In the United States, the retail pharmacy field is dominated by two large firms, Walgreens and CVS. CVS, the second largest pharmacy chain, is constantly competing against Walgreens for market share, especially in its quest to become more of a health-care management company. 

One way in which CVS attracts customers is through its pricing strategies. CVS employs price discounts through several methods, including in-store discounts. Retail stores often display discounted prices through the use of shelf signs on individual products. In addition, CVS mails coupons and store-wide purchase discounts to customers and offers a number of online discounts through CVS.com. When customers link their CVS ExtraCare® cards to the company’s myWeekly Ad website, they receive weekly sales updates. The ExtraCare® card also gives customers access to personalized coupons in-store and through mobile apps. 

Questions for Discussion

1. Why is price competition such an issue for CVS as it fights to gain market share

2. Describe ways CVS uses sales promotion techniques to provide price discounts

3. Why is it important for CVS to negotiate with pharmaceutical companies on the prices of drugs?