Creative BrieďŹ ng
CBM: Amanda Rue CS: Clarissa Hillen CT: Max Hendren CW: Ryan Contillo AD: Raihana Halim, Kevin Su
AGENDA 1. Objective 2. Methodology 3. Industry & Competitive Analysis 4. Industry Insights 5. CVS/pharmacy Brand 6. Target 7. Insights 8. Brand Strategy 9. Key Messaging
OBJECTIVE Shift perception of drug stores to differentiate CVS/pharmacy from competitors in the marketplace.
METHODOLOGY
Secondary Research - Industry Publications - Category & Industry Trends and Reports - Annual Reports - Social Media (Blogs, Twitter, Facebook) - Target Demographics - Competitive Review Primary Research - One-on-One Interviews - Online Survey - Observational Research
INDUSTRY | CATEGORY ANALYSIS Pharmacies and Drug Stores retail a range of prescription and over-the counter (OTC) medications, health and beauty items, toiletries, and consumable goods directly to consumers. They may also provide basic health and photo processing services.
$216 billion in revenue
30%
Other
12%
Rite Aid
31%
Walgreens
$4.3 billion in profit
Industry Structure Life Cycle Stage: Mature Revenue Volatility: Low Competition Level: High Industry Globalization: Low
27%
CVS Caremark
Source: IBISworld Industry Report 44611 - Pharmacies & Drug Stores in the US, July 2010
INDUSTRY | CATEGORY ANALYSIS Industry Segmentation
Pharmacy & Drug Stores Segmentation among products
Pharmacy & Drug Stores Segmentation among demographics
COMPETITIVE ANALYSIS Retail Pharmacy Segments
2009 Revenue
2009 Operating Income
Number of Stores
$63,355
$3,247
7,522
$48,990*
$4,158
7,025
$50
4,780
“Inspiring a healthy life in your communities.”
“Improve the quality of human life.”
$26,289.3 “With us, it’s personal”
(In millions, except for number of stores) *Not including PBM sales or operating income
Other pharmaceutical retail competitors include mail order pharmaceuticals, mass merchants, super centers, warehouse clubs and grocery stores.
INDUSTRY INSIGHTS
1. Lack of differentiation in positioning and communications.
INDUSTRY INSIGHTS
1. Lack of differentiation in positioning and communications.
INDUSTRY INSIGHTS
1. Lack of differentiation in positioning and communications.
2. 70% of revenues stem from pharmaceutical sales.
3. Mature market begs for an industry innovator.
CVS/PHARMACY BRAND CORE BUSINESSES
RETAIL PHARMACY With more than 7,000 CVS/pharmacy and specialty pharmacy locations across the country.
MINUTECLINIC
PBM SERVICES
More than 560 of CVS/ pharmacy stores in 25 states now feature a MinuteClinic, the U.S. leader in retail-based health clinics.
Payors and patients count on Caremark for a broad range of services, from managing pharmacy benefits to filling prescriptions by mail or offering clinical expertise.
CVS/PHARMACY BRAND Culture Vision Strive to improve the quality of human life. Mission Improve the lives of those CVS serves by making innovative and high-quality health and pharmacy services safe, affordable and easy to access. Values Accountability
Respect
Integrity
Openness
Teamwork
CVS/PHARMACY BRAND 2009 Revenues
‘09 Revenues for Retail Pharmacy
Percentage of Revenue
Dollar Amount*
Prescription Drugs
68%
$37,642
OTC and Personal Care
11%
$6,089
Beauty/Cosmetics
5%
$2,768
General Merchandise and Other
16%
$8,857
16%
CVS/pharmacy Brand 68%
5%
11%
Prescription Drugs OTC/Personal Care Beauty General
* in millions
CVS/PHARMACY BRAND Company Facts
• 1 in 5 prescriptions are filled at CVS. • ExtraCare loyalty program has more than 64 million active card holders. • CVS doubled in size in the last 8 years in both revenue and store count. • 75% of the US population lives within 3 miles of a CVS/pharmacy store.
CVS/PHARMACY CHALLENGES
Drug stores have become ubiquitous. CVS and Walgreen’s both stand for ease and convenience. This category thrives on a monkey see - monkey do strategy.
BRAND STRATEGY
Embrace an Expanding Medical Role
3 BASIC SEGMENTS
SEGMENT
NEED
Uninsured
Quick, basic and preventative care
Money
16%
Under-Insured
Quick, basic and preventative care
Money
35%
Time
49%
Quick, basic and Comprehensive preventative care Insurance without scheduling a doctor appointment
DRIVER PERCENTAGE
TARGET AUDIENCE “Young and Under-Insured”
Age: 18-35 Men & Women - Struggling Financially - Recently removed from Parent’s Insurance Plan - Medically lost
INSIGHTS DIY Doctors
Cutting back on traditional medical treatment and seeking alternatives Ask friends or family to diagnose them (42%) Seeking out medical solutions online (44%) Asking pharmacists for advice (8%)
“They borrow leftover prescription drugs from friends, attempt to self-diagnose ailments online, stretch their diabetes and asthma medicines for as long as possible and set their own broken bones.� -NY Times 2/17/09
INSIGHTS Want advice from brick and mortar
Want their retail locations to evolve into go-to destinations for total heath and wellness needs Service Support Advice Rewards “If I had a strange rash on my arm I’d go to the Rite-Aid or CVS and ask the Pharmacist what to put on it. I wouldn’t go to the doctor for that, and I wouldn’t really be sure about ” -Jason, 21
INSIGHTS There’s nothing in the name
Frequenting one store over another is usually based on proximity
!
“Regardless if the building was a CVS, Walgreens, Rite Aid, or something else, it makes no difference where I go. All the stores offer near identical experiences.” -Jon, Brand Autopsy
BRAND POSITIONING
From “Just another pharmacy” to
!
!
BRAND POSITIONING
From “Just another pharmacy” to “Your Primary Care Pharmacy”
! !
KEY MESSAGING “Health Care Comes in Different Forms” Minute Clinics 75% of CVS customers are not aware clinics exist
Consultation Counseling Affordable Health Care Options 75% of CVS customers don’t have insurance because it’s too expensive.
THANK YOU.