Differentiation from your competitors is a fundamental tenet of effective business strategy. It’s not to be confused with uniqueness. Your product or service doesn’t need to be the only one on the market, but it needs to be the best one in the eyes of your target customers.
What ‘best’ means will depend on the needs of those customers. Best really means best fit. For some it might mean the lowest price, and for others, superior service. All pharmacies essentially sell the same core products, and for items such as PBS medicines, the price is consistent. Therefore, differentiation in a pharmacy business isn’t necessarily about unique products or better prices.
To compete, a business needs to differentiate its offering from that of the other businesses competing for the same customers. As I’ve written in an earlier article, those competitors are not limited to other pharmacies.
What differentiates your offering?
What are the things that you do that make customers love you and want to keep coming back? It depends on who your customers are and what they want.
For example, if a customer is going to spend a large amount of money on a piece of jewellery, then they’ll expect the jeweller to provide attentive personal service. However, if they’re picking up lunch on the go, then prompt but friendly service with little waiting time is the priority.
Thinking big by thinking small
Sometimes we think we can achieve growth by trying to be everything to everyone. But that’s not always the most effective approach.
Clipsal, which produces electrical fittings, such as light switches, is selling a common household item that most of us wouldn’t think twice about. It has long had the tagline ‘Every room, every home’ as an indicator of the market penetration it hopes to achieve.
While achieving this ubiquitous presence requires a different approach from that for serving a luxury market, as with jewellery it’s no less important to be clear about the strategic choices you’ve made. Successful strategy requires seeing small details through the lens of the global view.
Know your terroir
Champagne is a drink of celebration. Just mentioning the word is enough to make almost anyone smile. While sparkling wine is made around the world, only wine produced in the small region of Champagne, France, is allowed to carry the name ‘Champagne’. The official boundaries for the Champagne appellation were set out in 1908 and are an example of a very narrowly and specifically defined geographical boundary that differentiates the products produced there.
Does this mean that champagne is always better than other sparkling wines? Not necessarily, but it does mean that you can guarantee its place of origin and that the processes used in its production have been strictly controlled according to the requirements for the appellation.
You’ll certainly pay a premium for genuine champagne, and like good real estate, you’re paying for the location. The French term terroir encapsulates the idea that the place of origin has supreme importance to the ultimate quality of the product. This exclusivity can’t be replicated elsewhere.
Most pharmacies are local businesses, well grounded in their communities. This sense of place can differentiate you from more generic or corporatised businesses that may be less connected to the community. This is something to celebrate and emphasise as a strategic advantage. What local community events or initiatives could you participate in to improve this connection?
Geography isn’t the only way we can define our boundaries. It may be by the services you provide or your ways of working. It’s something that makes you stand out from the crowd and keeps customers coming back.
How do you define your terroir? How can you use it to your advantage?
By Dr Monique Beedles.
This article was published in Retail Pharmacy November magazine.