‘Will a 4-in-1 store strategy have a strong impact on the market?’
Question: We’re avid readers of Marketing Rx and we also have your book. Here’s our question. We’re in the generic pharmaceutical business. We’re thinking of a 4-in-1 pharma store as a marketing strategy to attract more customers as well as investors. So we differ from other pharma stores who use the 2-in-1 (branded + generics) and the 3-in-1 (branded+generics+distributor) strategy.
Here’s what we mean by a 4-in-1: branded medicines + generic medicines + a reloading business + an ice cream parlor. Will this store strategy create a strong impact on the market? We are already planning to apply this in the signage and logo for our next store.
We currently have one store. That’s on Ortigas Extension. We will open our second store in July. We intend to grow fast and this is why we wanted your help to clarify us on our planned unique selling proposition.
Answer: Here’s the way we understand your current pharmaceutical store strategy. Your store now is a generic pharma store. You’re planning or are already selling generics alongside branded medications. Next, however, you’d like to convert your current store into a 4-in-1 pharma store and will do the same for your second store. And you’re wondering if this is a good enough USP that “will create a strong impact on the market?”
Market definition
Another important matter is clear. You’re in the small-scale business. You only have one store and will have a second one this coming July. Realize this first.
Your market is defined by where your current store is located at Ortigas Extension. Similarly with your second store and wherever it will be located. So you’ll have to think of that specific local store market segment: one on Ortigas Extension and the other in another specific neighborhood.
Your being a small-scale business may be a limitation in attaining your goal “to grow fast.” But the fact that you are a store is actually working in your favor. Your store provides you with a natural laboratory where you can validate with your customers if they will shop more often or buy more in your store because they find your 4-in-1 store idea as indeed a motivating USP.
Do a small validating survey of your customers. We’re not talking here about a “quick and dirty” research. It’s a “quick but clean” research that you should do. It’s clean because you’re putting science into it and therefore it has validity. Here’s that little bit of science to put.
Choose the customers to survey so that they are the ones from whom you can learn the most about what you are testing. One such customer would be your most frequent shopper, almost like your most loyal. She’s your most demanding customer and therefore the best source of learning about the strengths of your store. At the opposite end is an occasional or infrequent shopper who’s your source for your store’s weakness.
Infrequent shopper
Actually, we like talking more about lapsed shoppers who will be better sources of your store’s areas of weakness. But recruiting your store’s lapse shoppers will require taking you to another store where your lapsed shopper had switched. This may take more time and trouble.
The infrequent or occasional shopper can serve as a suitable replacement. Interview 3 of each for a total of 6. The “science” behind 6 is fully explained in the Senior MRx-er’s 3rd edition User Friendly Marketing Research book, Chapters 6 and 17.
Correct question
More importantly, ask the correct question in your survey. Avoid asking a direct question like: “If this store of ours becomes a store where you can buy generics as well as branded medicines plus get your mobile phone re-loaded and also buy ice cream, will you find this unique enough so that you’d frequent this store more often and buy more?”
In consumer surveys, a direct question comes across to consumers as a hypothetical question. Unfortunately, a hypothetical question is given a hypothetical answer, i.e., a “yes” answer as in the direct question just given so that the respondent can quickly end and escape from the interview.
The correct question or questions to ask are “indirect” ones and then you find out the uniqueness and motivating power of your 4-in-1 concept “by analysis.” You have two alternative ways of doing this.
The first one has the more compelling logic and validity behind it. It’s to ask the question or set of questions drawn from a relevant consumer purchase model like the “purchase system” model we previously devoted a column to. As applied in your pharma store, the purchase system concept asks the shopper what else she bought now or last time together with the generic or branded medication. All those products mentioned define your shopper’s purchase system and those are the products or services to extend to in your 4-in-1 strategy.
Validated strategy
The second way to get to validate your 4-in-1 strategy “by analysis” is to find out where your shopper currently goes to satisfy her mobile phone reloading need and her craving to eat or buy ice cream. “Current source” refers to both where she bought “the last time,” and where she buys “most often.”
If where-bought-the-last-time is the same as where-buy-most-often, then by analysis you can infer that it’ll be hard for your store to get your shopper to switch to you if this source is not a pharma store. So your 4-in-1 strat won’t probably work in this case. However, if where-bought-last-time is different from where-buy-most-often, then by analysis you may infer that there’s a chance that he or she will switch to your pharma store. Your 4-in-1 is likely to click here.
So there are your somewhat long and complicated answers to your short but practical question.
Keep your questions coming. Send them to us at [email protected] or [email protected]. God bless!
