Transcript FIP Meeting
Chapter 2
Important Marketing
Concepts
Chapter 2 slides
TIP
for Marketing
for
Know the terms to know
the concepts.
Pharmacists,
2nd Edition
Learning Objectives
• Define the following marketing terms: product;
core, expected, and augmented product;
marketing myopia; potential, target, and actual
markets; the marketing mix; the 4 P’s;
positioning.
• Describe two major categories of competitors.
• Differentiate internal from external customers.
• Explain the difference between the “products” of
pharmaceutical care and of dispensing activities
mandated by OBRA ’90 legislation.
• Identify and differentiate the various marketing
tasks, the type of demand they regulate, and
suggested strategies.
Defining the Product
Provided by
Pharmacists
Defining a “product” as a
tangible object
Typically defined by nonmarketers as
physical objects of value, such as a pill.
For marketers, the tangible product is only
a means of packaging a benefit.
Many benefits come in intangible packages
(e.g., pure services such as drug
information).
People do not buy drugs. They buy the
benefits that drugs can provide.
How marketers define
“product”
Anything satisfying a need or want
Can be an object, service, activity,
person, place, organization, or idea
This broad definition discourages focusing
only on tangible objects (e.g., drugs)
Changes focus from tangible object to
benefits received
Total product concept
Core
Product
Defines products
on several levels
Core product
Definition -- benefits resulting from
the overall product package
It is what the customer is really
buying. What is the core product of
A camera?
Makeup?
Drugs?
Medication therapy management (MTM)
services?
Marketing myopia
Shortsightedness of
marketers who become
preoccupied with selling
the tangible product while
failing to consider their
core product
How might pharmacists
suffer from marketing
myopia?
What are the consequences
of this?
Tangible
Product
Total product concept
Core
Product
Expected
Product
Expected product
Definition –what the customer
expects from the marketer
Depends on the purchasing situation
and the expectations set by the
marketer
Studies have shown that patients do not
expect much from pharmacists.
What do patients expect?
Total product concept
Core
Product
Expected
Product
Augmented
Product
Tangible
Product
Augmented product
(a.k.a. “differentiated”)
Definition -- bundle of services that
accompany the tangible product
Used to differentiate one’s product
package from competitors
Anything provided that is more than
that expected by the customer is
“augmented”
List some ways that pharmacists augment
the core product.
Example: Aspirin
Tangible
Core
Expected
Augmented
Medication therapy
management services
Tangible
Core
Expected
Augmented
Differentiating
Pharmaceutical Care
from Basic Dispensing
Quickly and clearly describe
the difference between
pharmaceutical care and
basic dispensing services.
Background
Many pharmacists and students can’t clearly
explain the difference between
pharmaceutical care and typical dispensing.
This is a serious problem because payers and
patients often wrongly believe that
pharmaceutical care services are covered by
dispensing fees.
In truth, dispensing fees cover only the
minimum level of service pharmacists are
capable of providing.
If pharmacists wish to expand their service
compensation beyond dispensing fees, they
must be able to articulate the differences.
Background
OBRA ’90 established the minimum
level of care required by pharmacists.
It mandated that pharmacists
Accurately dispense
Clarify incomplete or illegible prescriptions
Not dispense “obvious” errors
Keep patient profiles
Carry out simple drug-use review activities
“Offer” to counsel.
Limitations of OBRA ’90
Focuses on tangible products
Addresses only flagrant drug-related
problems (DRPs)
Doesn’t recognize value of pharmaceutical
care
Establishes standards that are far less than
what pharmacists are capable of providing
Pharmaceutical care/MTM
Assistance with drug therapy
individualized to patient need
Detects, prevents, and minimizes DRPs that
may not be revealed in normal dispensing
Requires a greater level of communication,
monitoring, and problem solving
e.g., patient and provider consultation,
planned monitoring and follow-up, care plans,
education
Services not covered by
OBRA ’90
Consultations with patients, prescribers,
and other health care providers
Treatment plans
Detecting “safe” but less-than-optimal
therapy
If it doesn’t hurt, then dispense it.
Assisting in selection of appropriate drugs
Training patients
“Brown bag” drug review sessions
the Market for
Determining
Pharmacist Services
Market
A market is a set of anyone who
might conceivably buy a given
product.
Actual buyers
Potential buyers
Whenever there is a potential for
exchange, there is a market.
Total
Population
Potential
Customers
Targeted
Customers
Actual
Customers
Market
Actual market size depends on
Interest of the customer
Ability to access and pay for the
product
Willingness to pay.
Actual market may include
untargeted customers.
What is the market for
MTM services?
Potential customers
Target customers
Actual customers
What do pharmacists need
to do to expand the market
for MTM services?
Think interest, ability,
and willingness.
Marketing mix
(a.k.a. 4 P’s)
TIP
Everything you do is part
of the marketing mix.
Product
Place
Price
Promotion
P roduct
- f ast, friend ly s ervice
- e xtens ive
co mp lementary d ru g &
merch and ise selection
-d isease managem ent
serv ices
-gen eric d rug s
-co mpu terized p atient
p ro files
-p leasan t service
su rro un d ings
-co mpeten t, emp athetic,
& reliab le care
P rice
-d isp en sin g f ee
-p ercent o f A W P
-in su rance co verage
-cop ay ment
-p ro fessio nal serv ice fee
-f in an cing
P rom otion
-adv ertisin g
-d irect marketin g
-p ub lic relation s
-p erson al sellin g
-sales p ro mo tion
P lace
-easy access to the
ph armacis t b y teleph on e,
In tern et, o r in perso n
-con ven ien t lo catio n &
park in g
-d eliv ery and mail
serv ices o ffered
Product
Place
Positioning
Promotion
Price
Positioning (the
th
5
P)
Process of creating a favorable image of a
product or business in the minds of the
customer (i.e., target markets)
Image results from everything that the
customer see, hears, touches, smells,
tastes
e.g., Starbucks
Whether there is an active positioning
effort or not, an image will occur in the
mind of customers
What is the image of:
Oprah
Arnold Schwarzenegger
Christina Aguilera
Britney Spears
Donald Rumsfeld
Martha Stewart
The average pharmacist
Competitors
Need to be identified, monitored,
and beaten in the market
Identification of competitors
requires a clear definition of one’s
product(s), customer(s), and
market(s)
What markets are served by CVS or
Walgreens?
Competitor types
Intratype - similar or the same
products as the organization or
individual
GM/Ford, McDonald’s/Burger King
Intertype - distinctly different and
competing organizations or
individuals
Movie theaters, Richmond Braves, TV
Competition
Intratype competitors compete by
offering similar tangible and
augmented products.
Intertype competitors compete in
terms of the benefits provided.
Therefore, it is critical for
pharmacists to understand how
customers view their product.
Competition depends on how a product is defined
in the mind of customers.
http://marketplacemoney.publicra
dio.org/display/web/2005/09/16/c
linic_on_aisle_one/
Options for illnesses after
MD office hours
Urgent Care Clinic
Retail Store Clinic
Emergency Room
What is a customer?
Customer
Marketers consider a customer to be any
person or group involved in or affected by
an exchange.
External – people outside the organization
(patients, suppliers, third-party payers,
family members, other health care
professionals)
Internal – people within the organization
(technicians, boss, people in other
departments)
Customers of MTM services
provided by Walgreens
External – people outside the
organization
Internal – people within the
organization
Definitions
Customer chain – relationships
between internal and external
customers that lead to final
product
Internal marketing – when
management treats internal
customers as they would treat
external customers
The task of marketing
is to influence demand
through various combinations of
the marketing mix.
Marketing tasks
Conversional marketing
Negative demand (dislike of
product)
Understand why people dislike and
develop strategies
Stimulational marketing
No demand (indifference or
disinterest)
Find ways to connect benefits of
product with person’s needs and
interests
Marketing tasks (cont)
Developmental marketing
Latent demand (strong
need, no product)
Identify unmet needs and
develop new products
Remarketing
Declining demand (and
further declines likely)
Regenerate demand by
repackaging product
Marketing tasks (cont)
Synchromarketing
Irregular demand (undesirable
fluctuations in business)
Even out by “training” your customers
Maintenance marketing
Full demand (ideal situation)
Prevent erosion of demand
Maintain quality, keep up with customer
tastes, and outdo the competition
Marketing tasks (cont)
Demarketing
Overfull demand (demand exceeds
supply)
Long-term solution - increase
production. Short term – raise prices,
cut corners, restrict access
Countermarketing
Unwholesome demand (socially
undesirable)
Help people give up bad behavior
Summary
Knowing marketing terminology
helps in learning marketing
concepts.
Those concepts can be used to
Communicate with managers
Understand more complex topics.
Questions?