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Price VS. Value – How Do You Differentiate?
Michael Gray
The very notion of value is plagued by ambiguity in much the same way that beauty is in the eye of the beholder, explain Michael Gray, Directors of Advantage Pharmacy Group.

The very notion of value is plagued by ambiguity in much the same way that beauty is in the eye of the beholder, explain Michael Gray, Directors of Advantage Pharmacy Group.

Price VS. Value – How Do You Differentiate?

With the abundance of online information available, tech-savvy customers and patients are now able to compare products and services offered online with those offered by bricks-and-mortar pharmacies. Traditional pharmacies must now take into consideration the benefits that online shopping may offer. Pharmacists must differentiate to make sure they are creating and delivering as much value as possible for their patients and customers, while running a professionally satisfying and accessible pharmacy business.

A diagram by Professor Elie Ofek of Harvard Business School, illustrates how businesses can create differentiation along what he describes as ‘vertical and horizontal dimensions’.

** CREDIT: PROF ELIE OFEK (TJ DERMOT DYNPHY PROFESSOR OF BUSINESS ADMINISTRATION, HARVARD BUSINESS SCHOOL), BOSTON, US

UP AND DOWN VS. ACROSS

The vertical dimension, Professor Elie Ofek explains, is an objective dimension where customers and patients calculate how much they are willing to pay for certain products or services. That is, customers and patients make their decisions based on price.

The horizontal dimension, on the other hand, is a much more subjective dimension, where motivations other than price engage consumers and patients to choose one product or service over another. It is along this dimension, by offering greater convenience and pharmacist advice, that traditional pharmacies are best placed to add value.

For example, convenience would be a key value driver along the horizontal dimension. A patient with a prescription for an antibiotic to treat an acute infection is unlikely to wait several days for an online prescription to save a few dollars when they can get their prescription from their local pharmacy and receive immediate consultation. The expanded funding under the 6CPA offers community pharmacy the greatest opportunity to create value for their patients whereby outcomes will be a key value driver.

BREATHING EASIER

This year Advantage Pharmacy Group trialled COPD screening clinics in a number of its stores. The program was promoted by the pharmacies, which took appointments. At all stores that were involved, a number of patients were referred to their doctor for being likely at risk of COPD. A customer from one pharmacy commented, “The best thing about the clinic was getting to talk one-on-one with the pharmacist.”

It is time that pharmacists believe in the value they can offer their customers and patients and start to better position themselves to deliver value in the area of professional services.

* Michael Gray is a student at Harvard Business School ** CREDIT: PROF ELIE OFEK (TJ DERMOT DYNPHY PROFESSOR OF BUSINESS ADMINISTRATION, HARVARD BUSINESS SCHOOL), BOSTON, US