Chapter 2 Important Concepts in Marketing

IMPORTANT MARKETING

CONCEPTS

David Holdford, RPh, MS, PhD

Professor, School of Pharmacy

Virginia Commonwealth University

Each Concept Has an Important Lesson for

Pharmacists

Slides to Accompany Chapter 2 in “Marketing for

Pharmacists”

Learning Objectives

Define key marketing terms: product; core, expected, and

augmented product; marketing myopia; potential, target, and

actual markets; the marketing mix; the four P’s; positioning; and

value proposition

Explain the difference between customers, partners, and

competitors

Describe two major categories of competitors

Differentiate internal from external customers

Describe the “products” offered by pharmacists

Identify and differentiate the various marketing tasks, the type of

demand they regulate, and suggested strategies

DEFINING THE PRODUCT

What is the general “Product”

Provided by Pharmacists to

Patients?

Marketing Myopia

Core

Product

Total Product Concept

Core

Product

Expected

Product

Augmented

Product

Tangible

Product

Total Product Concept

MEASURING THE MARKET

Market

Set of all individuals and organizations who

are actual and potential buyers of a product

or service

Wherever there is potential for trade, there is

a market

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

THE MARKETING MIX

PRODUCT PLACE

PRICE PROMOTION

POSITION

CUSTOMER MARKETER

Value Proposition “promise to customers of the value to be delivered in exchange for some

price”

“explains in a compelling and clear manner why a product or service

solves a problem or makes things better for customers than competing

options.”

Value proposition requires definition of:

• target audience

• the problem(s) faced by customers for which a solution is offered

(e.g., non-adherence with medications, uncontrolled warfarin levels)

• Based upon that information, the value proposition presents the

main features of the value package to be provided, typically

supported by evidence or logic-- called proof points.

DIFFERENCE BETWEEN

CUSTOMERS

COMPETITORS PARTNERS

Customer

Any person or group involved in or affected by an exchange

External – people outside of the organization

Internal – people within the organization

Primary Customer

Who is the Primary Customer of

Newly Graduated Pharmacists?

Your Employer or Your Patients?

Competitors

Identification of competitors requires a

clear definition of one’s product(s),

customer(s), & market(s)

What markets are served by Walgreens?

Competition

Intra type competitors compete by offering

similar tangible & augmented products

Inter type competitors compete in terms of the

benefits provided

Other Marketing Terms

THE TASK OF MARKETING IS

TO INFLUENCE DEMAND

Through various combinations of the marketing mix

Market Demand

Description Health Care Examples

Negative Demand

When potential customers dislike a product and may even go to great lengths to avoid it.

Screening for colon cancer even when at high risk. Men's aversion to vasectomies.

No Demand When customers are indifferent or uninterested in a product.

Preventive health care services and MTM services.

Latent Demand

When there is a strong need but no product available to satisfy it.

There are unmet needs for cures for cancer and drugs without adverse effects.

Declining Demand

When demand is falling and likely to continue falling.

The old time pharmacy

Irregular Demand

This describes a market with undesirable fluctuations in demand.

Retail pharmacy practice where customers decide the time and place to visit.

Full Demand Supply is perfectly balanced with demand.

Good examples are uncommon.

Overfull Demand

When demand exceeds supply. Drug shortages due to unexpected demand situations or shortages in supply.

Unwhole-some Demand

Demand that is not in the best interests of the consumer or society.

Cigarette, illicit drug, and underage alcohol use

Summary

Knowing marketing terminology helps to

learn marketing concepts.

Those concepts can be used to:

Communicate with managers

Understand more complex topics