In a country the size of New Zealand, there is a lot to be gained by centralising essential services such as roading and rail, law enforcement, emergency services, health and education. The challenge for governments of all stripes is how to deliver local service that is responsive and effective, while the funding and planning is nationwide.
The arrival of the “big box” Chemist Warehouse chain has changed the competitive landscape of the NZ Pharmacy market. Local pharmacies need to re-think their response.
With 56 CW stores in NZ and talk of up to 100, plus the proposed arrival of their Sigma wholesale division and Amcal discount model, it is important that locally-owned-and-operated pharmacies do everything possible to protect their valuable position in the market.
One of the main competitive advantages the discounters have is their dominance of mass-market advertising. With regular print catalogues, sport sponsorships, outdoor advertising and saturation TV and online ads, they are creating an impression that they are the destination of choice for pharmacy retail and health services.
The fact is: our 800 owner operated community pharmacies provide a significantly more convenient, more local and more personalised pharmacy service to most New Zealanders*.
The best marketing rule I ever learned is to “accentuate the positive.” Successful marketing is all about identifying a message which highlights a strength, then amplifying this message at every opportunity.
A key area of community pharmacy success is the one-to-one client relationships that pharmacists and staff have with their customers. The opportunity to engage instore with every customer and deliver health solutions and advice is something that the discounters can’t copy due to their impersonal checkout-style service.
This means it is a survival imperative to differentiate your instore experience by ensuring that your pharmacy operates on the right-hand side of this table:
Once your pharmacy is performing to a high standard on the personal-service side of the ledger the big challenge is to find effective ways to spread this message.
A pharmacy spending (say) 2% of turnover annually on advertising ($20,000 per $1m annual turnover) can’t compete with the millions of dollars spent each year in NZ by Chemist Warehouse.
However if hundreds of pharmacies band together they can promote a nationwide message that clearly differentiates locally owned pharmacies (health professionals) from the corporate chemist chains (discount warehouses).
Marketing of New Zealand’s community pharmacy network is one of the important jobs that needs to be centralised in order to have enough reach and frequency to communicate successfully.
There are several other jobs in pharmacies that will be much more efficient and effective when done centrally.
Working together as a nationwide collective provides significant economies of scale and can enhance performance in many areas of business. This is a fundamental reason why so many franchise groups and co-ops exist across all business sectors. A lot of the heavy lifting that supports a high quality business model is carried out by skilled, specialist personnel for the benefit of all members.
The current pharmacy ownership laws have successfully protected our high quality community pharmacy network throughout New Zealand.* Now we must join together and centralise many aspects of pharmacy businesses if we want to continue to remain viable and competitive.
Get in touch to see how membership of The IPG can benefit your pharmacy: john@theipg.co.nz
*Reference: The ICPG Position Paper on Pharmacy Ownership
