetic clinic services for the local doctor
Table 2: Product growth strategies – the Ansoff Matrix
Strategic Objectives Oak Pharmacy will build sales and market share of the new service to be provided to the doctors’ surgery. it will compete with these market rivals by
. They are likely to have chronic conditions like diabetes and hypertension. This market consist of elderly people in nursing homes who are on four or more medications for chronic conditions and have mobility problems 3. Most are educated. working and have incomes at or above average. They are concerned about managing all their medications and being healthy. Oak Pharmacy can not compete on price of medicines and other health And other health and beauty products. Their families are older. most are well educated and those working have incomes at or above average 2. hold the sale and market share of existing product and services and may want to drop the nutrition supplement sales. This target market consist of young people (<40 years) who are relatively healthy and are interested in healthy lifestyle. Although. These people may be single or in a family unit. as a nutrition shop has just opened nearby which will have more variety. This target markets include middle aged (50years) or older and taking at least two prescription medications.
advice and supply of emergency contraception. Oak Pharmacy is also more customers focused and more sensitive to customer’s needs than competitors 9. Medication review service is aimed at target market 1.providing clinical services. body mass index (BMI) testing. The other advantage is the home delivery service offered by Oak Pharnacy. beauty and nutritional products. 5. offering prescription delivery service and advertising aggressively at the local surgeries to attract the targeted customers. cardiovascular risk testing. A 30 minutes session is included to provide appropriate lifestyle and nutrition advice. Over the counter medicinal products and health. Home care service is aimed at target market 2 and will include medication review service and supplying and delivery of medicines for the home bound elderly patients. blood glucose testing.
. Marketing Mix Decisions Product 1. It is basically a service provided as a quicker alternative to consulting a doctor. This means that customers do not have to wait for 48 hours before seeing their doctor for prescription. Competitive Advantage The main competitive advantage is that the pharmacist at Oak Pharmacy is an independent prescriber who can prescribe medicines for certain conditions. This programme include comprehensive medication review. Healthy lifestyle service is aimed at target market 3. cholesterol testing. patient education and developing a plan to manage any medicines related problems. The service includes blood pressure monitoring. This programme makes it possible to consult a pharmacist privately for minor ailments. 4. advice on smoking cessation and provision of free nicotine replacement therapy. Care at the chemist service is aimed at target markets 1 and 3. 3. 2.
Leaflets about medication review and disease state management services will be posted regularly to all current customers who are diabetic or on four or more medicines.£5. cardiovascular risk testing .£5. Price Care at the chemist service is priced at the NHS price.6. Complete programme is £20. blood glucose testing. Healthy lifestyle service is priced as a complete programme or separate components. The price is £7. Pharmacy staff will be trained and given incentives to sell the services in the Pharmacy. disease state management and home care services are free. Sales promotion offering discount will be offered at the time of launch (for paid services) to attract customers. Disease state management service is aimed at target market 1. as it is paid for by the Government.£5. medication review and disease state management services will be provided at the pharmacy and at the doctors’ surgery while care at the chemist service and healthy lifestyle service will be provided at the pharmacy. when opportunity arises when interacting with customers. Promotion Advertisement to promote Oak Pharmacy and services provided will be put in the newspaper. health. where patients can pick one. Prices are usually set for the medicinal. Free for children up to 16 years or over 60 years old and for people on income support.
. Leaflets describing all products offered at the Oak Pharmacy will be sent to all local doctors’ surgeries. while the components are priced as follows: blood pressure monitoring . Services offered by Oak Pharmacy will be advertised on the shop windows.£5. This programme will be aimed initially at diabetes (other diseases may be introduced later). Promotions and discounts offered on other products will be displayed on the shop windows and around the pharmacy. BMI testing -£5.20 per item on any prescription issued for working people. Medication review. blood glucose testing. Place Homecare service will be provided at the nursing homes for the elderly. The addresses will be taken from our Patients Medication Record (PMR) kept at the Pharmacy. dietary advise etc. beauty and nutritional products by the head office. It includes medication review. cholesterol testing .
but it can be expanded later to meet demand. Physical evidence Patient consultation area. will be created. computer. They will provide all the services at the Oak Pharmacy. All pharmacy staff will also be suitably trained to be familiar with the process involved with the service provision. on the days the services are provided. pharmacy staff. The consultation area needs to be big enough to fit equipments. The overall budget will be 100% and it will be broken down as follows: Advertising in newspaper 10% Direct mail 2% Sales promotions 5% Posters and leaflets 10% Education and training of staff 20% Incentives given to staff 3% Salary (for cover pharmacists) 30% Pharmacy refit to create additional consultation area 10% Organization and Implementation
11. a table and at least 2 chairs. Budget Marketing budget is to be set according the business objectives. Appointment system will also be used to provide medication review service at the doctor’s surgery and is provided within an afternoon session once a week. The services will be available during a specific block of times during 2 days in a week. 10. People Pharmacists will be the main service providers. The space will have a door to allow privacy to perform tests and hold counselling sessions. smartly dressed.
. which will be separate from the dispensing area.Process Appointment system will be used initially to provide the services at the pharmacy. health and beauty and nutritional product by a group of suitably trained. The customers will be served with over the counter. The head office will provide afternoon pharmacist cover for 3 days a week.
The managing director at the head office is aware of the new marketing effort and will therefore recruit 2 part time extra shop floor staff and a pharmacist (3 afternoons a week).
. Implementation time for the marketing plan. Budget will be allocated to the manager by the head office and the pharmacy’s performance will be evaluated every month. The control process to be in place will evaluate: Service quality.
The main responsibility of controlling will be on the pharmacist manager of Oak pharmacy.The pharmacist manager will be responsible for implementing marketing plans and will report directly to the managing director. who will report to the head office on a regular basis.
Descriptions Remodel service area Staffing and workflow Develop repeat forms/medicatio n history Prepare promotional materials Staff training Promote service continuously Go live with service Provision of service Adjust service as required
July10 Aug10 Sept10 Oct10
Table 3: Implementation plan for Oak pharmacy
12. showing when a step is started and completed is outlined in table 3. A regular survey of the quality of the services received by the customers at the Oak Pharmacy should be performed.
organisation and implementation. strength and opportunities and work on them. I did not really understand the topic until I applied it to pharmacy practice which is my familiar territory. Service growth. Now I have realised that the pharmacy can actually focus on its competitive advantage. Even this was difficult for me initially but later I could understand it better. I found the SWOT analysis and core strategy quiet easy but struggled a bit with control. whose main competitor is the supermarket chain pharmacy. During the preparation of the marketing plan. Prior to my taking this module. In the future. is to sell it off. Actual spending on the service should be compared with budgeted figures regularly. I also have time constraint with studying as I work full time. Income statements can also be developed to monitor the financial performance of the new services. The module has made me understand that marketing can be applied to any product/service/ profession. I will give myself more time to go over the study texts. The number of customers receiving the service and the number of service provided should be tracked every month. A survey of customer satisfaction with the service process and the benefits acquired from the service Financial performance.Customer satisfaction. I would consider that the only option left for an independent pharmacy. Reflexive account
The limited words (including reflexive account) were a big constraint. practicalise the marketing plan
. I am now aware that it is more profitable to be a marketing oriented company than a product/service focused one. 13.