Walgreens Marketing Plan Essay
The Alliance Boots part of the company also includes wholesale operations serving more than 140,000 harmonies, hospitals, and clinics in a dozen countries. (Walgreen Annual Report, 2014) Walgreen main objective is to be America’s most loved pharmacy-led health, wellbeing and beauty enterprise. Situation Analysis Currently Walgreen is relying on reinventing its stores to attract the aging population and the new health care reform which is expected to bring 30 more million people into the system. CEO Greg Wesson said, “Our ‘plan to win’ was a journey to innovate and reinvent Walgreen for a new era of growth and value creation.
Toward that end, we slowed new store growth to invest more in our existing tore base. We looked at new, innovative retail concepts both in the U. S. And around the world. We made major acquisitions such as Duane Reader in New York City and drugstore. Com, forged a strategic partnership with Alliance Boots and began a long- term strategic relationship with Impressionableness. All of this culminated in a year of solid progress in fiscal 2013 and a five-year total shareholder return for our stock of 145 percent. (Walgreen news 2014) Market Summary The profile type for the typical Walgreen customer
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Demographics 75% of Walgreen transactions come from female clients. (Hoover) 55% of Walgreen customers with smart phones use it while in the store. Hoover) Behavior Factors Behaviorally, there are many occasions that a person would need or want to visit a Walgreen. The benefit segmentation for consumer markets may be the most Walgreen Marketing Plan By tapeline powerful appeal that Walgreen NAS . Market Needs Walgreen is providing a “wellness experience” for customers at over 8,000 corners in America. Walgreen seeks to fulfill the following benefits that are important to its customers. Walgreen Market Values 2014) Honesty, trust, and integrity with our customers, our shareholders, suppliers, the communities we serve, and among ourselves. Quality through consistent and reliable service, advice, and products across every touch point and channel. Caring, compassionate and driven to delivering a great customer and patient experience through outstanding service and a desire for healthy outcomes. A strong community commitment and presence built through service, expertise, and the personal engagement of every Walgreen team member.
Market Trends In the last fiscal year, Walgreen reached record sales of $72. 2 billion with an adjusted net earnings increase of 16. 3 percent to $3 billion, while GAP net earnings increased 15. 2 percent to $2. 5 billion. Operating cash flow was $4. 3 billion for the year, and free cash flow reached a record $3. 1 billion. The company continued to return significant cash to shareholders with $1 billion paid in dividends, and provided a total shareholder return in the last 12 months of 53 percent. (Walgreen Annual Report 2014) Market Growth In fiscal 2014, prescriptions accounted for 64. % of sales compared to 62. 9% in fiscal 2013. Third party sales, where reimbursement is received from managed care organizations, government and private insurance, were 96. 5% of fiscal 2014 prescription sales which increased slightly from 95. 8% in fiscal 2013. Overall, Walgreen filled approximately 699 million prescriptions in fiscal 2014, an increase of 16 million, or 2. 4%, from fiscal 2013. Adjusted to 30-day equivalents, prescriptions filled were 856 million in fiscal 2014 and 821 million in fiscal 2013. Walgreen accounted for 19. 0% of the U. S. Detail prescription drug market in fiscal 2014 compared to 18. 7% in fiscal 2013(Walgreen Annual Report 2014). SOOT Analysis Strengths As the nations leading drugstore in sales, earnings growth, same-store sales increases, prescription sales per store, Walgreen position as the market leader is perhaps its greatest strength. Walgreen filled 856 million prescriptions in fiscal 2014, with the average store filling about 256 prescriptions daily, compared to the average 180 filled by other chain pharmacies. (Walgreen Annual Report 2014) Another strength for Walgreen is its superior locations.
As of May 31 ,2014 the company operated 8,217 stores. Walgreen numerous stores gives the company a large asset from which it can borrow against in the time of economic distress. A large chain means a large pool of resources including inventory, talented employees, and knowledge via networking. As a market leader Walgreen endeavors to provide convenience in its stores by offering Take Care Clinics at select locations, drive- through service, all-night hours, snacks, photofinishing, greeting cards, and general merchandise in addition to medication.
Weakness While Walgreen it the current market leader, the company’s greatest weakness may be its TTY to set itself apart trot competitors based upon price. W Walgreen competitive rival Wall-Mart announced that it will sell a month’s supply of many generic prescription drugs for only $4, Walgreen stock dropped 11%. Walgreen is not the low-cost leader in the industry and faces serious competition room discounters, who are willing to accept lower margins on prescription drugs because they can make up for lost profit in other categories.
Walgreen will not match these prices, meaning that Walgreen has chosen not to compete on price in its most important category. Walgreen is getting more involved in its customers’ welfare. Through in-store clinics, the company is providing such services as treatment for minor injuries, vaccinations, and physical therapy. These activities raise concerns about company and individual employee liabilities to the patients. Decisions involving malpractice insurance and who pays, employer vs.. Employee, will have to be addressed. Another weaknesses that Walgreen possess is its brand limitations.
Walgreen was one of the top 25 leading retailers in the United Sates based on brand value, being limited and having no international presence is a major weakness for Walgreen. (Satanist) Opportunities As mentioned previously, the new health care reform is expected to bring more than 30 million Americans into the market, increasing the pool of people seeking regular health care. In addition to this increase, the aging population of the United States promises to increase the fraction of the population seeking cure for chronic notations.
These two population growths provide Walgreen with an opportunity to gain more customers. Walgreen currently operates 400 in-store Take Care health clinics in the United States, which primarily employ physicians assistants and nurses rather than doctors because of their costs savings and equal ability to diagnose simple health issues. Expanding more of these clinics in response to the increased number of patients expected as a result of the health care reform could provide a source of future growth, as these clinics can easily serve people experiencing routine illness. Threats
One of the biggest threats to Walgreen is its competition with other companies that offer pharmaceuticals. Retail giants, Wall-Mart and Target are offering prescription medications at steep discounts, undercutting pharmacy chains like Walgreen. Consolidation and strategic alliances in the healthcare industry is a threat that could affect Walgreen. Many organizations in the healthcare industry, including pharmacy benefit managers, have consolidated in recent years to create larger healthcare enterprises with greater bargaining power, which has resulted in greater pricing pressures.
For example, in April 2012, two of the three largest pharmacy benefit managers, Medico Health Solutions, Inc. And Express Scripts, Inc. , merged. The resulting entity is the largest pharmacy benefit manager in the United States. If this consolidation trend continues, it could give the resulting enterprises even greater bargaining power, which may lead to further pressure on the prices for Walgreen products and services. (Walgreen annual Report 2014) Changes in economic conditions could be a threat to Walgreen also.
Walgreen performance has been, and may continue to be, adversely impacted by negative changes in national, regional r local economic conditions and consumer confidence. Competition As leader in the retail drug industry and as a retailer to general merchandise, Walgreen competes with various retailers, including chain and independent drugstores, mail order prescription providers, grocery stores, convenience stores, mass merchants, online pharmacies and retailers, warehouse clubs, dollar stores and other discount merchandisers(Walgreen Annual Report,2014).
Some of Walgreen major competition includes C.V. Carmaker, Rite-Aid Corp.. , Medication Solutions, Express Scripts, Safe Way Inc. , Target, Wall-Mart, C.V., and Kroger. Product Offerings Walgreen offers several products and services. Product offerings include household products, convenience foods, personal care beauty care, photos, and seasonal items. Walgreen has its private brand known as ‘Nice” products, which includes more than 400 high quality grocery and household products at prices up to 30 percent below other national brands.
The pharmacy service would have to be the best product offering that Walgreen possess, prescription drug sales are the biggest source of value for Walgreen accounting for more than 60% of its total value. Walgreen Annual Report) Keys To Success Walgreen key success is their convenience delivered to customers. Most of their stores are on high-profile corners of the world. Their stand-alone buildings also let their drugstores set their own hours and have greater visibility. Another key to success is the employees of Walgreen, who are uniquely productive and good performers.
According to L. Daniel Jordan, former chairman and chief executive of Walgreen, “we’ve got people who’ve been here 10 years, 20 years, 30 years, 40 years. With those people, there’s a lot of continuity’ (Griffin, 2000, p. 1). The employees’ staying in the same company for a long time enables Walgreen work ethic to be very consistent. Critical Issues Walgreen main critical issues are completion and debt. As of the 2014 fiscal year, Walgreen was 13 billion dollars in debt. Waistlines, 2014) Marketing Strategy Going forward, the company said it is focused on three areas of opportunity: Delivering a complete “Well Experience” by transforming the customer experience across all of the company’s touch points, channels and formats; Transforming the role community pharmacy plays in health care by offering unparalleled access to innovative, high quality and affordable health-and-wellness services; and Creating an unprecedented and efficient global platform through its strategic partnership with Alliance Boots Gumbo. CSS, 2014) Mission Walgreen has a creed rather than an mission statement: We believe in the goods we merchandise, in ourselves and in our ability to render satisfaction. We believe that honest goods can be sold to honest people by honest methods. We believe in working, not waiting; in laughing, not weeping; in boosting, not knocking; and in the pleasure of selling our products. We believe that we can get what we go after, and hat we are not down and out until we have lost faith in ourselves.
We believe in today and the work we are doing, in tomorrow and the work we hope to do, and in the sure reward the future holds. ” (Misinformation 2008) Marketing Objectives A general objective tort Walgreen NAS been and should continue to be I TTS customer satisfaction. Because Walgreen offers a variety of services, with the pharmacy being of the most importance, it is critical that customers have a positive experience. Walgreen is unique because it offers a combination of goods and services, and therefore must find a balance between meeting the expectations of customers in OTOH areas.
Walgreen seeks to grow pharmacy, front-end and online market share through new store growth, comparable store sales increases, pharmacy prescription file purchases and strategic acquisitions. Target Markets Walgreen sells its drugs to anyone from the age of 18 to possibly someone over 100 years old. The stores layout shows Walgreen is marketing to multiple different target segments. Walgreen primary customer profile is a 25-54 year old woman with two children. In addition, she is the primary caretaker for one elderly parent or relative. She is high school educated and has an average income of $48,000.
Walgreen entire new “store of the future” concept was built around this customer profile and lifestyle where “she” shops for herself, children, family and those seniors in her life where she is the primary caregiver(Obviousness.. 2014). The second target customer profile is the senior population. The next markets being targeted are patients with chronic conditions like diabetes, hypertension, and CHEF (congestive heart failure). Positioning Walgreen is the one stop shop that provides 2417 prescription and healthcare product and services with convenient locations.
As part of Walgreen multilayer Roth program and market leadership strategy, they have gone to the lengths of paying top dollar for the best freestanding locations in every city and town on the corner of main and main. The company has been successful by placing Walgreen in 50 states and nearly every retail market from Maine to Hawaii. As a result of their growth plan, Walgreen has enjoyed uninterrupted growth in sales and profits for 36 years. Walgreen was able to fill more prescriptions, operate more drive through windows and offer more open all night stores than any other chains in the retail market (Reuters).
Strategies In fiscal 201 5, we plan to pursue strategies designed to create a “Well Experience” and further transform our traditional drugstore to a “retail health and daily living” store while delivering an outstanding customer experience through enhanced employee engagement; transform the role of community pharmacy to play a greater role in healthcare through integration and expanded services; and establish an efficient global platform enabling us to expand across new channels and markets(Walgreen Annual Report, 2014).
Marketing Mix Product: Walgreen offers both goods and services. This includes products that are or everyday household use and services for prescription drugs. Their product includes a store brand that consumers can trust and has a target group at who they aim their services to Price: Walgreen strives to have fair but competitive pricing for services and products and even offer coupons or discounts Promotion: Walgreen uses this marketing strategy to its fullest by having an online website, a flyer sent out in the mail, internet ads, magazine ads, and customer loyalty programs.
Place: Walgreen is located conveniently tort consumers in all cities and states tort consumers to have readily access to. They are also located online for those nonusers who may not be able to get out without some help due to a disability. They have a distribution strategy that includes having their product and services delivered right to the consumer. Conclusion Based on Walgreen’ SOOT Analysis, there are several areas which Walgreen can focus in order to retain its position of market leader.
First, Walgreen must further focus on what makes different from its competitors, customer convenience. This is especially important in setting Walgreen apart from large discounters and supermarkets. Convenience is why customers choose Walgreen, and Walgreen must do its best to take advantage of it. Walgreen should expand Take Care Clinics into New York and California, states with areas of very high populations.
Within those states, locations near concentrated workplaces and schools should take priority, as working individuals and individuals with school-aged children have the most exposure to contagious disease and the most limited schedules. In order to further focus on convenience and maintain its number one market position, Walgreen must also concentrate on expanding its online services. Online services add convenience and helps Walgreen’ brand image while allowing the company to achieve the benefits off multiplicand strategy.