Publication Date 01/04/2011         Volume. 3 No. 3   
Information to Pharmacists

Editorial

From the desk of the editor

Welcome to the April home page edition of i2P. A lot certainly happens over a month in pharmacy and health-related activities.
When we first started publishing our primary concern was to cover pharmacy issues within Australia, delivered monthly. Eleven years on we now cover global pharmacy and associated health issues on a daily basis, but delivered weekly.
New areas embracing climate change, food growing and processing and information technology are all increasing areas of health concern. Their impacts translate into systems that affect health negatively or positively and for all such contemporary issues, pharmacists need to have a working knowledge and understanding that translates into an effective pharmacy service
This month we are introducing a new column called Pipeline, and you will find it near the top of the centre column of the i2P home page.

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A Matter of Trust

Barry Urquhart

articles by this author...

Barry Urquhart, Managing Director of Marketing Focus, Perth. Barry is an internationally recognised conference keynote speaker, facilitator of strategic planning workshops and marketing business coach.
Contact Barry: TEL:61 8 9257 1777 - EMAIL: urquhart@marketingfocus.net.au -
WEB: www.marketingfocus.net.au

Editor's Note: Barry Urqhart's introduction for this month illustrates the predatory damge being done to the milk industry. We have also noted in recent weeks the discounting of alcohol products, an action that is both irresponsible and must eventuate in damage to health, particularly among our young people. Major retailers cannot be trusted as custodians of public health because of this behaviour.
All the more reason to keep pharmacy in the hands of pharmacists, but under competitive conditions.

COLLATERAL DAMAGE

In warfare, as in business, the casualties from direct conflict extend well beyond the main protagonists.
Australian retail businesses will experience that reality as a consequence of the "milk discount war" that is being waged by Coles and Woolworths, with understandable but reluctant participation by the independent supermarkets.

Retailing household milk at around $1 per litre is reportedly below cost. That is not sustainable without cross-subsidisation (potentially from liquor and petrol sales) and is arguably grounds for regulatory action on predatory pricing legislation.
Among the potential casualties will be smaller convenience stores, the relatively few dairy farms which remain operating in Australia and rural communities.

An unseemly visualisation is two sets of elephants at loggerheads in a China shop. In Australia, Coles and Woolworths enjoy around 78% of the dry grocery market. Transnational milk processors and distributors Kirin (home base Tokyo, Japan) and Fonterra (New Zealand head office) command a striking 92% of the Australian retail milk marketplace. Elephants all!!!

Negotiations for dominance of a stable food sector like milk must be direct and aggressive. Clearly, Coles has outperformed Woolworths during the most recent four quarters and it is strategies like these that are generating store traffic and sales.

What are the essential lessons? History is repeating itself.

The Australia retail bread marketplace during the 1960's saw the disappearance of countless local neighbourhood bakeries because of the evolving growth and dominance of the major supermarkets who contracted the local bakeries to supply bread... at wholesale. Local brand recognition and loyalty was lost. For over two decades the Australian retail landscape was devoid of a significant presence of local bakeries until the emergence of the franchise networks "Bakers Delight" and "Brumby's" corrected the imbalance.
Sadly, the product category which Coles in particular is now contemplating for strong discounting is bread... the wheel just keeps turning.

ARTICLE:  A MATTER OF TRUST

Confidence. It is the aphrodisiac of business.
It is the reason so many economists' forecasts are so wrong, so often. Bland statistics, economic modelling, historical records and trend lines do not recognise, respect or factor in the inherently important role and impact of confidence in the buying, investment and developmental decision making of the overall marketplace.

Economists need to study and better understand the emotional drives of key stakeholders rather than simply the mechanisms of the marketplace. To do so, may well be a Nobel pursuit.

Confidence is the focus, outcome and essential that is deficient in a huge majority of current advertising and business dealings. Emphases on product, price and finance no longer stimulate and sustain significant increments in demand, revenue, margins, profit, and above all, consumer and client confidence!

What happened to identifying needs, fulfilling them, projecting a compelling ambience and featuring a great, positive buying and transaction experience? Are we so devoid of creativity, energy, enthusiasm and pride? Is the art of selling a lost skill set, replaced by the single dimension declaration, "we wont to be beaten on price".

ANIMAL INSTINCT

Animals, domestic pets in particular, can detect confidence, or a lack of it. That, seemingly, is a sixth sense which is possessed and exercised by contemporary consumers and clients.

Interestingly, the typical instinctive response to hesitancy by prospective buyers of offering a lower price actually stimulates a loss or lowering of confidence.

Many consumers are seeking advice and recommendations about alternatives rather than cheaper prices. That is the underlying rationale of asking questions, many of which sales and service people do not hear, comprehend or respond to.

INFORMED CONSUMERS

The internet has been the instrument and inspiration for many changes in lifestyles, expectations, education, communication, commerce and confidence.

Ready access to information has empowered consumers and clients at large. They are discerning, demanding and sadly, in many instances, possess better product knowledge than sales and service providers.

Confidence in a company brand, product, service and person can and will plummet in such circumstances.

VOLATILE EMOTIONS

Confidence can be and is influenced substantially by the media and the 24 hour news cycle. Headlines regularly are the catalysts for demand surges for retail petrol on the "news" that prices are going up imminently. Likewise, bookings for airline tickets can and do dry up with media reports about safety issues.

Media releases about the pending launch of a new model motor vehicle impacts on sales enquiries, regardless of consequence of the impact on confidence, for people wanting to make the best possible decisions, avoid making a wrong decision and pursuit of a sense of "peace-of-mind".

"Peace-of-mind" is a term which is interchangeable with the word confidence. All people in business, financial planners, developers and home builders in particular, need to truly embrace the role of being a "confidence builder".

BROAD HORIZONS

High levels of confidence provide for and facilitate longer term horizons in the typical buying cycle. They are also an effective insulation against the volatility of market forces, which typify a lack of confidence.

One key and fundamental consequence is stability in cash flows. That then enables better planning for and the deployment of resources, including staff, inventory and communications. Individually and collectively, these contribute to greater efficiency, effectiveness and profitability.

MULTI LAYERED CONFIDENCE

Consumer and client perceptions, images and motivations are not single dimensions. Each is complex and often integrated with numerous variables.

A good example is that of Telstra, the Australian telecommunications company. The Board of Directors has been forthright in maintaining and projecting adherence to an annual dividend payment total to shareholders of 28 cents. That is reassuring to those shareholders whose primary investment criterium is dividend receipts.

However, for those seeking capital growth or a positive mix of stable dividends and capital growth have a pronounced reluctance to invest in Telstra. From a list price of $7.40 per share at the time of the third tranche of Telstra shares the current value languishes at around $2.75.

Hence, confidence is a complicated master or a slave which is difficult to master. Nonetheless, it is an important ingredient in the mix of success factors in any or all businesses, products and services.

THE AUTHOR

Barry Urquhart, Managing Director of Marketing Focus, Perth is an internationally recognised business analyst, strategist and conference keynote speaker.

Email:           urquhart@marketingfocus.net.au

Web:            www.marketingfocus.net.au

Tel:               (08) 9257 1777

Mob:             041 983 5555

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Submitted by Gerald Quigley on Mon, 04/04/2011 - 16:47.

Don't we have our own "Milk war" by the consistent offer of Swisse Mens or Ladies Multi's from between $16 and $18 each? Even the Swisse stand at APP admitted that the multi's are regarded as a "loss leader" and it was a privilege to be informed that by a sweet young thing obviously all over this marketing stuff!! Time to really look at what direction we want to take, especially in nutritional supplements.

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