The Discount Pharmacy
Problem & Solution
Problem Worth Solving
People need to be able to buy prescriptions at accessible prices. We make that possible by carefully maintaining efficiencies in our operations. So we can target a specific segment of the market – those customers who pay for their prescription medications themselves. They are poor, they are sick, they deserve the same care as those who can afford healthcare and full price prescriptions.
The Discount Pharmacy’s main goal is to provide prescription medications for our customers at the lowest prices on the market. We will be able to sell prescriptions at reduced prices by carefully maintaining efficiencies in our operations and by targeting a specific segment of the market – those customers who pay for their prescription medications themselves. By focusing on this segment it gives us additional efficiencies – we avoid disruptions in cash flow often associated with insurance payments and we can eliminate unnecessary services for the type of knowledgeable, repeat customer taking maintenance-type medication.
The Discount Pharmacy will operate from one store that will serve both mail order customers and those who visit in person. We will thrive by employing friendly and knowledgeable personnel, which, along with our great prices, will drive the repeat business that we will rely upon. We only expect that as the price of medication continues to skyrocket, The Discount Pharmacy will appeal more and more to the customer’s sense of value and convenience.
Market Size & Segments
The Discount Pharmacy will seek to attract two different groups of customers and will thus have two strategies to attract them.
We anticipate that by far our largest group of customers will be those who order through the mail. These customers will be targeted through an advertising campaign in magazines and newsletters that have an older (>55) audience who regularly need medication and are aware in advance of their needs. For example, one of the main advertising vehicles will be the A.A.R.P monthly newsletter.
Walk-in customers will be targeted through advertisements in the local paper, "The Oregonian." Ads will raise awareness for the The Discount Pharmacy and our low prices.
Competition takes many different forms in the pharmacy industry.
- Chain pharmacies. These are state or national chains such as Rite-Aid. The advantage to these chains are better prices through economies of scale, as well as personalized service. The personalized service takes the form of the chain having a record of your medication purchases as well as any allergies that you have disclosed to them.
- Local pharmacies. These are the pharmacies where you typically know the pharmacist and they know your medical history. This option is high in personalized service and convenience, and high in price.
- Mail order and Internet pharmacies. These are similar to The Discount Pharmacy.
- Canadian pharmacies. These pharmacies are located in Canada where the cost of drugs is lower than in the U.S. These pharmacies can be accessed through mail order, the Internet, or via travel. Recently there has been the trend for trips arranged for senior citizens in Northern States to travel up to Canada for the day to pick up their medicines.
The Discount Pharmacy’s competitive edge is superior pricing. To do that we must maintain our position as the low cost provider by painstakingly ensuring that costs are kept low through operating efficiencies.
We will be able to do that by eliminating some of the services traditionally offered by pharmacies. For example, we will employ only one pharmacist and use pharmaceutical technicians to fill the void. As long as a pharmacist is on site during the hours of operation, we can use the pharmaceutical techs for all other capacities where other pharmacies use pharmacists. Other efficiencies are created by having only a small store front and conducting most of our business through mail order.
Finally, The Discount Pharmacy is not designed to hold the patient’s hand during their purchase. We expect that the vast majority of our customers will already be informed of how to take the medication, and any side effects or drug interactions that should be avoided. We will simply provide each patient with a print out of all the relevant information for consumption of the medication.
Keys to Success
Keys to Success
The keys to success are:
- Satisfy our customers so they will return again and again
- Maintain low overhead and operating costs
- Provide better prices than all our competitors