3M Integration Challenge

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Under the guidance of 3M’s Strategic Marketing Planner, we conducted a brand perception study and competitive analysis of 3M within the pharmacy channel. Through observational research, in-depth interviews, and our own survey design and analysis we were able to analyse how the brand is perceived by pharmacists in relation to their key competitors. Additionally, we identified key purchasing drivers and barriers. We leveraged our insights to offer recommendations regarding how 3M can be more impactful in this channel and where they can fill gaps in the market.
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  • 1. A COMPETITIVE JOURNEY THROUGH THE PHARMACY CHANNEL TERRI MORTRUD | DAWN SLEDGE | SVETLANA ARISTARKHOVA | CASSIE HOZ | JULIJA SEMIONOVA | DARIA SAVCHENKO July 2014 www.3m.com
  • 2. STEPS TO RX SUCCESS METHODOLOGY SECONDARY RESEARCH Develop a firm foundation and understanding of the company and the market OBSERVE SURVEY ANALYZE Thorough observation of product line and consumer purchase behavior at 15 pharmacies IN-DEPTH INTERVIEWS In-depth interviews with five pharmacists and industry expert to understand dynamics of the channel Built a survey based on secondary research and key findings from observational to address gap areas Sort through data to draw conclusions and insights to improve business proposition of 3M pharmacy channel
  • 3. KEY FINDINGS PHARMACIES CONCLUSION Through the analysis of our secondary research, we were able to narrow our scope and focus specifically on the pharmaceutical channel, as its importance in the Spanish healthcare system will begin to increase. SECONDARY RESEARCH AGING OF EUROPE • Predicted life expectancy of 77.7 for males and 83.8 for females by 2020 in Spain • Aging populations will lead to increases in the number of people suffering from chronic, expensive-to-treat diseases and disabilities • Changing consumption patterns HEAVY RELIANCE ON PHARMACIES IN THE FUTURE • NHS will begin to reduce it’s resources, this means 10% reduction in hospital charts and less beds • Consumers will begin to rely on alternatives such as pharmacies and other channels
  • 4. KEY FINDINGS PHARMACIES CONCLUSION This means that there is still opportunity for 3M to expand, especially with their product lines: Futuro, NexCare and ColdHot. OBSERVATIONAL • Pharmacist can easily influence customers who do not know a specific brand name • Increasing aging population in addition to increasing life expectancy means there’s a need for more products for pain and chronic diseases • Supply is based on preferences of the fixed audience of pharmacy consumers • Pharmacists can forecast what the customer wants and order these products for them IN-DEPTH INTERVIEWS • Out of the 10 pharmacies observed, 7 did not have 3M products • Some providers showed a preference for private label brands • Brands offered by observed pharmacies: Hansaplast, Compeed, Urgo, Leukosan, Lainco, Salvat, Meda, Smith & Nephew, Hatmann, Dr Scholl, VIADOL • Waiting times during peak hours
  • 5. AUDIENCE AND SEGMENTATION SURVEYING Segment by areas with highest percentage of people over the age of 65 2 weeks to complete surveying Chamberi 32.75% Salamanca 32.05% Moratalaz 31.65% Retiro 31.38% La Latina 32.05% 1 2 3 4 5Target audience of pharmacists, not the end consumer
  • 6. RESPONDENT PROFILE PHARMACISTS 37% male vs. 63% female 60% of respondents with 5-15 years of industry experience 41.8% of respondents aged 31 - 40
  • 7. COMPARISON OF OVERLAPPING PRODUCTS SECONDARY DATA PRODUCT 3M HARTMANN MÖLNLYCKE SMITH & NEPHEW Skin Care Orthopedics Medical Diagnosis Adhesive Bandages Personal Safety/Thermotherapy Personal Care
  • 8. OUR KEY COMPETITOR ANALYSIS VS FAMILIARITY SMITH & NEPHEW MÖLNLYCKE HARTMANN 3M LOW 89% 88% 3% 6% MEDIUM 8% 12% 24% 52% HIGH 3% 0% 73% 42% Pharmacists surveyed said 3M and Hartmann are the top two choices in brands that they order, with 3M at 86% frequency and Hartmann right behind with 82%. CONCLUSION
  • 9. OUR KEY COMPETITOR ANALYSIS ASSOCIATIONS SMITH & NEPHEW MÖLNLYCKE HARTMANN 3M QUALITY 8% 4% 84% 90% PRICE-QUALITY RATIO 0% 2% 78% 83% TRUST 6% 0% 87% 79% INNOVATION 0% 0% 60% 76% DURABILITY 6% 0% 61% 67% 3M is winning in almost every category except for trust. This could be because of their business mission. 3M prides themselves on their innovation, while Hartmann focuses more on the client relationship with the brand. CONCLUSION
  • 10. OUR KEY COMPETITOR ANALYSIS 3M and Hartmann are neck and neck: 2 for 2. There is one problem: 3M considers wound care one of their winning product categories. However, according to pharmacists, Hartmann is addressing this better. CONCLUSION PRODUCT SMITH & NEPHEW MÖLNLYCKE HARTMANN 3M WOUND CARE 8% 5% 70% 59% CREAMS 15% 0% 35% 60% BANDAGES 4% 4% 74% 67% PAIN RELIEF 29% 5% 29% 43%
  • 11. SWOT ANALYSIS HARTMANN S TO W STRENGTHS Focus on customer with total solution Business strategy is adapted to demographic changes OPPORTUNITIES Expansion to emerging markets Accommodating the needs of consumers in Iberia THREATS Might have difficulty gaining share of markets outside of Europe since production is located in Europe WEAKNESSES 34% sales in Germany – need to adjust production for other European regions 89% of sales in Europe – little expansion outside of EU Most research conducted on European consumers Europe is their primary market, so they are knowledgeable of core issues and demand Solutions for infection for quick healing results Relationships with physicians/nurses to reduce strain of daily treatment Due to European economic instability, may lose business due to dependence on this market
  • 12. KEY PURCHASING DRIVERS PHARMACISTS RATIO OF PRICE TO QUALITY SUPPLIER AGREEMENTS 79% 78% CUSTOMER DEMAND 88% TOP THREE
  • 13. KEY PURCHASING DRIVERS CONSUMERS 85% Price 37% Trust 58% Quality 73% Pharmacist recommendation 61% Doctor recommendation 55% Ask directly for product 9% Browse displayed products 75% Ask for advice 39% Ask for a specific brand 22% No influence 72% Purchase what’s prescribed 19% Purchase least expensive PURCHASE INFLUENCERS PURCHASE PROCESS DECISION INFLUENCERS
  • 14. BARRIERS TO PURCHASING PHARMACISTS QUALITY 72% PRICE-QUALITY RATIO 58% TRUST 43% DURABILITY 15% INNOVATION 6% SUSTAINABILITY 1% 3M is most highly associated with Quality and Price-Quality Ratio. These are the two main points that they communicate in their messages, so this is successful. They are least associated with innovation in the eyes of pharmacists. CONCLUSION CLIENT DEMAND REASONS FOR SWITCHING BRANDS POOR SALES PRICE-QUALITY RATIO OVERALL QUALITY
  • 15. POWER OF THE PHARMACIST RECOMMENDATIONS NEVER SOMETIMES FREQUENTLY ALWAYS HARTMANN 7% 18% 66% 9% 3M 5% 45% 42% 8% VS Pharmacists are more likely to recommend Hartmann products. This may be related to their core business mission of establishing strong relationships with key decision makers, building a bond of trust between Hartmann and the pharmacists. CONCLUSION
  • 16. POWER OF PHARMACISTS CONSUMERS 0%94% OF CONSUMERS FREQUENTLY BUY RECOMMENDED PRODUCTS There is a very slim likelihood of consumers not purchasing recommended products. 94% of pharmacists frequently recommend brands and products to consumers but only half the time are referring 3M. CONCLUSION OF CONSUMERS NEVER BUY RECOMMENDED PRODUCTS
  • 17. LIMITATIONS OF STUDY 4 KEY NOTIONS Sample size (n=70) Did not survey end consumer Key decision makers are hard to contact Time limitation
  • 18. IDEAS ARE THE BEGINNING points of all fortunes
  • 19. BUSINESS CONCEPT RECOMMENDATIONS UPDATES IN STRATEGY Establishing mutual communication with pharmacists Driving sales in wound care Reaching the end-consumer through targeted communication strategy
  • 20. RECOMMENDATIONS RELATIONSHIPS RELATIONSHIPS Despite the fact the 3M is considered to be high quality and well priced, pharmacists have a strong sense of trust in the Hartmann Brand. Hartmann is winning with pharmacists in the sense that they’re more willing to recommend Hartmann products. 3M must invest more resources in relationship building with key decision makers. • Utilize 3M innovation center for yearly pharmacy conference highlighting new innovations and product specialties • Use this as a space to educate industry on key products related to emerging trends in healthcare, such as the aging population • Constant communication with pharmacists to understand their needs and those of their clients ACTION PLAN BACKGROUND
  • 21. RECOMMENDATIONS ASSOCIATIONS WOUND CARE BACKGROUND 3M is highly associated with wound care, but Hartmann’s products are recommended at a much higher rate. Hartmann is also considered to be addressing wound care issues better than 3M. ACTION PLAN 3M needs to drive customers to the pharmacist requesting their products. • Complementary product bundles such as brand-aids with creams in order to drive cross-sales
  • 22. RECOMMENDATIONS COMMUNICATION COMMUNICATION BACKGROUND 3M is considered by pharmacists to communicate best with end-users when compared to other brands (85%) ACTION PLAN Leverage this strength to become top of mind and drive consumers to the pharmacy with the intention of purchasing 3M products. • Develop a communication plan expressing the unique benefits 3M provides to elderly consumers, i.e. creams developed for their specific needs, etc.
  • 23. THE APPENDIX
  • 24. COMPETITIVE ANALYSIS • Multinational medical technology company that is one of the leading producers of advanced wound management products • Main areas of focus: orthopedic reconstruction (join replacement systems), advanced wound management, sports medicine, trauma • Strategic priorities: • Gain market share in established markets through innovation and efficiency • Build strong direct customer in emerging and international markets and use to develop tailored products • Invest more in R&D in support of innovation that will maximize value • Streamline operation and manufacturing in order to maximize efficiency • Growth through the acquisition of technologies, manufacturing and distribution
  • 25. COMPETITIVE ANALYSIS • Global professional healthcare brand known for unique, high quality product and innovative technologies that allow patients to live better lives and help healthcare professionals efficiently treat more patients to better care • Main areas of focus: wound care, surgical products and service provider to healthcare sector • Strategic priorities: • Innovation is a core part of Molnlycke’s DNA by helping them offer new products that better suit their patients needs • Drive expansion through innovation which allows company to reinvest in the business
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