Marketing plan for Oak Pharmacy

1. Terms of Reference

Oak pharmacy is a family run, independent pharmacy business which started

in 1970 in
Essex.
It provides the traditional dispensing and advisory services to the local
community. It also
sells a few selection of health and beauty products and also sells some
general sales and
over the counter medicines.
Oak pharmacy is situated in a community where there is 1 hospital, 3 general
practitioners
(GP) surgeries, 10 pharmacies (including a supermarket chain and a
hundred hour
pharmacy).
The population in the community is diverse, with 66% Caucasian, 20% Asian
and 14%
Black. The population generally is well educated and most are working class. Over
50% of
the population is over 50 years of age.

The supermarket chain pharmacy and the 100 hour pharmacy just opened
recently.
The sales and the number of prescription dispensed began to reduce. Oak
pharmacy also
offer some extra services, but these are rarely taken up due to lack of
advertising.

Oak pharmacy needs to offer pharmacy services that will be able to compete with the
nearby competitors. To achieve this, a marketing plan was developed.
The market was evaluated by considering both the microenvironment and the
macroenvironment. SWOT analysis was performed to identify major competitive
advantages of Oak pharmacy as compared with the weakness and to be able to
identify opportunities and threats and be able to use this to its advantage.
Marketing mix was designed to be able to meet the marketing objectives of Oak
pharmacy via targeting the right people and offering them what they need.

2. Executive summary

The Oak pharmacy is an independent pharmacy business whose retail

business has
reduced recently due to intense competition.
The external and internal marketing audit was performed to be able to
analyse the business
strengths, weaknesses, opportunities and threats (SWOT).
• Strengths - having an independent pharmacist prescriber and having
loyal customers
• Weaknesses - May need to remodel pharmacy for space for new
services. The staff will need improved knowledge on herbal and
nutritional medicines.
 • Opportunities - The local population consist of large number of people
with cardiovascular and diabetes diagnosis. The local doctors’ surgery
wants to develop some presence in diabetes to compete.
• Threats – Supermarket chains pharmacy, 100 hour pharmacy, and
nutritional shop nearby.

New target markets are developed and products /services are offered to
these target
Markets identified based on the SWOT market analysis performed.
SWOT was used to work on a plan of action to improve marketing
performance

3. Business Mission

The Oak pharmacy’s mission is to provide Pharmaceutical and health care at

the
highest possible quality to both healthcare professionals and members of the
public.

4. External Marketing audit

External environment of a business is divided into the

macroenvironment and the
microenvironment.

The macroenvironment of Oak pharmacy is illustrated by the

following PESTLE
analysis:

Political factor: Agenda for change in the National Health Service

(NHS), which
may make the hospital sector more attractive to work than the
independent
pharmacies.
Government policies also limit profitability of independent pharmacies,
favouring the
bigger chains, since the Government dictates the amount paid for
pharmaceutical
products and services.

Economic factors: Taxation and interest rate changes will have an

influence on the
profit of the business. Increased unemployment may mean less cash
flow. Changes
to budget allocation (allocations for health) may mean provision of
many clinical
services in the pharmacy for little remuneration

Social factors: Increased ageing population, changing ethnic

population, customers
desiring their chemists to be closer to home (convenience). All these
may influence
 the kind of service to be offered to the customers, as it may mean
opportunities for
specialised services for that group. Customers are moving towards a
one stop
shopping (i.e. bringing in their prescriptions and shopping in the same
place)

Technological factor: Implementation of central Information

Technology systems,
modernisation of patient care pathways. Although it enables fast
access to up to
date medical information on patients, hence ability to offer patient
counselling service
more accurately. It can also mean requirement of investment in
equipments for the
pharmacy business.

Legal factors: The Independent pharmacy contracts with the NHS,

which will state
the minimum service required, the minimum opening hours, which
brand of
medicines to be supplied on a prescription etc.
NICE guidelines will also influence what medicines to prescribe for
what condition
and this may influence the kind of stock held at the pharmacy.

Environmental factor: Pollution may cause increase in asthma

cases. This may
increase cash flow/ profit as the number of customers requiring
emergency asthma
pumps may increase.

The microenvironment of Oak pharmacy consists of the market, customers,

competitors, distributors and suppliers.

The market for Oak pharmacy consists of people living within the local
areas, male females and children. Over 50% of potential customers
are >50 years of
age. Most are working middle class people and are economically
conscious and are
always on the look out for good deals.
Over 50% are on more than one medication for long term illnesses
(poly-pharmacy).
There are a few nursing homes in the area who require extra
pharmacy services like
prescription delivery, medication usage reviews, blood pressure
monitoring, smoking
cessation services etc.
The market trend is towards cost effectiveness. The Government is
reducing the cost
paid for various products and services offered by the pharmacies,
therefore
suppliers/ distributors are under pressure to cut costs.
 As there is increased ageing population, they become more
dependent on
Medications as people want to live longer and more comfortably.

The competitors for Oak pharmacy include supermarket chain

pharmacies e.g.
Tesco, Boots chemist, who are able to obtain better prices for their
products due to
economies of scale. Internet pharmacies, who offer convenience
ordering of
medicines from the comfort of ones home and also cheaper products
due to reduced
overheads. Other local pharmacies which may be closer to some customers or offer
more personalised services and 100 hours pharmacies who open for longer hours.

The micro environment can also be described using the five forces
model.

Figure 1: Five Forces Model

Competitive rivalry among current competitors – High

Supermarket chain pharmacies are able to sell over the counter
(OTC) medicines
cheaper due greater purchasing power.

Bargaining power of buyers - High

Buyers are not able to differentiate between the services offered by
different
pharmacies. Customers are also more sensitive to price deals which
will be greater
in the supermarket chain pharmacies and online pharmacies

Bargaining power of suppliers – Low

 There are any suppliers in the industry

New entrants into industry - Low

There are barriers to entry into pharmacy business in UK.
Licence to open a pharmacy or supermarket pharmacy is only granted
if no other
pharmacies within 1.6mile radius.

Threats of substitute - Low

Only herbal medicines are available as substitute and many
customers will not be
willing to substitute.

5. Internal Marketing Audit

This provides an insight into various activities and overall performance

of Oak
Pharmacy Limited.

Operating Results
Oak Pharmacy is an Essex based family owned pharmacy business
started in 1970.
Oak pharmacy dispense medicinal product on National Health Service
prescription,
sell over the counter medicines and health and beauty products. Most
of its product
and services are targeted for over 50s. The estimated sales in 2006
was 1.5million
pounds

Strategic Issues Analysis

The marketing objectives of Oak Pharmacy is to increase the
customers on repeat
Prescription records by 5% each quarter. To create increased
customer awareness
of services offered, to increase profitability and to achieve 20% growth
in the next
year.

The company has a competitive advantage of offering a local delivery

service to
customers. Prescription can be dispensed and some other product
bought at the
pharmacy can be delivered to the customer.
The company’s core competencies a wide range of product and
services targeting
over 50s and also having an experience pharmacist manager who is
also an
independent prescriber. This means that customers may not need to
make an
appointment to see their doctor, when they can drop in at their local
pharmacy for
their prescriptions.
The prices for over the counter medicines are higher than that of
supermarket
 pharmacy chain, but Oak pharmacy offers more pharmaceutical
services tailored
towards customers needs.

Marketing Mix Effectiveness

Oak Pharmacy provides a range of products and services including
over the counter
medicines, health and beauty products, repeat prescription, blood
pressure and
blood glucose monitoring, medication usage review, prescription
collection and
delivery services. Most of the services are provided free of charge, as
the
Government pays for them. Over the counter and health and beauty
product are
slightly more expensive than competition , but customers are receiving
personalised
service.
Promotion is mainly by advertising on shop windows and direct
marketing.
Oak Pharmacy is strategically positioned very close to the doctors’
surgery. Patients
go to the pharmacy for medicinal products. Patients who are unable to
visit the
pharmacy are offered delivery service.

6. SWOT Analysis

Strengths Weaknesses

1) Has loyal customers due 1) Limited experience in

to high quality of service,
excellent clinical skills and
knowledge, hence good
reputation among local
doctors
2) Staff who are highly
trained and customer
attentive
3) Pharmacist manager is an
independent prescriber,
hence patients do not
have to wait for
appointment for minor
ailments with doctors
delivering other services
2) May need to remodel
the pharmacy so as to
create space for new
clinical services
3) Staff will need to
improve their knowledge
on herbal and nutritional
supplements
 Opportunities Threats

1) Large population with 1) Supermarket pharmacy

cardiovascular diagnosis
2) Doctor’s surgery does not
have diabetic service and
wants to develop some
presence in diabetes to
compete
3) Large number of people
with diabetes and asthma
4) Constant growth in number
of people taking medication
chain are putting
pressure on the
independent pharmacy
business
2) Short of pharmacist in
the community sector
(since agenda for
change and pharmacist
are moving into hospital
sector)
3) Nutrition shop has just
opened nearby

Table 1: Strengths, weaknesses, opportunities and threats (SWOT)

analysis

7. Marketing Objectives

There are two types of marketing objectives.

Strategic Thrust

The objectives in terms of service to provide and for which market is

explained
below. The Ansoff Matrix is a way of looking at growth opportunities.

Existing market New/related market

Market penetration Market development

Existing • Encourage • Providing the BP

Products customers to opt for monitoring, medication
repeat prescription usage review service
ordering/dispensing etc at the doctors’
• Improve reputation surgery
as customer
focused
 New/related Product development Enter new market
Products
• Health lifestyle • New service for
advice customers with
• Advice/ supply of cardiovascular problems
emergency • Running a diabetic clinic
contraception services for the local
• Offering cholesterol doctor
testing service

Table 2: Product growth strategies – the Ansoff Matrix

Strategic Objectives
Oak Pharmacy will build sales and market share of the new service to
be provided to
the doctors’ surgery, hold the sale and market share of existing
product and
services and may want to drop the nutrition supplement sales, as a
nutrition shop
has just opened nearby which will have more variety.

8. Core Strategy

Target Market(s)
1. This target markets include middle aged (50years) or older and
taking at least two
prescription medications. They are likely to have chronic conditions
like diabetes
and hypertension. They are concerned about managing all their
medications and
being healthy. Their families are older, most are well educated and
those working
have incomes at or above average
2. This market consist of elderly people in nursing homes who are on
four or more medications for chronic conditions and have mobility
problems
3. This target market consist of young people (<40 years) who are
relatively healthy
and are interested in healthy lifestyle. These people may be single
or in a family
unit. Most are educated, working and have incomes at or above
average.

Competitor Targets
The main competitors of Oak Pharmacy are the supermarket chain
pharmacies.
Although, Oak Pharmacy can not compete on price of medicines and
other health
And other health and beauty products, it will compete with these
market rivals by
 providing clinical services, offering prescription delivery service and
advertising
aggressively at the local surgeries to attract the targeted customers.

Competitive Advantage
The main competitive advantage is that the pharmacist at Oak
Pharmacy is an
independent prescriber who can prescribe medicines for certain
conditions. This
means that customers do not have to wait for 48 hours before seeing
their doctor for
prescription. The other advantage is the home delivery service offered
by Oak
Pharnacy.
Oak Pharmacy is also more customers focused and more sensitive to
customer’s
needs than competitors

9. Marketing Mix Decisions

Product
1. Care at the chemist service is aimed at target markets 1 and 3. This
programme
makes it possible to consult a pharmacist privately for minor
ailments, advice on
smoking cessation and provision of free nicotine replacement
therapy, advice and
supply of emergency contraception. It is basically a service
provided as a quicker
alternative to consulting a doctor.

2. Medication review service is aimed at target market 1. This

programme include
comprehensive medication review, patient education and
developing a plan to
manage any medicines related problems.

3. Healthy lifestyle service is aimed at target market 3. The service

includes blood
pressure monitoring, blood glucose testing, cholesterol testing,
body mass index
(BMI) testing, cardiovascular risk testing. A 30 minutes session is
included to
provide appropriate lifestyle and nutrition advice.

4. Home care service is aimed at target market 2 and will include

medication review
service and supplying and delivery of medicines for the home
bound elderly
patients.

5. Over the counter medicinal products and health, beauty and

nutritional products.
 6. Disease state management service is aimed at target market 1.
This programme
will be aimed initially at diabetes (other diseases may be
introduced later). It
includes medication review, blood glucose testing, dietary advise
etc.

Promotion
Advertisement to promote Oak Pharmacy and services provided will
be put in the
newspaper.
Leaflets describing all products offered at the Oak Pharmacy will be sent to all local
doctors’ surgeries, where patients can pick one. Leaflets about
medication review
and disease state management services will be posted regularly to all
current
customers who are diabetic or on four or more medicines.
The addresses will be taken from our Patients Medication Record
(PMR) kept at the
Pharmacy.
Pharmacy staff will be trained and given incentives to sell the services
in the
Pharmacy, when opportunity arises when interacting with customers.
Promotions and discounts offered on other products will be displayed
on the shop
windows and around the pharmacy.
Services offered by Oak Pharmacy will be advertised on the shop
windows. Sales
promotion offering discount will be offered at the time of launch (for
paid services) to
attract customers.

Price
Care at the chemist service is priced at the NHS price. Free for
children up to 16
years or over 60 years old and for people on income support. The
price is £7.20 per
item on any prescription issued for working people.
Medication review, disease state management and home care services are free, as it
is paid for by the Government. Healthy lifestyle service is priced as a complete
programme or separate components. Complete programme is £20, while the
components are priced as follows: blood pressure monitoring - £5, blood glucose
testing- £5, cholesterol testing - £5, BMI testing -£5, cardiovascular risk testing - £5.
Prices are usually set for the medicinal, health, beauty and nutritional products by the
head office.

Place
Homecare service will be provided at the nursing homes for the
elderly, medication
review and disease state management services will be provided at the
pharmacy and
at the doctors’ surgery while care at the chemist service and healthy
lifestyle service
will be provided at the pharmacy.
 Process
Appointment system will be used initially to provide the services at the
pharmacy.
The services will be available during a specific block of times during 2 days in a
week, but it can be expanded later to meet demand.
Appointment system will also be used to provide medication review
service at the
doctor’s surgery and is provided within an afternoon session once a
week.

People
Pharmacists will be the main service providers. They will provide all
the services at
the Oak Pharmacy.
The head office will provide afternoon pharmacist cover for 3 days a
week, on the
days the services are provided.
The customers will be served with over the counter, health and beauty
and nutritional
product by a group of suitably trained, smartly dressed, pharmacy
staff.
All pharmacy staff will also be suitably trained to be familiar with the
process
involved with the service provision.

Physical evidence
Patient consultation area, which will be separate from the dispensing
area, will be
created. The space will have a door to allow privacy to perform tests
and hold
counselling sessions. The consultation area needs to be big enough to
fit
equipments, computer, a table and at least 2 chairs.

10. Budget

Marketing budget is to be set according the business objectives.

The overall budget will be 100% and it will be broken down as follows:

Advertising in newspaper 10%

Direct mail 2%
Sales promotions 5%
Posters and leaflets 10%
Education and training of staff 20%
Incentives given to staff 3%
Salary (for cover pharmacists) 30%
Pharmacy refit to create additional consultation area 10%
11. Organization and Implementation

The managing director at the head office is aware of the new marketing effort
and will
therefore recruit 2 part time extra shop floor staff and a pharmacist (3
afternoons a week).
 The pharmacist manager will be responsible for implementing marketing
plans and will
report directly to the managing director.
Budget will be allocated to the manager by the head office and the
pharmacy’s performance
will be evaluated every month.

Implementation time for the marketing plan, showing when a step is started
and completed
is outlined in table 3.

Descriptions Apr10 May10 June1 July10 Aug10 Sept10 Oct10 Nov10 Dec10
0
Remodel
service area
Staffing and
workflow
Develop repeat
forms/medicatio
n history
Prepare
promotional
materials

Staff training

Promote service
continuously

Go live with
service

Provision of
service

Adjust service
as required

Table 3: Implementation plan for Oak pharmacy

12. Control

The main responsibility of controlling will be on the pharmacist manager of

Oak pharmacy,
who will report to the head office on a regular basis.
The control process to be in place will evaluate:
Service quality. A regular survey of the quality of the services received by
the customers at
the Oak Pharmacy should be performed.
 Customer satisfaction. A survey of customer satisfaction with the service
process and the
benefits acquired from the service
Financial performance. Actual spending on the service should be compared
with budgeted
figures regularly. Income statements can also be developed to monitor the
financial
performance of the new services.
Service growth. The number of customers receiving the service and the
number of service
provided should be tracked every month.

13. Reflexive account

The limited words (including reflexive account) were a big constraint. I also
have time
constraint with studying as I work full time.
I did not really understand the topic until I applied it to pharmacy practice
which is my
familiar territory. Even this was difficult for me initially but later I could
understand it better.
The module has made me understand that marketing can be applied to any
product/service/
profession.
During the preparation of the marketing plan, I found the SWOT analysis and
core strategy
quiet easy but struggled a bit with control, organisation and implementation.

I am now aware that it is more profitable to be a marketing oriented company

than a
product/service focused one.

Prior to my taking this module, I would consider that the only option left for an
independent
pharmacy, whose main competitor is the supermarket chain pharmacy, is to
sell it off. Now I
have realised that the pharmacy can actually focus on its competitive
advantage, strength
and opportunities and work on them.

In the future, I will give myself more time to go over the study texts,
practicalise the
marketing plan