5-1 Milestone Two

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1 5-1 Milestone Two: Marketing Strategy Framework 5-1 Milestone Two: Marketing Strategy Framework Paige Katz INT 640 International Marketing Strategy Dr. Pesakovic January 11, 2024

2 5-1 Milestone Two: Marketing Strategy Framework Marketing Strategy Framework There are two main audiences I believe will benefit CVS to target in India. The first one, much broader than the next, is families and parents. I think this is a group that will have a need for the services that will be provided. Between having young kids and at least one working parents, there will be a lot of small injuries and sickness that just needs a quick test or a check that it isn’t a big deal. The CVS clinics will help save the families a lot of time and money by not forcing them to go to a larger clinic or ER. Most importantly, the out-of-pocket cost is something that even a lower income family would hopefully be able to manage. The age range for the parents would be 25 years and up while the kids would be 0-18 years. The targets would be of multiple religious and political backgrounds with varying education levels; however, most would likely not have higher degrees. They would be middle class to lower class with a value in their family and spending money to keep them safe and healthy. The other target audience for the CVS MinuteClinics is young adults. College age students 18 to 24 who are either on limited or have no financial support from their families/parents. Many would be working part time jobs with low pay either living in school provided housing or paying their own cost of living. There is a lot of important balance for this age groups life. They have academic responsibilities, working responsibilities, social and familial responsibilities, and often their personal responsibilities feel like less of a priority (especially when they have to pay for it). The low cost of the clinics gives this group an easy and inexpensive healthcare option that they can get into their school schedule.

3 5-1 Milestone Two: Marketing Strategy Framework The marketing objectives for CVS, in short, are create brand recognition, cultivate audience loyalty, and retain any customer bases they create upon opening. The rivalry that CVS will face upon entering this market is all local clinics and hospitals. Most of which are specialized or run through larger hospitals (Top hospitals and clinics in India, n.d.). There are not many brands to recognize and while these locations are organized, they aren’t compiled to compete with a corporation. That does not mean they will not present as strong alternatives for the people of India. That is why CVS has to create strong marketing strategies to rope in those specific groups above as they work to expand their market. Through my research and in doing my TOWS analysis, there is a lot of benefit that comes from CVS expanding. It will affect both the company and their customers in positive ways. CVS has a very solid domestic reputation that can easily be found and carried to other countries. They offer well known and affordable medical services that are needed in many parts of the world. The healthcare sector in India is growing every year (Stiftung, 2022). Now would be a perfect opportunity for CVS to be the first to move in and capitalize off the need for reliable healthcare and growing access to the resources to provide that. The reputation CVS has might protect them against any instability as they would be operating as a foreign company and have strong financial backup (“About our company, 2023). CVS opening MinuteClinics in India would benefit from having affordable and genuine healthcare nearby for their families and themselves. Expanding to a new country also increases the share value and potential for profit. Looking back a few years at the revenue for CVS, even through the pandemic when most companies were posting loss, CVS was gaining. Their revenue, assets, and profit all increase by

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4 5-1 Milestone Two: Marketing Strategy Framework at least $10 billion (“CVS Health Corp,” 2023). It would be preferable to continue this positive trend over the first couple years. There is a chance over the first sixth to twelve months that there is a downtick in profits as some of that should be invested into the expansion and improvements of the new clinics in India. It is more than likely a budget would be allocated to the international teams that is all a part of the larger corporate plans and balance sheets. In 2022, CVS held 34% of the market share for pharmaceuticals. The company opened virtual visits for the MinuteClinics in 2018 and the gross profit from 2018 to 2019 increased by almost $14 billion (Kaushal, 2023). The hope for the market share when expanding to was to grab more control over consumer spending. The market would be different but CVS already having so much stake in even just the pharmaceutical market gives them an incredible leg up. After the first year there should in an increase in the market share and their finances. Over the second year, there would be an increase even more so as CVS intends to work with the expanding medical sector and the changing healthcare policies from the government to improve the industry through the company. By 18 months there should be more than two or three locations with more on the way. As for branding, opening clinics in an area of need is a huge PR opportunity to gain more support back in the U.S. Giving back and being charitable in any way, even if the intentions, like in this case, are still to force profit and make a gain for the company, do really well in American markets. Consumers love companies that appear philanthropic; it increases brand loyalty. I believe it will have a somewhat similar affect in India. People would see a brand that is there for

5 5-1 Milestone Two: Marketing Strategy Framework them and wants to help them, not just take their money. They will be attracted to the new option and appreciate what the company is providing to their communities (Carlson, 2019). I think the first strategy CVS should employ, even before the clinic opens would be to start their marketing and branding as a community forward company that is there for people in need of small medical help. They can send and post advertising in the cities and towns to directly involve the people they will be serving and create excitement through word of mouth. They will also have some luck announcing it on social media, however due to access roadblocks and other policies about social media/internet usage, they will not be able to rely on web advertising as much as they can in the U.S. (India, 2023). They will be able to use some e-commerce capabilities. During the pandemic online shopping and online healthcare took off in a way in India (“E-Commerce in India: Industry overview, market size & Growth| IBEF,” n.d.). Another important goal will be to get a foot in the door and start networking with other hospitals and medical centers so there can be communication and collaboration in regard to handling potential push back from government agencies and trade issues that may arise. Hopefully, the company can put some stock into their branding and use that reputation to work with the governmental bodies necessary to make their transition to opening as well as the subsequent years of business there as easy as possible (India, 2023). Segmentation, Targeting, and Positioning (continued from separate document) Using the STP framework for the buyer personas allowed me to the determine exactly who was really going to benefit most from the services that CVS will be bringing to India. It’s

6 5-1 Milestone Two: Marketing Strategy Framework difficult to narrow down when the service is medial help. Anyone could and will need that. The segmentation process broke down the ages and backgrounds of the communities. That allowed me to see more detailed aspects of the bigger picture and be more objective about who to target. Creating the specific target audience groups was easy after that. The struggle I had was creating a negative persona. I had never done that before. I ran into the same concern of “medical help is for everyone” and I had to go one step further in my head and understand how I would position the company and the clinic to know who would not be an ideal customer. Target Market Entry Mode CVS has made multiple acquisitions in the American market as they have become more than a retail location and focused more on becoming a larger healthcare company. I believe, in entering the Indian market CVS should either make an acquisition of a current medical center or pharmacy of some kind or just do a full greenfield investment. The acquisition would likely be much easier from a financial and a consumer standpoint. They would be able to market with the former business’ clients and work with their clients. The risk posed are the volatility of the market might not provide a viable option to buy out. They also might not find a stable enough company that would be a worthwhile acquisition. The greenfield investment would be a much larger undertaking and could affect the goals above for expansion and profit over the first two years. However, it could be better for the company in the long run in terms of return on investments and their flexibility and independence. It will just take a lot longer to see that (Miron, 2023). Because both options pose persuasive risk, it would be important for the company

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7 5-1 Milestone Two: Marketing Strategy Framework to do as much research as possible. Based on what I know, a full investment would be the best choice for longevity and control. My decision to go with a greenfield investment is based mostly in the uncertainty of the Indian market. Both the social unrest and the unstable government. There are a lot of changes that could happen at any moment to affect the business and trade (“India – trade barriers,” n.d.). That is too big of a risk for CVS. Their goal is to grow and continue an upward trend financially. Making a big acquisition of a company that could easily tank or might not have an effective consumer reach isn’t going to help CVS grow. Even if something goes wrong after a few years and they have to pull out of India, they will have the ability to do so if they are not tied to any other institutions or contracts (Miron, 2023). Creating a subsidiary or extension of CVS in a foreign market is a big commitment. It takes more time and investment than any other entry mode. I think there would be some aspect of exporting rather than setting up entirely new distribution and production operations. However, they will still have to create an implementation plan and be careful in how they conduct business. The risks of time and complexity will be offset by the financial incentives. The trade-off for all that is control. CVS will be able to make most of their own decisions. The company will be doing its own marketing. They will shape the narrative and the targets for that branding. If there is ever changes in the markets the company can adapt quicker with control over their company allowed by a greenfield investment. As metrics come back the strategies could change in order to reach their target audience and create a customer base (Miron, 2023).

8 5-1 Milestone Two: Marketing Strategy Framework The greenfield investment option would likely affect promotion and pricing of services. The risks posed of entering a market with no connections and making such a long-term plan in an unpredictable market can cause the pricing to start lower than a company might want. They need to build trust and loyalty because there is none of the familiarity or connections that a buyout would present. That would also affect how they promote the company. Promoting would have the same goals as the pricing: creating loyalty and reaching the target audience. CVS will have to be extra attentive to what stories they tell and how. References Carlson, N. (2019, June 10). Why giving back increases brand loyalty . Forbes. https://www.forbes.com/sites/theyec/2019/06/10/why-giving-back-increases- brand-loyalty/?sh=1ef61c8170d2 CVS Health Corp . (2023). advantage-marketline.com. https://advantage-marketline- com.ezproxy.snhu.edu/Company/Financials/cvs_caremark_corporation Https://www.google.com/ MedicaltourismReviewCommunity. (n.d.). Top hospitals and clinics in India . MedicalTourism.Review. https://medicaltourism.review/providers/medical/in/ india/all Kaushal, T. (2023, March 5). How CVS evolved from retail pharmacy into health care behemoth . Yahoo Finance. https://finance.yahoo.com/news/how-cvs-evolved-from-

9 5-1 Milestone Two: Marketing Strategy Framework retail-pharmacy-into-health-care-behemoth-130515054.html? guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer _sig=AQAAADu4cpUjMPCOZbga0AflzGpkZgEqBx2Ln5Au7ENh1gnzIiFYC3tddQ_X WQs_1N9gpMvyxTDJY7togJ33coBQN2z- 7khX1qOodepnKkIsg9J7B95WJbAETafk6xAlsEblRgGTkWun1YQiBC- wRuossJSsbqUqPJW48vQDX_bCqGdT Miron, T. (2023, January 13). How to choose the right entry mode for new international markets? Prime Target. https://primetarget.tech/how-to-choose-the-right-entry-mode- for-new-international-markets/

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