Please wait while the transcript is being prepared...
0:00
Hello, I'm Ruth Stevens,
Professor of Marketing
at NYU Stern.
Welcome to this talk
on hearts and minds,
how McKesson gained
market share via
insight into customer
wants and needs.
0:16
McKesson is the largest
pharmaceutical distributor
in North America.
They faced a daunting challenge
in their institutional market,
that's hospitals
and health systems.
How to grow market share
in a setting where first,
wholesale pharmaceuticals
were really
treated like a commodity and,
second, they really had little
to no differentiation
from competitors.
Let's look at this case where
ultimately McKesson succeeded in
capturing an extra five percent
of market share in a
three-year period
by starting with the most
fundamental principle
of marketing: listen to,
understand and focus
your marketing
on the hearts and minds
of your customers.
1:04
Here's the situation in 2010.
US hospitals and health systems
have traditionally struggled to
contain costs while delivering
more and better patient care.
When it comes to
hospital's expenses,
the second largest cost for
most organizations
after labor are
the medicines used and
dispensed throughout
the hospital system.
This necessary cost category is
often managed by
administrators who believe
the only option for optimization
is through price
negotiation on contracts.
McKesson was
frustrated by years of
negotiations with hospitals that
constantly shrunk their margins,
but they came up
with a fresh idea.
Several years earlier,
McKesson had hired a team of
former hospital pharmacy
directors who had developed
tools to optimize a pharmacy's
business processes.
For example they had a tool
for easier access to Medicare
340B funds available for
indigent patient
drug reimbursement.
They also had developed a "drug
spend trend" reporting tool
that allows hospitals to better
forecast their drug demand
and adjust their purchasing.
These solutions reduce
excess inventory
and waste and save costs,
while at the same
time speeding up
the dispensing process and
reducing the
possibility of errors.
In short, they help find
significant hidden value
in the hospital pharmacy.
