Research with drug store shoppers shapes advertising for Standard Drug

By Quirk's Staff | March 1, 1992

Reading time: 7 minutes

Abstract

Standard Drug Company conducted a three-phased research program to determine its marketing strategy. To compare service levels among competitors, in Phase 1, participants shopped at Standard drug and its competitors, completed a questionnaire and participated in focus groups. The results of the first phase led to the development of 16 drugstore concepts that were tested using focus groups in Phase 2. The final phase applied a quantitative approach using telephone surveys of selected households.

Research Topics:: Competitor Analysis Evaluation | Concept Testing | Focus Groups | Qualitative Research | Shopper Insights | Store Simulation Studies | Telephone Interviewing/CATI
Industry/Market Focus:: Pharmacists | Retailing
Content Type: Case Study

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The pharmacist is foremost

When Standard Drug began developing a strategic marketing plan to help carry the retailer through the 199Os, the company's ad agency, Richmond, Virginia-based Edelmann Scott, Inc., applied its proprietary Logical Interacting Network of Knowledge (LINK) marketing plan development system to help guide the direction of the plan.

According to agency CEO/Creative Director Richard Scott, "We knew that by getting down to the consumer level, we could help Standard's management prioritize marketing and communications needs. And more importantly, this process could help vault Standard ahead of its competition in the fierce battle for drugstore market share."

Background

Standard Drug Company, headquartered in Richmond, is a 60 unit chain of retail drugstores operating throughout Virginia and Washington, D.C. The chain was founded by Sam Rosenthal in Richmond over 75 years ago and is still owned and operated by the family. Thomas Rosenthal serves as the current president and commissioned the research project through Edelmann Scott.

With 20 locations in the Richmond area, Standard Drug is second only to People's Drug in terms of number of locations and local market share. Additional chain drugstore competition comes from Revco and Rite-Aid, not to mention a bevy of independently owned drugstores. But with an increasing number of distribution options for health and beauty aid products as well as prescription drugs, Standard faced an increasingly competitive market.

As David Blum, director of research at Edelmann Scott, explains, "With the increased pressure from discounters like the Price Club and Phar-Mor at one end and the aggressive marketing by competing drug chains and supermarket pharmacies, it was important for Standard Drug to position itself for the future, and help define itself to its consumers. So, we suggested a concentrated research project to learn directly from the market where the chain could hang its hat for the next few years."

The research project was initiated in late Spring 1991, and once the work began, was completed in eight weeks. Subsequently, final marketing strategy was formulated and new marketing communications materials premiered in November 199 1.

An integral element in Edelmann Scott's LINK process involves primary marketing research. For Standard Drug, a three-phased research program was designed.

Phase 1

In phase 1, Standard Drug, Edelmann Scott and the research firm that designed and administered the study - Richmond-based Southeastern Institute of Research--quickly learned just how fiercely competitive the market was.

During this first, or qualitative phase, a number of shoppers were recruited and assigned real life drugstore shopping assignments. The shoppers were selected to represent Standard Drug's targeted customer base. The largest segment comprised women 25-54; men 25-54 were represented in smaller proportion, reflecting shopping habits gleaned from various drugstore industry demographic data. Also, the shoppers were equally divided into a "city" group and a "county" group, acknowledging the fact that in Richmond, shopping patterns differ according to the consumer's place of residence and access to transportation.

The shoppers were invited to visit a Standard Drug and two predetermined competitors, not including their regularly shopped drugstore. Each shopper was armed with some cash and asked to buy specific items from each store. The merchandise chosen required the shoppers to interact with a variety of store personnel including the pharmacist.

The objective was to compare service levels among the competitors. Of course, the shoppers naturally compared their regular drugstore to the three stores shopped in the survey, so in effect they were comparing four stores.

Richard Steele, executive vice president/partner, Southeastern Institute of Research, says another objective behind sending consumers out on the shopping assignments was to get a step beyond the information obtained from previous research. "We wanted to talk about what the consumers really wanted in a drug store, beyond what they see every day in their own drug store. Our initiative was to say, Let's give the respondents specific assignments that relate to purchasing and let's send them to stores that they don't normally go to."

Shoppers filled out a complete shopping questionnaire after each visit and subsequently reported their findings during focus groups where 8-10 shoppers discussed their experience.

The focus group moderator's outline was designed in three parts. Part one concentrated on the participants' general drugstore shopping. Part two's focus was a direct comparison of drugstores based on the shopping trips. And part three asked consumers to profile the ideal drugstore, setting the stage for the quantitative portion of the research project.

Throughout the focus groups, respondents were probed about the service level they expected from their drugstore, and whether their expectations were being met.

One area was intentionally left out of the study - physical appearance and store aesthetics. Previous research efforts had covered this territory. Moreover, Standard Drug had already embarked on a major renovation effort designed to modernize the look of its stores and enhance the shopping experience for its customers.

The shopping assignments required the respondents to interact with the pharmacist, a floor person, and a check-out person. "That got the emphasis away from the store's physical appearance and down to the layout of the store, the positioning of the products, and the willingness of the employees to help you," Steele says.

The first major issue that came to light was that many shoppers couldn't remember which drugstore they had visited at which location. For instance, a panelist would describe his experience at one store's location, when in fact another chain was actually located there. Clearly, for any drug retailer, there was a mandate for differentiation. So, how should, and how could, Standard stand apart?

Phase 2

To answer this crucial question, one that would form the foundation for a market position for the chain, Standard Drug and Edelmann Scott developed a list of 16 drugstore concepts based on the findings from the shoppers study.

One finding of primary importance was related to service and was consistent with published industry data. The shoppers often commented on how much they liked the service level at other retail establishments better than the service they received at their local drugstore. Industry analysts often refer to the importance of the pharmacy (pharmacists) and store clerks as defining this concept of service, and the panelists reinforced this fact during the research.

Other published industry data that the focus groups helped confirm included:

A trend toward mass discount warehouses and drugstores.
The use of multiple drugstore chains by the same consumer.
The use of the drugstore as a less expensive substitute for physician care.

The 16 drugstore concepts were presented to the shopper panels, and the participants were asked to come to a decision as to which concept was most appealing. However, before testing each of the 16 concepts, the focus groups were asked to complete the statement, "If you could shop at only one drugstore, it would be the drugstore with_______." Thus, the respondents were not biased with the preselected 16 concepts until well after they had discussed the same ideas in their own words. In addition, the original concepts were enhanced by the open-ended repartee.

The result: four concepts came to the forefront during the focus group sessions. Standard Drug management and Edelmann Scott's account team now had four positioning concepts to work with. The first was related to senior citizens, the second to operations changes, and the last two to the pharmacy.

Phase 3

Armed with the qualitative information the study entered its final stage - the quantitative phase. Since primary research validated some existing secondary industry research, the agency knew the marketing research was on track. SO, the input into the agency's LINK marketing planning model was almost complete. According to Edelmann's Dick Scott, "Marketing research is critical to our LINK system because even before we get the creative wheels turning, we're completely tuned in to what the customer is looking for."

Telephone surveys tested and helped advance the "favorite" drugstore concepts that emerged from the shopper focus groups. Three hundred households were surveyed using random digit dialing and respondents provided basic demographic information and answered questions on the drugstore concepts. Since all types of consumers shop drugstores, no attempt was made to target specific respondent segments. However, as expected, the final respondent profile closely resembled the target customer profile.

Before proceeding with the telephone survey, however, management slightly refined the concepts to ensure that the final ideas tested were easily adaptable and economically feasible during the short term.

Moreover, the advertising team made sure the concepts could be simply communicated, and that Standard Drug's advertising message and positioning could be differentiated from competing drugstore chains.

The result: Standard learned directly from its customers--not surprisingly, some might say--that customers most wanted to shop at the drugstore with the caring pharmacist. The focus groups had helped define the concept completely. In other words, what types of services would the caring pharmacist offer, how accessible should the pharmacist be, and how can the pharmacist be more helpful? So, in terms of positioning and advertising messages, here are just a few of the ways the findings played out:

Actor William Christopher, who played Father Mulcahy on the long running TV hit M*A*S*H, was chosen as company spokesperson. He personified the image of the caring and helpful person who customers felt comfortable asking advice. Interestingly, focus group participants had said a recognizable and personable male would be the best spokesperson.
A new tagline was selected to represent the chain's new philosophy, "We're creating a whole new Standard." The tagline was chosen to symbolize not only the attitudinal changes in the pharmacy, but also of the store renovation program that already had changed the face of several stores. Hundreds of slogans were developed before the final slogan was selected by Standard Drug management. Neither the tagline nor the commercials were tested per se, but the creative strategies were derived directly from the research findings.
The addition of pharmacy-related information to the company's newspaper advertising inserts helped pull the campaign together. Before the research, Standard had rarely included the pharmacy in its printed price/item advertising.
Direct mail featured the pharmacy. A separate campaign designed for newcomers and for residents located near renovated stores specifically asked customers to come in and meet the pharmacist, by name, at the Standard Drug located closest to them.