Computachem
E-Newsletter
Editor:
Neil Johnston
Regular Contributors:
Rollo Manning
Leigh Kibby
WWW (Who, What, Where) + E-Vents
This edition marks a turning point for a number of pharmacists
who have made a decision to have an e-commerce extension. Most of these
newcomers are feeling their way, and it will take some time before they
evolve to a successful enterprise. However, they will be in a position
to compete and engage their customers/patients in new and interesting
ways. Those pharmacists who have not come to a decision may regret this
position into the future, as they stand by and watch market share erode
to all other forms of competition. We have provided a triad of Internet
articles (What makes a successful e-pharmacy, More on Ideavirus, Web
women increasing) for those pharmacists developing their marketing plans
and strategies for the Internet, and we hope there is scope for implementation
of some of this material. Please let us know if there is any particular
subject you would like researched.
Our columnist, Rollo Manning, comments on the ethical debate concerning
pharmacists and certain forms of rewards. He gives an interesting perspective
to the problem, and comments: "Pharmaceutical manufacturers who
give pharmacists incentives in cash or kind, instead, should use the
value to establish a professional development fund for the Pharmaceutical
Society of Australia. The fund being administered now by the Pharmacy
Guild (and for the next five years) is from dollars foregone in remuneration
gains for PBS dispensing. If the same principle was to be applied to
"kickbacks" and "rorts", the profession as a whole would be able to
withstand any pressures placed on it by Government inquiries and the
like."
Any comment on Rollo's article will be forwarded on, if you would care
to take the time. Our second columnist, Leigh Kibby, provides us with
more insight into male behaviour and we follow his interesting train
of thought with the hope that you will reach out and capture men as
customers/patients in a direct dialogue. They represent a market opportunity,
and they desperately need help and guidance in the health department.
We also continue our commentary on developments of genetically modified
substances, with the view that whether you like it or not, as a health
professional at the coal face, you will have to make a contribution.
The point is that there is genuine opportunity in this area. An interesting
item on a spice connection with diabetes has been included to illustrate
the blurred boundary between food and drugs. Considering that pharmacists
originally started life some centuries ago trading in herbs and spices,
the cycle seems to have potential to repeat itself.
And finally, we report on a senate investigation into public hospital
funding. We sincerely hope this mess is sorted out once and for all.
MANAGING FUTURE
CHALLENGES
From Rollo Manning
The "winter parcel" buy for 2001 can be the watershed
for change in the way official pharmacy manages the environment it finds
itself placed in through marketplace reforms and consumerism. When the
sales representative advises the proprietor pharmacist of the incentive
deals on offer, it can be accompanied by a choice. "Would you like the
incentive in the form of a set of golf clubs, a microwave oven , or
have the value placed in the Pharmaceutical Society of Australia’s professional
development fund?" the question could be asked. Imagine $1000 worth
of incentives to 1000 pharmacies gives $1 million for starters. And
then there is the $200,000 reported to have been contributed by a "generic"
manufacturer to the Guild towards the "save pharmacist only ownership"
campaign. Add to that another say $1 million to flow from the same company
but this time to the "save chemists only" products fund.
The deal struck with the Commonwealth, by "community pharmacy" sets
a precedent for others to follow. The accolades that have been heaped
on the Guild for negotiating the deal are evidence of the value the
profession places on using money otherwise "in the pocket" to give a
return to the development of remunerated professional services. Too
many times in the past the leaders of the pharmacy profession have been
criticised for being too "reactive" in approaching the changes being
mooted in the marketplace environment. A "lack of vision" has been a
reason given as to why this has occurred.
The Third Agreement changes this.
Men of vision (sorry girls!) have emerged prepared to look ahead and
spend money (pharmacists’ money) to invest in a program which will set
the profession on another road when it comes to credibility with the
health care arena.
There is $2.2 million in the PSA fund so far, by early calculations.
Add to that the value of a recently formed distribution company’s shares
being given to pharmacists dependant on the value of their purchases
from the company over the next two years. It is estimated that this
is already standing at $15,000 odd for the leading purchasers. If we
estimate conservatively that it could be $20,000 at say 1000 pharmacies,
all of a sudden we have another $20 million in the development fund.
In the same pharmacy trade press publication as the above information
was gleaned, is found a report that another "generic" manufacturer will
not be able to give a discount on goods purchased of ANY MORE than 30%.
What a shame! But don’t despair.
The company is putting their foregone funds into a grant to research
better pharmacy business management. And what of the 30% discount which
still applies? That too could go into the PSA fund and it must be approaching
the $30 million mark. The headline read "Kickbacks cause industry uproar".
If 30% discounts are normal discount trading terms, and golf clubs and
microwave ovens are appropriate to try and entice pharmacists to sell
product, then maybe it could be argued that such incentives do not demonstrate
the worn old phrase that pharmaceuticals are NOT "ordinary items of
commerce". If that is the case then the funds could well be applied
in a "front foot" exercise in being proactive and establishing programs
that clearly demonstrate these are not ordinary items of commerce and
are a part of the contribution pharmacy can make to better health. Suggestions
are welcomed as to how the PSA fund, which has now reached a notional
$30 million, may be spent.
"In your dreams" some might say.
And the same would have been said if six months ago it had been suggested
that the Commonwealth would set up a fund with in excess of $300 million
for professional pharmacy services. Be proactive, get on the front foot,
use some incentive money to really get in front over the next five years
and show the community by example it cannot be without it’s friendly
family pharmacist, and the products that pharmacist owned pharmacy sells.
ends
The comments and views expressed in the above article are those of the author and no other. The author welcomes any comment and interaction that may result from this and future articles. The editor would be pleased to publish any responses.
WHAT MAKES FOR A SUCCESSFUL E-PHARMACY
Success in e-commerce seems to be elusive for a number
of businesses, both large and small. Most of the noise in recent times
has come from the big end of town, where much energy is being spent
on forming alliances and procurement platforms to reduce costs at the
back end of business. There has been some dramatic success for some
of the participants in this B2B (Business to Business) restructuring,
but there has been limited success at the B2C (Business to Consumer)
end. In examining the successes in B2C it is noted:
* most successes come from small to medium operators;
* they have an established "bricks and mortar" associated business operating
in conjunction with the e-business, either wholly owned or in alliance;
* they are experienced in retail marketing and know how to intuitively
"window dress" on their site;
* they know how to provide service, communicate with their customer
and are able to deliver the product within a reasonable time;
* they are able to promote in such a fashion that consumers are able
to easily find them on the Internet and find value in their goods and
services;
* they have been able to promote consumer confidence through ethical
trading and by giving the customer complete control of the transaction,
including the option to return any goods for credit "no questions asked";
* they have been able to assure customers of complete privacy, and have
adopted "permission marketing" i.e no information is stored on a customer's
behaviour without their approval.
How does pharmacy stack up against this profile?
Well, in the "bricks and mortar" area, pharmacists score highly in all
aspects.
In respect of their e-business, the score is not so high because few
have entered into this new arena. Up to this point, pharmacists have
not enthusiastically embraced the Internet, but this is all about to
change through necessity. There is always a critical point when a new
idea gathers momentum and becomes an "ideavirus", and e-retailing is
about to infect large areas of pharmacy. Anyone who is not giving thought
to how they are going to project themselves on the Internet is setting
themselves up for a potential loss of a one-third market share over
the next five years. Such an erosion could be terminal for some pharmacists.
In every respect, pharmacists qualify for the criteria to develop successful
e-pharmacies.
They are established in the marketplace, score high in consumer confidence,
have a high local and national profile (through market groups), have
a consumable and sought after product (health) which is the most accessed
topic on the Internet, and they are used to providing a high standard
of service in an ethical manner (as evidenced by the Gallup Poll). They
are also recognised as respecting an individual's privacy. Being professionals
with retail skills, pharmacists are experienced in delivering their
products through to consumers.
Pharmacists should not be deterred by the negative comments of retailers
who have expressed disappointment for their efforts on the Internet,
and these comments even come from the major retailers!
Gerry Harvey of Harvey Norman fame has expressed disinterest in the
Internet, yet there are current reports of small business succeeding
in the same market as he, and are having great success.
He has a blind spot!
The Internet has proven that rewards come for those who are quick on
their feet, who are creative and bring new ideas and a "freshness" to
the marketplace, and do so with confidence.
Big business is not as flexible as small business, and the Internet
is proving to create a more level playing field because of its relative
low cost to establish, and the ability to communicate with large volumes
of people. Woolworths, for example, has done little to this point with
its e-retailing site. The site lacks excitement, has been established
for about three years (although few people have realised it even existed)
and has imposed a high delivery and service fee on each of its processed
orders ($12.50 per order), with a minimum order of $60. Already it is
receiving competition from, wait for it, FoodDirect.com.au,
a Brisbane-based, small business e-supermarket. The Woolworths site
has recently undergone improvements and is about to be rolled out nationally
over the coming months. I have no doubt that it will be successful in
the long haul, but I am equally confident that pharmacy can compete
in those areas of common interest and win back market share With the
passage of time, many Woolworths and Coles stores have become "pharmacy-like"
in the range of products and services provided. This is not going to
abate, and they are being joined by a chorus of smaller e-retailers,
all of which seem to stock complementary therapies plus a wide range
of fashion and toiletry items.
Pharmacy has been given a powerful tool with which to fight its competition,
provided it learns to use it to advantage.
I would not delay any longer.
Obtain a presence on the Internet and begin building experience to obtain
the maximum lead time over all other forms of competition. Do not be
deterred if your initial efforts do not produce expected results. As
with all forms of business you must patiently build your e-pharmacy,
cyberbrick by cyberbrick, until you have a workable formula. Make sure
that you are set up to sell (product, price and where and how you get
it!), and make sure your customers have to drill down into your site
to obtain free information. Information rich sites attract numbers,
but may not sell much in products and services, if it congests the front
door.
Why not give it a go?
In our last edition, we introduced a new approach to marketing
as detailed by Seth Godin in his book titled "Unleash your Ideavirus".
In this edition we elaborate on some of the concepts under the heading
of "Concentrate your Ideavirus".
There are proven techniques that can be used identify, launch and profit
from ideas that can be turned into viruses. The care and feeding of
your ideavirus can dramatically affect its ability to spread. One of
the key elements in launching an ideavirus is to concentrate the message.
If just 1% of a group is excited about your idea, it's not enough. It
is still not enough if that percentage hits 15%.
You only win when you dominate and amaze the group that you have targeted.
This is why focusing obsessively on a geographic, demographic or psychographic
group is a common practice among successful ideavirus practitioners.
Why are new net companies so obsessed with generating Internet traffic
and building up "hits"? How is it that a company like GeoCities can
be sold for more than $2 billion, when it has close to zero revenue
and features software that is not even unique?
It is because infecting large populations with an ideavirus is the first
step to building a profitable online business. How to build an online
ideavirus?
* Create an online experience that offers your users something completely
new, or something they can't get offline. Alternatively, create an online
experience that duplicates an offline experience, but does it so much
faster, cheaper and better, so that switching is worth the trouble.
* Have the idea behind your online effort reach your target group without
spending a fortune on advertising. Your idea is more likely to go viral
if you invest effort in some form of unique or creative communication
which consciously or unconsciously, attracts interest.
* Fill the vacuum in the marketplace with your version of an idea so
completely that your competitors will have to "unteach" your virus before
they can unleash one of their own.
* Achieve "lock-in" by making it more and more costly to switch from
your service to someone else's.
* Get permission from users to maintain an ongoing dialogue with them
so that you can build a relationship that gives them a beneficial experience,
and gives you a profit stream.
* Continue creating noteworthy online experiences to spread new viruses.
Always begin by infecting your core audience of "sneezers".
The objective of creating an ideavirus is to generate a winning position
as quickly as possible. Because of the speed of the Internet it is possible
to create an epidemic, and with it, an unassailable position. The difference
between being first and a bit behind is that the "bit" is a yawning
chasm. To the victor go the spoils, and so it is that a handful of e-commerce
businesses that got there first, have a capitalisation equal to all
the others put together (Amazon.com + eBay + priceline.com= more than
all the rest combined). More than any other medium, the Internet allows
an individual to display ideas for a low startup cost. Potential customers
are able to access this type of material free of charge, and if handled
correctly, can lead to a high profile and lucrative offers. Nathan Mhyrvoid,
former chief technology officer at Microsoft says that a great employee
is worth 1,000 times more than an average one, because of the quality
of that person's ideas.
The point to be made is that "Ideas aren't a sideshow that make our
factory a little more valuable. Our factory is a sideshow that makes
our ideas a little more valuable."
We will be exploring more of this unusual marketing theory in the next
edition.
In a recent survey conducted by American companies Jupiter
Communications and Media Metrix, strong increases of women using the
Internet have been recorded in all age groups, except ages 18 to 24
years. There was an actual decline in this particular group, and the
reason given was that: "women in the college age group appear to have
more offline interests and more offline business to take care of".
I wonder what those offline interests are?
The study recorded the fact that 50.4% of the total US Web audience
in the first quarter of year 2000 were women, and for the first time
in the history of the Internet, they outnumbered men. The growth statistics
indicated that the total number of Web users grew by 22.4% during the
past year, but the number of female users surged by 34.9%.
Particularly strong growth was found among teenaged girls, this segment
growing by 125% over the past year. Teens apparently go online for social
reasons, and as women get older, they make practical use of their time,
logging on for information about health, childcare, vacations and financial
planning. The study also found that many consumer product sites, which
provide information on a range of health products, have a disproportionate
number of female users. This reflects the current offline "bricks and
mortar" Australian pharmacy environment and also the fact that this
type of environment is not attracting males for a number of reasons.
Leigh Kibby's articles give an insight into why this is so, but as we
have previously pointed out, this also represents an untapped market.
With males highly inclined to use the Internet, it only needs the right
ideavirus to attract them and obtain a market share increase. We have
previously pointed out that in Australia men could occupy an initial
"gatekeeper" role for family shopping on the Internet, but with these
recent figures, they had better hurry up!
One surprising finding was that several women's community sites e.g
Women.com and IVillage, have a 30% male component, which is attributed
to "good generic content". Perhaps the finding should not have been
so surprising, because significant male readership is found in Women's
Weekly and New Idea magazines in Australia.
The Internet is just providing a new twist.
The survey was based on a total of 55,000 people across the United States,
and has validity for Australian market research as American trends seem
to be exported about 18 to 24 months later
BUSINESS RESPONDS TO CONSUMER GM CONCERNS
Swiss biotechnology giant Novartis, has moved to stop
using genetically modified ingredients in its own food products. The
move was made in response to concerns of Belgium and the Netherlands
and follows a campaign initiated by Greenpeace, which criticised Novartis
for contaminating the food chain and the environment. A spokesman for
the company stated that it was obviously uneconomic for Novartis to
produce a product that the market does not want, therefore it would
bow to market pressure. The policy extends to its Gerber Baby Foods
and Ovaltine drink mix, both brands well known in Australia.
In a local context, Coles has announced that it is pioneering a new
line of GM-free private label products, after the recent ruling that
full disclosure of GM ingredients will be required on all processed
foods, irrespective of concentration. Coles confirmed what many already
knew, that the majority of their customers were expressing concern at
not being able to make a choice, and are deeply suspicious of potential
health and ecological threats in the long term.
Immediately following Coles' announcement, Unilever Foods announced
that marketing of GM-free foods in this manner constituted negative
labelling, and could be challenged under the Australian Food and Grocery
Council's Code of Conduct, as not being appropriate marketing. As the
debate rages, it is obvious that with the strong laws planned for Australia
and New Zealand, niche market opportunities will open up, particularly
for organic foods.
Australia is well placed with its clean food image, to provide many
world markets with organic foods. A study in 1996 showed that organic
food sales in Australia had reached $96 million and it is estimated
that current year's sales could reach $250 million in domestic sales
and exports. The total market is currently increasing at an annual rate
of 25%. Organic foods are becoming more mainstream and predictions have
been made that within 15 years, it will represent 30% of total food
sales. Export sales are growing at a faster rate than domestic sales
and government is beginning to take notice of this export potential
by lending support.
Industry observers have recently noted that organic food sales increase
proportionately to the publicity given to GM foods, and that a close
correlation already exists between adverse problems through food and
chemical contamination, and increased organic food sales. Australian
supermarkets are reporting increasing enquiries for organic foods and
Coles supermarkets have reported a 600% sales increase over the previous
twelve months.
As we have reported in previous editions, consumer sentiment runs high
when genetic modification is mentioned.
This represents a challenge for pharmacy, as many of the major drug
advances in the near future, will come as a result of genetic engineering.
So the proposition is to develop a strategy that assures customers that
as far as foods products stocked by pharmacy remain GM free (or clearly
labelled if not), this should not be the case for medication. It is
no accident that revelations and advances in genetic medicine are being
highlighted in the media, well in advance of their release date, as
positive and innovative discoveries, to ensure their commercial passage.
Pharmacy marketers are faced with developing clear communication channels
to their customers/ patients in an honest and unambiguous fashion. Those
that do, and develop a positive and open approach, as Coles have done,
will generate consumer confidence and gain in market share. The lines
are rapidly blurring between a medicine and a food, and pharmacists
may find themselves selling foods, traditional and non-traditional,
in the best interests of their customers/patients.
Your attention is drawn to the next article on a food treatment of diabetes.
How will you plan your future market mix?
There is a great potential here to develop an ideavirus!
DIABETES AND THE SPICE CONNECTION
In a recent article published by New Scientist, it was
reported that clinical trials involving the use of a cinnamon extract,
are due to begin within a year. The trials involve people who have Type
11 diabetes, and it is postulated that by taking a quarter to a full
teaspoonful a day of cinnamon, a positive benefit could be derived.
In people with Type 11 Diabetes, fat and muscle cells gradually lose
their ability to respond to insulin, with the result that glucose builds
up in the blood, causing symptoms such as fatigue, weight loss and blurred
vision.
In earlier experiments, conducted by the US Agricultural Research Service
in their nutrition laboratories, it was established that cinnamon revitalises
the response to insulin, and increases glucose metabolism by a factor
of up to 20 times. The active substance responsible for this resensitisation
is a polyphenol called methylhydroxy chalcone polymer (MHCP).
The cinnamon extract does not replace insulin by binding to the hormone
receptor itself, but appears to improve the internal messaging system
of cells to make them more responsive to insulin. In unpublished studies
involving diabetic mice with abnormally high glucose concentrations,
blood levels of glucose fell dramatically after MHCP administration.
Blood pressure also remained stable in spontaneously hypertensive rats,
such rodents generally having a soaring blood pressure, if they are
insensitive to insulin and maintain a high sugar diet.
A daily dose of cinnamon taken in orange juice, coffee or on oatmeal
is recommended as a suitable method of administration for those wishing
to experiment.
YOU'VE GOT MALE
By Leigh Kibby
"What’s Up and Down Below"
Why are men so reluctant to go the GP and especially nervous
about “Percy?”
The answer is to firstly understand men and then see the appointment
to the GP through their eyes. What is it to be a man?
Many men will have many, slightly varying perceptions that relate mainly
to context not essence. Some men, through the luck of birth, friendship
or marriage, will be somewhat different. But there are some current
themes that are strong within most men and, for some of us, overwhelming.
Provider, protector and hero are the flags that men carry to work, to
the pub, to everyday interactions and, eventually, to home where a whole
new set of roles wait to entrap him, some of them not his making, to
his liking nor in his understanding. These roles demand a level of sufficiency
and confidence that denies the opportunity to be afraid and prevent
the ability to deal emotionally with any perceived failure.
As men, the main thing is that we are seen fulfilling these roles.
Being doers and achievers not recipients nor respondents.
Sex falls in these categories, which is why performing well can be more
satisfying than the experience. For such men, going to the doctor means
something is wrong which threatens our ability to achieve and so threatens
who we are. Our very "personhood" is in question if we cannot do and
cannot achieve because this is how we are defined and rated, by ourselves
and our workplace and, for some of us, at home where we most want to
feel safe and accepted for who we are.
Add to that the experience of going to the quack.
The waiting room is full of women’s magazines, children’s toys and posters
about breast self-examination, male violence at home and 100 ways that
your favourite diet of pies and beer will kill you (oh no, death simply
means I failed again). The GP will simply confirm that you have been
a fool not to get the “Fizzle with the Pizzle”, or the “Problem with
the Possum” checked sooner and anyhow, it’s a sign that your blood pressure
is too high, cholesterol too high and heart rate too high. By the way,
what’s wrong with the back, how did you do that to your arm and is that
a skin cancer on your face.
“Now, drop your dacks and let’s have a look see.”
All of these mean much more than embarrassing moments. They mean that
I am human and, as a man, I cannot afford to be because I am the provider,
protector and hero.
“Not getting it up,” is not on, in any interpretation.
“What’s up down below?” is the last question we will ever ask because
the answer scares us so much we would better off dead because to live
with failure – our failing those we care about – is more than we can
live with.
This is what it can mean to be a man – strange but true. Some of us
realise the path of the dinosaurs and are asking ourselves, and one
another, the questions that kill our false beliefs before they kill
us. So, if anyone ever asks, “What up down below?” the answer will always
be Everything!
The comments and views expressed in the
above article are those of the author and no other. The author welcomes
any comment and interaction that may result from this and future articles,
and can be contacted directly by e-mail at leigh@kinematic.com.au .
Alternatively, the editor would be pleased to publish any responses
directed to neilj@computachem.com.au .
PUBLIC HOSPITAL FUNDING UNDER INVESTIGATION
A Senate community affairs reference committee (entitled
"Roundtable") is to be convened on Friday 18th August in Parliament
House, Canberra, to consider funding options in respect of future Commonwealth/State
funding of public hospitals. The proceedings are being broadcast directly
on the Net through the parliamentary Webcast, and may be accessed at
http://webcast.aph.gov.au . Government is finally facing the fact
that public hospitals are experiencing extreme problems, because current
funding arrangements are disruptive, less than transparent, and are
typified by cost shifting, which has developed into an art form.
A range of options has been prepared for discussion which include:
* A fundamental overhaul of funding and delivery arrangements with a
single level of government to fund and deliver services i.e the Commonwealth
as a single funder or the States/Territories as a single funder.
* Variations on the theme where the Commonwealth fund all pharmaceutical
services or perhaps just all medical services
Additional options for discussion include National Health Policy, community
involvement and consultation and the redefining of the role and services
of hospitals. Perhaps we can finally look forward to some responsible
outcomes from this Senate Roundtable Enquiry, and end once and for all
the daily spectre of patients being turned away for elective surgery
because of a lack of resources, and emergency departments stretched
to the limit for similar reasons.
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