1.13 Case study Chapter 1: Maine East Pharmacy This pharmacy is located in a small town in the northeastern United States. It is a pharmacy that doesn't have the support of a larger group or chain, which could provide merchandising advice and sales force assis- tance. It is active on a number of Internet networks such as Facebook. The owner has paid for market research over the years in an effort to boost his sales and to accelerate product turnover. His project is to rede- sign his store and customer interface to improve his business. Some of the key findings from past research are listed in Table Case 1.A. Table Case 1. A MEP past business reports Date Past main recommendations 2013 Better display of products Better promotion of product lines Better signage Promotions during holidays Target nearby university students 2014 Better display of products Better outside signage Make store family friendly More promotion More use of colors 2015 Increase social network with Instagram and Twitter Encourage employee training Appeal to women The store is located in a small town where the population is aging, with 21% being over 65 years old, and with the median age being 50. The 29 of 42 CAMPUNC. ---Project definition 65 272 percentage of children aged 0-14 is about 13. The average yearly income is US$20,000 The store employs four pharmacists, five pharmacy assistants, one dietician, one part-time nurse, one part-time orthopedic insole specialist, as well as 15 employees assigned to various duties. The customers judge the staff to be pleasant Competition comes from two food retailer outlets located four miles away, a specialty store (five miles away), a local alcohol outlet (10 miles away) three drugstores (15,24, and 40 miles away), and one Walmart (40 miles away) Maine East Pharmacy (MEP) offers a large assortment of products and services. With respect to products, profit centers are as shown in Table Case 1.B. Table Case 1.B MEP profit centers Sales 2015 Average Main First quarter sales category Category (in USS0,000) #SKU'S USSISKU Health First aid 980 3,600 Baby 30 200 150 Body care 22 2000 Subtotal 1,032 5,800 178 Impulse Tickets (Lotto) 30 30 1,000 Smoking 50 180 Chips/snacks 1,500 Magazines 2 85 24 Subtotal 206 1,665 Female Hygiene and female 400 150 Cosmetics 56 1,900 29 Subtotal 116 2.300 50 Home Durable home 59 1,200 Cleaning home 20 500 School 200 15 Subtotal 82 1,900 104 Special Cards 55 200 275 occasions Christmas 17 1,500 Others 72 1,700 Subtotal 3,400 328 11 9 165 110 124 40 49 40 3 11 42 MEP also offers a number of services ear piercing, foot care, pass- port photos, photocopies and lamination, prescription refills by phone or online, as well as an adjacent coffee and food bar (which has a door 66 Project Feasibility: Tools for Uncovering Points of Vulnerability connecting to the pharmacy) and an adjacent gas station (owned by a dif- ferent owner), both of which attract a lot of customers. When a customer enters the store for the first time, they can immedi- ately notice, consciously or not, that the floor plan is somewhat hectic and cumbersome. There are dead spots along/between shelves, the flow of products does not follow a standard pharmacy floor plan, there is an unused large room at the back, and there is an empty room leading to a storage space that is antique looking. Many products are not combined by type/category, products are located in antagonistic ways (HABA next to pet foods, etc.). In short, the place is cluttered, offers mismatched items, has dead spots, and presents obstacles to the eager customers moving through the store There are two entry/exit points, but each one has major efficiency problems. The main entrance provides erroneous information: it pro- motes the adjacent coffee place, which in fact has its own door. In the pharmacy retail business, the main hall that the customer faces once they walk in should normally be devoted to high-priced items (usually perfumes and the like), as the customer's wallet is full. In the case of the MEP, precious space is dedicated to low profit items such as inexpensive can- dies, which may convey the wrong image (Table Case 1.0). The main exit provides a hindrance to purchasing. The items on sale can- not be purchased until after the client has paid for these other products and is leaving The customer is unlikely to step back and wait in line once more in order Entrance of the MEP. to buy a magazine or a phone card. Many products are put side by side when in fact they do not belong together, thus rebuffing customers (eg, pet food beside ladies" products). Many aisles are cluttered: this creates dead spots, which disrupt the customer's line of thinking (and purchasing objectives) and confuse them (see Table Case 1.D). An analysis of the computerized inventory system shows the following: Exit of the MEP. 1. The coding system does not make it easy to group products by cat- egory or function, which renders in-depth analysis of data nearly impossible. 3. Prepare a short prefeasibility study and list all POVs, rank them, and group them where applicable (e.g., by level of potential lost sales). 1.13 Case study Chapter 1: Maine East Pharmacy This pharmacy is located in a small town in the northeastern United States. It is a pharmacy that doesn't have the support of a larger group or chain, which could provide merchandising advice and sales force assis- tance. It is active on a number of Internet networks such as Facebook. The owner has paid for market research over the years in an effort to boost his sales and to accelerate product turnover. His project is to rede- sign his store and customer interface to improve his business. Some of the key findings from past research are listed in Table Case 1.A. Table Case 1. A MEP past business reports Date Past main recommendations 2013 Better display of products Better promotion of product lines Better signage Promotions during holidays Target nearby university students 2014 Better display of products Better outside signage Make store family friendly More promotion More use of colors 2015 Increase social network with Instagram and Twitter Encourage employee training Appeal to women The store is located in a small town where the population is aging, with 21% being over 65 years old, and with the median age being 50. The 29 of 42 CAMPUNC. ---Project definition 65 272 percentage of children aged 0-14 is about 13. The average yearly income is US$20,000 The store employs four pharmacists, five pharmacy assistants, one dietician, one part-time nurse, one part-time orthopedic insole specialist, as well as 15 employees assigned to various duties. The customers judge the staff to be pleasant Competition comes from two food retailer outlets located four miles away, a specialty store (five miles away), a local alcohol outlet (10 miles away) three drugstores (15,24, and 40 miles away), and one Walmart (40 miles away) Maine East Pharmacy (MEP) offers a large assortment of products and services. With respect to products, profit centers are as shown in Table Case 1.B. Table Case 1.B MEP profit centers Sales 2015 Average Main First quarter sales category Category (in USS0,000) #SKU'S USSISKU Health First aid 980 3,600 Baby 30 200 150 Body care 22 2000 Subtotal 1,032 5,800 178 Impulse Tickets (Lotto) 30 30 1,000 Smoking 50 180 Chips/snacks 1,500 Magazines 2 85 24 Subtotal 206 1,665 Female Hygiene and female 400 150 Cosmetics 56 1,900 29 Subtotal 116 2.300 50 Home Durable home 59 1,200 Cleaning home 20 500 School 200 15 Subtotal 82 1,900 104 Special Cards 55 200 275 occasions Christmas 17 1,500 Others 72 1,700 Subtotal 3,400 328 11 9 165 110 124 40 49 40 3 11 42 MEP also offers a number of services ear piercing, foot care, pass- port photos, photocopies and lamination, prescription refills by phone or online, as well as an adjacent coffee and food bar (which has a door 66 Project Feasibility: Tools for Uncovering Points of Vulnerability connecting to the pharmacy) and an adjacent gas station (owned by a dif- ferent owner), both of which attract a lot of customers. When a customer enters the store for the first time, they can immedi- ately notice, consciously or not, that the floor plan is somewhat hectic and cumbersome. There are dead spots along/between shelves, the flow of products does not follow a standard pharmacy floor plan, there is an unused large room at the back, and there is an empty room leading to a storage space that is antique looking. Many products are not combined by type/category, products are located in antagonistic ways (HABA next to pet foods, etc.). In short, the place is cluttered, offers mismatched items, has dead spots, and presents obstacles to the eager customers moving through the store There are two entry/exit points, but each one has major efficiency problems. The main entrance provides erroneous information: it pro- motes the adjacent coffee place, which in fact has its own door. In the pharmacy retail business, the main hall that the customer faces once they walk in should normally be devoted to high-priced items (usually perfumes and the like), as the customer's wallet is full. In the case of the MEP, precious space is dedicated to low profit items such as inexpensive can- dies, which may convey the wrong image (Table Case 1.0). The main exit provides a hindrance to purchasing. The items on sale can- not be purchased until after the client has paid for these other products and is leaving The customer is unlikely to step back and wait in line once more in order Entrance of the MEP. to buy a magazine or a phone card. Many products are put side by side when in fact they do not belong together, thus rebuffing customers (eg, pet food beside ladies" products). Many aisles are cluttered: this creates dead spots, which disrupt the customer's line of thinking (and purchasing objectives) and confuse them (see Table Case 1.D). An analysis of the computerized inventory system shows the following: Exit of the MEP. 1. The coding system does not make it easy to group products by cat- egory or function, which renders in-depth analysis of data nearly impossible. 3. Prepare a short prefeasibility study and list all POVs, rank them, and group them where applicable (e.g., by level of potential lost sales)