Management Pharmaceutical Drug Costs in Term Paper
- Length: 8 pages
- Sources: 5
- Subject: Business
- Type: Term Paper
- Paper: #55471858
Excerpt from Term Paper :
These four dimensions are the tools for developing the company's marketing strategy and deciding which product line to cultivate, preserve, yield, or get rid of. Strong products should be grown or maintained. Weak or unprofitable lines should be sold or discontinued as soon as possible. "Four basic factors are critical in the decision to manage individual product lines.
Cost to produce
Total sales volume" (Berry, 2012).
Going through the process of developing a marketing plan will help CVS to figure out how they are going to draw people into their stores and sell them things beyond discounted generic drugs. A provides the market with a source of discounted drugs among other products. This market need is important today as many Americans are faced with the dilemma of using their limited income on food or meds. A pharmacy should seek to fulfill the following benefits that are important to their customers.
Selection: The pharmacy needs to offer a wide range of medication, both originals as well as generic alternatives.
Accessibility: Products should be distributed through their conveniently-located store front
Customer service: The pharmacy should recognize the value of having outstanding customer service. By exceeding all of the customer's expectations, they are ensuring repeat customers and many referrals.
Pricing: The pharmacy's prices have to be noticeably better than other local pharmacies (Pharmacy Marketing Plan, 2012).
CVS also needs to conduct some marketing research in order to ensure their success in the market. One method that they can use would be to conduct several focus groups in order to gain insight into the targeted customer's mind and the processes of their decision making. These focus groups help to provide the pharmacy with a wealth of information. In addition they could hand out surveys to current customers. Having a carefully designed survey is paramount to ensuring that the data collected is accurate and applicable. The surveys can help provide insight into the barriers that people face when buying products from a pharmacy as compared to other retail shops. The last source of marketing research that CVS can do is an in-depth analysis of the pharmacy industry, focusing on consumer decision models within the industry. Cumulatively, all of this market research will help the store to lay out a plan on how to move forward in the market (Pharmacy Marketing Plan, 2012).
The keys to CVS's success include: repeat customers, low overhead and operating costs and superior prices and service. In the drug store business the prescription department is the profit core and center of the business. The prescription department ranks as one of the most profitable sections in the pharmacy and has a significant influence on other department sales. The pharmacist should, therefore, concentrate on making this department the central
Focus of the drug store. Other merchandise may be carried based upon clients' needs and what the drug store's competition is offering (Drug Stores Business and Industry Profile, 2004).
A broad line of merchandise may be carried to appeal to a wide range of shoppers. "Some of the items generally carried by a drug store include: cosmetics/fragrances, cigarettes and cigars, small art and crafts items, hair care/skin care products, magazines/books, film/film developing, vitamins, greeting cards, batteries, disposable diapers, blank videotapes, oral hygiene products, contact lens solutions, diet aids, pet food, and candy. Some drug stores have added a cooler with beverages and snack foods" (Drug Stores Business and Industry Profile, 2004).
In order to be successful, the management of a drug store must know its competition, have a vision as to the markets that it can cultivate, promote a helpful atmosphere for both clients and employees, and strive for profitable accounts and customers. Management of a drug store should be able to gauge the approximate saturation point in a given market area. Markets should be developed where growth potential exists and where the firm has a price or some other advantage. Effective labor, supplies, and operating cost controls should be followed by the owners and employees. By combining reliable professional service and Responsive product offerings to meet customer health care needs, independent drug stores can expect to maintain a position of profitability. Those drug stores that can be flexible to meet changing customer attitudes will continue to fill a vital need within their community (Drug Stores Business and Industry Profile, 2004).
Potential customers must be attracted to the store and then enticed to buy the offered merchandise. Promotion in the drug store business is very important. The store front should be neat and appealing, while the inside should be clean, white, and "hospital-like" in appearance. Signs may indicate specials for the week. Generally, the prescription department should be elevated and in the rear of side of the store so customers pass other merchandise to get to the counter. The firm's operating objective should be to develop a good reputation in the industry for quality pharmaceuticals and goods at a fair price (Drug Stores Business and Industry Profile, 2004).
CVS knows that they are never going to make any money on selling generic drugs. In order to offer their discount drug program they are having to sell generic drugs at such a deep discount that they are anything but profitable. In order to combat this they have to figure out a way to get more people in the door in hopes that hey not only buy other prescription medications there but also buy other products as well. It is on these other products that the store will be able to make money and be profitable. Having a good marketing plan in place will help CVS to do just that.
Berry, T. 2012. "Add competitive analysis to your marketing plan." Web. 2 April 2012.
Available from: http://articles.mplans.com/include-competitive-analysis-in-your-plan/
Berry, T. 2012. "Product marketing." Web. 2 April 2012. Available at:
Buttell, Amy E. "4 Steps to an Effective Marketing Plan." Journal of Financial Planning
(2009): 6-8. Business Source Premier. Web. 2 Apr. 2012.
"CVS/pharmacy Health Savings Pass." 2012. Web. 1 April 2012. Available from:
"Drug Stores Business and Industry Profile." 2004. Web. 2 April 2012. Available at:
"Facts at a Glance." 2012. Web. 1 April 2012. Available from:
Gerson, Vicki. "Arming Yourself With a Marketing Plan." Bank Marketing 30.9 (1998): 38-
40. OmniFile Full Text Select (H.W. Wilson). Web. 2 Apr. 2012.
Milne, G. 2011. "Writing the Situational Analysis for Your Marketing Plan." Web. 2 April
2012. Available at: http://www.marketing-plan-success.com/articles/situation-analysis.php
"Pest Market Analysis Tool." 2010. Web. 2 April 2012. Available at:
Pharmacy Marketing Plan." 2012. Web. 2 April 2012. Available at:
http://www.mplans.com/pharmacy_marketing_plan/executive_summary_fc.php "Retail Discount Drug Programs." 2012. Web. 1 April 2012. Available from:…