People shop at drug stores and pharmacies primarily to get medical supplies, medications, and other products that impact their health in a positive manner. But walk into most drugstores and one will see a plethora of tobacco products being sold – a decidedly unhealthy product!
Publically acknowledging this discontinuity, CVS recently decided that it could no longer sell a product as unhealthy as cigarettes and tobacco products and still maintain its main premise of helping people. Yes, the second-largest pharmacy in the U.S. announced that it will stop selling cigarettes and tobacco in more than 7,600 stores by October 1, 2014, thereby becoming the first nationwide drugstore to eliminate the toxic products.
The move will not be cheap for CVS. Analysts estimate that tobacco sales contribute roughly $2 billion in annual revenue to the company. But it is a move that has been lauded for helping the company move into a more authentic and consistent direction, helping to reposition the company into a broader based health and services provider instead of just a dispensary for pills.
Group Activities and Discussion Questions:
- View the announcement on CVS’ Web site: http://info.cvscaremark.com/cvs-insights/cvs-quits
- Discuss why this is an important development in the drugstore industry? Will other companies follow CVS’ example? Why or why not?
- Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
- Divide students into teams and have each team develop a positioning map for CVS – both before the elimination of tobacco, and after the elimination of tobacco. How will the change help the company reposition?
- Have each team draw their map on the board.
- Debrief exercise.
Source: New York Times, other news sources, 2/5/14