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Target Case Study: SpotCare Table of Contents__________________________________ Target’s Current Situation: An Introduction …………………………………………………………………………….. 3 SWOT Analysis: Target Corporation ………………………………………………………………………………………… 4 Accessibility Trends: SpotCare® ………………………………………………………………………………………………….. ………… 6 Health Savings Passes and Their Benefits ………………………………………………………………………………………………. 7 Medication Compounding: The Convenient Way Out ……………………………………………………………………………. 7

From On-Line to In-Store: Pharmaceutical and Home Health Care Supplies ………………………………………….. 8 Prescription Home Delivery Service: Bringing the What, Where and When Home ………………………………… 8 Mail Order Prescription and Health Care System: The Whole Delivery Package ………………………………….. 10 SWOT Analysis: Target SpotCare® ……………………………………………………………………………………………………….. 13 Financials: SpotCare’s® Cost of Implementation ………………………………………………………………………………….. 15 Works Cited/ Links Used for Financial Data …………………………………………………………………………………………. 8 Target’s Current Situation: An Introduction_____ According to research found by Target, “Today, 13 percent of the U. S. population is over 65. On average, people over the age of 60 use about three times as many medications as those under that age. By 2030, Americans over the age of 65 will represent about 20 percent (69 million) of the population. ” The average age of a Target customer is 42. One of Targets biggest threats is losing these customers to other competing pharmacies.

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Because of this, Target it looking into expanding their target market to better fit their current customers as they mature, as well as reaching out to those who have already matured. Target could achieve this by satisfying home health care and other over-the-counter needs of seniors. SWOT Analysis: Target Corporation____________ Strengths| Weaknesses| * One of the best known retail brands; they are perceived as innovative/fashion-forward and trendy, continually setting trends and is the second largest retailer; Target focuses on new ideas and exclusive products, such as Clear Rx. Target offers a number of secondary services including: Target financial services, Target sourcing services, Target commercial interiors, Target brands, and Target online. * Carries a variety of products from clothing all the way through produce. * Top designer products (i. e. Isaac Mizrahi, Zac Posen); Perceived as providing quality products to customers. * Provides a family-friendly, good shopping environment by not selling firearms, tobacco, or toy guns. * Store layout from store to store is similar/ consistent. Donates an immense amount of its profits to its surrounding communities and is associated with many community organizations. * ClearRx has grossed the company over 7% of total sales & contributes to about 33% of guestsConsistent execution, store layout and product range from one store to another * Credit card payment option helps business and profits * Target’s locations are accessible to their current/potential guests | * Not all stores offer the same services (produce section, photo center, optical center, pharmacy, Starbucks, etc. * Pharmacy guests account for over 7% of their total sales. The turnover rate for Pharmacists (and employees at store level in general) is very high, since they are required to work 12-hour workday schedules. * only operates in North America– not enough diversification * food margins and sales lower than other merchandise sold—gives least profit * Stores vary little by region * Poor number of in-stock items * Target Corp. Opportunities and Threats located on following page. Opportunities| Threats| * Need to meet their “Expect more. Pay Less,” brand promise and improve price perception; considered overpriced when compared to competitors. * Add produce section to more of their stores * Increase availability of in-store items * Emphasize more pharmaceutical aspect of the store * Gift cards can now be used in both the store and on the Internet, thus leading to more sales and reaching the computer literate market. * Take on competitors plans (i. e. Wal-Mart) and focus on opening stores in international markets  * Growth of private label/brand * Increase/growth of food margins/products| * Due to recession Target might lose some of their loyal customers, because of competitors’ perceived lower prices * Wal-Mart and K-mart highly competitive * Lack of experience in international markets could ruin their chances on expanding internationally * In the past, several lawsuits are filed against company—could damage reputation * Pharmacy industry competition from Wal-Mart and K-Mart * Most Targets are located within a 10-mile radius of their major competition * In some markets, Target’s prices are perceived as higher than competitors * Target stores that do not possess a grocery department are a threat to retailers such as Wal-Mart, who are now implementing the majority of their stores into Super centers. Growth/increase of secondhand apparel stores * Credit card business with current economic state/among economic turmoil * Its core shoppers trading down to other stores because of macroeconomic conditions * Declining trips across discount industry| Accessibility Trends: SpotCare®________________ “See. Spot. Care. ” That will be the selling point for SpotCare®, a proposition for Target’s current marketing situation regarding pharmacy and health care. SpotCare® is a way for Target to effectively brand their entire pharmacy department along with the revolutionary bottle design known as ClearRx. SpotCare® is an innovative way to implement new pharmaceutical and healthcare trends Target might want to offer as well as integrate them with the current benefits Target’s pharmacy already offers.

Benefits Target can offer under SpotCare® along with services it already offers are: prescription home delivery service, with the option to deliver by mail or courier; health savings passes exclusive to pharmaceutical and home health care needs, with the possibility of additional discounts and savings in other Target store departments; medication compounding services whereby medicinal dosages can be manipulated into other forms that are easier to ingest; proposal to integrate a home health care supply department for items such as mobile scooters, rollers and other costlier items that users would like to personally test before ordering; and an entire mail ordering system for prescription and other health care needs as well as reminders for refills and required forms to fill out. Upon research conducted, we have found that Target does indeed have a clinic that is only available in two states (Maryland and Minnesota); therefore, we also propose that they expand their clinic into all other stores where SpotCare® is available.

Since Target has a strong brand image and is known as a trendsetter, it is only expected that Target integrate its unique brand strategies into its most recent addition to the Target line of products and services. Health Savings Passes and Their Benefits Health Savings Passes is another option Target should consider to both obtain and retain customers. These passes would give customers various benefits and help them save on prescriptions and other health care-related products. This pass should not be offered exclusively; it should be offered regardless of insurance coverage or lack thereof. All that is required is a small annual fee paid by pass holders. Pass holders could possibly benefit from the program by having a point or dollar system that would help them save on current and future prescriptions or other store purchases.

On average, senior citizens take about six prescription medications daily, if not more. As customers get older, the amount of prescriptions purchased increases dramatically. Target’s aging customers are also continually attempting to find more ways to save and cut down on costs, not just on medication. These passes will allow them to save money by paying a flat rate on a 90-day supply of generic medication. Medication Compounding: The Convenient Way Out Medication compounding is an emerging trend that few competitive pharmacies are implementing. Medication compounding is the process whereby pharmacists customize medication dosage strength to fit a patient’s specific needs.

In this process, the pharmacy would be able to create patient-specific doses according to size and weight, combine medications into a single dose, change the dosage into a form that is easier to ingest, or develop allergy-free formulas by taking out inactive ingredients, preservatives, dyes, or lactose. Though Target does offer a form of medication compounding by adding better-tasting flavors to medicines, it is proposed that Target expand on this option by offering to chemically alter medicines in a way that is beneficial to consumers who might be allergic or prefer to not ingest other perceptually harmful ingredients contained in the medication. This is really helpful for children and the elderly, as it is more difficult for these specific age groups to take certain medications.

From On-Line to In-Store: Pharmaceutical and Home Health Care Supplies Another trend Target can implement is bringing the home health care products they sell online into physical store locations. While they have an impressive array of quality products available online for customers every home medical need, the majority of these products are not available in-store. Senior citizens are more likely to want to test bigger-ticket items, like scooters and wheelchairs, before purchase. Therefore, it is proposed that Target integrates a home health care supply department or bring some of these products to its stores to accommodate those who prefer to test products before purchasing such costly products.

Should it be their decision to purchase the item, Target will supply the customer with order forms both in-store by a representative or online. Prescription Home Delivery Service: Bringing the What, Where and When Home According to a 2001 report from the National Household Travel Survey conducted by the U. S. Department of Transportation’s Bureau of Transportation Statistics and the Federal Highway Administration, 21 percent of seniors 65 and older do not drive. Moreover, people 85 and older are especially likely to be non-drivers (U. S. General Accounting Office, 2004). With that being said, making pharmaceuticals more accessible for the elderly is becoming increasingly important.

This particular age group is a considerable part of the pharmaceutical market and it is imperative to cater to them, which is yet another reason why the benefit of prescription home delivery service should be included under SpotCare®. It is proposed that Target implement the strategy of offering a prescription home delivery service. This prescription delivery trend has already been implemented by some of Target’s competitors such as Wal-Mart, which offers the standard 7-10 business day free delivery. Having a home delivery service carries many benefits for the elderly. The first and most obvious benefit is the time saved and convenience that driving to a Target location does not offer.

This is especially true for senior citizens who do not drive; they will not have to rely on another individual to drive them or pick up their medicine for them. The second benefit is the privacy given to the elderly that may feel uncomfortable while refilling their prescription medicines at a Target location. With this home delivery service, the sense of confidentiality and privacy is always present. It is believed that Target should not charge for prescription home delivery since other local pharmacies do not charge for the service; therefore, by Target not charging as well it will serve as a third benefit to its customers and keep Target competitive with its local and national competitors alike. A Target Pharmacy customer can receive the same prescription medicines at the same cost.

As per a prescription refill, it is believed that Target will benefit greatly by offering the prescription home delivery service if they make it accessible online, not just by telephone or in person. According to Pew Research Center Publications, “older generations use the internet less for socializing and entertainment and more as a tool for information searches, emailing, and buying products. In particular, older internet users are significantly more likely than younger generations to look online for health information. Health questions drive internet users age 73 and older to the internet. ” Contrary to what many think, senior citizens prefer using the internet as an information tool rather than speaking with a representative over the phone.

This will also be beneficial to Target because it will bring about another new “trend,” and it is known that Target is has up-to-date and trendy brand image; it is one of Target’s main strengths. Lastly, it is believed that implementing this idea of a prescription home delivery service will be beneficial to Target in terms of increased exposure. With every idea and perceived benefit offered by a firm comes the need to bring about awareness of it. The advertising objective of bringing awareness to the service/benefit to be provided will once again put Target in the public eye and give their consumers and target market alike the perception of Target’s dedication to continually striving and implementing bigger and better ideas to benefit their customers.

Mail Order Prescription and Health Care System: The Whole Delivery Package Under SpotCare® customers would have an entire mail order system at their fingertips without ever having to leave their home; this proves ultimately beneficial for those who are not able to leave their home as well as those who prefer convenience. The system includes myriad consumer benefits as well as a simple, one-stop way (such as a customer profile) to manage medicines and other products needed and how they are delivered to customers. Target can also selectively distribute certain prescriptions by mail or courier, or choose to distribute all prescriptions in this manner. Another option under this system is a reminder service either by e-mail, online or telephone of refills in supplies such as testing strips or medications as needed by SpotCare® customers. Customers will also have every required or optional form to fill out (i. e. order forms, prescription fill-out forms, etc. available online; customers have the power to choose whether to turn it in right there online or by e-mail, as well as the option of having it mailed directly to them. Another form available online is a transfer of pharmacy prescription form, by which new customers will be able to receive discounts on their first prescription and/or pharmaceutical purchase for choosing Target as their new pharmaceutical and home health care provider. Target is seen as unique and a trendsetter; it should keep this image by encouraging its pharmacy to keep up with the emerging trends its competitors are taking on and make it unique to the corporation’s brand.

Target’s Pharmacy, like its large and small competitors Walgreens, CVS, and Surfmed among others, is offering services that benefit customers of all ages such as auto refill, large print labels, clinics, and Medicare benefits. However, some of the benefits Target does not offer but its competitors do are: 24-hour service, drive-through service, medication compounding, prescription refill email reminders, health savings passes and home delivery. It is believed that for Target to continue being perceived as a viable competitor in the pharmaceutical market, it should offer these benefits to its customers belonging to this particular target market as well. This is why it is proposed that Target start an entire new pharmacy department trend: SpotCare®.

Taking on emerging trends such as home delivery services, health savings passes and medication compounding, and adding their online medical supply department to stores under SpotCare® should be implemented by Target in order to keep their current customers as they age as well as expand their target market. Home delivery services will allow those who cannot pick up their prescriptions on their own, whether it is for health or convenience reasons, obtain said prescriptions needed in a hassle-free manner. Even though Target offers services similar to their competitors such as auto-refill, Medicare benefits and large print labels, improvement is needed in their clinic services. With more than 1,400 stores in the United States, Target offers clinic services in only two states: Minnesota and Maryland.

It is obvious that Target needs to expand their clinical services into more states. Implementing this strategy will allow customers to shop for their household or personal needs, get their medicine, and get examined if they are feeling ill. These increasingly popular pharmaceutical trends will allow Target to reach its ultimate goal of growth in its target market and retention of current customers. SWOT Analysis: Target SpotCare®______________ Strengths| Weaknesses| – SpotCare® adds a different demographic to current target market. – Will allow target to keep current customers over the years to come as well as a strong possibility of luring new ones. SpotCare® will earn Target a more profound presence and market share in the pharmacy and home health care industry-Customers’ use of health savings passes will encourage more purchasing-Medication compounding gives Target’s customers a perception of a more personalized service-Bringing home health care supply items in-store for senior citizens to “try-before-buying” will lure customers in and increase store traffic-New home delivery of prescription will bring about new/more customers, which will in turn bring more revenue-SpotCare’s® mail order system gives consumers the power to customize and manage their medical and healthcare needs in a more efficient, convenient manner. -Adding a clinic to SpotCare® in each store will increase store traffic and allow Target to offer a complete, one-stop shop for the consumers’ pharmaceutical and home health care needs. – Prescription costs will not be affected by the ClearRx system. | – May have difficulty luring in loyal customers from competitors. SpotCare® will require sizeable costs to implement though it is considered a great investment. -Consumers using the health savings passes and applying its discounts is an added cost for Target. -Medication Compounding requires hiring of an experienced professional in this field and requires more specific equipment. -Added costs to bringing bigger home health care items to stores. -Fuel charges, miles and automobile purchases add to Target’s cost of implementing prescription home delivery option. -Added postage costs to mail order option-Added costs of having to hiring drivers and expenses from purchasing a company car will bring down advertising budget. -Added costs to place clinics in more Target store locations. System structure may become more complicated in its logistics. *SpotCare® Opportunities and Threats continued on the following page. | Opportunities| Threats| -Target’s advertising will expand exponentially, especially through Television outlets which senior citizens frequently view. -SpotCare’s® unique program perspectives on the pharmacy and home health care department will strengthen Target’s brand image and recognition. -The new advertising will prove beneficial and create public awareness– staying in buyers’ minds while making (pharmaceutical) purchasing decisions is important. | – Competitors pricing on certain trends could make it difficult for Target to excel in this area. Since Target will be trendsetting pharmaceutically with SpotCare®, its large competitors might attempt provide a similar program, thus possible diluting SpotCare’s® uniqueness. -Other companies and pharmacies might produce said similar program with lower prices and more benefits. | Financials: SpotCare’s® Cost of Implementation_______ Cost of Health Savings Passes/ Point System Technology Implmenetation *Based on average price index Newspaper Free Standing Insert Coupon Booklet: 52 weeks (1 year) x 1,300 per week avg. cost = 67,600, est. per year Implementation of New Point System: Nationwide Tech Upgrade with Expandability $725,000 (IBM) Est. Total: $792,600

Medication Compounding Technician & Implementation Costs *Based on average price index Hourly Pay of Medicinal Pharmacy Tech: $10-$30/hr* Total Cost to Implement Per New Employee: $19,200-$57,600/per year *depending on experience Cost of Prescription Home Delivery Service System *Based on average price index Delivery Fleet Vehicles 2010 Toyota Yaris (1 per store): $11,975* Avg. Fuel Costs per vehicle $1252, est. per year Total Cost to Implement Per Store: $13,227 *per vehicle Mail Order Prescription & Health Care System and Implemented Costs *Based on average price index Current Cost First Class Stamp: . 44 Avg. Weight of Prescription Vial: 1 ounce 1 Stamp Covers 1 Ounce of Weight, therefore ach plastic vial mailing will cost the equivalent of a . 44 First Class Stamp Avg. Prescriptions Per Senior 65+ Per Year: 38. 5 So, . 44 per ounce x, The per year avg. prescriptions for seniors 38. 5 = $16. 94 Per Person, Per Year Nationwide Itemized (Average Price Index) Internet Website Advertising: $0. 60 pay-per-click or $1,200 – $1,800 a month for aggressive campaigns Newspaper Ad Advertisements: $1,300 per week for 2” x 2” Implementation of New Point System: $725,000 (IBM) Fleet Vehicles (2010 Toyota Yaris) $11,975 Avg. Fuel Costs Per Vehicle $1252/year Avg. Per Hour Wage of a Pharmaceutical Compounding Tech $10-$30/hr First Class Stamp . 44 Avg.

Prescriptions Per Senior 65+ Per Year: 38. 5 Works Cited________________________________________ “Generational Differences in Online Activities. ” Pew Internet & American (2009): Web. 11 Apr 2010. . “Community Mobility and Dementia. ” National Highway Traffic Safety Administration (2006): n. pag. Web. 11 Apr 2010. . Links Used for Financial Data http://www. google. com https://www. cia. gov/library/publications/the-world-factbook/geos/us. html http://www. iesmallbusiness. com/resources/Major_Media_Types. doc. http://www. ibm. com http://www. target. com http://www. rexam. com http://www. usps. com http://www. familiesusa. org/site/DocServer/drugod. pdf? docID=726

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