4/15/2021 Marketing Strategy Of Walgreens Boots Alliance

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Marketing Strategy Of Walgreens Boots Alliance

Posted by Matthew Harvey on Oct-17-2018

1 Marketing Mix of Walgreens Boots Alliance

The marketing-mix model is applied to discuss the Marketing Strategy of Walgreens Boots Alliance.

1.1 Product
This Marketing Strategy element reflects the solution to the customers’ needs. Walgreens Boots Alliance should develop unique product
design, name and features to stand out in the competitive market. Following factors should be considered to develop the product
strategy- quality, variety, features, packaging, brand name and augmented services.

1.2 Pricing
This Marketing Strategy element requires an evaluation of the value of products for targeted customers. The pricing strategy of the
Walgreens Boots Alliance will focus on setting the list price, credit terms, payment period and discounts.

If Walgreens Boots Alliance decides to choose the price penetration strategy, it will have to set the lower price than competitors.
The company will be able to win market share based on discounted pricing. However, management should be aware of the
potential retaliation from competitors in the form of an undesired price war.
The choice of skimming strategy will require clear communication of differentiation basis and how such differentiation justifies the
extra price.

Today's customers are not interested in knowing the ‘price' but a total cost involved in acquiring, consuming and disposing of the
product.

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1.3 Place/distribution
This Marketing Strategy element requires Walgreens Boots Alliance to make some important decisions when developing its distribution
plan. It should decide:

Whether the company wants to make the product available to targeted customer segments through its channels, or it needs a
distribution partner to serve the customers' needs.
Whether the distribution will be direct (involving no middlemen), or indirect. If indirect distribution strategy is adopted, the number
of middlemen must be selected (wholesalers, retailers etc.)
Whether it is interested in: traditional brick and mortar distribution network, online distribution or a combination of both. Certain
online retailers like Amazon are available if online distribution strategy is chosen. The company can also develop its online
website to sell the product.

Modern customers give high importance to the ‘convenience’ and ‘easy availability’. The selection of ‘right’ distribution channels will
require Walgreens Boots Alliance to:

Firstly, consider the product characteristics. Involving various middlemen to distribute perishable products will not be a wise
decision if the product is perishable. 
Analyse the market dynamics, customers' preferences and own resources and capabilities. If customers place high importance to
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to open their outlets, than distribution strategy should be set accordingly. Customer Support just now
The competitors’ distribution strategies also need to be studied. A comprehensive cost-benefit analysis of each channel and
comparison with own resources and capabilities will help Walgreens Boots Alliance develop an effective distribution plan. 1
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1.4 Promotion
This is one of the most important elements of Walgreens Boots Alliance Marketing Strategy. Walgreens Boots Alliance can blend above
and below the line promotional strategies to achieve its marketing objectives. The above the line promotion options for Walgreens Boots
Alliance are- television, radio and print advertising. Below the line promotion options are- catalogues, tradeshows and direct mail
campaigns.

The promotional plan of Walgreens Boots Alliance Marketing Strategy requires the company to consider the following factors:

Start with clearly defining your unique selling propositions and understand why customers need the product and how it is different
from available alternatives.
Craft the message content and evaluate how the crafted message will help customers in creating a clear image of the offered
product. Consider the AIDA (awareness, interest, desire, action) when developing the message.
The promotional strategies like direct selling or high profile advertising will suit if the company wants to push the product.
However, the pull strategy will require the development of a prestigious brand image that could attract the customers towards the
offered product.
Collect the following target market information- who will buy the product? (Age, gender, income and social status), what is price
sensitivity level? And what are customers’ desired communication modes? Incorporate this information into the promotional plan.
Filter out the promotional options based on the above information and conduct a cost-benefit analysis of selected promotional
alternatives.
For example, the selection of TV advertising as a promotional strategy will allow the company to target the mass market,
increase brand awareness and brand recall. However, it is an expensive promotional strategy and suits if the company has
adequate resources available for the promotional efforts.
The popularity of social media marketing has raised significantly during the last few years. Use of this promotional strategy
will enable Walgreens Boots Alliance to reach the mass market economically. It will also offer an opportunity to actively
interact with customers, develop a personalised relationship and manage e-WOM to get better results. However, the risk of
uncontrollable negative e-WOM remains there.

Lastly, consider the budget constraints and allocate budget to chosen promotional strategies according to their nature, importance
and frequency.

2 Customer Analysis of Walgreens Boots Alliance

The development of effective marketing mix strategies depends on Walgreens Boots Alliance’s knowledge of its potential customer
base. The strategies will be more effective if the company understands the needs, expectations and attitude of its customers. The
detailed analysis leads towards the identification of different customer profiles or segments (as explained in detail in the next section).

Walgreens Boots Alliance can follow three steps to conduct customer analysis:

Firstly, Walgreens Boots Alliance should clearly define who current and potential customers are? At this step, a whole group of
customers is identified so that it could be divided into different segments based on their motivations, traits and characteristics.
Identification of potential customers can be more challenging than current customers.
The customer analysis should offer information about how the needs and expectations of different groups differ from each other
and what can be possible reasons.
Lastly, Walgreens Boots Alliance should analyse how it’s offered product/service serves the needs of different groups and which
customer groups have more profit and growth potential. This information will help Walgreens Boots Alliance develop customer
profiles and personas.

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Walgreens Boots Alliance can consider following factors when developing the customer profiles:

The customer analysis must identify the total market size including current and potential customers that could be divided into small
measurable segments.
The customer profiles must have some observable differences.
The company should also conduct behavioural analysis to identify the psychographic profiles. It involves identifying and weighing
the relative importance of factors considered when making a purchase decision or more commonly called buying criteria. Common
buying criteria are- prestige, convenience, quality and price.

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Walgreens Boots Alliance can then develop the customer personas. Important elements to be included in developing customer
personas are: LOGIN
Demographic information (e.g. gender, family, age, location etc.)
Preferred communication channels.
Possible influencers (publications or celebrities they follow)
Challenges they face due to unserved needs and desired solutions.

The customer analysis and development of segmentation strategies run in parallel. Walgreens Boots Alliance can use the information
obtained from the customer analysis to develop the segmentation, targeting and positioning strategies as discussed below:

3 Segmentation of Walgreens Boots Alliance

The development of Walgreens Boots Alliance Marketing Strategy requires identifying segmentation basis to understand the specific
buying behaviour of customers. The needs, expectations and buying behaviour of customers are heterogeneous and depend on
multifaceted factors- like:

Age
Gender
Income
Lifestyle
Values etc.

By using the segmentation technique, Walgreens Boots Alliance can narrow down the large, diversified target audience into specific and
narrowly defined groups. Market segmentation surveys are common methods of obtaining the customer-specific information that could
be used to create groups sharing common characteristics.

After understanding the unique buying behaviour of customers and getting the required information through surveys, Walgreens Boots
Alliance can divide the market into small homogeneous groups. It can be done by exploring the geographic, demographic, behavioural
and psychographic characteristics of customers.

The company can use one or more of these segmentation strategies to choose the right market segments and develop an effective
Marketing Strategy.

The geographic segmentation divides the market according to geographic areas, like- city, country and region.
The demographic segmentation will require Walgreens Boots Alliance to divide market according to demographic characteristics,
like- gender, age, income and ethnicity.
If Walgreens Boots Alliance chooses behavioural segmentation, then customers will be divided according to their buying pattern
like usage frequency, benefits sought, usage occasions and brand loyalty.
Use of psychographic segmentation will result in customers' grouping according to their lifestyles, interests, attitudes, values and
traits.

Walgreens Boots Alliance can combine the different segmentation strategies for more specific targeting as explained in the next section.

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4 Targeting and Positioning of Walgreens Boots Alliance

After dividing the large diversified customer market into smaller groups with homogeneous characteristics, Walgreens Boots Alliance
should wisely choose the target segment/segments whose needs and expectations match the company’s resources and capabilities.

The targeting can be done by evaluating the commercial attractiveness and growth potential of identified segments. Walgreens Boots
Alliance can choose one or more segments depending on the segments’ characteristics and the company's resources, capabilities and
growth objectives.

The commercial attractiveness and growth potential of each segment can be evaluated by using the following indicators:

Identified segments have the appropriate size

Have concrete differences.
The estimated profits should exceed the additional marketing costs.
Segments are easily accessible.

After segmenting the customer market and choosing the right target market, Walgreens Boots Alliance now requires to set a clear
positioning statement that could create a positive image of the offered product in the customers' mind. Walgreens Boots Alliance can
follow the following steps to develop an effective positioning strategy:

Develop the positioning statement for Walgreens Boots Alliance Marketing Strategy by answering the following questions:
What your brand stands for?

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What are the needs and wants of your target market?

How your brand serves those needs? LOGIN
How different is your offering from competitors?

Answers to these questions will yield enough information to develop a positioning statement.
The comparison of their communication and messaging strategy with competitors will reveal the potential areas that could be
addressed with targeted positioning message.
Identify the strengths/weaknesses of business by comparing with competitors to find that gaps that offered product can fill.
Analyse positioning of competitors and evaluate own position in the market.
By using the analytical data collected from a different market, customer and competitor surveys, develop a positioning statement
and periodically test its effectiveness by collecting qualitative and quantitative data (like focus groups, polls, interviews etc.).
Use the test results to make necessary adjustments in the brand positioning.

5 Company Competitive Advantage in the Marketing Strategy of

Walgreens Boots Alliance
The survival in the increasingly competitive market requires Walgreens Boots Alliance to set the clear differentiation basis that could
provide an edge against rivals. Walgreens Boots Alliance Marketing Strategy should focus on identifying unique selling propositions
(USPs). Some examples of USPs are the highest quality, lowest cost or uniqueness of idea. Identifying USPs is not sufficient as the
effectiveness of the Marketing Strategy of Walgreens Boots Alliance will directly depend on management's ability to communicate the
identified unique selling propositions.

The Walgreens Boots Alliance can apply Porter's generic strategies model to explore how competitive advantage can be created. The
pictorial presentation of the Porter Model is given below:

The company can set a competitive advantage based on cost or differentiation.

5.1 Cost based competitive advantage

The cost leadership strategy will suit if Walgreens Boots Alliance has developed capabilities to reduce the cost below the industry
average and achieve the economies of scale. Moreover, it will require Walgreens Boots Alliance to develop close collaboration
between different functional areas.
Developing most effective distribution channels, access to latest technological tools to assist production processes, using lean
production methods and strong bargaining position when negotiating with suppliers are some indicators of setting competitive
advantage based on cost leadership.

5.2 Differentiation based competitive advantage

The differentiation strategy focuses on developing brand loyalty by offering premium products. The company can find different ways to
develop differentiation leadership, such as- by focusing on the reliability, durability, benefits and distinctive features of products, by
developing strong brand recognition and by increasing expenditure on marketing efforts like celebrity endorsements and sponsorships
etc. Walgreens Boots Alliance can set achieve competitive advantage by adopting product, service, quality, image, people or innovation
differentiation.

5.3 Competitive advantage model

Following the model shows how Walgreens Boots Alliance can develop an effective Marketing Strategy by evaluating its resources and
capabilities, identifying distinctive competencies and leveraging those competencies by adopting either cost or differentiation
orientation:

6. BCG Matrix in the Marketing Strategy of Walgreens Boots Alliance

Walgreens Boots Alliance should continuously evaluate its product line by assessing their growth potential and share in the market. The
products can be classified into the following categories:

The products with high growth and high market share are classified as stars. Walgreens Boots Alliance should increase the
investment after identifying the stars in its product lines.
Products with high market growth but low share are classified as question marks. Walgreens Boots Alliance should analyse why
market share is low despite the high growth rate.
Products with low growth but high market share are cash cows that need to be milked for continuous good performance in the
market with low growth and limited opportunities.
Lastly, products with low growth and low market share are dogs’ Walgreens Boots Alliance should divest as it is difficult to make
profits and get an adequate return by investing in dogs.

The high number of stars and cash cows will indicate good performance, whereas, a high number of question marks and dogs will be a
cause of concern for Walgreens Boots Alliance. The product classification is necessary for evaluating the success of the Marketing
Strategy of Walgreens Boots Alliance.

Brand Equity of Walgreens Boots Alliance

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Brand equity reflects the overall value of the brand. The customers' experiences and perceptions determine the brand value. Positive
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perceptions reflect the high brand value and positive brand equity, while negative perceptions reflect the low brand value and negative
brand equity. Walgreens Boots Alliance should continuously evaluate its brand equity to ensure the long-term survival in an increasingly
complex and competitive customer market. It can be done by evaluating the following brand equity components:

7.1 Brand equity components

7.1.1 Brand awareness
Brand awareness provides the basis for brand equity development process. High brand awareness shows that the customers know that
the Walgreens Boots Alliance brand exists and can recall the important brand-related information. The company can measure brand
awareness by conducting brand recall surveys. The high brand awareness acts as an anchor to other associations. It increases brand
visibility that can help Walgreens Boots Alliance gain consideration in the competitive market.

7.1.2 Brand association

Brand association reflects the customers’ associations with Walgreens Boots Alliance based on their memories, previous experiences,
interaction with Walgreens Boots Alliance’s employees, price points, advertisements, WOM, celebrity associations and publicity in
different media channels. It is important for Walgreens Boots Alliance to carefully plan each interaction with internal and external
environmental actors (such as government, employees, shareholders and media), as customers develop brand association not only due
to direct interaction with the brand, but also the indirect interaction with different environmental factors.

7.1.3 Perceived quality

Walgreens Boots Alliance should carefully evaluate the customers’ perceptions of product quality as these perceptions influence their
pricing decisions.

7.1.4 Brand loyalty

Brand loyalty is among the most important element of Walgreens Boots Alliance’s brand equity. It can be attitudinal (customers’ feelings
towards the brand) and/or behavioural brand loyalty (repeat purchase). Higher brand loyalty can decrease the marketing expenditure,
increase Walgreens Boots Alliance's ability to introduce new products successfully, erect the barriers to new players and strengthen the
company's bargaining power against other channel members.

Walgreens Boots Alliance can increase brand loyalty by rewarding the customers' repeat purchase behaviour. Although the loyalty
programs are expensive, it will benefit Walgreens Boots Alliance be reducing the costs of acquiring new customers.

7.1.5 Proprietary brand assets

Lastly, Walgreens Boots Alliance should evaluate its proprietary assets (like channel relationships, trademarks and patents). These
intangible assets prevent the competitive advantage erosion and develop brand loyalty.

7.2 Brand equity development

In light of Keller brand equity model (shared above), the Walgreens Boots Alliance can take the following steps to develop the brand
equity:

Develop the brand identity by building brand salience/awareness.

Identify and communicate the meaning of Walgreens Boots Alliance brand. How it serves the customers’ tangible needs
(performance) and emotional/psychological needs (imagery).
Evaluate the customers’ feelings and judgments of Walgreens Boots Alliance brand to assess their response.
Lastly, focus on building- behavioural loyalty, sense of community, attitudinal attachment and active engagement to develop brand
resonance that sits on pyramid top.

7.3 Brand equity measurement

Walgreens Boots Alliance can measure its brand equity by evaluating the:

Difference between the price charged by Walgreens Boots Alliance due to its brand name and price charged by similar unbranded
products.
Amount of extra sales volume generated compared to other branded and non-branded competitors.
The company’s share price.
Brand’s potential to make future earnings.
Return to shareholders.

The company can also combine the above methods and formulate a multiplier to accurately assess the esteem and strength of the
brand that reflects the brand equity.

8. Competitors Analysis in the Marketing Strategy of Walgreens Boots

Alliance

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The detailed competitor analysis is highly important for the development of Walgreens Boots Alliance Marketing Strategy. The
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competitive analysis is done to understand the relative positioning and market share of the company's direct and indirect competitors.
Walgreens Boots Alliance should first identify the competitors, evaluate their strategies and compare the strengths and weaknesses of
their products with their product offerings. There are five steps Walgreens Boots Alliance can follow to understand the strategic
positioning of its key competitors:

Firstly, clearly define the target market.

Identify the director competitors and create a list of it.
Analyse the competitors’ product offerings, their market share, key strengths and weaknesses.
Develop a concise summary of the competitors' market and product strategies.
Conduct a comparative analysis against its products and/or services.
Continuously update the competitive analysis to make informed and strategically wise decisions.

The company can use different strategies to get the information about competitors, such as- doing Google research, going to trade
shows, browsing public documents, asking customers, playing secret shopper technique and tapping the vendors

A detailed competitor analysis can be categorised into the following parts:

Identify market growth, share and financial objectives. Some examples are maximising short-term profitability or investing in R&D
for long-term growth.
Evaluate the competitors’ strategies by collecting information from shareholder reports, white papers, press releases, promotional
campaigns, hiring practices, acquisitions and mergers. This information will reveal the direction in which the competitors are
moving.
Use the above information to analyse competitors’ strengths, weaknesses and core capabilities.

9. Market Analysis of Walgreens Boots Alliance

Walgreens Boots Alliance Marketing Strategy development requires a comprehensive market analysis. It can be done by quantitatively
and qualitatively assessing the customer market. The information obtained from the market surveys will help Walgreens Boots Alliance
management in identifying the emerging opportunities, exposing the potential threats and understanding how they relate to the
company’s major strengths and weaknesses.

Walgreens Boots Alliance can follow the following steps to conduct the market analysis:

9.1 Market size analysis for developing Marketing Strategy of Walgreens Boots
Alliance
Walgreens Boots Alliance should evaluate the market potential and volume to determine the size. The market potential includes
potential customers and considers upper demand limit. The market volume includes certain indicators like realised sales and total
turnover. Walgreens Boots Alliance can take information from different sources to accurately determine the market size, such as-
financial data of industry’s major players, government data, customer surveys, published industry reports and trade association data.

9.2 Market trends analysis for developing Marketing Strategy of Walgreens Boots
Alliance
It is important to analyse the emerging market trends, particularly when environmental turbulence is high. Walgreens Boots Alliance can
use different trend analysis techniques for this purpose, such as- marketing mix modelling, risk analysis, choice modelling and customer
analysis. Walgreens Boots Alliance should also monitor the political, legal, regulatory, social and economic changes as these
environmental forces play an important role in shaping the market trends.

9.3 Market growth analysis for developing Marketing Strategy of Walgreens Boots
Alliance
Walgreens Boots Alliance can extrapolate the historical data to determine the market growth rate. This information can help a company
in determining the current lifecycle stage of the industry.

9.4 Market profitability analysis for developing Marketing Strategy of Walgreens Boots
Alliance
Walgreens Boots Alliance can use Porter's five force framework to determine market profitability. The high buyer power will negatively
affect market profitability, showing Walgreens Boots Alliance’s customers have different options. Low supplier power positively
influences profitability and indicates Walgreens Boots Alliance has a strong position during the negotiation process with suppliers. High
entry barriers show that there will be lesser new entrants in the market. High substitute product threat and high competitive rivalry will
also decrease the market profitability and attractiveness for Walgreens Boots Alliance.

9.5 Cost structure analysis for developing Marketing Strategy of Walgreens Boots
Alliance
Walgreens Boots Alliance can use Porter’s value chain model (as given below) to determine the industry’s cost structure.

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It will help Walgreens Boots Alliance in isolating the costs and identifying critical success factors. Walgreens Boots Alliance can also use
the information obtained from cost structure analysis to develop cost advantage. LOGIN

10. References
Dibb, S. (2010). Market Segmentation Success–Making it Happen! Strategic Direction, 26(9).

Jaworski, B. J. (2018). Commentary: advancing marketing strategy in the marketing discipline and beyond. Journal of Marketing
Management, 34(1-2), 63-70.

Keller, K. L., & Brexendorf, T. O. (2017). Measuring brand equity. Handbuch Markenführung, 1-32.

Khan, M. T. (2014). The concept of 'marketing mix' and its elements (a conceptual review paper). International journal of
information, business and management, 6(2), 95.

Kim, K. H., Jeon, B. J., Jung, H. S., Lu, W., & Jones, J. (2012). Effective employment brand equity through a sustainable
competitive advantage, marketing strategy, and corporate image. Journal of Business Research, 65(11), 1612-1617.

Lee, K., & Carter, S. (2011). Global marketing management. Strategic Direction, 27(1).

Schlegelmilch, B. B. (2016). Segmenting Targeting and Positioning in Global Markets. In Global Marketing Strategy (pp. 63-82).
Springer, Cham.

Shaw, E. H. (2012). Marketing strategy: From the origin of the concept to the development of a conceptual framework. Journal
of Historical Research in Marketing, 4(1), 30-55.

Tan, Q., & Sousa, C. M. (2015). Leveraging marketing capabilities into competitive advantage and export performance.
International Marketing Review, 32(1), 78-102.

Wensley, R. (2016). The basics of marketing strategy. In the marketing book (pp. 75-107). Routledge.

West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage. Oxford University Press, USA.

Zablocki, A., Schlegelmilch, B., & Schant, E. (2017, May). Customer-Based Brand Equity in the Digital Age: Development of a
Theoretical Framework: An Abstract. In Academy of Marketing Science Annual Conference (pp. 741-742). Springer, Cham.

Warning! This article is only an example and cannot be used for research or reference purposes. If you
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