The Strategy for Marketing of A-Z Pharmaceuticals - Admission/Application Essay Example

Business Plan for A-Z Pharmaceuticals Table of Contents Table of Contents 2 Introduction 4 Objectives 5 Mission 6 Values to Success 6 The Company 6 2.1 Ownership 6 2.2 Summary for Start-up 6 Start-up Requirements 8 Start-up Expenses 8 Start-up Assets 8 Start-up Funding 8 Assets 9 Liabilities and Capital 9 Capital 9 Products 10 Analysis of the Market 11 3. 1Market Segmentation 12 3.2. Segment Strategy for Target Market 13 3.3 Buying Patterns and Competition 14 4.0 Strategy and Execution 14 4.1 Competitive Edge 15 4.2 The strategy for marketing 15 4.3 Sales Strategy 15 4.4 Forecasting Sales 16 Sales Forecast 17 4.5 Milestones 18 5.0 Summary of the web Plan 18 5.1 Necessary Requirements for Development 18 6.0 Summary of management 18 6.1 Personal Plan 19 Personnel Plan 20 7.0 Financial Plan 21 7.1 Break-even analysis 21 Break-even Analysis 21 Works Cited 22 Introduction The main goal of A-Z Pharmaceuticals is to offer prescriptions of medicine to community members at the lowest prices possible on the market. The pharmacy shall sell prescriptions at the lowest prices members of the community can find on the market by maintaining effectively cautiously in business operations as well as aiming at reaching particular sections of the market. These parts entail those clients who cater for their prescriptions without external support. This section of the market shall A-Z Pharmaceuticals extra efficiency because the pharmacy will be able to keep of disruptions that emanate from the flow of cash often associated with issues in insurance payments. Business activities at A-Z Pharmaceuticals will be under one store with the capacity to serve customers walking in and out as well as mail orders. The business expects to perform well in the market by hiring professional personnel with excellent customer relation skills that in addition to the low prices offered, will create and maintain a competitive advantage over competitors in the market (Jones, 2007, p. 12). The management of A-Z Pharmaceuticals projects that the price of drugs will continue to shoot retrogressively and the business will capitalize on the same to appeal more to the clients by creating a sense of value and remaining the best option for convenience. The main medium of advertising for A-Z Pharmaceuticals will be in magazines targeted at the over-75 crowd, especially those interested in saving on costs. Steinberg Nicholas will lead A-Z Pharmaceuticals because he holds an Msc in Pharmacy and Pharmaceutical Technology with vast experience of working in Level 5 hospitals. The business will only recruit one pharmacist with pharmaceutical technologists filling into the other slots to minimize labor costs. The management of A-Z Pharmaceuticals expects to break-even in the second of doing business generating adequate sales the subsequent year. Objectives The management and shareholders of A-Z Pharmaceuticals is specific that over the next three years business objectives are Work towards increasing the quantity of client base by more than forty percentile every year Apply superior pricing making it difficult for customers to avoid or reject Build and maintain a business running on its own cash flow Mission A-Z Pharmaceuticals aims at providing clients with the most affordable prices on the market on all prescriptions. The business targets offering convenience and excellent customer service relations exceeding expectations held by clients. Values to Success The business holds the following aspects as important to the success of A-Z Pharmaceuticals: Excellent service to customers making A-Z Pharmaceuticals their chemist of choice Maintaining both operating and overhead costs at the lowest possible level Provision of exemplary prices in the market difficult for competitors in the market to match The Company Situated in Happyland, Southampton, A-Z Pharmaceuticals engages in prescription medications at reduced prices to members of the community both to customers walking in and out and by mail order. 2.1 Ownership A-Z Pharmaceuticals is a Mwangaza Limited liability having Steinberg Nicholas as the leading shareholder. 2.2 Summary for Start-up The following equipment costs constitute the start-up costs for the company: Overall equipment for the office that includes file cabinets, chairs, as well as desks among many more Storage bins, front office counter, and the register for cash recordings Three terminals for the computer Chief server for the computer that comes together with a laser printer and the back-up structures (Khanh, 2011, p. 51) The software includes among others QuickBooks Pro, Microsoft Office, medicine interaction software as well as doctor’s desk reference software that encompasses effects in addition to specific information to the client Boxes, mixed bottles, and envelopes used in supplying drugs and shipment of the same wherever necessary Intercom connection system Extended front on the building for packaging and loading for huge orders Utility bills, rent, and insurance schemes It is important to understand at this point that the identified costs are capital and therefore, will be used for more than twelve months qualifying them as long-term assets. The items will only undergo depreciation through the G.A.A.P, which constitutes the certified straight-line depreciation. Start-up Requirements Start-up Expenses Legal $800 Rent $1,600 Utilities $ 300 Telecom System $300 Insurance $200 Storefront Build-out $10,000 Expensed Equipment $ 3,500 Website development $800 Total Start-up Expenses $17,500 Start-up Assets Cash Required $141,500 Start-up Inventory $15,000 Other Current Assets $0 Long-term Assets $8,000 Total Assets $164,500 Total Requirements $182,000 Start-up Funding Start-up Expenses to Fund $17,500 Start-up Assets to Fund $164,500 Total Funding Required $182,000 Assets Non-cash Assets from Start-up $18,000 Cash Requirements from Start-up $141,500 Additional Cash Raised $0 Cash Balance on Starting Date $141,500 Total Assets $164,500 Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $0 Capital Planned Investment Seed Funding $51,000 John $50,000 Friends and Family $51,000 Additional Investment Requirement $32,500 Total Planned Investment $182,000 Loss at Start-up (Start-up Expenses) ($17,500) Total Capital $164,500 Total Capital and Liabilities $164,500 Total Funding $182,00 Products A-Z Pharmaceuticals sells a variety of prescription medicines to patients based in Southampton and the United Kingdom at large (Great Britain, 2007, p. 63). The company sells both original drugs also referred to as name brands and generic drugs as well. For a client to buy products through mail, then he or she must take the initiative to contact A-Z Pharmaceuticals on phone from his or her location. Three options are available to the customer after making the call over the phone and include mailing the order, using the fax, or mail in the prescription. When A-Z Pharmaceuticals receives, the order payment arranges follow and after completion, the company then sends the drugs to the customer using either U.P.S or U.S.P.S. On the other hand, members from the local community have an opportunity to get in the shop at the front office and pick medications as prescribed. It is necessary to comprehend that the company will offer medications only to customers who pay for drugs themselves. The low prices at which the prescriptions sell will serve as the attracting factor to this group of clients. Prices will remain to a level that even competitors in the market would not match. For most residents in Southampton and across the nation without medication plans among them most of the elderly running over sixty-five years old, lower prices become the greatest relieve they can get considering the increasing monthly expenditure (Jack, 2007, p. 41). Operating efficiency will be at the centre of survival for A-Z Pharmaceuticals achieved via mail orders from the national front and avoiding insurance covers dealing with drug plans of action that mainly interfere with cash flow. Another measure to maintain efficiency applied by A-Z Pharmaceuticals entails saving money keeping off the unlimited access to a pharmacist. The pharmaceutical technologist answers questions raised by clients and in the process eliminating consultation costs that would hurt clients. The business will only recruit one Pharmacist acting as the last resort to complex issues (Aiken, 2010, p. 116). The company will print medical literature for use by the pharmaceutical technician when answering questions. A sure fact is that failure to provide unlimited access to a pharmacist will succeed because majority of clients will interested in buying drugs they know well because of time taken on the same. This is different from new prescriptions that would require fresh prescriptions on the dosage and usage. The company will draw the interest of customers because of its inexpensive nature as a source medication. There will be a printout for every order dispatched to offer directions on ways of using the medication, drugs to avoid while on the prescribed dose in addition to other essential information. Another aspect of reducing costs is cutting down on paperwork. The business will use computer receipts from within the industry software when giving information (Mikler, 2009, p. 31). The company applies the term self-pay to refer to a customer paying for his drugs at the front office desk irrespective whether he or she has an insurance cover or not. This is as opposed to the concept that the customer must pick money from his pocket without a cover from the insurance schemes. Customers at ad liberty to pay for the money even if they are on insurance schemes, receive the receipts, and later apply for re-imbursement from their policy providers. Analysis of the Market The target market for A-Z Pharmaceuticals falls into two different categories constituting customers making orders through the mail and the second category entails local clients who walk in and out of the store to buy their drugs (Kurson, 2002, p. 19). To reach, attract, and retain these customers, the company will employ various tactics. 3. 1Market Segmentation Customers making orders by mail fall in the first category of mail order clients and do so through this means to save money that would go to postages. The management projects that most them would be aged, mainly people with more than fifty years. Statistics show that overall, elderly people use more drugs compared to people in the young generation. Only maintenance medication will available on mail orders. They are directions to people on treatment that calls for regular medication. New patients must walk into the shop for proper guidelines (Warner, 2010, p. 22). It is likely that customers in the mail order segment would buy drugs for use over several months. This means that most of them engage in bulk buying. Customers walking in and out of the store shop are also interested in purchasing medications at lower prices. Contrary to mail order clients, customers in this group have a tendency of buying drugs on monthly basis and mainly at higher prices. One characteristic of this group customers is that they do not have a particular demographic description apart from the fact that they most of them would consist of residents of Southampton (Burns, 2010, p. 53). In addition to those paying for medication out of pocket, the other segment will submit insurance policy claims for re-imbursement after paying for medication in cash. Analysis of the Market Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR Walk-in clients 12% 340,000 370,200 400,4000 425,500 400,575 12.00% Mail order buyers 6% 54,700,200 60,800,216 65,198,585 71,066,458 77,462,439 9. 6% Total 18% 54,200,101 60,256,774 65,602,028 71,502,176 77,933,014 18% 3.2. Segment Strategy for Target Market To attract the two different segments, A-Z Pharmaceuticals will apply two different strategies. The management at the company estimates that customers interested in mail orders will outdo the other group walking in and out of the store shop. The business will use advertisements in magazines to reach this group of the market in addition to newsletters covering an over-55 crowd (Van Wart, 2011, p. 78). This class is always in need of drugs and spends lot of money on the same. Clients are informed before their problem strikes because they treat an ailment they are used. The company will put adverts in monthly newsletters and magazines as part of this strategy. The local weekly and daily newspapers will be at hand to serve local clients. 3.3 Buying Patterns and Competition Within the pharmacy industry, competition is high and takes various forms. They include chain stores, internet pharmacies, local pharmacies, as well as international pharmacies. Chain pharmacies are chains owned and run by the government such as Light-Aid. Better prices emanating from economies of scale offer the greatest advantage to these types of chains. Another advantage comes from the personalized services from the chains. The framework of personalized services includes having a record of medication purchases in addition to all the types of allergies disclosed by the client to the attendants. On the other hand, local pharmacies constitute outlets where a client typically understands the pharmacist in the pharmacy well. The pharmacy also comprehends the medical history of the client without much inquiry. The option entails enhanced provision of personalized service and in the process attracts a higher fee. The alternative also offers much convenience to the client and the pharmacist. The other option is the internet and mail order pharmacies. The outlets operate in a similar manner to the A-Z Pharmaceuticals. A-Z Pharmaceuticals will also operate branches in Canada called Canadian Pharmacies. These outlets will be in Canada considering that the cost of drugs in Canada is lower compared to those that drugs attract in the US. Clients will access the pharmacies through the internet, mail order, and travel. Patterns from research show increasing arrangements for senior citizens from the Northern states to Canada to collect their prescriptions. 4.0 Strategy and Execution Experts at A-Z Pharmaceuticals will use the company website in developing the visibility and releasing information to employees, clients, and potential buyers. 4.1 Competitive Edge Superior pricing remains the competitive edge of A-Z Pharmaceuticals. To achieve this fete, the company will have the responsibility of maintaining the position as the most affordable pharmaceutical entails painstakingly making sure that the costs are low by implementing operating efficiencies. The company will manage the situation by scrapping some services offered in traditional pharmacy setups but attract additional charges. The company will utilize the services of one pharmacist and fill the void using pharmaceutical technicians. Job analysis will require the availability of a pharmacist at the pharmacy during working hours and then the company will only use pharmacist technicians in other areas where competitors use pharmacists. Carrying out most of the business transactions through mail orders and small storages at the site constitute other efficiencies. The design of the A-Z Pharmacy does not hold the hand of the patient when they purchase drugs. The assumption is that clients have adequate information on prescriptions, side effects of the medications, as well as interactions to avoid while under prescription. Clients will receive print outs containing all the valuable information when consuming medication. 4.2 The strategy for marketing Targeted advertisements that appeal to the sense of value for the customer form the basis of the marketing strategy at A-Z Pharmaceuticals. The goal of the marketing campaign will be increasing awareness of the company within the target market. 4.3 Sales Strategy The sales strategy applied at A-Z Pharmaceuticals will aim at building long-term relationships with clients. The company will offer medication at affordable prices to attain the fete. The pharmaceutical company will also have enough stock of medicines to facilitate storefront pick up and quick shipment in addition to providing the best customer care services. The company will train sales agents or medical representatives to offer knowledgeable customer service considered by clients as friendly. The pharmaceutical company will strive to maintain simple and effective practices in the business with the aim of convincing clients that it is the destination for medications. Some clients have medications as a core component of their lives therefore; creating cordial long-term relationships will enhance a big, loyal customer base. 4.4 Forecasting Sales A-Z Pharmaceutical Company will set up a storefront and in the process develop a national outlook and local recognition. The company will begin sales in the second month. The company will focus on domestic sales from the second month through to the fifth (Khanh, 2011, p. 96) . The sales will take place through front stores. The company expects to see sales change to the mail order in the sixth month. The growth of the sales curve will be steady from the sixth month onwards. Sales Forecast Year 1 Year 2 Year 3 Sales Walk-in buyers $210,600 $400,833 $476,334 Mail order clients $200,200 $570,432 $650,543 Total Sales $451,800 $950,265 $1,161,866 Direct Cost of Sales Year 1 Year 2 Year 3 Walk-in clients $82,850 $160,950 $174,500 Mail order buyers $90,800 $230,900 $251,200 Subtotal Direct Cost of Sales $186,729 $390,906 $438,751 4.5 Milestones Early milestones at A-Z Pharmaceuticals include profitability, business or office setup, and creation of the first strategic relationship. Milestones Milestone Start Date End Date Budget Manager Department Office/business set up 1/1/2001 5/1/2001 $0 John Executive Establishment of the 1st strategic relationship 1/1/2001 7/1/2001 $0 John Business Development Profitability 1/1/2001 11/1/2002 $0 Everyone Finance Totals $0 5.0 Summary of the web Plan The pharmaceutical company will use the website to release information besides acting as the best channel for communication through emails. The company does not expect any orders through the email because the method will attract less trust among clients and potential customers. 5.1 Necessary Requirements for Development A-Z Pharmaceuticals will employ the services of a fresh graduate with majors in computer science to complete and manage a simple website for them. Application o the same will be a cost management strategy. 6.0 Summary of management Steinberg Nicholas has of working with established manufacturers of drugs. The manager started as a medical representative. It offered him an opportunity to experience profitability linked with prescription in the pharmacy industry. The manager also comprehends inefficiencies by other players in the industry. Steinberg graduated from Massachusetts Institute of Technology (MIT) with an MBA in innovative entrepreneurship. While undertaking his master program, the manager won $ 100, 000 interest-free loans having emerged the best in a business plan competition. The manager plans to use the money in addition to finances from other sources as start-up expenses for A-Z Pharmaceuticals. His first degree was a Bachelor’s degree in Biochemistry from the University of Michigan. 6.1 Personal Plan A-Z Pharmacy will make use of services from the following people. Phones/agents sales representatives: three of them during the third month with two more at the end of the sixth month(Great Britain, 2007, p. 71) Four pharmaceutical technicians: two after the second month and the remaining two during the sixth month The company will only use the services of two pharmacists Phone or counter representative. The company will hire the representative after the second month Personnel Plan Year 3 CEO (Steinberg)Year 1Year 2 $50,000 $55,000 $70,000 Pharmacist $45,000 $55,000 $70,000 Pharmacist technician $25,000 $27,000 $32,000 Pharmacist technician $25,000 $27,000 $32,000 Pharmacist technician $20,500 $25,000 $32,000 Sales agent $20,000 $24,000 $26,000 Sales agent $20,000 $24,000 $26,000 Sales agent $20,000 $24,000 $26,000 Counter rep. $15,000 $18,000 $20, 000 Counter person/phone r $15,000 $18,000 $20, 000 Order fulfillment $15,000 $18,000 $20, 000 Total People 10 10 10 Total Payroll $288,670 $350,960 $350,960 7.0 Financial Plan 7.1 Break-even analysis The company will apply the break-even analysis to estimate the required revenue every month to attain the break-even status. Break-even Analysis Monthly Revenue Break-even $49,900 Assumptions: Average Percent Variable Cost 42% Estimated Monthly Fixed Cost $29,485 Works Cited Aiken, C. (2010). Transformational Leadership. Chicago: McGraw-Hill Publishers. Burns, J. (2010). Leadership. New York: Harper Perennial. Great Britain. (2007). Success and failure in the UK car manufacturing industry. London, The Stationery Office. Jack, W. (2007). Plunketts Automobile Industry Almanac 2008 Automobile, Truck and Specialty Vehicle Industry Market Research, Statistics, Trends & Leading Companies. Plunkett Research Ltd. Jones, G. R. (2007).Strategic management: an integrated approach. Boston, Mass, Houghton Mifflin. Khanh, P.-G. (2011). Radical innovation and open innovation creating new growth opportunities for business; illumination with a case study in the LED industry. Hamburg, Diplomica-Verl. Kurson, K. (2002). Leadership. New York: Hyperion. Mikler, J. (2009). Greening the car industry varieties of capitalism and climate change. Cheltenham, UK, Edward Elgar. Van Wart, M. (2011). The business of leadership: an introduction. Armonk, N.Y., M.E. Sharpe. Warner, A. G. (2010). Strategic analysis and choice a structured approach. New York, Business Expert Press. Read More