Let me start with this: I was NOT the one who said I swore by using the Neti Pot. I have never used a Neti Pot and although I know the counseling information that a pharmacist would be required to give to a patient, I don't think I will EVER use one... pouring water up my nose just isn't my thing!
This week was yet another week with a lot of material to take in. The main topic? Competitor analysis.
We started by learning what competitor analysis was... what to look for, who to identify, what to identify, what this data all means, and how it pertains to marketing decisions for OUR organization. Of course, there's no need to go through all of the steps (as its in plenty of the chalk board talks, lecture material, articles, chapter readings, etc.). But I'd like to extend a question; a question I didn't necessarily have until listening to this week's recorded lecture, and I would've asked the class/professor had I been able to connect synchronously this week (night shift is never a convenient shift!).
The very first question to ask in a competitor analysis is WHO. Who are our competitors? Now as Professor Spotts mentioned in the lecture, this depends on how broad or narrow of a spectrum you view your competition. This got me thinking about my own organization, the hospital. We have a major advantage over other "area" hospitals. My organization owns three different hospitals in the area, each within 15 miles of one another. There is one other hospital in the area which is relatively smaller in size than our hospitals. Other than our three hospitals and the one of the competitor, patients would have to travel to either the Boston or Providence area to seek care and each is about a 45 minute drive; not ideal for the type of health service they are seeking if it is an emergency. However, this doesn't mean patients won't make the drive. Is it common? Probably not, but it most certainly does happen. So are Boston and Providence hospitals within the realm of competitors? It gets you thinking... is radius a factor in analyzing competitors? Certainly for big name companies with plants and distributors all over the country or world radius is not a factor. But for a hospital organization that only typically serves a concrete area/community I think that you could argue that it does play a role. We really have no need to view Beth Israel Deaconess Hospital or Mass General as a competitor because they are so far away and it is unlikely that patients will seek care there instead of our hospital. However, the competitor's hospital located just a few miles from one of our sites is certainly a target!
Going off of that, it depends on the service they are seeking. For example, it is unlikely that someone suffering a sudden heart attack or stroke is going to be taken an hour away to Boston to be treated. It is an emergency, and time is critical. However, for cancer patients who schedule their chemotherapy treatment sessions months in advance, time is on their side. They are able to schedule appointments with big well known cancer care centers such as Dana Farber in Boston. Or take someone who is scheduling same day surgery that doesn't require admittance. They too have time on their side to decide where they would like to go. And they base this decision off of what they have heard about different hospitals, how well they know the "brand" of the hospital, and their judgement on the quality of care provided.
For these reasons, my organization developed two local oncology centers in the area to provide chemotherapy treatment close to home. Access was one major issue cancer patients in the area were having. My organization saw this need and developed a marketing plan to make this need satisfied by our company. No other competitor has that going for them. It has been hugely successful in the two years it has been in operation. Then again, perhaps its success is attributed to the fact that it is the only location in the area that these patients can get their treatment. Who's to say that if our competitor also builds an oncology center in the area that we won't lose our customers to them? This is why keeping an eye on the competitors is essential to keep the advantage over them and to ensure that any growth opportunity in the market is seized.
I also found a particular slide used in the lecture to be very intriguing. It's titled "Behaviors exhibited by a competitor under pressure to improve profits/cash flow". Many of these characteristics are present in my own organization. For example, "not recruiting new people as employees retire; shrinking work force." THIS IS THE EXACT SAME ISSUE MY DEPARTMENT/ORGANIZATION IS FACING! When we have pharmacy students who graduate, they can no longer be interns; they either are hired as pharmacists or they leave and find work elsewhere. Over the past three years that I have been there, 4 students have graduated and only 2 new students were hired to replace them. Additionally, we have lost at least 5 per diems over the last two years and we have only gained 3 back. Our department is shrinking and shrinking, and its certainly not because there is no one to fill the positions.... its because they never repost and hire for the positions lost. This leaves us working short, nearly everyday. I have been working 48+ hours a week and am currently on my 10th day working in a row out of a 12 day stretch. Prior to this I did a 9 day stretch and starting next Monday I will also be on another 9 day stretch. It is absolutely absurd. I keep asking "Why are we always so short people? Why arn't they hiring anyone to fill that vacant position?" The answer: that position was never approved to be refilled. So when I saw this slide, it fit like a puzzle piece.
PharmaSim update: Well, I have finally found some time to play around with the simulation. I did great my first period, increasing my net income and my stock price rose $10. However, I have played four periods since and down down down I have gone. I'm still not sure what I'm doing wrong. I suppose I have to pay closer attention to the reports given to me before I make my decisions. Additionally, last week I had commented in my blog about a classmate who was having difficulty with capacity. Unfortunately, I am having the same issue and don't know how to avoid being over capacity. Is there a way to tell?
That about wraps this week's blog post up! I apologize for the length and detail about my organization regarding competitors and being under pressure. Its just that I find it extremely satisfying and rewarding when you apply concepts from a book or a lecture powerpoint to something you are activity involved in and trying to improve. Until next week!
Jennie
This week's topics revolved around market research and analysis. Through the class discussion, assigned readings, chalk board talks, and education portal videos, we were able to absorb A LOT of information regarding the ins and outs of conducting market research and what it all means. Prior to this week I really didn't comprehend the importance behind market research. I always presumed it was done just to gather information and use it to back up ideas people might have. After this week, I know the vitality of market research and the role it plays in a marketing department's decision making. Not only the conducting of the research, but also its skillful analysis of what it all means and how to apply it to decisions for your company.
While I certainly am in no such position to be doing this at MY organization, I must admit that it was semi thrilling to be the one calling the shots on Pharmasim. I haven't had much time to play around with the simulation but I did get the chance to complete one period. However, I'm now starting to think I may have made too many decisions in one period. I was having a tough time trying to start off. As one of my classmates mentioned in class, there's so many decisions you can make... where do you begin? Well, I began by looking at the market update tab and I think that this was tremendously helpful. It gives you all of the news that is coming out about the market to help you aim your decisions where the trends are going. For example, I saw in the market update that a competitor came out with a new cold medicine that was similar to Allround's current cold medicine. So I adapted my advertising to be much higher in benefits and reminder messages and changed the brand of comparison messages to compare it to Dryup. The market update also said that mass merchandisers were increasing exceptionally. I increased the sales force all across the board but especially mass merchandiser since they were the category with the most growth. I also dropped the price by $0.10 in hopes that since it was cheaper than other products customers would be more willing to buy them. I also increased my coupon offerings from $0.50 off to $1.00 off. This was also in the hopes that having a whole dollar off would get more people to try and purchase Allround medicine.
The net result was pretty good when I advanced the simulation. The stock price increased by about $10 and there was a 16.2% increase in revenue with a 21.9% increase in net income. I was pretty pleased with this... especially for my first period!
One catch... I nearly spent my entire budget on sales force. Now luckily for me, I didn't know that you necessarily got more in the budget when you advanced the simulation. So I was worried that I had 0.1 million left in the budget with no promise of more, and more decisions to make in future periods. I am happy to say that when I want to make decisions in the second period I now have $3.2 million to spend.
So what did I learn from all of this? Tons! I'll admit that when I was first looking at the simulation I began making my decisions off of nothing more than what I wanted to do. I wanted to drop the price so I did... I wanted to offer a bigger coupon discount so I did... There was no reasoning behind my decisions. However as I mentioned above, when I found the market update tab all of my decisions started to be carefully thought out and planned; they began to have a meaning. I didn't just increase mass merchandiser sales force because I felt like doing so, but rather because the market research showed that this particular segment was growing and I wanted to prepare the business for this growth by providing them more sales support. The same can go for why I chose to advertise and compare against Dryup... because they were the biggest competition! The pieces started coming together.
So in period #1, the total cost of the surveys cost $458,920. That's a ton of money! The budget for that period is $3.2 million. So I suppose in the grand scheme of things, it really isn't too expensive to purchase SOME of these reports. Professor Spotts recommended that we purchase some research in order to be best prepared to make decisions when we start our group play. But it is pretty clear that buying ALL of them would take a huge chunk out of the budget and some reports may not give very useful information (compared to how much they are costing you!). I hope to make some more decisions and advance the simulation further to see the results of my decision making and whether or not they were the right decisions to make based upon the market research available to me and the analysis I conducted.
Neil's blog this week was helpful for me to read. He discusses his problems about reaching/exceeding capacity. Since I have only completed one period, I'm not quite sure what problem he is dealing with. However, I was glad to have read his section about capacity because it now gives me insights into a problem that may occur and how to avoid it! He also mentions offering a brand new product and all of the costs added to this process. This too is something that I have not yet reached in the simulation but I will be sure to really think about starting a new product before I make that decision!
Another classmates blog that I found interesting and helpful was Greg's. Although he posted it today, I will certainly be using his blog as a guide for my next Pharmasim decisions. He posted an excellent photo of his own simulation statistics where he shows the budget allocation into each area: promotion, advertising, sales force, and research. This screen shows the budget allocation in both monetary amounts as well as percent of the overall budget. I honestly don't think I would have found this screen and I can't thank Greg enough for posting that photo! Thank you, thank you, thank you! I will definitely be referencing that tool in my future decisions!
Finally, we were asked to identify a classmate's question that we found interesting this week. I think that of all the questions, Adam Wopschall's question was the most intriguing:
"When we look at SLEPT, do some influences carry more weight than others or is this dependent on the organization and industry marketers work in?"
By SLEPT he is referring to the social, legal, economical, political, and technical factors that influence a company's decision making. We discussed this at large in the online class meeting/discussion. It seemed as though each classmate's organization differed in the weights that played the biggest role. For some, economic factors played the largest role and for others it was legal factors. So to answer Adam's question, I would say that yes, it depends on the organization and industry of the marketers!
Cheers to the weekend! And to more Pharmasim decisions on the way!
Disclaimer: I am a HUGE fan of Friendly's.... HUGE
Let me start by saying that I dine at Friendly's pretty frequently, at least once a month. I go in and don't even look at the menu because I always get one thing: the famous Honey Barbeque Chicken Supermelt. It's phenomenal. I also always pair it with a Coke and a Happy Ending Sundae. Not this time...
Tonight I went to a Friendly's in North Dartmouth, MA. They recently made over the restaurant; new design, furnishings, menu, etc. I have no complaints about the design and furnishings, they were not over the top and they fit well with the theme and culture of the restaurant. The menu I felt was smaller than it used to be... less options. But I couldn't really tell because I've never ordered anything else but the Honey Barbeque Chicken Supermelt. HOWEVER! There was a huge change that I noticed. They always offered the following deal: a soda, supermelt, and happy ending sundae for $9.99. Who could refuse a deal like that?! With the new menu tonight, there were absolutely no ice cream combinations available for ANY meals. What is with that?!
I couldn't believe my eyes. I could understand if the combination cost a little more, maybe like $11.99 or something. But NOTHING. Sure I could still order the drink and sundae, but for $5 more than what I paid about a month ago for the same thing. So what was the result? I didn't order a soda or a sundae... and neither did the two other people I dined with.
It got me thinking. It seemed that marketing clearly did not play a big role in this new make over. I'm sure this change was not location specific. Did they truly think about what the customer wants and values when they made these changes in the menu? A company who has made its business off of the popularity and good reputation of its ice cream no longer offering combinations of meals and ice cream? It just doesn't seem well thought out. As a customer, I go to Friendly's for a good meal followed by ice cream at a great value. Additionally, the offering of the ice cream with the meal made me more likely to pay the extra price for the ice cream.
Did they do any marketing planning? What did they think the customer valued? Did they do any market research? Did they project what the customer response would be? Did they survey customers about the new changes or do a small trial?
I will get off my soap box about having to pay $5 extra for a Happy Ending Sundae... but I just feel that marketing should have played a much larger role in the rolling out of the new plans and changes. It's even part of the name! It's supposed to be a Happy Ending!! And part of their slogan.... "Where ice cream makes the meal"....
Happy Friday everyone!
I am pleased to announce that last week (the first week of the semester) I was honored to have my blog post inducted into the Marketing Blog of Fame! Although nervous and unsure of how much I learned my first week, it appears I was off on the right track!
We had many different reading assignments and videos this week, along with a Pharmasim quiz. While all of these sources aided me in learning and familiarizing myself with marketing, I found the most beneficial source of learning this week to be virtually attending class through the Adobe Connect program. It was a great way to engage the learners into active discussions using their own work experience to identify and apply the marketing concepts being taught.
For some reason (perhaps because of my own chiming in), the healthcare field seemed to come up a lot in the classroom discussion. I currently work as a pharmacy student at a medium sized hospital in New Bedford, MA. Therefore, most of my contributions to this week's discussion stemmed from my experience at the hospital. I'd like to focus most of my blog post on how customer value and satisfaction are measured, interpreted, and applied in marketing where I work.
Since I am merely a student, I am not at the hospital year round; nor do I have a glorified high stakes position. Therefore, most of my examples that I will be discussing are the simple metrics of measuring customer satisfaction at a departmental level rather than an organizational level.
The healthcare field operates a little differently when it comes to customer value and satisfaction. And even within the healthcare field, it is quite obvious that big chain pharmacies like RiteAid, CVS, Walgreens, etc. have MUCH more emphasis on marketing and meeting the customer's expectations than hospitals do. Simply put, there is much less competition among hospitals than there is among retail pharmacies. Additionally, the services provided are SO much different.
For example, CVS may be able to market certain products to attract customers to purchase these goods but a hospital cannot do the same. Rather, the hospital provides a service when approached by the patient. Now I'm not saying that hospitals don't market their services, because they most definitely do. However, due to the nature of their services (emergency, surgery, labor and delivery, etc.) patients are more likely to go to a hospital regardless of how much marketing the hospital has done. This relates to the fact that the patients NEED the hospital in order to survive, improve quality of life, etc. However, customers CHOOSE which retail pharmacy they take their prescriptions to based on how well that chain meets their expectations of products and services.
During the virtual class discussion, we were asked what metrics our organizations use in order to have an idea that our customer's needs and wants are being met. I responded to the class saying that specific to the pharmacy department, we often evaluate how many orders are processed per hour. More importantly than this metric, we measure how long it takes an order to be processed. Perhaps I didn't explain this very well in the class discussion because some of my classmates found this to be a terrible metric.
While we can all agree that the pharmacy department measuring how many orders are processed per hour is more focused on the number than it is on the accuracy, it is important to also look at the nature of the metric. This is why we also measure how long it takes an order to be processed. Yes, speed isn't everything, but timeliness is. For example, if there is a patient in the intensive care unit who is having a seizure, you better make sure that (although perhaps more accurate) that order doesn't take more than ten minutes to process. Otherwise, the patient is left seizing, untreated, with possible fatality if not severe permanent damage.
The same could be said for a patient who has dangerously low blood pressure that could result in death. If the order for a blood pressure raising drug is not processed and made in a timely manner, that patient dies. In this complicated way, accuracy and timeliness battle against each other for the top priority.
So what does all of this have to do with marketing? This is the exact question I asked myself when answering Professor Spotts' question. In the hospital pharmacy sense, this is about as much as we can do to market our services to our patients/customers. It is rare that patients come into the hospital happy and looking forward to the business they are about to exchange in (except for maybe a carpal tunnel surgery which will improve quality of life or the delivery of a baby). Most of the time, it is because people feel sick and they are in pain and unhappy, seeking help. Already, it makes for a hard customer to please. But if the pharmacy department can make sure that our patients are receiving the right medications at the right time, we can improve their health status which will hopefully get them back to feeling "normal". Of course this is not always possible. Many elderly patients pass away, cancer patients lose their battles, overdosed patients cannot be resuscitated, etc. However, it is our job not only as pharmacy staff members but as MARKETERS for our organization to do our part in our patient's treatment and if within our power, make them value the services we provided.
As I get off of my pharmacy soap box, I conclude this week's blog post. The main concept that I took out of this week's materials was this: know how your organization/department measures customer satisfaction and WHY it is done that way. Normally, you would think that quickly entering medication orders would not necessarily be the best metric to use, but when taken into context, we can understand why. What about your company? And why do they use THAT particular metric? What could be changed to make it better reflect the customer's needs, wants, and values?
As you may or may not have read in my very first post with my introduction, I am a pharmacy major; which means I'm all about science. Biology, chemistry, anatomy, etc. are all my strong subjects. Business courses... not so much. But that is why I chose to enroll in the joint MBA program, so that I can understand and learn more about business and its applications.
This first week has been a tough one. As mentioned above, I have a science brain, not a business brain. It takes me a lot longer to pick up on the main concepts/relationships mentioned in business courses than science courses. Also, my Drucker book came in today (Friday July 5th) so my reading preparation is a little last minute. My questions earlier in the week were not from Drucker's book since I didn't have it yet, so instead of answering those questions I would like to instead focus on the chapters assigned from Drucker in my blog post this week.
Chapter 2.... WOW! The purpose of a business is not profit?! Now I knew I wasn't naturally good at anything business. But this was one thing I was pretty certain that I knew. I can admit, I was wrong.
Drucker makes a very important distinction between the importance of making a profit and shying away from profit maximization. This was the key point I was missing before reading this chapter. Yet half way through the reading I thought to myself "if businesses aren't maximizing their profit, then how do they become so successful?" It wasn't many pages later that Drucker brought the most important key to success into light: marketing over profit maximization. Sure the business needs enough profit to keep it going, but focusing on making the most profit won't get you any more customers (in fact as Drucker points out, it could lose you customers!). And loosing customers is just the opposite of what us marketing people are working so hard for!
As a pharmacy major, I was on Cloud 9 as they related profit maximization to oxygen supply for the body. Now THIS made sense to me!
Additionally, this next sentence was another beautiful piece I found to my delight:
"If the focus is solely on profit maximization, the customer can be ignored or given secondary consideration. This can lead to cutting corners on safety, service, or product performance. We have seen this recently in many industries, including pharmaceuticals...."
Surely most people reading this blog were made aware of the New England Compounding Center tragedy last summer when their pharmaceutical products were manufactured by cutting safety corners that resulted in multiple deaths from meningitis. The organization was so concerned about mass producing these products that the requirements for safety, sterility, and quality preparation were overlooked. Why would they overlook such important factors? Because the less quality work meant larger production numbers which meant maximizing as much profits as they possibly could. And what did they get for it? The lost every single customer they had... in addition to legal actions, ethical debates, patient death, etc.
Another very important difference that I learned in this first week of marketing is the difference between marketing and sales. While the text makes the distinction very clear that marketing is the adaptation of a product or a service to what customers want or value while sales is the action of turning inventory of a product into cash, I think there is also a very important similarity between the two. Since those individuals making the sales often have the most communication and contact with customers purchasing the good or service, they are the frontlines to marketing. They are the eyes and ears of marketing in my opinion. They can hear what the customers are saying as they browse the aisles, they can see customers reactions to one particular product over another. While Drucker points out that innovation is essential, innovation is made possible by feedback. The sales department of organizations certainly have a large role to play in this feedback system. Additionally, the marketing department has a huge impact on the sales department. The marketing department conducts their research to find, plan, design, and innovate new products and services to meet the customers' needs. These are the products and services which are then placed on the sales people to sell. With this relationship, its easy to see the different roles and tasks of each position but also how interdependent they are.
As I wrap up my first marketing blog, the major point that I learned from this week's readings, videos, discussions, etc. was this: I LEARNED WHAT MARKETING IS! And to be honest, I think that its the most important thing I could havetaken from this week's topics. You can't learn the do's and dont's of marketing until you know what marketing is. I certainly am no expert, but I'm happy to say that I've got one foot through the door. Here's to hoping that I have two feet by my next post! Have a great weekend :)
