As a first time "marketer" I can easily admit that in writing and synthesizing our marketing plan for Allround we clearly had some goals that were too high to reach as well as strategy implementations that were simply too strict to follow to a "T" without risking harm to the brand. For example, a situation analysis had revealed that our sales force allocation was inefficient and likely due to increasing sales force by too great of a magnitude each period. Therefore in our marketing strategy plan we said that we would not increase sales force by more than 5 employees per period. We also said that any channel growth would receive an additional employee for every 5% growth that channel experienced. We quickly saw that although these were good strategies to make sales force efficient in theory, they were conflicting and unrealistic. For some periods, every channel grew more than 5%... some even 15%. This resulted in needing to add 9 sales force personnel (which deviated from what we had planned to do in our strategy).
However, no plan is ever implemented perfectly and our group can certainly attest to that. We had to weigh the benefits vs. risks in deviating from the plan. In keeping with the example mentioned above: a benefit of deviating from the plan was that we would be giving growing channels more sales force support despite the rule of only adding 5 vs. risking not supporting those growing channels because we were limited to only 5 per period.
The moral of the story: the marketing plan was the guideline to follow, but exceptions were made and rules were tweaked a bit in order to stay competitive with the constant changes in the market.
Overall, I would say that our team is satisfied with the results of our marketing plan implementation. During the periods before writing the marketing plan, we were not succeeding by any means... our sales were dropping, we were losing market share, our net income was plummeting along with our stock price... it was just overall not pretty. However, by identifying strengths, weaknesses, opportunities, and threats, we were able to make decisions based upon where we stood and where we wanted to go (up!). One of the ways we were able to do so was by introducing a new product to an attractive market and using our company's competitive advantage.
We had one period between periods 3 and 7 that we did not do as well (period 5 I think?). However, we noticed that there was just a negative growth in all sales across all channels in the market, so we're hoping that it wasn't just poor decision making! Either way, we took as much information from the research reports, social media comments, market updates, and special situations that we could in order to prepare ourselves to make the best decision IN CONTEXT. I emphasize this because what may be the best decision one period. could turn out to be a bad decision in another period... everything changes... including markets.
Looking forward a bit onto the revision of the strategy memo, there will definitely be some changes made. Mostly, I think we will keep our overall strategy the same but change some of the minor details we had made at the end of period 2. There will likely be much looser requirements/budget limits to account for situational changes each period. In this way, we will not feel like we "have to stick to the plan" rather than taking a great opportunity available to us.
Friday, August 30, 2013
Sunday, August 25, 2013
Marketing Plan Strategy
This past week was a very busy one, filled with lots of typing, brainstorming, skyping, and stressing. Our team spent most of our week discussing which strategy plans would be best for our company. We identified four major issues:
-poor participation in co-op advertising and point of purchase promotion
-low pharmacist and doctor recommendations
-declining market share
-possibilities to introduce new product lines/reformulate
Our team decided to tackle these issues in a few different ways.
In order to solve the issue of low participation in our advertising and promotion programs, we decided to dedicate more of our budget to these areas. However, at the same time we limited our advertising budget to $15M since research showed that our brand spent the most on advertising of all the competition. Since we are the market leader, we typically don't have to spend as much on advertising as brands who are fighting to become the market leader.
In order to increase recommendations by pharmacists and doctors, we had a pretty simple solution: increase the number of detailers.
Our declining market share was a big concern of ours. We had multiple ideas in order to increase or keep our current market share. One of these strategies was to target our advertising towards demographic groups who Allround is not the most frequent brand purchased. By doing this, groups who do not often purchase our brand will receive more advertising messages about our product and thus be more likely to purchase Allround. We also chose to change our advertising messages to more reminder messages since our brand is a market leader at its mature stage. We drastically decreased our comparison messages to less than 5% since market leaders do not typically compare themselves to the competition. This was a flaw of the marketing team in the past few periods. Another strategy that we hoped would increase or maintain market share was the introduction of a new product in the upcoming periods. One of the options for product introduction is a unique allergy capsule that is non-drowsy due to an ingredient that the company will submit for OTC use to the FDA. This would give Allround a superior advantage over the competition in the allergy market. In addition, our team conducted a market attractiveness analysis and found that the allergy market in all demographics is a very attractive one to enter.
These are some of the strategies that our marketing team chose to pursue in order to address our major key issues. Of course, there are many other modifications that the marketing team may make in the upcoming periods but none of them are addressed specifically to the four identified key issues. We hope that these changes will help to solve these issues and put our brand in a better position to maintain market leader status and profitability.
Overall, the assignment was very stressful and time consuming. I must say that trying to fit four very busy people's schedules into meeting multiple times a week is not easy. We did the best we could to not simply assign sections but rather discuss each section as a team to decide where we wanted to aim our efforts. Although I was not at all a fan of the situation analysis, it truly ended up being a gift when writing the strategy plan. Most of our issues were identified by the situation analysis which made the assignment that much easier.
We will see how our brand does in the upcoming periods when we implement our plan. Here's to wishful thinking!
-poor participation in co-op advertising and point of purchase promotion
-low pharmacist and doctor recommendations
-declining market share
-possibilities to introduce new product lines/reformulate
Our team decided to tackle these issues in a few different ways.
In order to solve the issue of low participation in our advertising and promotion programs, we decided to dedicate more of our budget to these areas. However, at the same time we limited our advertising budget to $15M since research showed that our brand spent the most on advertising of all the competition. Since we are the market leader, we typically don't have to spend as much on advertising as brands who are fighting to become the market leader.
In order to increase recommendations by pharmacists and doctors, we had a pretty simple solution: increase the number of detailers.
Our declining market share was a big concern of ours. We had multiple ideas in order to increase or keep our current market share. One of these strategies was to target our advertising towards demographic groups who Allround is not the most frequent brand purchased. By doing this, groups who do not often purchase our brand will receive more advertising messages about our product and thus be more likely to purchase Allround. We also chose to change our advertising messages to more reminder messages since our brand is a market leader at its mature stage. We drastically decreased our comparison messages to less than 5% since market leaders do not typically compare themselves to the competition. This was a flaw of the marketing team in the past few periods. Another strategy that we hoped would increase or maintain market share was the introduction of a new product in the upcoming periods. One of the options for product introduction is a unique allergy capsule that is non-drowsy due to an ingredient that the company will submit for OTC use to the FDA. This would give Allround a superior advantage over the competition in the allergy market. In addition, our team conducted a market attractiveness analysis and found that the allergy market in all demographics is a very attractive one to enter.
These are some of the strategies that our marketing team chose to pursue in order to address our major key issues. Of course, there are many other modifications that the marketing team may make in the upcoming periods but none of them are addressed specifically to the four identified key issues. We hope that these changes will help to solve these issues and put our brand in a better position to maintain market leader status and profitability.
Overall, the assignment was very stressful and time consuming. I must say that trying to fit four very busy people's schedules into meeting multiple times a week is not easy. We did the best we could to not simply assign sections but rather discuss each section as a team to decide where we wanted to aim our efforts. Although I was not at all a fan of the situation analysis, it truly ended up being a gift when writing the strategy plan. Most of our issues were identified by the situation analysis which made the assignment that much easier.
We will see how our brand does in the upcoming periods when we implement our plan. Here's to wishful thinking!
Friday, August 16, 2013
Short and Sweet!
Ahh.. short and sweet it is! This week's blogpost simply is to choose five metrics that we feel our PharmaSim progress should be evaluated with.
1. Customer Satisfaction
2. Brand Awareness
3. Market Share
4. Gross Margin
5. Units Sold
There it is! Have a great weekend :)
1. Customer Satisfaction
2. Brand Awareness
3. Market Share
4. Gross Margin
5. Units Sold
There it is! Have a great weekend :)
Thursday, August 8, 2013
PharmaSim Team Play Progress
Happy Thursday!
The weekend is near and we are already a week into August. Where did the summer go?!
This week we began our oh-so-anticipated team play in the PharmaSim simulation. It seemed like we had little time to truly discuss as a group what decisions we wanted to make each period before advancing to the next (although we were only allowed to advance 2 periods total). Our team communication seemed to be slow and a little lacking due to everyone's different busy schedules. Nonetheless, we were able to make some decisions and see/evaluate the outcomes.
Disclaimer: I was not the individual making decisions on our team's PharmaSim account, I simply participated in group discussion. That being said, I may not be 100% accurate on reporting the changes and decisions made by our group in the first two periods.
In the first (0) period, I don't believe that we made a whole lot of changes. Our market update said that mass merchandisers were the largest group increasing in growth so as a result, we increased our sales force that was focused on mass merchandisers by a few people. Additionally, we rose our price about ten cents to compensate with the increase in prices and inflation. Our competition also introduced a new cold liquid that was similar to our Allround brand cold liquid. Because of this, we chose to use this product as a comparison product in our advertising. We also introduced trial sizes of our product and purchased all of the research reports. Lastly, we chose to make a Facebook and Twitter account for our brand along with some web advertising.
Now that I re-read all that I typed I suppose we made more decisions than I originally thought! Surely not as many as our next period though...
So the results were in and our stock price had dropped a bit.. along with sales. We couldn't seem to figure out what we did wrong. The newest market update said that we should check our sales force to see if it was ideal but we only increased the mass merchandising sales force by a couple of people and compared to other companies we seemed to be equal to them. Our Facebook and Twitter accounts were doing well. What could've been the problem?!
In the second (1) period, we made A LOT of decisions... I mean A LOT! Perhaps this was our downfall since the outcomes of this period were also not that hot. We had been over the budget by about 2 million I believe (don't know how it got there!) so we had to make some budget cuts. Since we had purchased the research reports showing advertising and promotion spending for other companies, we were able to see that these budgets were much larger from our company than any other brand... by quite a bit (maybe a few million). So we cut the advertising budget from 20million to 18million which was still higher than most advertising budgets of the competition. Similarly, we cut the promotion budget from 1.4 million to 1.2 million for both co-op and consumer promotion. We increased our co-op to 17% allowance since we found our percent participating to be only 0.9%. We decided to add "relieves allergies" to our advertising messages since previously it had not been included (our product has the maximum allowable amount of antihistamine which is used to treat allergies). We decreased the amount of advertising used in comparison messages and increased the amount of advertising by benefits and primary messages. We also put more budget money towards trial sizes and coupons. Since convenience stores were reported to be the highest in growth by the market update, we increased our sales force by a few people in this area.
There were multiple incidents within these first two periods in which our group had to make tough decisions. For time and length sake, I will speak of two. The first incident was that we had a batch of medicine that was shortly expiring. We had the option to sell it anyways but have to accept returns back and risk our good reputation/relationship with these retailers, dump the batch and lose $100,000, or sell it below price to a special buyer who would not pay full price. We did not feel that it would be a good decision to try and sell it anyways because we did not want to risk our relationship with our customers. We also didn't want to sell that batch for less than it was worth to a semi-sketchy buyer. So we chose to bite the bullet and dump the batch and lose $100,000.
The second incident was that we had the choice to reformulate our product. We had the choice to drop the alcohol or switch from a cough suppressant to an expectorant. We decided not to drop the alcohol because we didn't find it to have much of a benefit. The small amount of alcohol in the product helps the patient to rest, so in some ways this would actually decrease the benefits of our product. We chose not to switch from a cough suppressant to an expectorant. While these two classes of drugs do very different things, the same percent of symptoms were reported (60% reporting cough and 60% reporting chest congestion). So by looking at the reported symptoms, there was no benefit of one or the other. Competition wise, no matter what formulation we chose, we would be one of two brands offering it. If the switch made us the only company to offer a product with a class of drug than we would have chosen this choice. But because we would have had the same number of competitors with the same amounts of reported symptoms, we chose not to reformulate and leave the original formula.
To wrap this up, I know this post was mostly about what I did in PharmaSim but the truth is... that's all that I really focused on this week. The lecture surrounded itself around the module as did much of the discussion. So while this post may not have been about articles or videos or chapters from textbooks, I most certainly am advancing my marketing knowledge by virtually testing the outcomes of my group's various marketing decisions.
The weekend is near and we are already a week into August. Where did the summer go?!
This week we began our oh-so-anticipated team play in the PharmaSim simulation. It seemed like we had little time to truly discuss as a group what decisions we wanted to make each period before advancing to the next (although we were only allowed to advance 2 periods total). Our team communication seemed to be slow and a little lacking due to everyone's different busy schedules. Nonetheless, we were able to make some decisions and see/evaluate the outcomes.
Disclaimer: I was not the individual making decisions on our team's PharmaSim account, I simply participated in group discussion. That being said, I may not be 100% accurate on reporting the changes and decisions made by our group in the first two periods.
In the first (0) period, I don't believe that we made a whole lot of changes. Our market update said that mass merchandisers were the largest group increasing in growth so as a result, we increased our sales force that was focused on mass merchandisers by a few people. Additionally, we rose our price about ten cents to compensate with the increase in prices and inflation. Our competition also introduced a new cold liquid that was similar to our Allround brand cold liquid. Because of this, we chose to use this product as a comparison product in our advertising. We also introduced trial sizes of our product and purchased all of the research reports. Lastly, we chose to make a Facebook and Twitter account for our brand along with some web advertising.
Now that I re-read all that I typed I suppose we made more decisions than I originally thought! Surely not as many as our next period though...
So the results were in and our stock price had dropped a bit.. along with sales. We couldn't seem to figure out what we did wrong. The newest market update said that we should check our sales force to see if it was ideal but we only increased the mass merchandising sales force by a couple of people and compared to other companies we seemed to be equal to them. Our Facebook and Twitter accounts were doing well. What could've been the problem?!
In the second (1) period, we made A LOT of decisions... I mean A LOT! Perhaps this was our downfall since the outcomes of this period were also not that hot. We had been over the budget by about 2 million I believe (don't know how it got there!) so we had to make some budget cuts. Since we had purchased the research reports showing advertising and promotion spending for other companies, we were able to see that these budgets were much larger from our company than any other brand... by quite a bit (maybe a few million). So we cut the advertising budget from 20million to 18million which was still higher than most advertising budgets of the competition. Similarly, we cut the promotion budget from 1.4 million to 1.2 million for both co-op and consumer promotion. We increased our co-op to 17% allowance since we found our percent participating to be only 0.9%. We decided to add "relieves allergies" to our advertising messages since previously it had not been included (our product has the maximum allowable amount of antihistamine which is used to treat allergies). We decreased the amount of advertising used in comparison messages and increased the amount of advertising by benefits and primary messages. We also put more budget money towards trial sizes and coupons. Since convenience stores were reported to be the highest in growth by the market update, we increased our sales force by a few people in this area.
There were multiple incidents within these first two periods in which our group had to make tough decisions. For time and length sake, I will speak of two. The first incident was that we had a batch of medicine that was shortly expiring. We had the option to sell it anyways but have to accept returns back and risk our good reputation/relationship with these retailers, dump the batch and lose $100,000, or sell it below price to a special buyer who would not pay full price. We did not feel that it would be a good decision to try and sell it anyways because we did not want to risk our relationship with our customers. We also didn't want to sell that batch for less than it was worth to a semi-sketchy buyer. So we chose to bite the bullet and dump the batch and lose $100,000.
The second incident was that we had the choice to reformulate our product. We had the choice to drop the alcohol or switch from a cough suppressant to an expectorant. We decided not to drop the alcohol because we didn't find it to have much of a benefit. The small amount of alcohol in the product helps the patient to rest, so in some ways this would actually decrease the benefits of our product. We chose not to switch from a cough suppressant to an expectorant. While these two classes of drugs do very different things, the same percent of symptoms were reported (60% reporting cough and 60% reporting chest congestion). So by looking at the reported symptoms, there was no benefit of one or the other. Competition wise, no matter what formulation we chose, we would be one of two brands offering it. If the switch made us the only company to offer a product with a class of drug than we would have chosen this choice. But because we would have had the same number of competitors with the same amounts of reported symptoms, we chose not to reformulate and leave the original formula.
To wrap this up, I know this post was mostly about what I did in PharmaSim but the truth is... that's all that I really focused on this week. The lecture surrounded itself around the module as did much of the discussion. So while this post may not have been about articles or videos or chapters from textbooks, I most certainly am advancing my marketing knowledge by virtually testing the outcomes of my group's various marketing decisions.
Thursday, August 1, 2013
Consumer Analysis: Know Your Customer!
Happy August!
We started the week with some assignments and discussion around consumer analysis. Now to me, the sound of it seems quite simple. Know who your customers are, what they value, what price they're willing to pay, and where they are. As it turns out, consumer analysis is far from that simple.
Lehmann and Winer identify 9 Need-to-Knows for consumer analysis ... as you can see I was kind of on the right track:
Who buys and uses the product
What customers buy and how they use it
Where customers buy
When customers buy
How customers choose
Why they prefer a product
How they respond to marketing programs
Will they buy it (again)
What they are worth
They also identify the following buying roles: the initiator, the influencer, the decider, the purchaser, and the user. While it makes sense in this kind of context, I was terribly confused by the title of "Buyers versus Users". Aren't they the same? It depends what kind of view you are looking at. On a macro level, the ultimate buyer is the user. However, at the micro level we see the five different broken down positions of the buyer vs the user.
This section of the chapter made me analyze my own organization (the hospital) to identify these five levels of buyer roles, from the pharmacy department perspective.
The Initiator (who identified the need for the product): senior management/expert specialists (such as cardiologists, respiratory therapists, orthopedic surgeons, etc.). These specialists or senior management members identify the need for a certain drug. It could be a brand new drug recently introduced on the market, it could be an existing drug that is not currently on the formulary, or it could be a justification to keep a drug on the existing formulary.
[Side note: a formulary is a carefully crafted list of drugs that a hospital agrees to use by its physicians and pharmacists. This is ideal from both an inventory standpoint as well as a cost savings standpoint. For example, there are many different types of cholesterol lowering drugs called "statins"; fluvastatin, simvastatin, rosuvastatin, pravastatin, atorvastatin, etc. However, it makes no sense for a hospital to carry all of these different drugs when they relatively do the same thing... one or two is enough. So there is a committee at every hospital called a P&T Committee that evaluates which drugs should be approved to be a part of the formulary and which drugs are not suitable to be on formulary. By becoming familiar with a formulary, it is easy to see why drug representatives work so hard to pitch their drug product to pharmacy management in hopes that their drug will be included (used) in their formulary.]
The Influencer (who have informational or preference input to the decision): drug reps/P&T Committee members. I think its safe to say that drug reps having an informational and preferential input into the buying decision is self explanatory. P&T Committee members stem from all departments of the hospital, not just pharmacy. It consists of nurses, pharmacy managers, physicians, surgeons, nutritionists, etc. All of these members have preferential input into the decision. They have the voting rights of whether or not a drugs gets approved to become a part of/no longer be a part of the formulary.
The Decider (who makes the final decision through budget authorization): senior management/medical executive committee. As one would imply, the higher ups typically are the ones with the final decision (although the information they base their decision off of is the decision made by the P&T Committee since they are so far removed from the very specific details of information used).
The Purchaser (who makes the actual purchase): purchasing/inventory specialist. This individual orders drugs that are on formulary once the inventory gets low. Especially as of late, many drugs are unavailable due to a national shortage/manufactuer backorder and it is the purchaser who is responsible for getting around these obstacles and obtaining the drugs needed. Most hospitals buy their drugs from a wholesaler.
The User: patients. Simply put: patients use the medications to get better!
Although lengthy in this blog post, identifying and analyzing each of these buying roles in my own organization has helped me to better understand the difference between buyers and users. In the grand scheme of consumer analysis, it has also helped me understand who has the most say in what the consumers are receiving.
Going back to the 9 Need-to-Knows identified by Lehmann and Winer, I was puzzled by the last point: what they are worth. What could they possibly mean by this? Aren't all customers worth the same? What I realized is that it comes down to how much they purchase, at what cost, how frequently, and to what extent. As an out-of-pharmacy example, a firm who makes so many purchases from your organization that they make up about 15% of your gross margin each year would be "worth" much more to your company than a firm who's purchases only make up 1% of your gross margin each year. Losing the 15% firm would be a much more devastating loss to the company than losing the 1% firm. From a pharmacy standpoint (as terrible as it may seem) cancer, HIV/AIDS, and other chronic disease patients are probably "worth" the most since these patients often take many medications and these medications are often some of the most expensive medications on the market. Additionally, all of these conditions are conditions these patients will likely live with for the rest of their life (so longevity of business plays a role). As opposed to a child who gets a one time antibiotic treatment.
Phasing into the lecture discussion of this week, the class discussed some of the reports available in PharmaSim regarding consumer analysis. One of the ones highlighted during the discussion was the intended vs actual customer purchases. The class evaluated which brands' actual purchases were higher than what customers intended to purchase and which brands' actual purchases were lower than what customers intended to purchase. So why does this matter? Because it shows that some brands are able to sway customers away from what they intended on purchasing at the point of purchase. Is our company one of them? Are our biggest competitors one of them? What do we need to change in our marketing strategy to sway customers' actual purchases to be OUR brand? What are some of the marketing strategies being used by other brands who are successful at swaying the customer at point of purchase?
All good answers to these questions were brought up in class except for one factor that I was hoping to hear someone on the recording say but never did: PHARMACIST RECOMMENDATIONS!! If someone intends to buy just a cough suppressant but asks the pharmacist for their recommendation and the pharmacist recommends a combo product that has a cough suppressant and a nasal decongestant the brand could change! So maybe increasing relationships with pharmacists is something to look into for more recommendations of our brand.
I know this blog post is painfully long so I will end it with the discussion requirement. I would say that as a hospital, the marketing and advertising department do a pretty good job at not only marketing the special services offered at our hospital but how they affect the patient and why they are important. For example, by marketing certain surgical options like ACL surgery, carpal tunnel surgery, etc. they explain not only what these surgeries do but how they make the patient FEEL after the surgery as well as the benefits these surgeries offer to the patient's quality of life. Another good example of linking products' functional benefits to the emotional benefits of the consumer is drug company commercials (especially psychiatric medication for depression, bipolar disorder, ADHD, etc.).
Have a great weekend!
We started the week with some assignments and discussion around consumer analysis. Now to me, the sound of it seems quite simple. Know who your customers are, what they value, what price they're willing to pay, and where they are. As it turns out, consumer analysis is far from that simple.
Lehmann and Winer identify 9 Need-to-Knows for consumer analysis ... as you can see I was kind of on the right track:
Who buys and uses the product
What customers buy and how they use it
Where customers buy
When customers buy
How customers choose
Why they prefer a product
How they respond to marketing programs
Will they buy it (again)
What they are worth
They also identify the following buying roles: the initiator, the influencer, the decider, the purchaser, and the user. While it makes sense in this kind of context, I was terribly confused by the title of "Buyers versus Users". Aren't they the same? It depends what kind of view you are looking at. On a macro level, the ultimate buyer is the user. However, at the micro level we see the five different broken down positions of the buyer vs the user.
This section of the chapter made me analyze my own organization (the hospital) to identify these five levels of buyer roles, from the pharmacy department perspective.
The Initiator (who identified the need for the product): senior management/expert specialists (such as cardiologists, respiratory therapists, orthopedic surgeons, etc.). These specialists or senior management members identify the need for a certain drug. It could be a brand new drug recently introduced on the market, it could be an existing drug that is not currently on the formulary, or it could be a justification to keep a drug on the existing formulary.
[Side note: a formulary is a carefully crafted list of drugs that a hospital agrees to use by its physicians and pharmacists. This is ideal from both an inventory standpoint as well as a cost savings standpoint. For example, there are many different types of cholesterol lowering drugs called "statins"; fluvastatin, simvastatin, rosuvastatin, pravastatin, atorvastatin, etc. However, it makes no sense for a hospital to carry all of these different drugs when they relatively do the same thing... one or two is enough. So there is a committee at every hospital called a P&T Committee that evaluates which drugs should be approved to be a part of the formulary and which drugs are not suitable to be on formulary. By becoming familiar with a formulary, it is easy to see why drug representatives work so hard to pitch their drug product to pharmacy management in hopes that their drug will be included (used) in their formulary.]
The Influencer (who have informational or preference input to the decision): drug reps/P&T Committee members. I think its safe to say that drug reps having an informational and preferential input into the buying decision is self explanatory. P&T Committee members stem from all departments of the hospital, not just pharmacy. It consists of nurses, pharmacy managers, physicians, surgeons, nutritionists, etc. All of these members have preferential input into the decision. They have the voting rights of whether or not a drugs gets approved to become a part of/no longer be a part of the formulary.
The Decider (who makes the final decision through budget authorization): senior management/medical executive committee. As one would imply, the higher ups typically are the ones with the final decision (although the information they base their decision off of is the decision made by the P&T Committee since they are so far removed from the very specific details of information used).
The Purchaser (who makes the actual purchase): purchasing/inventory specialist. This individual orders drugs that are on formulary once the inventory gets low. Especially as of late, many drugs are unavailable due to a national shortage/manufactuer backorder and it is the purchaser who is responsible for getting around these obstacles and obtaining the drugs needed. Most hospitals buy their drugs from a wholesaler.
The User: patients. Simply put: patients use the medications to get better!
Although lengthy in this blog post, identifying and analyzing each of these buying roles in my own organization has helped me to better understand the difference between buyers and users. In the grand scheme of consumer analysis, it has also helped me understand who has the most say in what the consumers are receiving.
Going back to the 9 Need-to-Knows identified by Lehmann and Winer, I was puzzled by the last point: what they are worth. What could they possibly mean by this? Aren't all customers worth the same? What I realized is that it comes down to how much they purchase, at what cost, how frequently, and to what extent. As an out-of-pharmacy example, a firm who makes so many purchases from your organization that they make up about 15% of your gross margin each year would be "worth" much more to your company than a firm who's purchases only make up 1% of your gross margin each year. Losing the 15% firm would be a much more devastating loss to the company than losing the 1% firm. From a pharmacy standpoint (as terrible as it may seem) cancer, HIV/AIDS, and other chronic disease patients are probably "worth" the most since these patients often take many medications and these medications are often some of the most expensive medications on the market. Additionally, all of these conditions are conditions these patients will likely live with for the rest of their life (so longevity of business plays a role). As opposed to a child who gets a one time antibiotic treatment.
Phasing into the lecture discussion of this week, the class discussed some of the reports available in PharmaSim regarding consumer analysis. One of the ones highlighted during the discussion was the intended vs actual customer purchases. The class evaluated which brands' actual purchases were higher than what customers intended to purchase and which brands' actual purchases were lower than what customers intended to purchase. So why does this matter? Because it shows that some brands are able to sway customers away from what they intended on purchasing at the point of purchase. Is our company one of them? Are our biggest competitors one of them? What do we need to change in our marketing strategy to sway customers' actual purchases to be OUR brand? What are some of the marketing strategies being used by other brands who are successful at swaying the customer at point of purchase?
All good answers to these questions were brought up in class except for one factor that I was hoping to hear someone on the recording say but never did: PHARMACIST RECOMMENDATIONS!! If someone intends to buy just a cough suppressant but asks the pharmacist for their recommendation and the pharmacist recommends a combo product that has a cough suppressant and a nasal decongestant the brand could change! So maybe increasing relationships with pharmacists is something to look into for more recommendations of our brand.
I know this blog post is painfully long so I will end it with the discussion requirement. I would say that as a hospital, the marketing and advertising department do a pretty good job at not only marketing the special services offered at our hospital but how they affect the patient and why they are important. For example, by marketing certain surgical options like ACL surgery, carpal tunnel surgery, etc. they explain not only what these surgeries do but how they make the patient FEEL after the surgery as well as the benefits these surgeries offer to the patient's quality of life. Another good example of linking products' functional benefits to the emotional benefits of the consumer is drug company commercials (especially psychiatric medication for depression, bipolar disorder, ADHD, etc.).
Have a great weekend!
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