Subject:

Pharmaceutical Management and Marketing

Pharmacy
Layout
Design

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Objective of layout design
Areas that our pharmacy consultants focus on include:
• Advise on starting a pharmacy business
• Attorney selection
• Budget review
• Pharmacy business plan review and assistance
• Pharmacy business structure design
• Cash flow analysis
• Competitor analysis
• Disaster prevention planning
• Employee training and development
• Facility planning
• Goal development
• Idea development and evaluation
• Location selection
• Logistics planning
• Marketing plans
• Policy & procedure development
• Process design
• Regulatory compliance
• Risk assessment
• Pharmacy staffing requirements and modeling
• Technology evaluation
• Vendor selection and relations

PHARMACY DESIGN, LAYOUT, AND

MERCHANDISING
Most consumer purchases in pharmacies are not planned very far in advance.
Pharmacy managers use pharmacy design, layout of fixtures, and merchandising of
products to affect the purchasing behaviors of their customers. Studies have shown
that more than 80 percent of all purchases are made by people who less than a week
before their purchases were not planning to buy these particular items (Eisenpreis,
1983). The primary reasons why consumers make unplanned purchases are
emergencies (running out of a needed item), latent buying interests brought on by a

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good price or a new product, and impulse purchases (buying on a whim to try
something new or different). An important contribution to sales success isthe store
design and layout of merchandise. Getting medical equipment, blood glucose
monitors, or natural products). These departments often are placed near the
prescription department for the convenience of both the patient and the pharmacist.
The Americans with Disabilities Act (ADA) of 1990 has affected almost all
businesses, including pharmacies. This federal mandate prohibits discrimination based
on any form of disability. To comply with the ADA, pharmacies may be required to
adjust counter heights, aisle widths, telephone equipment, doorways, and almost any
other physical aspect of their operations. The act allows for reasonableness in
designing stores without undue hardship on daily operations. The design goal is to
have a store that offers equal access to all products and services for all customers
(Laskoski, 1992).
The Heath Insurance Portability and Accountability Act (HIPPA) is a federal mandate
designed to protect the confidentiality of patient information. HIPPA considerations
in the design and layout of a pharmacy are to ensure that disclosure of protected
health information is minimized. Pharmacy managers are to make reasonable efforts
to protect the privacy of their patients. Some of the efforts made by pharmacy
managers include installation of a partition extending the height of the pharmacy
counter, redesigned storage areas for prescriptions that are waiting to be picked up by
customers, designated staging areas for patients waiting to be served by pharmacy
staff, and private patient consultation areas. Internal and external environmental
factors play a major role in the design and layout of a pharmacy. The age, race, sex,
and income levels of consumers are important characteristics that should be
addressed. Addressing the needs of a predominant ethnic or age group is beneficial in
attracting these potential patrons to a pharmacy. For example, elderly people may be
more likely to patronize a pharmacy that has a large section of durable medical
equipment.
Designing the exterior of a pharmacy is just as important as design and layout of the
interior. When designing the exterior of a pharmacy, one must consider legal
requirements, local codes or ordinances that govern materials, the number and sizes
of windows, external signage, and the number and placement of doorways. The
exterior design of a pharmacy may need to complement other stores in a shopping
center. Many shopping centers place restrictions on the exterior designs of their
stores. Pharmacies commonly will try to add defining features (e.g., signage and
lighting) that allow their stores to be recognized easily. The placement of entrances
and exits to the shopping center is key to the ease of getting to the pharmacy. The
traffic patterns and placement of traffic signals on the roads adjacent to the shopping
center affect the convenience of shopping in the pharmacy. Pharmacy managers often
negotiate with local officials to have traffic signals at or near the entrance and exit of
the center.
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The traffic pattern of a shopping center will influence the placement of entrances and
exits of the pharmacy. Pharmacy managers wish to maximize the number of patrons
that find their store once they are in the shopping center. Pharmacies often desire to
be located next to a grocery store or other high-traffic stores to attract cross-shoppers.

Pharmacy Layout
A pharmacy’s layout contains numerous cues, messages, and suggestions that
communicate to shoppers. A pharmacy manager’s goal is to create a mood that
welcomes customer traffic, increases time spent browsing (yet not wasting time
searching for needed items), encourages customers to make more purchases than
originally planned, and invites them to return to the pharmacy in the future.
The layout or arrangement of in-store fixtures should be designed to move patrons
around the pharmacy to obtain the items they need or desire. Ideally, customers
should visit as many areas of the pharmacy as possible to increase the probability of
impulse purchases. Pharmacy layout should capitalize on the strengths of the
prescription department and pharmacist because they are what make pharmacies
unique from other retail outlets. Pharmacy layout should have the prescription
department very prominent and visible topatrons in any part of the store (Fig. 23-1).
Ideally, consumers should travel past a variety of merchandise on their way to the
prescription department. This explains why many prescription departments are
located in the rear of a pharmacy. While this layout is popular with pharmacy
managers, it is not always popular with consumers. For example, some elderly patrons
may find it difficult to walk through the entire store to get to the prescription counter.
They may choose to use the drive-through window or frequent a pharmacy that has
the prescription counter in the front of the store. The demographics of the population
that shops the pharmacy will be very influential to the design of a pharmacy and
prescription counter (Walker, 1996). Gaedeke andTootelian (1993) discussed two
types of store layouts: grid and free flow. In a grid layout, all the counters and fixtures
are at right angles to one another. Merchandise is displayed in straight, parallel lines,
encouraging maximum travel time in the aisles and maximum product exposure. The
free-flow layout groups merchandise and fixtures into patterns that allow for an
unstructured flow of customers. Many of the fixtures are irregularly shaped circles,
arches, and triangles. This design is used often in gift and specialty stores, mostly
encouraging browsing and impulse buying. Grid layouts are more common in
community pharmacies than free-flow layouts. Aisles are set in straight-line grid
arrangements with key departments or service areas located to encourage shoppers to
visit the four corners of the store.Departments are arranged to place high-demand
items in the rear of the store, promoting traffic past lower-demand and
impulsepurchase items. In grid layouts, the prescription department often is located in

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the back of the store, adjacent to high-demand over-the-counter (OTC) items mand
other items that may sell better if accompanied by a recommendation from a
pharmacist (e.g., durable medical equipment or natural products). Department
placement is done with the intent to entice customers to purchase more than they had
intended originally. Some locations in a pharmacy tendto attract more traffic. High-
traffic areas are a good place to generate additional sales with placement of new
product displays or impulse items. In pharmacies, placement of impulse items near or
on the prescription counter may increase sales of these items owing to the increased
traffic in that area of the store. In almost any retail business, the risk of theft of
merchandise (both by shoppers and by employees) is always present. Pharmacy
managers can use store design and layout to minimize losses from theft. Highcost and
other items that may be liable to theft generally are placed in open areas where store
personnel can observe both the items and shoppers easily. Pharmacies are increasingly
using locked cabinets to store items that are liable to theft (e.g., smoking-cessation
products and weight-control products). Most states also have enacted laws that
require products containing psuedoepherine be kept behind the pharmacy counter
despite the fact that it technically has OTC drug status. This has been done to
decrease the theft and inappropriate use of psuedoepherine, particularly in the
production of methamphetamine. Efforts should be taken not to place high-cost and
high-theft items in corners (which are more difficult for personnel to see) or near exits
(where it would be easier for shoppers to steal an item leave without being noticed).
Many pharmacies use store security personnel, video surveillance equipment, one-way
mirrors, and even sensors embedded in products to detect and prevent losses of
merchandise.

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Types of community pharmacies
Community pharmacy practice
 Filling of prescription medications based on physicians’ orders
 Compounding of prescription medications
 Over-the-counter medications
 Nutritional supplements
 Offering and fitting durable medical equipment
 Information about prescriptions medications
 Information about OTC medications
 Information about nutritional supplementation
 Health and beauty aids
 Greeting cards
 Disease-state management
 Prospective drug utilization review
 Counseling on prescription drug use
 Adjudication of claims with third-party payers
 Provision of medications to nursing home residents
 Special convenience packaging (e.g., bubble packs)
 Screening for drug interactions

Institutional pharmacy practice

 Filling of prescription medications based on physicians’ orders
 Compounding of prescription medications
 Preparation of intravenous medications and solutions
 Delivery of medications to floors
 Oversight and inventory of controlled substances
 Collection of orders from hospital floors
 Drug event monitoring
 Formulary management

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  Therapeutic interchange
 Prescription medication counseling
 Medication use evaluation
 Filling of prescription medication carts
 Drug information to physicians and other health care providers
 Total parenteral and enteral nutrition
 Stocking of emergency crash carts
 Pharmacokinetic dosing
 Clinical drug trials

Consumer Goods
Consumer goods are alternately called final goods, and the second term makes more
sense in understanding the concept. Essentially, consumer goods are things purchased
by average customers, and will be consumed or used right away. This is in contrast to
other types of goodscalled intermediate goods. Intermediate goods are products
produced or things sold that will be used in the making of something else by another
manufacturer or an assembler. For instance, fabric produced from cotton might be an
intermediate good. The clothing made from the fabric would be consumer goods,
since it has reached its final destination: the consumer.
The issue of consumer goods is most important in assessment of Gross Domestic
Product (GDP), basically a yearly measurement of what is purchased (consumed),
made, invested, and what is spent by the government. Economic analysts can parse
out the different types of goodsthat are included in the GDP, and look at how each
area is performing. So for instance, a decline in the sale of consumer goods would
indicate people aren’t spending as much on mostconsumer items, which can include
on food, automobiles, clothing, electronics, and a host of other things.

Types of Consumer Purchase Decisions

Consumers are faced with purchase decisions nearly every day. But not all decisions
are treated the same. Some decisions are more complex than others and thus require
more effort by the consumer. Other decisions are fairly routine and require little
effort. In general, consumers face four types of purchase decisions:

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  Minor New Purchase – these purchases represent something new to a consumer
but in the customer’s mind is not a very important purchase in terms of need,
money or other reason (e.g., status within a group).
 Minor Re-Purchase – these are the most routine of all purchases and often the
consumer returns to purchase the same product without giving much thought
to other product options (i.e., consumer is brand loyalty).
 Major New Purchase – these purchases are the most difficult of all purchases
because the product being purchased is important to the consumer but the
consumer has little or no previous experience making these decisions. The
consumer’s lack of confidence in making this type of decision often (but not
always) requires the consumer to engage in an extensive decision-making
process..
 Major Re-Purchase - these purchase decisions are also important to the
consumer but the consumer feels confident in making these decisions since they
have previous experience purchasing the product.

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 Sales
Management

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Sales management is a business discipline which is focused on the practical application
of sales techniques and the management of a firm's sales operations. It is an important
business function as net sales through the sale of products and servicess and
resulting profit drive most commercial business. These are also typically the goals
and performance indicators of sales management.Sales manager is the typical title of
someone whose role is sales management. The role typically involves sales
planning, human resources, talent development, leadership and control of resources
such as organisational assets.

Defining Personnel Management

There are many definitions of personnel management, but all basically say that it is:
attracting and developing competent employees and creating the organizational
conditions which result in their full utilization and encourages them to put forth their
best efforts.

Two major points about personnel management are implied in this definition. First,
effective personnel management must be future oriented. Support for organizational
objectives now and for the foreseeable future must be provided through a steady
supply of competent and capable employees. Second, effective personnel management
is action oriented. The emphasis must be placed on solution of employment issues
and problems to support organizational objectives and facilitate employee
development and satisfaction.

PERSONAL SELLING
According to the U.S. Department of Labor’s Bureau of Labor Statistics, people
working in sales number close to 12 million, or about 10 percent of the total
workforce in the United States. Personal selling is critical to the sale of many goods
and services, especially major commercial and industrial products and consumer
durables, and can be defined as: Direct communications between paid representatives
and prospects that lead to transactions, customer satisfaction, account development,
and profitable relationships.
The relationships between selling and other elements of the marketing mix are
highlighted in Marketing programs are designed around four elements of the
marketing mix: products to be sold, pricing, promotion, and distribution channels.

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The promotion component includes advertising, public relations, personal selling, and
sales promotion (point-of-purchase displays, coupons, and sweepstakes). Note that
advertising and sales promotions are nonpersonal communications, whereas
salespeople talk directly to customers. Thus, where advertising and sales promotion
“pull” merchandise through the channel, personal selling provides the “push” needed
to get orders signed. With public relations, the message is perceived as coming from
the media rather than directly from the organization. Personal selling involves two-
way communication with prospects and customers that allows the salesperson to
address the special needs of the customer. It is often the job of a salesperson to
uncover the special needs of the customer. When customers have questions or
concerns, the salesperson is there to provide appropriate explanations. Furthermore,
personal selling can be directed to qualified prospects, whereas a great deal of
advertising and sales promotions are wasted because many people in the audience
have no use for the product. Perhaps the most important advantage of personal
selling is that it is considerably more effective than advertising, public relations, and
sales promotion in identifying opportunities to create value for the customer and
gaining customer commitment. The person responsible for management of the field
sales operation is the sales manager. He or she may be a first-line manager, directly
responsible for the day-to-day management of salespeople, or may be positioned at a
higher level in the management hierarchy, responsible for directing the activities of
other managers. In either case, sales management focuses on the administration of the
personal selling function in the marketing mix. This role includes the planning,
management, and control of sales programs, as well as the recruiting, training,
compensating, motivating, and evaluating of field sales personnel. Sales management
can thus be defined as: The planning, organizing, leading, and controlling of personal
contact programs designed to achieve the sales and profit objectives of the firm. Of
whether the sales manager directs salespeople or other sales managers, all managers
have two types of responsibilities
• Achieving or exceeding the goals established for performance in the current period
• Developing the people reporting to them
Each of these responsibilities includes a number of more specific functions and
activities that will be discussed throughout this book. Now it is important that you
understand the context in which sales managers execute these two responsibilities. In
the next section we discuss some of the more consequential changes taking place in
the marketplace and in selling operations.

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Customer service
Customer service is the provision of service to customers before, during and after a
purchase.
According to Turban et al. (2002),] “Customer service is a series of activities designed
to enhance the level of customer satisfaction – that is, the feeling that a product or
service has met the customer expectation."
Its importance varies by products, industry and customer; defective or broken
merchandise can be exchanged, often only with a receipt and within a specified time
frame. Retail stores often have a desk or counter devoted to dealing with returns,
exchanges and complaints, or will perform related functions at the point of sale; the
perceived success of such interactions being dependent on employees "who can adjust
themselves to the personality of the guest,"according to Micah Solomon quoted
in Inc. Magazine.
From the point of view of an overall sales process engineering effort, customer
service plays an important role in an organization's ability to generate income and
revenue. From that perspective, customer service should be included as part of an
overall approach to systematic improvement. A customer service experience can
change the entire perception a customer has of the organization.
Some have argued that the quality and level of customer service has decreased in
recent years, and that this can be attributed to a lack of support or understanding at
the executive and middle management levels of a corporation and/or a customer
service policy. To address this argument, many organizations have employed a variety
of methods to improve their customer satisfaction levels, and other KPIs

Sales promotion
Sales promotions are short-term incentives to encourage the purchase or sale of a
product or service.

Sales promotion includes several communications activities that attempt to provide

added value or incentives to consumers, wholesalers, retailers, or other organizational
customers to stimulate immediate sales. These efforts can attempt to stimulate
product interest, trial, or purchase. Examples of devices used in sales promotion

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include coupons, samples, premiums, point-of-purchase (POP) displays, contests,
rebates, and sweepstakes.

Sales Promotion Strategies

There are three types of sales promotion strategies: Push, Pull, or a combination of
the two.

A push strategy involves convincing trade intermediary channel members to "push"

the product through the distribution channels to the ultimate consumer via
promotions and personal selling efforts. The company promotes the product through
a reseller who in turn promotes it to yet another reseller or the final consumer. Trade-
promotion objectives are to persuade retailers or wholesalers to carry a brand, give a
brand shelf space, promote a brand in advertising, and/or push a brand to final
consumers. Typical tactics employed in push strategy are: allowances, buy-back
guarantees, free trials, contests, specialty advertising items, discounts, displays, and
premiums.

A pull strategy attempts to get consumers to "pull" the product from the
manufacturer through the marketing channel. The company focuses its marketing
communications efforts on consumers in the hope that it stimulates interest and
demand for the product at the end-user level. This strategy is often employed if
distributors are reluctant to carry a product because it gets as many consumers as
possible to go to retail outlets and request the product, thus pulling it through the
channel. Consumer-promotion objectives are to entice consumers to try a new
product, lure customers away from competitors’ products, get consumers to "load up"
on a mature product, hold & reward loyal customers, and build consumer
relationships. Typical tactics employed in pull strategy are: samples, coupons, cash
refunds and rebates, premiums, advertising specialties, loyalty programs/patronage
rewards, contests, sweepstakes, games, and point-of-purchase (POP) displays.

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 (a) Buy-One-Get-One-Free (BOGOF) - which is an example of a self-liquidating
promotion. For example if a loaf of bread is priced at $1, and cost 10 cents to
manufacture, if you sell two for $1, you are still in profit - especially if there is a
corresponding increase in sales. This is known as a PREMIUM sales promotion tactic.
(b) Customer Relationship Management (CRM) incentives such as bonus points
or money off coupons. There are many examples of CRM, from banks to
supermarkets.
(c) New media - Websites and mobile phones that support a sales promotion. For
example, in the United Kingdom, Nestle printed individual codes on KIT-KAT
packaging, whereby a consumer would enter the code into a dynamic website to see if
they had won a prize. Consumers could also text codes via their mobile phones to the
same effect.
(d) Merchandising additions such as dump bins, point-of-sale materials and product
demonstrations.
(e) Free gifts e.g. Subway gave away a card with six spaces for stickers with each
sandwich purchase. Once the card was full the consumer was given a free sandwich.
(f) Discounted prices e.g. Budget airline such as EasyJet and Ryanair, e-mail their
customers with the latest low-price deals once new flights are released, or additional
destinations are announced.
(g) Joint promotions between brands owned by a company, or with another
company's brands. For example fast food restaurants often run sales promotions
where toys, relating to a specific movie release, are given away with promoted meals.
(h) Free samples (aka. sampling) e.g. tasting of food and drink at sampling points in
supermarkets. For example Red Bull (a caffeinated fizzy drink) was given away to
potential consumers at supermarkets, in high streets and at petrol stations (by a
promotions team).
(i) Vouchers and coupons, often seen in newspapers and magazines, on packs.
(j) Competitions and prize draws, in newspapers, magazines, on the TV and radio,
on The Internet, and on packs.
(k) Cause-related and fair-trade products that raise money for charities, and the less
well off farmers and producers, are becoming more popular.
(l) Finance deals - for example, 0% finance over 3 years on selected vehicles.
Many of the examples above are focused upon consumers. Don't forget that
promotions can be aimed at wholesales and distributors as well. These are known
as Trade Sales Promotions. Examples here might include joint promotions between
a manufacturer and a distributor, sales promotion leaflets and other materials (such as
T-shirts), and incentives for distributor sales people and their retail clients.

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