Marketing and Branding, Essay Example

Introduction

Marketing and branding are very important concepts in any industry, and healthcare products and services are not exempt to this. This report selects the online pharmacy healthcare service and discusses marketing and branding as it relates to this service. In particular, the succeeding sections shall define target markets and their importance, as well as the issues that need to be considered when selecting and managing a target market. Following this, this report proceeds to describing the concept of branding and its importance to online pharmacies. This report selects The Canadian Drug Store as a current common brand of the online pharmacy service and analyzes how successful the company has been in branding its service to its market.

Target Markets

A target market is a group of people sharing some common characteristics who become the intended audience of a company’s marketing efforts in selling a specific product or service (Kurtz, 2010). A target market can be selected according to various factors, such as geography, gender, age, economic capacity, and many others (Kurtz, 2010). For online pharmacies, the target market is strongly defined in the work of Cook (2003). Cook (2003) narrated how in the United States, healthcare costs are soaring because of the country’s free-market approach to medicine. That is, the prices of medicine are allowed to rise in line with market demand. Thus, many Americans, particularly those who do not have sufficient insurance coverage, are burdened heavily by expensive medication, and this is especially true for people with common ailments that require regular medication such as diabetes, high blood pressure, and the like. These people are the usual target markets of online pharmacies. Online pharmacies are based in other countries, where government laws put strict caps on the prices of medicines that prevent manufacturers from increasing prices based on demand (Cook, 2003). As a result, online pharmacies are able to offer clients from the United States much cheaper medicine than is available from pharmacies in the country. This frames the target market as Americans who need medication but cannot afford the high prices in local pharmacies, or are simply looking for better deals than local pharmacies can offer on their needed medications.

Selecting the correct target markets is of critical importance to any business. As discussed by Kurtz (2010), a well-defined target market can enable the business to maximize its resources spent in marketing and advertising its product, while a poorly or too broadly defined target market can lead to wasteful spending on marketing activities that would not benefit the company at all. This can be illustrated in the context of online pharmacies by considering the rationality of identifying Americans on general as the target market, or identifying only Americans with poor healthcare coverage. If the entire American population was identified as the market, the firm can spend hundreds of thousands of dollars advertising across various channels. However, this is wasteful since Americans with good healthcare coverage are likely not to need the service provided by online pharmacies since the costs of their prescription drugs are covered by their health insurance. By determining that the target market should be Americans with poor or no healthcare coverage, the company can limit where it will launch its marketing activities, such as advertising in the timeslots of shows that are known to be popular among the working class who are also known to have poor or no healthcare coverage. Thus, when selecting a target market, among the primary considerations is determining what are the characteristics of people who are most likely to purchase the product if it was properly introduced (Kurtz, 2010). Also, it should be determined how large the market is, and whether the market is large enough to be able to buy enough of the product or service to make spending money to market it worthwhile for the company (Kurtz, 2010). It is also important for the company to assess its competitors who may already have a firm grasp of the market, and consider how much needs to be spent in order for the company to be able to challenge its competitor’s control over the market (Kurtz, 2010). In managing a target market, the primary consideration identified by Kurtz (2010) is the response of the target market to marketing activities in terms of product or service recognition, value, and actual purchase. Proper management of a market necessitates for the company to determine how many people from the market are actually availing of the service that they offer and changing strategies or even abandoning the market if the outputs remain constantly unacceptable (Kurtz, 2010).

Branding

The brand of a product or service is its identity (Kurtz, 2010). According to Kurtz (2010), branding is the collective sum of actions that are conducted by a company in order to define it or its product or service to the general market. The brand of a product or service gives it a personality, shows people what it stands for and what it does not stand for, and makes the public aware of its points of uniqueness when compared to other companies, products, or services (Kurtz, 2010). Branding a product or service is important for several reasons. Firstly, the brand of a product must be firmly established for customers to be able to notice from among its competitors. If a brand of service is unable to do this, then its clients would only select it randomly, or may not even trust it because it is unknown. Second, branding is important because it captures markets based on the values that it supports, thereby connecting with clients on an emotional level (Kurtz, 2010). If an online pharmacy shows pictures of happy old people on its website, and gives bonuses to senior citizen patrons, then people may come to associate that particular website as the senior-friendly website. If the business is successful in branding its product, then it may be ensured a steady patronage from older customers. Thirdly, companies should work towards establishing a strong brand because with it comes customer loyalty that extends across lifetimes (Kurtz, 2010). Once a brand has become established in a market, it becomes more difficult for competitors to challenge the brand, since they would have to offer consumers more in order to get them to try a service that is different from the brand that they trust. As can be inferred from the work of Larkin (1999), this is an especially important consideration in the online pharmacy industry, where online pharmacies must find a way to compete against highly established brick and mortar companies that consumers already have a great deal of trust on.

Applying the branding concepts discussed to The Canadian Drug Store (TCDS) online pharmacy, a visit to the website of the pharmacy shows several pictures of senior citizens who look very content and happy. The words “safety” and “savings” are very prominent in its pages and concerns related to both of those words are discussed thoroughly (TCDS, 2009). What comes to mind after seeing their website is affordability, as it seems that they really do offer some of the cheapest prices for prescription drugs. This is an appeal to the market that is shown to be effective, as shown in the works of Veronin (2007), and Levaggi et al. (2009). As explained by Levaggi et al. (2009), the branding strategy of TCDS is not simply to make it appear cheaper than other brands, but to show customers that the difference between its price and the prices that local pharmacies have to offer is not because of their products being substandard or not undergoing sufficient quality control. In doing so, online pharmacies are able to create an image of being the “good guys,” antagonizing local pharmacies in the process by making them look like greedy companies which take advantage of many people needing medicine by raising its prices (Veronin, 2007). Thus, it can be claimed that TCDS is successful in offering its pharmaceutical services to Americans looking for a more affordable deal but without wanting to compromise quality. As discussed by Veronin (2007), the revenue of companies such as TCDS has increased considerably, particularly after the economic crisis. If I owned TCDS, something that I would do differently is to gather greater support from validating agencies that are accredited by the United States Food and Drug Authority, as the company is still among those who have not been validated (LegitScript, 2010). According to Veronin (2007), validation would increase the trustworthiness of online pharmacies such as TCDS considerably, giving it the opportunity to capture even wider markets.

References

Cook, G. (2003). “‘No Prescription Required’: Online Pharmacies: Practical or Perilous?” Asthma Magazine, 8(5): 19-21.

Kurtz, D. (2010). Contemporary Marketing Mason. OH: South-Western Cengage Learning.

Larkin, M. (1999). “US online pharmacies strive for respectability.” The Lancet, 354(9180): 782-784.

LegitScript. (2010). tcds.com is an Unapproved Internet Pharmacy. Retrieved November 18, 2010 from: http://www.legitscript.com/pharmacies/show/881/03d6a0e5f459eac525a5c95e56dcbcea18658535

Levaggi, R., Orizio, G., Domenighini, S., Bressanelli, M., Schulz, P., Zani, C., Caimi, C., and Gelatti, U. (2009). “Marketing and pricing strategies of online pharmacies.” Health Policy, 92(3): 187-196.

TCDS. (2009). The Canadian Drug Store. Retrieved November 18, 2010 from: http://www.tcds.com/

Veronin, M. (2007). “Canadian Internet pharmacies: Price, policy, and perspective.” Research in Social and Administrative Pharmacy, 3(2): 236-248.