CONSUMER BUYING BEHAVIOR IN THE PHARMACY CHANNEL

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CONSUMER BUYING BEHAVIOR IN THE PHARMACY CHANNEL

The influence of in-store communication on buying behavior

of Over-The-Counter products

Master Thesis Suzanne Nijenhuis

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CONSUMER BUYING BEHAVIOR IN THE PHARMACY CHANNEL

The influence of in-store communication on buying behavior

of Over-The-Counter products

Master Thesis Business Administration: Marketing Management University of Groningen, Faculty Economics and Business

Suzanne Nijenhuis Marie Heinekenplein 103 1072 MK Amsterdam Phone number: +31645536836 Email: suzannenijenhuis@live.nl Student number: 1385011

Thesis supervisor: Dr. J.E. Wieringa Co-assessor: Dr. J.E.M. Van Nierop

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MANAGEMENT SUMMARY

Pharmacies are facing difficult times due to several governmental measures. Some pharmacy chains already choose to focus more on the Over-The-Counter market to compensate for their loss of income. This market of OTC products, for which no prescription is required, is growing rapidly.

In this thesis the influence of in-store communication on consumer buying behavior of OTC products in the pharmacy channel was empirically tested. From the drugstore and supermarket channel is known that more than half of all purchase decisions are made in-store. Therefore in-store communication has proven to play a large role in influencing consumer buying behavior. But does this also hold for the pharmacy channel?

The research was conducted by means of a case study for the dermatological skin care brand Eucerin. Because of the fact that Eucerin chose the pharmacy as exclusive sales channel in 2005 little is known about how consumers make their choice. 18 in-depth interviews were conducted to gain an initial understanding and insights about the buying behavior of skin care products in a pharmacy.

Due to many barriers the consumer experiences, the results show that in-store communication does not have much influence on the consumer buying behavior of OTC products in the pharmacy channel. It can attract the attention and inform the consumer but this does not lead to an immediate purchase, which is in fact the goal of in-store communication. To make in-store communication more effective, like it is in supermarkets and drugstores, the pharmacy should make changes to lower, or take away these barriers first.

Recommendations are provided for the pharmacy channel and Eucerin to put these results into practice. Since the results were gained by qualitative research they should be carefully interpreted. It is therefore suggested to conduct quantitative research to make these results significant.

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PREFACE

Graduating meant quite a change for me. From student life in Groningen to working life in Baarn and finally to the ‘in between’ status of a full time thesis writer. I have seen many (temporary) accommodations and have spent even more hours in the train. But overall speaking, I really enjoyed to see marketing come to life and ultimately to translate this knowledge into a thesis.

First of all I would like to thank Eucerin and my supervisor Jantien Kroese – Van den Berg in particular for the opportunity of conducting this research and this great internship experience! I really appreciate her creative and always optimistic approach. I would like to thank her for letting me experience marketing in practice and thinking along from the start of the first research proposals until the actual research.

The supervisor who helped me to write this thesis more thoroughly was Jaap Wieringa. I am thankful for the useful hints he gave me and the enthusiastic conversations about the pharmacy channel. Furthermore, I would like to thank my father Gerhard Nijenhuis for his keen questions. After working such a long time on this project it is good to talk to an ‘outsider’ and discuss how things can be more clarified to the reader. I would also like to thank Eddy Madern for correcting my English and Katrin Reber for helping me with the finishing touch.

And finally, I thank my family, friends and boyfriend for their encouragement and the necessary distraction.

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1. INTRODUCTION

1.1 Background problem

‘Conservative but changing’

The Dutch pharmacy channel is traditional compared to those in other European countries. Still 84.5% of the revenue was gained by prescription drugs in the Netherlands in 2008 (IMS Health, 2009). Whereas the Dutch pharmacy is primarily visited by consumers to pick up medicines which the general practitioner has prescribed, the foreign pharmacy also functions as a drugstore and sells a lot of products without a prescription. It is therefore much more commercial than in Holland, where generally consumers hand in their prescription at the counter and just have to wait until it is ready.

But the market is changing. At this moment, the pharmacy chain as a whole undergoes fundamental changes which are putting this channel under pressure. The Dutch medication market is traditionally regulated by much legislation and regulations. These regulations do not only impact the production and distribution but also the price of medication (ING Economisch Bureau, 2008). The government recently implemented a radical health care reconstruction program both in terms of health care insurance and pricing (Business Monitor International, 2009). Due to this deregulation several entry barriers were lowered and some even disappeared. This has led to both a strong increase of pharmacies and new entrants including for example Internet pharmacies. Moreover, owners of pharmacies now do not necessarily have to be a pharmacist anymore (Pharmaceutisch Weekblad, 2006). But maybe the most drastic change for the pharmacy channel were the price cuts which have led to a decrease of income for pharmacies.

The challenging position a pharmacy finds itself in, makes it very worthwhile to develop new strategies to strengthen its competitive advantage and employ the opportunities that arise in this market (Reber, working paper). A good example of such a strategy can be to focus on Over-The-Counter (OTC) products for which no prescription is needed. The Dutch OTC sales are predicted to increase from €0.74 billion in 2007 to €1.08 billion in 2012 which indicates a growth of 46% in five years. This development is not only driven by the changing regulatory environment but also by the transition of many prescription drugs into OTC and the expansion of the mass-market sector (Business Monitor International, 2009)

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they are becoming commercial institutions that sell health care products and maximize profits (Reber, working paper). It appears that modern pharmacies are repositioning themselves and see the importance of commercial developments.

1.2 Definition Over-the-Counter

Over-The-Counter products (e.g. paracetemol, cough syrup and vitamins) can be described as products sold in pharmacies for which no prescription is required. The definition of OTC might be confusing since these products have a medical background but can be bought without a prescription. Hence when can pharmacy products be characterized as OTC and in what situation are they real medication? In the Netherlands on July 1st 2007, a new medication law came into force which made the following distinction between OTC products and prescription medications. Products can be classified as OTC, if they can be used safely, with reference to the ingredients, dosage and package size. When it is necessary to monitor, inform or guide the consumer when he or she receives the medication, then a prescription is obliged. OTC should therefore primarily be used to treat a condition that does not require supervision and the risk of damage should be negligible during usage. Since July 1st 2007, OTC drugs can also be sold at supermarkets, gas stations, bookshops and evening stores, instead of only at drugstores and pharmacies. (Annual Report Neprofarm, 2007).

Business Monitor International expects that this liberalization will result in a boost of sales of OTC drugs, although pharmacies will remain the predominant sales channel. Up to 75% of all OTC products are sold in the pharmacy channel (Business Monitor International, 2009). Pharmacies distinguish themselves by the extensive advice they give. Although some OTC products can also be bought in supermarkets, OTC products are different from fast mover consumer goods because of their medical background. Please see 1.5.1 for a further discussion about the differences and similarities of the two product groups.

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Figure 1.1 Revenue pharmacy channel 2006 divided in segments (Stichting Farmaceutische Kengetallen, 2008)

1.3 Reaching the consumer

From the drugstore and supermarket channel (fast mover consumer goods market) is known that it is becoming more and more difficult for brands to be remembered and even to attract the attention of consumers (Pieters et al., 2002). Consumers spend more and more time out-of-home (De Pelsmacker et al., 2007) and each day they are exposed to hundreds of messages (Jansson et al., 2002) which makes it harder to be reached by traditional media (De Pelsmacker et al., 2007). Since 70% of all purchase decisions are made in-store (POPAI, 2005) the shop floor is the first-rate place where consumers can be convinced to make a purchase (Schoorman and Robben, 1997). Effective in-store communication is therefore a great opportunity to reach a consumer and stimulate consumption (POPAI, 2005). The influence of in-store communication has been significantly proven to influence consumer buying behavior (Liljenwall, 2004).

1.4 Problem statement

As previously discussed, pharmacies are in a difficult situation at this moment, OTC has a lot of growth potential and in-store communication has a significant influence on the consumer goods market. This makes it very interesting to investigate if the effect of in-store communication on buying behavior of consumers is also applicable to the OTC market in the pharmacy channel.

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1.4.1 Research objective

The main objective of this research is to gain insight in the factors that influence the OTC buying behavior of pharmacy’ consumers. To investigate this, first literature will be elaborated about buying behavior in drugstores and supermarkets and the role in-store communication plays on this behavior. Please see 1.5.1 for a further explanation. This knowledge from the fast mover consumer goods market will then be empirically tested for the pharmacy channel to see whether, and to what extent, this is applicable.

1.4.2 Research question

From the situation outlined in the previous section the following research question can be formed:

What is the influence of in-store communication on consumer buying behavior on OTC products in the pharmacy channel?

In order to provide an answer to this research question, the following research sub questions are formulated.

1. What is consumer buying behavior?

2. What does in-store communication incorporate?

3. What is the impact of in-store communication on consumer buying behavior? 4. How does the pharmacy as a sales channel look like?

5. Which examples of in-store communication play a role in the pharmacy channel?

1.5 Theoretical and practical relevance

1.5.1 Theoretical relevance

Much of existing research in this area has been conducted about consumer buying behavior and marketing activities in supermarkets and drugstores. Studies which can be found about the pharmacy channel primarily focus on prescription drugs or on foreign pharmacies, which do not resemble the ones in the Netherlands. Whereas, generally speaking, the foreign pharmacies look like our drugstores, Dutch pharmacies are much more medically focused and primarily provide prescription drugs. It becomes clear that little is known about the effect of marketing activities in Dutch pharmacies, especially on OTC. Because of this lack of information about the Dutch OTC market and the richness of information about the fast mover consumer goods market, literature about consumer behavior and in-store communication from the latter market will be used.

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consumer goods), its sales channel is completely different. In a pharmacy people primarily come to get their medication. Therefore a notion about the resemblance with fast mover consumer goods and the influence of marketing on the buying behavior of (Dutch) OTC products, must be examined. From an academic perspective, this research will contribute to the knowledge about marketing in the pharmacy channel. It will give insights about consumer buying behavior and the effect of in-store communication in pharmacies.

Not only does this under researched part of marketing deserve more attention in literature, this also holds for practice.

1.5.2 Practical relevance

Since attracting and retaining consumers is the basic function of marketing (Jobber, 2004) it is very important for a company to know its consumer’s insights, especially in a competitive and growing business like the OTC market. Manufacturers and retailers spend large sums on advertising and in-store promotions, hoping to increase sales through impulse buying. Manufacturers however need information about the effectiveness of in-store communication and to what extent it influences the consumer’s buying behavior. For pharmacies this information is needed to determine the efficiency of the in-store communication designed to stimulate additional sales. This information can also be used for a possible differentiation of their stores from those of competitors (Abratt and Goodey, 1990).

The interest of pharmacies and manufacturers for OTC products is rising, but for them OTC sales are still in a developing phase. This research will therefore not only help manufacturers but also pharmacies as retailers for which the way to sell these products is still explorative.

1.6 Setup of this thesis

This thesis consists of two parts. In the first part a literature overview will be given. As mentioned before, information will be used from the supermarket and drugstore channel. The second part consists of qualitative data, conducted from a case study with in-depth interviews.

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2. LITERATURE FRAMEWORK

A consumer can be influenced to buy a product in many ways. Perhaps the most well known way is through mass media: television and radio commercials, press, billboards etc. The consumer however, is not only stimulated by these traditional types of advertising. Coupons, samples, direct marketing, the Internet and newsletters can also play a role for example, not to forget efforts that are made on the place of purchase. Given that more than half of all buying decisions in the Netherlands are made inside a supermarket or drugstore (POPAI, 2005), it is interesting to find out how these buying decisions are formed and what the influence of in-store communication is on this process.

In this chapter information from the supermarket and drugstore channel will be given about how consumers make their buying decisions and how these can be influenced by in-store communication. Furthermore, information will be given about how the pharmacy channel looks like in the Netherlands. Combining all this information will lead to a conceptual model.

2.1 Consumer buying behavior

Literature about consumers’ information processing behavior implies that a consumer is a rational, intelligent, problem-solving person who seeks for information that is subsequently used to evaluate his/her choices (Gore et al., 1994). A frequently used model which elaborates consumer behavior is the consumer decision process model of Blackwell et al. (2007).

2.1.1 Consumer decision process model

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Pre-purchase evaluation Purchase Consumption Post-consumption evaluation Divestment Search for information

Need recognition

Figure 2.1 Consumer Decision Process (Blackwell et al., 2007)

This thesis will focus on the first four stages of the decision making process, since in-store communication aims to influence the consumer to make a purchase. The remaining three stages will however be described to get a complete understanding of the consumer decision making process.

Need recognition

As the model shows, the consumer goes through seven stages when making decisions. The starting point of any purchase decision is a consumer need or problem. This need recognition arises when the consumer senses a discrepancy between the desired versus the actual situation (Blackwell et al., 2007). The degree to which a consumer intends to resolve the problem depends on the magnitude of this discrepancy and the relative importance of the problem. A problem can for example be perceived by a consumer, but if the difference between the desired and actual state is small then a consumer may not be sufficiently motivated to move to the next step in the decision process (Jobber, 2004). The stage of need recognition can take place before entering a store as well as in-store itself (Willet and Kollatt, 1969).

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Search for information

Once need recognition occurs and this is sufficiently strong, a consumer begins searching for information and solutions to satisfy his/her unmet needs (Jobber, 2004; Blackwell et al., 2007). The search for information can be internal or external. The knowledge stored in memory (prior knowledge) which is retrieved from internal search (Blackwell et al., 2007) is a crucial element in processing information (Brucks, 1985). Prior knowledge makes searching for information easier and increases the efficiency of the search (Brucks, 1985).

When the information retrieved from internal search is insufficient, external search begins. This information is collected from personal sources (e.g. family, friends and word-of-mouth), commercial sources (advertisements and salespeople), third-party reports (product tests in magazines) and personal experiences (demonstrations in-store). The goal of this search for information is to build up an awareness set; the range of brands that may provide a solution to the perceived problem (Jobber, 2004).

These days many consumers experience higher levels of perceived time pressure (Silayoi and Speece, 2004). As time pressure increases, consumers decrease their information search (Laroche et al., 2000) and more often fail to make the intended purchases (Park et al., 1989). Absence of store knowledge makes consumers rely more on in-store communication to identify the location of products and brands than when consumers already have knowledge about the store’s layout (Park et al., 1989). Time pressure therefore does not only affect the extent of information search but it also can influence the informational sources used (e.g. from internal memory and in-store communication) (Laroche et al., 2000).

Pre-purchase evaluation of alternatives

The third stage of the decision process is the pre-purchase evaluation of alternatives. In this stage, the awareness set identified during the search process, is reduced to a smaller set of brands for serious considerations: the evoked set (Jobber, 2004). In this stage a consumer makes serious considerations about which brands or products to buy (Jobber, 2004). The consumer uses new or pre-existing evaluations stored in memory to select products, services, brands and stores which will most likely result in a satisfying purchase and consumption. Some attributes upon which alternatives are evaluated are salient, and some are determinant (Blackwell et al., 2007). Salient attributes such as price and quality are seen by a consumer as potentially the most important. Determinant attributes, for example the style and finish of a car, usually determine which brand or store the consumer chooses. This is especially the case when the consumer considers the salient attributes comparable (Blackwell et al., 2007).

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personal risk. This risk tends to increase when the consumer does not have much information about the purchase decision (Laroche et al., 2000). For low involvement products, which most of the fast moving consumer goods are, a consumer does not thoroughly search for information, evaluate and make profoundly decisions because the risk of failure or the wrong decision is low (Silayoi and Speece, 2004).

Purchase

In the purchase stage the consumer does not only have to decide what to buy but also where and how to buy. The purchase does not always have to be made in-store. The Internet and catalogs can also play a role (Blackwell et al., 2007). Another choice the consumer has to make is whether to buy a product since he or she can always choose to abort the purchase (Dhar, 1997). If the consumer eventually decides to make an in-store purchase, this decision can be influenced by many factors, for example location, store ambiance and cleanliness, level of service, in-store promotions and price (Blackwell et al., 2007). The perceived level of crowding within the store can also affect this purchase stage. Large crowds can result in postponed purchases, reduced shopping time and less interaction with sales personnel (Gilbert et al., 1980).

Four types of purchases can be distinguished by the classification of the POPAI/Du Pont Study Consumer Buying Habits Study (1977).

1. Specifically planned purchase. The consumer buys the brand or product he or she had in mind: a consumer for example wants Lay’s crisps and buys that particular brand.

2. Generally planned purchase. The consumer has a product category or product in mind, but does not yet know which brand to buy: the consumer would like red pepper flavored crisps, but yet decides in-store which brand to buy.

3. Substitute purchase. The consumer buys another product instead of the specifically planned one: the consumer intended to buy Lay’s but buys a private label.

4. Unplanned purchase. The consumer buys an item at the point of sale that was not planned at all: without any intention Lay’s crisps emerge in the shopping basket.

From the 70% of the Dutch supermarket decisions that were made in-store (purchase 2, 3 and 4) 8% of the purchases were generally planned, 1% were substitute purchases and 61% were unplanned (impulse purchases) in 2005 (POPAI, 2005). In 2003 in the Dutch drugstore channel the in-store decision rate was 59%. Generally planned purchases accounted for 16%, substitute purchases for 2% and unplanned purchases for 41%. (POPAI, 2003)

Consumption

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Post-consumption evaluation

The stage in which the consumer experiences either satisfaction or dissatisfaction is called the post-consumption evaluation (Blackwell et al., 2007). The evaluation depends on whether the consumer’s expectation is matched by the quality of the performance (Swan and Combs, 1976). This outcome is important because a consumer stores the evaluation in memory and refers to it in future decisions in the pre-purchase evaluation of alternatives stage. If a consumer is highly satisfied, later purchase decisions become easier. Moreover, for competitors it will become more difficult to get entrance in the mind and decision process of the consumer. But if the consumer is dissatisfied, it will be easier since he or she is seeking for a competitor who promises something better (Blackwell et al., 2007). Beside the fact that post-consumption evaluations affect repurchase behavior (Gilly and Gelb, 1982), they can lead to organizational complaints (Gilly and Gelb, 1982) and can influence other consumers’ behavior in the form of word-of-mouth communication (Blackwell et al., 2007).

Divestment

The last stage in the consumer decision process model is divestment. For example, a consumer who wants to dispose of his car can decide to sell it, trade it or take it to the junkyard (Blackwell et al., 2007).

The consumer decision making process is influenced by many factors that can be divided into three main categories: individual differences, environmental influences and psychological processes. The first category consists among others of values, personality, resources (money, time) and knowledge. Environmental influences include culture, social class, family, personal influence and situation. The final category consists of the psychological processes, which are important to discuss to be able to understand and influence consumer behavior. The three psychological processes are information processing, learning, and attitude and behavior change (Blackwell et al., 2007). Before consumers decide to buy a product they process information. Information processing can lead to certain attitudes, which in turn will or will not affect the decision consumers make (Dijksterhuis et al., 2005). Attitudes and behavior will be further elaborate in the following paragraph.

2.1.2 Attitudes and behavior change

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time, resistant to change, and influence information processing and action. Attitude strength matters because of the fact that if an attitude is strong and easily retrieved from memory, it may affect behavior. If an attitude is however weak and inaccessible it may less likely affect behavior. Strong attitudes are more likely to affect behavior while weak attitudes are more likely to be shaped by behavior (Bohner and Wänke, 2006; Holland et al., 2002). It seems that strong attitudes are the guides, and the weak are the followers. The stronger the attitude is, the better it predicts behavior (Holland et al., 2002).

2.1.3 Conscious or unconscious attitude-behavior relations?

As consistent with the previous information, researchers for a long time believed that attitudes guide behavior in a deliberate way. Attitudes were perceived as conscious evaluations based on extensively weighting of pros and cons. In general when products are important and expensive this is indeed the case. But often consumers perform immediate, spontaneous behavior. Recent insights have stressed that consumers often react relative mindlessly to stimuli that triggers certain automated responses (Dijksterhuis et al., 2005). These attitudes are automatically activated and guide further behavior (Bohner and Wänke, 2006). For example an advertisement with ‘today only’ on it, indicates scarcity which makes consumers more likely to buy the certain product (Dijksterhuis et al., 2005). Things that are difficult to obtain are in consumers’ minds typically better and more favorable than those that are easy to obtain. A restriction of time (and amount) therefore helps consumers to quickly and correctly decide on the quality of a product. Furthermore the scarcity principle threatens free choice, so consumers will react by trying to possess the product more than they did before (Cialdini, 2001). In case of spontaneous behavior, some information processing may have taken place, but not on the moment the consumer reached for the certain product. These spontaneous choices are influenced by automatically activated attitudes that are formed by information processing in the past. But sometime earlier information processing does not totally explain automatic attitude driven decision. When consumers are hungry while buying their groceries, they frequently buy more products than they usually do. This can be explained by the fact that these automatically activated attitudes are context dependent and mouldable. Another reason can be that some of the consumers’ decisions are likely made without information processing at all. In this situation attitudes are in fact avoided and therefore do not guide behavior. Consumers just buy products on impulse. These impulse purchases are influenced by subtle environmental cues (Dijksterhuis et. al., 2005).

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strongly affected by environmental cues. Consumers are not even aware of these influences (Dijksterhuis et. al., 2005).

2.1.4 MODE model

A model that integrates both consciously deliberated and spontaneously attitude-behavior relations is the MODE model of Fazio (1990). MODE is an acronym for Motivation and Opportunity as Determinants (Bohner and Wänke, 2006). This model is interesting to discuss here since it can give explanation about under which conditions conscious and spontaneous decisions are formed.

The conscious formation of intentions requires both motivation and opportunity (e.g. time and resources). When both determinants are low, attitudes immediately activate behavior and no intention or awareness seems to be involved here. This finding is consistent with literature (e.g. Bargh, 1996) showing that social behavior is strongly influenced by unconscious influences (Bohner and Wänke, 2006). Whenever there is motivation and opportunity to engage in deliberate thought, behavior is consciously planned and alternatives are therefore carefully evaluated (Bohner and Wänke, 2006).

Research conducted by Sanbonmatuse and Fazio (1990) showed that consumers who are both highly motivated and do not experience time pressure are more likely to make an attribute-based decision. For example when experiencing time pressure they would buy a camera at a generally favorable store but with an unfavorable camera department. Without time pressure, consumers would buy the camera at the generally unfavorable store but with a favorable camera department (Sanbonmatuse and Fazio, 1990). These findings support Fazio’s MODE model. If either motivation or opportunity to deliberate is missing, overall attitudes seem to guide behavior. However, when these determinants are present, behavior is guided by the processing of relevant detail information. In situations where the accuracy of decisions is important and a consumer is relatively not constrained to deliberate, more controlled processing seems to dominate the effect of automatic attitude activation (Bohner and Wänke, 2006).

2.1.5 Discussion

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unconsciously made decisions. When consumers are highly involved (and therefore perceive risk) and have the time and resources to make the purchase, they make deliberate choices (Bohner and Wänke, 2006). If one of these factors is lacking, consumers will react relatively mindlessly to stimuli that triggers certain automated responses (Dijksterhuis et al., 2005). However, Olshavsky and Granbois (1979) focus in their research on the consumer’s external search. The information search stage of the consumer decision making model does not comprise the entire pre-purchase decision process. Need recognition and pre-purchase evaluation also play a role in the run to search for a right purchase decision (Ursic, 1980).

Conclusively could be said that consumers do go through a decision process as illustrated by the model of Blackwell et al. (2007) but it depends if these decisions are consciously (high involvement) or unconsciously (low involvement) made. Most of the buying decisions are made unconsciously, especially in supermarkets, which are affected by environmental cues (Dijksterhuis et al., 2005). This is where in-store communication comes in, since this is developed to influence the consumer in-store to purchase (Jansson et al., 2002).

2.2 In-store communication

In-store communication includes promotional techniques developed to increase unplanned or subconsciously planned purchases in-store and can thus create a need or remind a consumer of forgotten needs. A few examples of these techniques are: in-store positioning, on-shelf positions, price promotions, sampling, point-of-purchase displays and in-store demonstrations (Abratt and Goodey, 1990). Besides these examples, store image, store organisation, store atmosphere and product presentation are also important elements of in-store communication. They all cooperate to the feeling a consumer has when making buying decisions. (De Pelsmacker et al., 2007). In-store communication comprises therefore any form of communication towards a consumer.

In particular during the last three years a lot more emphasis has been put on in-store communication to increase a brand’s presence. In-store communication is one of the few marketing tools which works for all three essential categories: brand, retailer and consumer (Cottam, 2006).

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A successful in-store communication strategy can result in a double-digit sales uplift and sometimes it can be as much as 40% or 50% (Cottam, 2006). This uplift is particularly gained if the product has been taken off the shelf and put on a dedicated place. If in-store communication should be an effective way to build a brand, it must be a part of an integrated campaign (Cottam, 2006). When advertising and in-store communication are combined, in comparison with advertising only, sales can increase by more than 100%. The combination of in-store communication and price cuts also has an enormous advantage over the use of in-store communication and price cuts only (De Pelsmacker et al., 2007).

The disadvantage of in-store communication is the need for retail cooperation. In-store communication will not be effective if it does not receive widespread support from retail staff. They should understand the full potential and for example remove old in-store communication and place the new correctly (Cottam, 2006).

2.2.1 Influence of in-store communication on consumer buying behavior

Communicating the store image and attracting the attention by shopping windows

Shopping windows can be seen as a key instrument of the retailers’ visual merchandising strategy and communication. During the consumers’ shopping experience, they are a central part of the consumers’ surrounding and therefore have impact on the consumer behavior. Shopping windows have a significant influence on the consumers’ perception of the store image and shopping attitudes. Shopping windows provide the consumer of a wide variety of information. They show the merchandise the store offers and thus create an overall image for the consumer. By showing sales items, the store window can attract price sensitive consumers. Moreover shopping windows can draw the attention of pedestrians (Yildirim et al., 2007).

Increase sales by shelf management and communication

Shelf management is considered as a crucial component of in-store merchandising for both retailers and manufacturers. Approximately 80% of all sales are attributed to products sold off the shelf. This is used as a rule-of-thumb for the retail industry. The product with the highest sales is usually given additional shelf space (Monatay et al., 2005). On the shelf, tags promote a special price or new brand. These shelf tags are used to encourage consumers in-store to have a look at the brand and are effective in influencing the consumers’ decisions. The effect can be over 100% increased sales (Hoyer and Cobb-Walgren, 1988).

Increasing brand awareness and impulse buying by the use of displays

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products and line extensions (Percy and Elliot, 2005). Supermarkets attain a considerable percentage of their sales through displays (Chevalier, 1975). Many studies have been conducted about the sales responsiveness of displays. They all found that displays increased the sales of items displayed (Abratt and Goodey, 1990).

Displays are mostly positioned at the end of an aisle and frequently offer a price reduction (Chevalier, 1975). A consumer is influenced to make an unplanned purchase in two ways. First of all, a consumer tends to see displays as special bargains, even it this is not the case, and therefore often buys something impulsively (Chevalier, 1975). Secondly, a consumer is attracted by the displays since it is a newly introduced contrast or change in his/her shopping environment. The consumer will pay attention to discover what it is about. This is especially important for brands driven by recognition awareness. Recognition brand awareness means that when a consumer sees the brand at the point of purchase he/she remembers the need for it. In order to achieve consumer recognition the displays must be consistent in ‘look and feel’ with the promotion and advertising (Percy and Elliot, 2005).

Influencing consumers’ price sensitivity by (non) price promotions and advertising

Consumers create price perceptions for multiple brands. These price expectations may have important implications for how a consumer responds to price promotions. The probability of buying a brand may not only depend on the consumer’s expectations of future prices for that brand, but also on the future prices of competing brands (Krishna, 1992).

In the long run, price promotions make both loyal and non loyal consumers more price sensitive. Price promotions teach consumers, and especially the non loyal ones, to look for the best deals. Non-price promotions (such as displays) make loyal consumers less focused on price since the promotions act like advertising. However, non loyal consumers become more price sensitive (Hoyer and Cobb-Walgren, 1988).

In the long run, advertising helps a brand since consumers, and especially the non loyal ones, become less price sensitive and more sensitive to non-price promotions. Therefore, advertising makes non price promotions, such as displays, more effective. This can be explained by the fact that advertising attempts to create brand loyalty and intends to make consumers less susceptible to influences such as price promotions (Hoyer and Cobb-Walgren, 1988).

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Changing price perception and store shopping intention by reference pricing

When consumers doubt about different purchase decisions, they compare prices to a standard or reference price (Broeckelmann and Groeppel-Klein, 2008). With reference pricing, the consumer is informed about a current, lower price compared to the former, higher price. Regularly: €8.99 NOW: €5.99! (Howard and Kerin, 2006). In case of uncertainty or insufficient knowledge about actual prices, consumers rely on their internally stored price memories or externally available price information which is provided in-store. The price image a consumer has is therefore a decisive factor in the decision process where to buy the product (Broeckelmann and Groeppel-Klein, 2008).

Advertising reference pricing results in favorable price perceptions and store shopping intentions. However, this effect is only seen with consumers who are shopping for a particular product. Reference pricing is therefore an effective strategy to persuade consumers who are the most interesting for retailers: those with an immediate interest in the product. Although consumers without an immediate product interest are not immediately persuaded, they keep the favorable pricing practices of the retailer in mind for future sales (Howard and Kerin, 2006).

When reference pricing is combined with limited-time availability (5 days only) the significant effect on the favorable price perceptions and store shopping intentions is larger than the use of either technique alone. As with the previous example, only the interested consumers are influenced. But this changes if the word ‘sale’ is used. A sale announcement, when used in combination with reference pricing, does not detract from persuasion when consumers are shopping for a product, but it contributes to persuasion when consumers are not shopping for a product. Sale cues therefore might have the potential to convert non-consumers into consumers (Howard and Kerin, 2006).

Long-term sales effects of sampling

Product sampling can be an excellent way to introduce new or unusual products, to change the image of a product, to compete with the market leader or to generate word of mouth (Lawrence and Kamins, 1988). Empirical findings suggest that free samples, unlike other consumer promotions such as coupons, can generate measurable long-term effects on sales that can be observed as much as 12 months after the promotion. For manufacturers, whose goal it is to produce a long-term increase in sales, sampling can play an important role. Especially for smaller share brands sampling might be highly effective as a basis for generating incremental sales and help to build consumer loyalty (Bawa and Shoemaker, 2004). For new brands or brand extensions, sampling is an effective but expensive way of gaining consumer trial (Jobber, 2004).

Packaging

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communicating a brand (Silayoi and Speece, 2004) since it informs consumers about the qualities and benefits they obtain if they consume the particular product (Ampurero and Vila, 2006). A good package and an attractive design often means convenience and superior quality for the consumer (Valero, 2005). In this current economy of self-service, packaging gives manufacturers a good chance to persuade potential buyers (Ampurero and Vila, 2006).

Designing packages has become more complex because of two conflicting trends in consumer decision making. Since consumers are becoming more concerned about health and nutrition, they pay extra attention to the label information. These consumers are more involved in making product decisions and therefore they use the information on the packages more extensively. The second consumer decision trend is that consumers perceive more time pressure and are looking for ways to reduce time spending on groceries. They tend to perceive less information from the package and the influence of visual elements would be stronger than informational elements of the packages (Silayoi and Speece, 2004).

To find out what the consumer buying behavior looks like in the pharmacy channel, first a background must be given about this sales channel. Paragraph 2.3 will consist of general information, developments and OTC information.

2.3 Pharmacy channel

In the pharmacy channel five types of pharmacies can be distinguished: the hospital pharmacy (which delivers only to hospital patients), the public pharmacy (the pharmacy in the streets), the service pharmacy (which focuses on services during evenings, nights and weekends), the policlinic pharmacy (where patients who are discharged from hospital can receive their medication) and the internet pharmacy (which offers the possibility to order medication online). Service pharmacies do not provide their service independently, but work together (Stichting Farmaceutische Kengetallen, 2008). In this research only public pharmacies are taken into account, which is the most common pharmacy category for consumers.

2.3.1 Growth in channel

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Figure 2.2 also shows percentages of privately owned pharmacies and pharmacy chains. The chain forming is a reaction on the competition within the pharmacy channel (Wieringa et al., 1998). Wholesalers like to secure distribution and chains are looking for partnerships with manufacturers. For manufacturers this means that making central agreements is easier than before the chain forming (Internal report Beiersdorf, 2006).

Figure 2.2 Development of the amount of public pharmacies

(Stichting Farmaceutische Kengetallen, 2008)

With almost 690 pharmacies in 2008, the percentage of pharmacies owned by chains remains stable: 35% since 2006. The largest branch association is ASKA (Associatie van Ketenapotheken) which has six members: Mediq Apotheek, Alliance Apotheek, Escura Apotheek, Lloyds Apotheken, Zorggroep Almere and Thio Pharma. This association includes 518 pharmacies. Next to the ASKA, there are three other branch associations: AIO (Apothekers in overdracht/Medsen) with 67 pharmacies, VNA (Verenigde Nederlandse Apothekers) which helds 80 pharmacies and Prickartz with 25 pharmacies. The four largest pharmacy chains are Mediq Apotheek, Lloyds Apotheken, Kring Apotheek en Escura Apotheek. (Pharmaceutisch Weekblad, 2009)

2.3.2 Pharmacy channel under pressure

Although the number of public pharmacies is still growing, the increase of pharmacies in 2008 is lower than in 2007. In 2008 55 new pharmacies were opened and in 2007 68 locations. The closing of 28

Chains Privately owned

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pharmacies has never been so high (Pharmaceutisch weekblad, 2009). The Nederlandse Apothekers Coöperatie (NApCo) is worried. The difficult situation pharmacies have to cope with is a combination of factors. Within the whole pharmacy channel drastic changes have taken place. Various governmental measures, the preference policy of insurance companies and the variable prescription compensation for pharmacists are putting this channel under pressure (ING Economisch Bureau, 2008). These factors will be explained below and are summarized in figure 2.3.

Purchase benefits: price reductions and bonuses

There is a discrepancy between the official prices determined by the manufacturers and the actual prices pharmacies pay for the purchase of medications. This difference can be explained by the price reductions given by the manufacturers. In addition to the reductions, pharmacies sometimes also receive bonuses, which are given after the medication is sold.

Governmental measures

For several years the government has been aiming on the controllability of the increasing medication expenses. To make this happen, price agreements have been made with insurance companies, pharmacists and medication manufacturers. The most important outcome for the pharmacies is that they are obliged to share a part of the purchase benefits of prescription drugs with the insurance company. This measure is called the clawback discount.

Preference policy

The preference policy means that insurance companies can choose to only compensate the cheapest medicines. The goal of this policy is to increase the competition between manufacturers and therefore to lower the costs.

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Prescription compensation

Pharmacies are not only medicine purchasers but mainly care providers. For this provided care they receive compensation. Until July the 1st 2008, this compensation included a fixed rate of € 6,10 per prescription. This was independent from the effort the pharmacy had to make for the prescription. To compensate the difference in effort, a new reward system has been implemented. For example the compensation for a weekly prescription is €2.90, a regular preparation (made by the pharmacist’ assistant) is € 10.60, the compensation for one special preparation (also made by the pharmacist’ assistant): €79.40. The average compensation for all the possible preparations is €6.10 (ING Economisch Bureau, 2008).

For the reader’s clarity the information mentioned above is now summarized in figure 2.3.

Figure 2.3 Changes in money flows by preferred medicines (ING Economisch Bureau, 2008)

Consequences for pharmacies

From measures in the period of July till October 2008, the Stichting Farmaceutische Kengetallen (SFK) concluded that almost 75% of all public pharmacies do not reach the average prescription compensation of €6.10. Primarily the frequency of weekly and first prescriptions is higher than expected. The average of special preparations is lower than expected (Pharmaceutisch weekblad, 2008b).

The effects of the price reductions due to the preference policy and the thereby lost purchase benefits are a loss of income for pharmacies. The prescription compensation should have covered this loss, but in practice it seems that this is not the case. Instead of being compensated pharmacies are losing revenue in two ways: an average yearly loss per pharmacy of €170.000 on purchase benefits and on top of that the discrepancy in compensation (Pharmaceutisch weekblad, 2008a).

Claw back discount Compensation Purchase benefits Purchase costs Pharmacy Wholesaler Medicines Manufacturer Medicines Purchase benefits Purchase costs Uses price reduction to

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Especially pharmacies that have recently invested heavily or the ones that merged with other pharmacies are in trouble (Pharmaceutisch weekblad, 2009). Napco, the association of independent pharmacies, estimates that 200 of the 1900 pharmacies in the Netherlands will face difficult times. According to a spokesman of this association, pharmacies will get a nasty blow from the problems mentioned before and the recent financial crisis (IMS Health, 2008).

2.4 In-store communication in the pharmacy channel

With the information about the pharmacy channel in mind, OTC and in-store communication in the pharmacy channel will now be discussed.

The role in-store communication plays in the OTC market seems to be dependent on the consumers’ involvement. If the OTC products are perceived as consumer goods, the purchases are characterized as low involvement decision making behavior and in-store communication most likely will play a large role. If consumers are highly involved with the purchase of OTC products, they will search for much information, actively evaluate the alternatives and a longer time will be taken to make a decision. In-store communication will therefore play a different role in the decision making process (Gore et al., 1994).

2.4.1 Placement of OTC

Two third of the Dutch population prefers to choose from the OTC range independently, so they can see the products for themselves. More than 50% of this group think it is also important to have an employee around to ask for advice. Placing OTC products for the counter is thus more appreciated than placing it behind the counter. The preference seems to correlate with the situation the consumer is used to. Consumers who experienced buying from self selection, value this option significantly higher than consumers who have not experienced it yet (Annual Report Neprofarm, 2007).

Furthermore, highly educated and young consumers have a preference for self selection, whereas less educated consumers and elderly rather choose advice from behind the counter. The consumers who often buy OTC (at least once a month) have a strong preference for self selection (Annual Report Neprofarm, 2007).

2.4.2 Advice

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One third of this group experienced situations with other people listening. Therefore, they prefer to search for the product themselves (Annual Report Neprofarm, 2007).

2.4.3 OTC in practice

The amount of attention pharmacies pay to OTC differs per pharmacy. Modern pharmacies in general tend to be more open to in-store communication than the more traditional pharmacies. This in-store communication is provided (without charge) by the manufacturers of the OTC products. Moreover, manufacturers can make agreements with the pharmacy chains on the acceptance of in-store communication. The pharmacies connected to the chains are then participating automatically.

Mediq pharmacies which are changing their OTC concept rigorously and are focusing on personal service are a good example of the modern OTC vision. This change is implemented by introducing little islands as counters instead of just one central counter. The OTC assortment is also positioned customer friendly so that the customers can see and choose the products for themselves. According to a Mediq’ pharmacist, this method decreases barriers. Customers can shop easily but can ask for advice if needed. In a special room, customers can discuss more personal complaints (Drogisten Weekblad, 2009).

Another new concept in OTC comes from the Medsen pharmacies (Apotheken In Overdracht -AIO). This chain profiles itself as a shop and combines the knowledge from the pharmacy channel with genuine customer involvement (http://westblaak.medsenapotheek.nl). The idea behind this concept is that consumers are increasingly interested in personal health care and need easy accessibility and expert advice about their health. The pharmacy has the atmosphere of a shop that sells care products and cosmetic; the counter for medication is positioned at the back of the pharmacy and pharmacist’ assistants walk around to give the consumers advice. Furthermore, the large assortment of OTC products has a prominent position in the pharmacy. The new Medsen concept is supported by several marketing activities and the AIO aims to convert all its 67 pharmacies in two years time (Profnews, 2009)

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giving regarding medication. The commercial trend that arises at the pharmacy chains is therefore lacking in Pharmacy education.

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Samples Floor- and counter display Poster Cubes Blow-up Brochure s

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Shop window

Shelves Lama

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2.5 Conceptual model

The previous literature about consumer buying behavior and in-store communication is integrated in the following model. Although literature does not directly give information about which in-store communication instruments influence which stage of the consumer decision process, it does provide information about the function of the instrument. Below, in table 2.5 an overview is given in which the symbol * is used if the in-store communication instrument provides information that is stored in memory. This information is not used actively but is used when the consumer perceives a sufficiently strong need and begins to retrieve knowledge from memory. It is important to realize that this is an interpretation of how in-store communication works. Other interpretations by the reader are therefore also possible.

Table 2.5 The influence of in-store communication instruments on the consumer decision making stages

In-store communication instrument

Function Influenced stage of

consumer decision process

Shopping window Attention/Building brand image Persuading

Information search* Purchase

Shelves Attention/Building brand image

Informing Persuading

Information search* Pre-purchase evaluation Purchase

Display Attention/Reminding of needs

Persuading

Need recognition Purchase

Price promotions Building brand image Persuading Information search* Purchase Sampling Attention Persuading Information search* Purchase

Advice Informing/Building brand image

Informing Persuading

Information search Pre-purchase evaluation Purchase

In-store advertising Persuading Purchase

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Impure Skin; 10% Face cleansing; 9% Face Care; 13% Liquid Shampoos; 3% Deodorants; 3% Body Cleansing;

3% Foot Care; 1% _{Lip products;}

1%

Body Care; 8%

Anti Aging; 43% Sun Care; 8%

3. RESEARCH DESIGN

In the previous chapters a theoretical framework was given. This framework and conceptual model are now tested in practice by means of a case study conducted for the OTC skin care brand Eucerin. Chapter three will start with a segregation of the research market and will give an introduction of the brand. The second part of this chapter will explain how this research was conducted by discussing the research method, data collection and the data analysis.

3.1 Case study

3.1.1 Segregation of the research market

This thesis only focuses on the category skin care within OTC and limited on the body and face products like a body lotion, cleansing face gel etcetera. Products like a muscular pain gel are excluded. The reason for choosing the skin care category is that Eucerin operates in this market.

In 2008 the skin care category has grown with 5%. The revenue increased from €47.827.000 (December 2007) to €50.188.000 (December 2008) (IMS Health, 2009). According to IMS Health, the market growth of this category will always be around 3 or 4%. The average revenue per pharmacy in 2008 was €2644 (IMS Health). As figure 3.1 shows, the skin care category can also be further subdivided. Anti-Aging and face care products cover 75% of this market.

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The information is gathered market wide which means that information is collected from the total skin care market (Vichy, La Roche Posay and Eucerin) and not only about Eucerin. As a result, there will be no emphasis on the differences between Eucerin and the competing brands. However, since this research is conducted for Eucerin, only this brand will be discussed here and the recommendations will also be narrowed down to this brand.

3.1.2 Introduction Eucerin

Beiersdorf

Eucerin is a brand of Beiersdorf; the international leading company of consumer goods for skin and beauty care. The focus of this company lies on fulfilling consumer wishes, therefore it wants to be as close as possible to consumers to provide them with powerful, innovative products. The basis of Beiersdorf’s success are the leading international brands, more than 120 years of experience in research and development and its strong international presence. The range of strong international brands are NIVEA, Eucerin, La Prairie, Hansaplast, Labello, 8x4, Florena and Tesa (www.beiersdorf.com).

History

Although NIVEA is the most well-known brand of Beiersdorf, it all started with Eucerin. In 1900 Isaac Lifschϋtz applied for a patent using Eucerit, an ingredient to produce a stable emulsion. Eucerit is the basis for Eucerin and, later on, for NIVEA Cream. The development of the Eucerin product can be seen as a medical revolution of its time since Isaac Lifschϋtz developed an extremely smooth basic ointment (www.eucerin.com).

The brand Eucerin

Eucerin is successful in more than 50 countries worldwide and is used by dermatologists, skin therapists and pharmacy’s consumers. In Hamburg, Germany, where the head office is located, 650 international scientists are working in cooperation with universities and institutes on dermatological research and product development (www.eucerin.com).

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Eucerin offers an extensive assortment for all skin types. The six ranges which all can be used alongside skin therapy are briefly discussed below.

Dry Skin. Eucerin Dry Skin offers solutions for a normal dry skin, a scaly dry skin and a red, itching dry skin which is the problem with eczema. This range consists of fragrance and colorants free lotions, body and face creams and cleansing products.

Sensitive Skin. This body range is developed for a sensitive skin that is caused by for example stress, allergies and medications. The caring and cleansing products are special for their pH balance of 5 which is the skin’s own balance. Eucerin Sensitive Skin protects and re-activates the natural defense system of the skin through which it is less receptive to irritations.

Sensitive Facial Skin. These caring and cleansing products are even suitable for the most sensitive facial skin. All products are free of alcohol, fragrance and colorants.

Impure Skin. Eucerin Impure skin is a mild caring and cleansing program for an acne prone skin. The products have an antibacterial and hydrating function due to the ingredient lactic acid.

Anti-Age. These anti-wrinkle creams with skin’s own ingredients are developed for the mature skin. This range can be seen as the most cosmetic of Eucerin.

Sun Protection. Eucerin offers with this sun range a very high protection against UVA and UVB radiation and protects the cells in the deeper skin layers against the damaging effects of the sun. Eucerin Sun Protection is even suitable for people with eczema, acne and sun allergies.

In 2005 an international decision was made to exclusively operate in the pharmacy channel, instead of the dual focus on the pharmacy ánd drugstore. This focus should radiate more expertise and moreover build one common European sales strategy. Because of the fact that Eucerin in the Netherlands (this will further be mentioned as Eucerin) changed this strategy three years ago, little is known about the market. Eucerin actively invests in marketing and sales activities but does not have information about which activities influence customers to buy skin care products and how consumers actually make their choices.

3.2 Research method

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A major methodology used in exploratory research is qualitative research. Qualitative research provides understanding of the underlying reasons and motivations, whereas quantitative research seeks to quantify the data (Malholtra, 2004). Since little is known at Eucerin and in literature about the influence of in-store communication on the buying behavior of OTC products in Holland conducting quantitative research would not seem logical. First, an understanding of this sales channel is needed.

In-depth interviews can be very helpful to find out what is happening and to seek new insights (Saunders et al., 2007). These interviews allow to uncover greater depth of insights than for example focus groups. With in-depth interviews the focus is on the consumer’s own decision process, barriers and triggers. Respondents are able to express their personal experiences with the pharmacy channel and are not influenced by the other respondents, what would be the case with focus groups. In-depth interviews therefore exclude social pressure and result in a free exchange of information (Malholtra, 2004).

In-depth interviews have to be conducted by researchers who have been appropriately trained (Fitzpatrick and Boulton, 1994) since the results depend heavily on the skills of the researcher (Malholtra, 2004). The researcher who conducts an in-depth interview needs for example to show interest in the respondent without being too involved which may result in bias. The researcher should be perceived by the respondents as neutral (Fitzpatrick and Boulton, 1994). Since the length of an in-depth interview is long and the costs are high, the number of interviews is small (Malholtra, 2004).

Another technique which is often used for testing consumer buying behavior are entry and/or exit surveys. However, this technique is a quantitative data collection method and moreover it would not be efficient for skin care products in the pharmacy. The conversion rate for these products is a few products per week per pharmacy. Therefore it would be very time-consuming and thus very expensive.

3.3 Data collection

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any of the following braches: journalism, PR, market research or marketing, distribution of manufacturing of skin care products.

3.3.1 Respondents

The respondents of this research are (potential) Eucerin users, between 25-60 years old, interested in skin care products and visit their pharmacy at least three times a year. At least 70% of the women have bought skin care products in the pharmacy before. The rest of the women have not yet bought these products in the pharmacy but occasionally buy competitive brands from the drugstore, like Biodermal and Dr. van de Hoog. Moreover, none of the respondents is opposing buying skin care products in the pharmacy. This will allow gaining insight into some of the barriers for buying these products in the pharmacy channel. Finally, none of the respondents visit the same pharmacy.

In the summer of 2008 Eucerin conducted a segmentation research from which seven segments were found; the so called Bridget, Margareth, Vicky, Frances, Susan, Emma and Maggie. Since this research is done for Eucerin, the respondents had to match these segments, and in particular should be a Bridget, Frances or Emma. These women have the highest penetration rate of the seven women. A penetration rate of 32% means that 32% of all Bridgets often visit the pharmacy.

Figure 3.2 Penetration pharmacy per Eucerin’ segment (Internal report Eucerin, 2008)

Bridget

Demographics

Bridget is a beauty conscious working woman of 35-55 years old. She is highly educated and does not have children.

Character & Attitude

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Frances

Demographics

Frances is between 50 and 64 years old. She has a lower education and in general she is not working (anymore). Her children have left home.

Frances has a traditional character and doing anything in moderation is her life motto. She takes care of herself with skin care. She mainly wants protection and moisturizing but looking nice is a welcome aspect too. This woman only buys the best labels. Dermatological tested, high quality, trustworthy brands and being able to rely on the latest scientific findings are important to her. Frances is brand loyal; once she finds a brand that meets her needs she will stick to it (Internal report Beiersdorf, 2008).

Emma

Demographics

Emma is a young to middle aged working women (mainly 25-44). She is married, has one or two children and with her average education has a low to medium income.

Emma is a working mother, balancing family and job with the focus on the family. She puts the family needs before hers and has not enough time for herself. Nevertheless, she wants to look nice at all times. Emma takes care of herself by using a broad range of products. Although she works, her budget is limited and family comes in the first place. She budgets, but she is not worried about money. Expertise, good value for money (promotions and low prices), suitable products for the whole family and effective ingredients are important for Emma (Internal report Beiersdorf, 2008).

In total, eight times an Emma was recruited and five times a Bridget and Francis. This choice was made because Emma is the main target group of Eucerin.

3.3.2 Place and timing of the research

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observed in a separate room through a closed television circuit. In Amersfoort the sessions could be followed through a one-way mirror. Two researchers changed shifts after two interviews.

Figure 3.3 Research facilities in Amsterdam (left) and Amersfoort (right)

As stimuli, material was used from both Eucerin and competitors (please see appendix 1). This included an example of the skin care products positioned before and behind the counter. This also functioned as a check to determine the layout of their own pharmacy. Furthermore examples of in-store communication were given. During the interviews, the interviews were fine tuned when necessary. Afterwards, all participant received a financial incentive from Synovate and a goodie bag from Eucerin.

3.3.3 Content of the interview

In-depth interviews are in general unstructured but the researcher attempts to follow a rough outline (Malholtra, 2004). This interview guide, composed in cooperation with Synovate, consisted of several subjects and questions. The order and phrasing of the questions were influenced by the respondent’s replies. With probing, meaningful responses and hidden issues were uncovered (Malholtra, 2004). This was done by asking questions such as: ‘That is interesting, can you please tell me more about that?’. The interview guide is now briefly described. Please see appendix 2 for the complete guide.

CONSUMER BUYING BEHAVIOR IN THE PHARMACY CHANNEL

CONSUMER BUYING BEHAVIOR IN THE PHARMACY CHANNEL

The influence of in-store communication on buying behavior

of Over-The-Counter products

CONSUMER BUYING BEHAVIOR IN THE PHARMACY CHANNEL

The influence of in-store communication on buying behavior

of Over-The-Counter products

MANAGEMENT SUMMARY

PREFACE

TABLE OF CONTENTS

1. INTRODUCTION

1.1 Background problem

1.2 Definition Over-the-Counter

1.3 Reaching the consumer

1.4 Problem statement

1.5 Theoretical and practical relevance

1.6 Setup of this thesis

2. LITERATURE FRAMEWORK

2.1 Consumer buying behavior

2.2 In-store communication

2.3 Pharmacy channel

2.4 In-store communication in the pharmacy channel

2.5 Conceptual model

3. RESEARCH DESIGN

3.1 Case study

3.2 Research method

3.3 Data collection