HEALTHCARE CHANNEL CONSUMER INSIGHTS

Supermarkets, Pharmacy & General Practitioners

Dr Gary MortimerAdvertising, Marketing & Public Relations

A TALE OF TWO CONSUMERS

Heterogeneity in the way consumers categorise products and services – Snack Food

Influenced by the individual needs, personal traits, values and goals – Blood Donation

Consumers base their choices on information from external sources and prior experiences stored in memory.

◦ Intrinsic – prior experience◦ Extrinsic – advertising, blogs, etc

WHY ARE CONSUMERS DIFFERENT?

(Blanchard, DeSarbo, Atalay & Harmancioglu; 2011)

Different from retailing or general services

Consumer healthcare demand ‘participation’ – co-production, co-creation. ◦ Seeking information rather than making a purchase

Thus, consumers can enhance/detract their own desired satisfaction and loyalty.

◦ Consumer inputs include; frequency of visits, knowledge, age...

CONSUMER HEALTHCARE CONTEXT

Bitner, Faranda, Hubbert & Zeithaml, 1997)

THE MAIN CHANNEL PLAYERS

• State of Play.◦ Concentrated market ◦ Discounter entrance ◦ SKU rationalisation ◦ Price Wars ◦ Private label ◦ They own everything... and want more

SUPERMARKETS

(Kate Carnell, (2011) Challenges and Opportunities Australian Regional Food Conference, AFGC)

• Price and Convenience in consumer healthcare

For the supermarket - medicines are a top priority◦ Growth of many grocery categories has plateaued

Woolworths/Coles are looking to healthcare products as a source of growth in the coming years*

◦ And they’re investing considerable resources in making it work Advanced modeling techniques to evaluate potential strategic

approaches*

SUPERMARKETS

(* Reference TBC - Woolworths presentation)

PROVIDE REAL OPPORTUNITY◦ Have money to spend ◦ Are focused on health and lifestyle ◦ Care about quality ◦ Are looking for new products

AFFLUENT 55+

Kate Carnell, (2011) Challenges and Opportunities Australian Regional Food Conference, AFGC

Customers are noticing these improvements 85% of Coles shoppers think medicines are easy

to find within their supermarket* In fact, both Coles and Woolworths are now

beating pharmacy on the feature ‘it’s easy to find the product you want’*

SUPERMARKETS

(* TNS Shopper research, 2011)

SUPERMARKETS

Supermarkets acknowledge ‘trust & legitimacy’ is the challenge

Talking steps to improve consumer access to information

Increased use of Smart Phone Apps, information at POS.

(*Kate Carnell, CEO, AFGC 2011; GS1 Australia)

Low involvement products Vs. High involvement products

• Pharmacy shoppers tend to have more complex presentations– They consider a greater number of symptoms on each

purchase occasion than grocery shoppers*

PHARMACY

(* TNS Shopper research, 2011)

• Quality advice and improved access to consumer healthcare

PHARMACY55

34

24

23

16

14

9

3

46

50

39

36

18

16

17

5

Sore throat

Cough

Runny nose

Nasal/sinus congestion

Flu and fever related achesand pain

Chest congestion

Fever/temperature

Other

Total Grocery

Pharmacy

66

18

15

14

9

6

4

3

1

6

44

27

26

21

6

3

5

12

1

7

Headaches/migraine

Back ache/joint pain

Muscle pain/sports injury

Cold/flu related

Feminine pain

Toothache

Stomachache

Fever

Cuts and bruises

OtherTotal Grocery

Pharmacy

39

20

12

10

9

7

7

6

4

1

15

28

32

0

28

8

16

28

28

12

4

4

Burning sensation in the chest

Burning sensation in the stomach

Constipation

Heavy stomach

Nausea or vomiting

Discomfort in the stomach

Feeling of trapped wind

Stomach cramps

Diarrhoea

Feeling that something is blocked in the chest

OtherTotal Grocery

Pharmacy

Heartburn & Indigestion

Cough and Cold

Pain Relief

(TNS Shopper research, 2011)

Consumer Decision Making Process: Quality Advice and Trust

PHARMACY

INFORMATIONWilling to provide consumers with unbiased, accurate and reliable information

BENEVOLENCECaring for and acting in the interest of consumer welfare

INTEGRITYTreating consumers fairly with equity and honesty

TRUSTPURCHASE

LIKELIHOODACTUAL

PURCHASE

(Wallace M.S. Yee, Ruth M.W. Yeung, Joe Morris, (2005)

Providing information and advice was the most important factor to build trust.

35% consumers engaged with Pharmacy to seek healthcare advice

166 respondents◦ 68% advice for self◦ 17% advice for children

Consumers want;◦ Advice on non-prescription medicines◦ Pharmacist advice on how to use medicines◦ Receive printed information about health related issues◦ Receive written instructions

PHARMACY

Health CheckPurchase Medicinal ProductHealthcare AdviceOther

(Chapman, C., Marritt, J. & van der Bosch, D., 2009 – The Nature, Extent and Impact of Triage provided by Community Pharmacies in Victoria)(Mott, K., et al, Consumer Experiences, Needs and Expectations of Community Pharmacy – Final Report.

Why do shoppers visit Pharmacy instead of Supermarket?

Access to quality healthcare advice

Value for money◦40% cited pharmacy as having better value for money

PHARMACY

So is it all about price?

* TNS Shopper research, 2011

Is it all about ‘Price’?

Brand name

Product strength or efficacy

Number of symptoms the product relievesProduct speed

Type of active ingredient

Price

53

32

28

18

17

16

16

13

11

10

9

7

3

2

55

30

20

24

15

17

18

23

22

9

13

14

5

3

Pharmacy

Grocery

* TNS Shopper research, 2011

Value is about the consumers’ judgement about an entity’s overall excellence or superiority in providing desired benefits....

When purchasing from a Pharmacist, Price is the 6th attribute considered.

VALUE

(Arnould, E.J., Price, L. L. & Zinkham, G. M., 2004)

•Judgements of Value

Extrinsic – price, brand name, packaging size, colour and prior use – and these are easily replicated

Intrinsic – Inherent within the product or service (subjective) – very hard to replicate

Degree of professionalism from staffLevel of service and responsivenessAccuracy of information and adviceExtent of customer relationship with retailerTrust and integrity

Reasons for consumers engaging with pharmacy, rather than GP, for healthcare advice.◦ 57% to purchase OTC◦ 18% pharmacy close and convenient◦ Other reasons; minor ailments, unable to get

appointment with GP, didn’t want to “bother” GP with minor ailment

PHARMACY

(Chapman, C., Marritt, J. & van der Bosch, D., 2009 – The Nature, Extent and Impact of Triage provided by Community Pharmacies in Victoria)

GP’s vital role in consumer healthcare Factors that encourage consumers to bypass

supermarkets and pharmacy and engage with GP’s for their healthcare needs;◦ Increased complexity of illness◦ Spread or worsening conditions◦ Exacerbating factors◦ New/other health related matters◦ Adoption of new medicines

GENERAL PRACTITIONERS

(Chapman, C., Marritt, J. & van der Bosch, D., 2009 – The Nature, Extent and Impact of Triage provided by Community Pharmacies in Victoria)

• Providers of specialist knowledge for complex consumer healthcare needs

Patient influences on Satisfaction and Loyalty for GP Services

◦ Frequency of visits – the more visitations, the higher the satisfaction and loyalty (trust)

◦ Older patients more likely to visit, hence, higher levels of satisfaction and loyalty

◦ Lower satisfaction and loyalty with younger patients, suggests an opportunity to segment and understand

◦ Provision of information increases loyalty and satisfaction.

GENERAL PRACTITIONERS

(Rundle-Thiele, S. & Russell-Bennett, R. 2011)

Each player plays a specific role in consumer healthcare

Each channel supports and complements one another ...but they all need to improve in what they do.

◦ Enhanced pharmacist primary care would alleviate GP workload – minor ailments

◦ Notional financial savings to governments were projected to be up to $260 million (2007/2008 – Medicare benefits paid)

◦ Improved training of PCA’s would increase consumers levels of trust

◦ Greater access to product information in the supermarket will improve consumer confidence to make choices

“...community pharmacies were not being used by customers as substitutes for GP visits...” (Chapman, C., et al, 2009)

ARE ALL PLAYERS NECCESSARY?

(ASMI Minor Ailments Report, 2009; National Minor Ailments Scheme, Llywodraeth Cymru Welsh Government)(Chapman, C., Marritt, J. & van der Bosch, D., 2009 – The Nature, Extent and Impact of Triage provided by Community Pharmacies in Victoria)

WHAT ARE CONSUMERS SEEKING FROM CHANNEL MEMBERS

Grocery Shoppers Pharmacy Shoppers General Practitioners

Convenience Competent/helpful staff Expert specialist advice

Close to where they work or live

More choice and variety Strong/long term relationships

Habitual/routine shoppers Trust pharmacist or pharmacies – access to healthcare advice

Very high levels of trust

Buy now for later use – top up shop

Buy now for immediate use Prescriptions

Supermarket (non-scheduled) medicines provide low price and convenience

Community pharmacy is regularly used by consumers for quality advice about healthcare matters

Consumers do not consider pharmacy as an alternative to GP’s

91% of consumers were ‘very satisfied’ with their interaction with pharmacy for primary health care advice

THE FUTURE: DRIVING CONSUMER HEALTHCARE

(ASMI Minor Ailments Report, 2009; National Minor Ailments Scheme, Llywodraeth Cymru Welsh Government)(Chapman, C., Marriott, J. & van der Bosch, D., 2009 – The Nature, Extent and Impact of Triage provided by Community Pharmacies in Victoria)

Enhance pharmacist primary care

◦ A model where patient, minor ailments are addressed by pharmacy in the first instance

◦ Pharmacy refers to GP’s for primary care

THE FUTURE: DRIVING CONSUMER HEALTHCARE

(ASMI Minor Ailments Report, 2009; National Minor Ailments Scheme, Llywodraeth Cymru Welsh Government)

A disjointed, adversarial approach is dangerous. Such an approach will drive consumers to make

discreet choices amongst channel players Consumers will benefit from an collaborative

approach to healthcare

◦ GP visit + non-prescription OTC◦ Initial pharmacist consult + referralto GP◦ POP/digital information strategic for all Health Care

Providers

THE FUTURE: BARRIERS TO EFFECTIVE CONSUMER HEALTHCARE

Things to consider...

Visits and advice sort from pharmacy often made on behalf of others, e.g. elderly parents, children

First point of contact (50%) Pharmacy Assistants – hence training and competency vital

Consumers may ‘self-diagnose’ – then use pharmacy/supermarket to merely purchase medicinal products – hence consumer education vital in self selection outlets

THE FUTURE: BARRIERS TO EFFECTIVE CONSUMER HEALTHCARE

(Chapman, C., Marriott, J. & van der Bosch, D., 2009 – The Nature, Extent and Impact of Triage provided by Community Pharmacies in Victoria)

• We can establish that consumers heterogeneous in choice behaviour

• Consumers engage with all main channel members for their healthcare needs

• Each channel member provides various levels of ‘value’ for consumers

• Quality advice is an important antecedent in a consumers’ perception of value.

• Consumer education and information will reduce barriers to the adoption of future models of consumer healthcare

In closing...