Marketing Trends and Target Market Growth of Best Cure Pharmacy - Essay Example

? Marketing plan for Best Cure Pharmacy I. Executive summary This marketing plan is on Best Cure Pharmacy (A fictitious company) which is a brick and mortar and a mail order pharmacy selling prescription medication at very low prices than other companies. Best Cure Pharmacy sells its medication at reduced prices, and this is enabled by its use of operating efficiencies and the elimination of unnecessary services to its customers that self pay their drugs. The pharmacy does not also accept insurance payment as they disrupt cash flow. The pharmacy has also gained economies of scale through selling larger quantities of drugs with less labor as the larger consumers order through mail order. The pharmacy expects a large number of customers since most Americans are on continuous medicine prescription. The Best Cure Pharmacy plans to increase its market share through targeted advertising in order to increase the number of customers who are looking for ways of saving on pricey which is a necessary expense (Malcol and Keegan, 2002). II. Situation analysis The Best Cure Pharmacy is in its first year of operation and highly believes that its products market demand will be high. The company is also convinced that it requires a cohesive marketing strategy. It offers a wide prescription of medicine for customer pick up at their store front and also distributes them via mail orders. Their prices are much better than those of their competitors and this makes their services attractive to a large number of people. SWOT Analysis i. Strengths Great prices It provides a unique business environment which is appropriate for business Has highly qualified and trained staff who are customer attentive It supplies drugs to its customers through mail orders ii. Weaknesses It lacks true experience of running a mail order outfit Government intervention or regulation to medicine It lacks brand equity and visibility of a start up business iii. Opportunities High pressure from consumers to purchase drugs through mail order The constant growth of those people on medication iv. Threats The entry into the mail order market by an already established company Regulatory legislation which may curtail the mail orders in the medicine industry III. Market Opportunity Analysis Market summary The Best Cure Pharmacy possessed good information in regard to their market as well as their target customers. The pharmacy plans to leverage this information in order to understand better who they serve, the specific needs of the customers and how the pharmacy can serve them better. Environment The Best Cure Pharmacy operates in a competitive market which is characterized by existing competitors. The environment is also characterized by different opportunities, and the company plans no to let any of these opportunities pass by. Demographics Best Cure Pharmacy customer profile consists of the following demographic, geographic and behavioral factors: Female and male A larger percentage of the clients are over 50 years Consist of economically good deals More than one medication per time The prescription is a continuous cycle not one that ends upon the correction of the malady Know what is needed and do not require extra services provided by some pharmacists Market needs The Best Cure Pharmacy is providing the target market with discounted drugs. This market is very important because many Americans are faced with the dilemma of using their income which is limited on either medication of food. The Best Cure Pharmacy will fulfill the following benefits which are very important to its customers: Pricing- the Best Cure Pharmacy prices will be better than those of the other pharmacies. Accessibility- the products of the company will be distributed through their store fronts which are conveniently located with the US Selection- the pharmacy offers a wide range of medication products which include both generic and originals Customer service- the Best Cure Pharmacy recognizes the value of having an outstanding customer service. The company also understands that it is by exceeding all the expectations of the customers that they will get repeat customer and referrals. Market trends The market trend for all pharmacies reinforces consolidation. The medical industry which includes pharmacists and doctors have had a lot of pressure being applied to them from different sides to achieve cost efficiencies and to decrease the cost of various services or products (Malcol and Keegan, 2002). Over the last years, there has been wide spread consolidation in the pharmacy industry which is done with a high degree aimed at achieving costs efficiencies. Insurance companies have been adding a lot of pressure on cost reduction since they form the main party in the payment for the medicines. The Best Cure Pharmacy is able to co-exit with this environment consolidation by achieving cost efficiencies through their unique business model of the mail order service and a reduction in the normal services offered by the pharmacists. Market growth In 2000, the global pharmaceutical industry was $897 billion as a whole industry. Since then, the industry has been highly forecasted on a continued growth and the growth in the industry today is attributed to factors like scientific growth. The scientific community has continued to make significant breakthroughs through medical applications, and this has made more people more reliant on medication in order to improve and lengthen the quality of their life. America is itself increasingly reliant on medication since more people have vested in longer lives. This demand for drugs has put pressure on the pharmaceutical companies and scientists who are always out for the next blockbuster pharmaceutical product in the market which will ensure high profitability. America remains the largest medication consumer across the world and based on its Gross National Product (GNP), it is expected that the growth rate for the retail distribution will be extraordinary. Target market growth IV. Competition The following types of competition are evident in the pharmacy industry: Local pharmacies- these are those pharmacies where the pharmacists are well known, and the pharmacists know the medical history of their clients, unlike Best Cure Pharmacy. The option her is high personalized services, high price and convenience. Chain pharmacies- these are the national chain of pharmacies. They have an advantage of better prices since they enjoy large economies of scale together with personalized services. The personalized services include having a record of the patient’s medication which is not the case with Best Cure Pharmacy. Canadian pharmacies- these pharmacies located in Canada sell their drugs at a lower cost than in US. They sell their drugs through mail order, travel or through internet, and this makes the cheap drugs accessible in the US. Table: Growth and share analysis Growth and share Competitor Price Growth rate Market share Competitor $0 0% 0% Competitor $0 0% 0$ Competitor $0 0% 0$ Average $0 0.00% 0.00% Total $0 0.00% 0.00% V. Products and pricing The pricing policy for the pharmacy includes High margins Competitive prices against the competition for quality Discounts are offered for prompt payments The pricing of the different products will depend on the required profit margin, cost of each drug and objectives of the company. The company also offers personalized service and products. The products currently on offer include different medications VI. Distribution Best Cure Pharmacy distribution strategy is to supply the drugs to their customers through their supply chain. For the walk in customers, the supply of drugs will be direct through the pharmacy counter. VII. Market Strategy Objectives Increase the number of repeat customers by 7% each quarter Decrease the amount of acquisition costs by 8% annually] Increase the level of customer awareness, and this is evidenced by the increase in the number of product requests which is generated by the knowledge of the pharmacy’s name Target markets Mail order customers are the largest number of target customers with walk in customers taking a small proportion. The walk in customers will be targeted via local paper advertisements- The Oregonian. The advertisements will raise the visibility of the company together with their discounted prices. The company will also appeal to its customer to contain any price increase in cases skyrocketed prices in the market. The mail order customers will also be targeted through the advertisement campaign through magazines and newsletters. The company will appear in the AARP newsletter on every month. Target Market Forecast Potential Customers Growth 2013 2014 2015 2016 2017 CAGR Walk in customers 8% 345,887 373,558 403,443 435,718 470,575 8.00% Mail order customer 9% 54,876,345 59,815,216 65,198,585 71,066,458 77,462,439 9.00% Total 8.99% 55,222,232 60,188,774 65,602,028 71,502,176 77,933,014 8.99% Summary of strategies The main objective of Best Cure Pharmacy is to establish itself as a mail order pharmacy serving in the US. The company aims at achieving a 305 market penetration within the next five years. The marketing strategy will seek towards the creation of customer awareness in regard to the products and the services offered, to develop a large customer base and to work towards building customer loyalty and referrals (Malcol and Keegan, 2002). The Best Cure Pharmacy will use advertisements in order to ease their message communication. Advertisements will also be placed in different venues depending on the target segment of the company. In order for the company to reach its walk in customers, the company will use advertisements which will be run in the Oregonian. To reach the mail order target segment, advertisements will be placed in different A.A.R.P’s newsletter. Marketing tactics The company will use different marketing strategies like marketing mix and market positioning. The company will position itself in a way which will make them as premier and customer service oriented pharmacy in the US. The company will then offer good selection, better prices and great service which are better than other pharmacies (Malcol and Keegan, 2002). The pharmacy will also leverage their competitive edge in order to achieve this market positioning. The company’s marketing mix consists of advertising and promotion, distribution, customer service and pricing Pricing- Best Cure Pharmacy prices will be better than other pharmacies Distribution- the products will be distribution all over US Customer service- all employees are trained in order to ensure that all expectations of the customer are exceeded. This will occur at a minimal expense in order to build a successful business Advertising and promotion – the company will target the advertising campaigns which are successful to the target market. VIII. Financials Sales forecast The first two months will be used in setting up the store front and generate both national and local visibility. The third month will be the first month with sales activity. Month three to five will include small amounts of mail order business. The main reason is that it may take up time to develop sufficiently the visibility in regard to the mail order operation. The sixth month will see a jump in sales activity for mail order and there will also be a steady growth in sales activity from the sixth month and so on. Sales Forecast Sales 2013 2014 2015 Walk In customers $183,056 $743,778 $843,540 Mail order customers $176,994 $976,543 $1,234,654 Total sales $360,050 $1,720,321 $2,078,194 Direct cost of sales 2013 2014 2015 Walk In customers $11,664 $453,705 $514,559 Mail order customers $79,647 $439,444 $555,594 Subtotal cost of sales $191,311 $893,149 $1,070,154 Expenses The marketing expenses will be budgeted on quarterly basis. These intervals have been chosen because they are the common intervals that are used by those people buying medications. Marketing expense budget 2013 2014 2015 Oregonian advertising $8,200 $20,000 $30,000 AARP advertising $47,000 $55,000 $65,000 Total sales and marketing expenses $55,200 $75,000 $95,000 Percent of sales 15.33% 4.36% 4.57% Contribution margin $113,539 $752,172 $913,040 Contribution margin/sales 31.53% 43.72% 43.93% IX. Implementation The following implementation milestone identifies the key marketing programs for the pharmacy. It is very important to accomplish each of them by the given time and budget. Milestones Plan Milestones Start date End date Budget Manager Department Marketing plan completion 1/04/2013 2/01/2013 $4,200 James Bi-annual Oregonian campaign 1/04/2013 31/10/2013 $4,200 James Bi-annual AARP campaign 1/04/2013 31/10/2013 $4,200 James Bi-annual Oregonian campaign 1/04/2013 31/12/2013 $4,200 James Bi-annual AARP campaign 7/04/2013 31/12/2013 $4,000 James Totals $16,400 References Malcol, H.B and Keegan D, (2002). Marketing plans that work. Butterworth-Heinemann Read More