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The Online Drugstore Industry By Kyriakos Leonidou Linda Moya Jeff Pany Juan Pulgarin.

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Presentation on theme: "The Online Drugstore Industry By Kyriakos Leonidou Linda Moya Jeff Pany Juan Pulgarin."— Presentation transcript:


2 The Online Drugstore Industry By Kyriakos Leonidou Linda Moya Jeff Pany Juan Pulgarin

3 2 Major Players in Online Drugstores PlanetRx Drug Store AARP Family Meds Advance Rx Pharmacy Home Drug Emporium CVS

4 3 Two Sample Front Pages Low price focus Mass market Product oriented Community focus Targeted market Relaxed presentation

5 4 Online Drugstore Basics For the most part online stores carry all the products that customers would find at a brick and mortar drugstore or pharmacy Most drugstores demand registration before any purchase can be made –Home Pharmacy does not, however it does not sell prescription drugs Consumer can shop at any time and any where as long as they have access to a web interface All online stores have virtual shopping carts, delivery options and support the use of credit cards

6 5 Two Sample Signup Pages Address required at check-out Address required at registration

7 6 Two Sample Drugstore Displays Minimal layout Extensive use of product images

8 7 Online Drugstore Customers Who are the targeted customers? –Most online drugstores target the general public e.g. Drugstore and DrugEmporium –Some focus on a specific consumer profile e.g. The AARP Pharmacy Service focuses on elderly/retired people –Other online drugstores target customers with very specific needs for specialized products e.g. Cyber Medical Group targets consumers of Viagra What is a general profile of the active market? –Affluent, upscale, married women who purchase primarily healthcare products

9 8 Customer Acquisition Strategies How do they attract customers? –Affiliate programs (DrugStore $5 - $20, PlanetRx $5 - $15, CVS 15% of the sales of selected products (not pharmaceuticals)) –Group affiliation (Rite-Aid, GNC and DrugStore) –Physical presence (CVS, DrugEmporium) –Maintain visibility on top search engines (all) –Word of mouth (all) –Direct mail (some) –Promotions (e.g. $1000 giveaways (DrugEmporium))

10 9 Online Appeal Drugstore related products delivered without having to leave home 24-hour shopping Discrete shopping (avoid the “embarrassment” factor associated with certain products) Higher product availability Greater convenience

11 10 Customer Retention Strategies Customization/Personalization (e.g. PlanetRx) Maintain customer profile –Shopping history (e.g. PlanetRx, AdvanceRx) –Medical history (e.g. DrugEmporium) –Shipping information (e.g. Family Meds, AARP) –Credit card information (e.g. DrugStore) –Order status (e.g. PlanetRx) –Prescription refills (e.g. CVS) “1-click” shopping (e.g. DrugStore) Reminders for purchases made on a regular basis (e.g. DrugStore)

12 11 Customer Retention Strategies Online medical consulting (e.g. DrugEmporium) Product recommendations based on diseases (e.g. Family Meds) Community chat room for health topics with periodic special guests (e.g. PlanetRx) E-mail subscription to health issue articles (e.g. PlanetRx, AdvanceRx) Customer choice – recommends product alternatives (e.g. DrugEmporium) Convincing privacy policy for personal information (e.g. Home Pharmacy)

13 12 Online Drugstore Issues July 30, 1999 WASHINGTON - In a stunning testimony this morning before the Oversight and Investigations Subcommittee, investigative TV journalists explained how a 7-year-old child, a man dead for 24 years, and a neutered cat ordered drugs over the internet.

14 13 Online Drugstore Issues Ensuring a medical prescription submitted is valid! Impact of FDA proposed regulation policies –Proposal to require that each Internet pharmacy provide consumers with information about the web site's operator and evidence of compliance with federal and state laws Ensuring confidential consumer health records Correct, timely prescription drug order fulfillment Crowded sector – shakeout likely to occur –400 and growing as of July, 1999 Customers want to use their insurance to pay Encroaching on turf of PBMs –“middlemen” between drugstores and health insurers –PBMs handle mail-order prescriptions, view web as logical extension of what has been exclusively their domain

15 14 Online DrugStore Trends Partner for power – investment in DrugStore, permanent tab –Rite-Aid online presence solely through Drugstore –PlanetRx – exclusive online drugstore for managed-care provider CCN Partner with healthcare information sites –Healtheon and CVS – advertising, services for each other –CVS sole drugstore promoted on the WebMD site Partner with PBMs –“middlemen” between drugstores and health insurers –"The online pharmacies went ahead full steam and ran straight into a wall," says Forrester Research analyst Evie Black Dykema. "That wall's name was insurance." –CVS and Medco (#1 PBM) –PlanetRx and Express Scripts (#3 PBM)

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