Welcome to the July 2014 homepage edition of i2P (Information to Pharmacists) E-Magazine.
At the commencement of 2014 i2P focused on the need for the entire profession of pharmacy and its associated industry supports to undergo a renewal and regeneration.
We are now half-way through this year and it is quite apparent that pharmacy leaders do not yet have a cohesive and clear sense of direction.
Maybe the new initiative by Woolworths to deliver clinical service through young pharmacists and nurses may sharpen their focus.
If not, community pharmacy can look forward to losing a substantial and profitable market share of the clinical services market.
Who would you blame when that happens?
But I have to admit there is some effort, even though the results are but meagre.
In this edition of i2P we focus on the need for research about community pharmacy, the lack of activity from practicing pharmacists and when some research is delivered, a disconnect appears in its interpretation and implementation.
Volume 1 Number 1
Volume 1 Number 2
Volume 1 Number 3
Volume 1 Number 4
Volume 1 Number 5
Volume 1 Number 6
Volume 1 Number 7
Volume 2 Number 1
Volume 2 Number 2
Volume 2 Number 3
Volume 2 Number 4
Volume 2 Number 5
Volume 2 Number 6
Volume 2 Number 7
Volume 2 Number 8
Volume 2 Number 9
Volume 2 Number 10
Volume 2 Number 11
Volume 3 Number 1
Volume 3 Number 2
Volume 3 Number 3
Volume 3 Number 4
Volume 3 Number 5
Volume 3 Number 6
Volume 3 Number 7
Volume 3 Number 8
Volume 3 Number 9
Volume 3 Number 10
Volume 3 Number 11
Volume 4 Number 1
Volume 4 Number 2
Volume 4 Number 3
Volume 4 Number 4
Volume 4 Number 5
Volume 4 Number 6
Volume 4 Number 7
Volume 4 Number 8
Volume 4 Number 9
Volume 4 Number 10
Volume 4 Number 11
Volume 5 Number 1
Volume 5 Number 2
Volume 5 Number 3
Volume 5 Number 4
Volume 5 Number 5
Volume 5 Number 6
Volume 5 Number 7
Volume 5 Number 8
Volume 5 Number 9
Volume 5 Number 10
Volume 5 Number 11
Volume 6 Number 1
Volume 6 Number 2
Volume 6 Number 3
Volume 6 Number 4
Volume 6 Number 5
Volume 6 Number 6
Barry Urquhart, Managing Director of Marketing Focus, Perth. Barry is an internationally recognised conference keynote speaker, facilitator of strategic planning workshops and marketing business coach.
Stop the bashing
Bank bashing is a favourite past-time of many Australians.
Some media commentators and numerous politicians have developed the pursuit into an art form.
In recent times the Australian Prime Minister, the Federal Treasurer and a number of leading cabinet members (each a former union leader) have, to the extent that many people believe, has overstepped the mark, with overly-politicised remarks, criticisms and demands.
Australia, its people (including share-owning superannuants) and businesses enjoy the fruits and advantages of a competently managed banking sector. Competence is not a description that sits well or is used freely when referring to the incumbent Federal Government.
The Federal Treasurer inherited a significant surplus which within 3 years he has converted into a deficit approximating $160 billion.
At this time, commerce, intending and existing home buyers and the public at large need financially viable and liquid banks, which have the capacity and disposition to maintain lending, as a key lubricant for keeping the wheels of the economy, turning efficiently.
Stop the bashing
Liquidity dries up
The recent assertive initiatives by the IMF (International Monetary Fund), the ECB (European Central Bank), Germany and, to a lesser extent, France to inject liquidity into the Eurozone were intended to protect the Euro currency, the banking systems of all European countries and to shore up national economies against the inevitable drawn-down on liquidities which will be a direct consequence of the Greek meltdown.
Those goals, benchmarks and outcomes appeared to have been achieved, or are about to be.
However, this is an enlightening case study of the importance of setting the “right” goals and being strategic, rather than tactical in focus.
The contributions which exceeded 1.5 trillion Euros, have improved the current balance sheets and liquidity ratios of the major European banking and financial institutions.
Sadly, there is no widespread evidence of a multiplier-effect impacting any of the Eurozone or broader European national economies. Consumer demand remains sluggish, unemployment rates are increasing and business failure statistics are growing.
The multiplier effect is only ever achieved if the currency (read: liquidity) flows through the whole economy. In this instance, the European financial institutions, having received funds from the central banks, are simply redepositing such with those lending entities... with improved financial records.
There is little or no evidence of more money or relaxed lending being made available to businesses and to consumers.
Hence, the immediate pending financial liquidity crisis for financial institutions has been avoided, but little more.
Resolving the structural and financial inadequacies which prevail throughout Europe will only be addressed and redressed by increased expenditure, demand, improved productivity and, yes, a touch of inflation.
Each seems to be politically unpalatable.
Therefore, the prudent will adopt the expectations of the governments of the United States of America and China and prepare for a long, (minimum one decade) path back to buoyancy.
In Australia, we are witnessing the flow-on effect of the scenario detailed above in the better placed sector of a two-speed economy.
An increasing number of smaller, start-up entrepreneurial mining companies which have previously made public declarations about their plans for highly profitable mining projects and resources export earnings are encountering the reality of the lack of available funds and/or the imposition of very demanding lending policies by the financial institutions, which wish to retain their liquidity ratios.
Cashflow remains imperative. For future local, national and global growth to be achieved and sustained, unimpeded cashflow through economies will be a prerequisite.
So, think long.
Act short... and...
be very friendly to your bank manager.
The not so silent "P"
The responses to the commentary in the last month’s e-zine about the silent “P” of customer service were received loud and clear.
Creativity knows no bounds among the recipients of these communications.
It was evident that no suggestion in the nominations of what was the silent “P” was wrong. These included:
Interestingly, none of those nominated attributes and aspects actually corresponded with the silent “P” which was released to and embraced by four entities (a company, a buying group, a franchise network and Curtin University Students Guild) during February, to their advantage and benefit.
Indeed, the date and occasion of a national conference keynote address delivered for The Coffee Club group introduced a new, creative and appropriate dimension to the silent “P” of customer service. It just gets bigger and better!
In recent weeks we have introduced the concept to the departments of one of the world’s largest companies, a diversified mining and exploration group and a legal practice, for application in the dealing with internal customers. The responses from participants were refreshingly positive and upbeat.
Your thoughts, perceptions and contributions on this energising and topical issue are welcome. I’m learning lots and am having a great time applying the concepts.
Rant about rents
The bi-annual reports to shareholders of a number of public-listed Australian property companies during February provided significant insights.
Officially declared shopping centre rents had been maintained, if not increased in the previous year.
Indeed, Westfield declared the highest rentals achieved among its 118 shopping centres and precincts, which are located in five countries, was up to $15,000 per square metre, per annum – at the Pitt St precinct in Sydney (CBD).
In the Bondi Junction shopping centre (metropolitan Sydney) rents were reported to be up to $12,000 per square metre, per annum.
One needs to draw on the generalised conclusion of the Productivity Commission, that to be viable and sustainable retail rentals should represent around 7 to 8% of gross annual turnover.
Accordingly, for $15,000 square metre to be 8%, gross turnover needs to be $187,500 per square metre, per annum.
Fortunately, for those lucky few in Bondi Junction they need only achieve sales of $150,000 per square metre, per annum. That is a lot of shoes, books, cups of coffee and bras. Doubtless, some retailers will need support!
Little wonder, the Chairman and Chief Executive of JB HiFi, arguably the most successful retailing network in Australia, declared at their recent shareholders’ meeting that they were pursuing active negotiations to lower rentals. That is a timely call-to-action for its peer retailers.
Rent is an issue that cuts both ways. Local municipalities which allow the conduct of growers’, farmers’ and cultural markets in strategically important and well-located sites at low or peppercorn rents are impacting negatively on the viability of property and business owners who pay substantial local council rates (That is: statutory rents).
It seems to be, and is, unfair and unequitable, particularly when many stallholders in such markets are not local and are not growers, orchardists or producers. These people are simply opportunists who are capitalising on subsidised and discounted rents.
And to think that some consultants are promoting themselves as champions of these ventures – at the expense of often long established local businesses. It’s enough to start a new phenomenon....
Article text: Sentiments are not sentimental
How can retailers possibly cope?
Actually, it is the sentiments of consumers rather than the consumers themselves that are fickle, and thus hard to analyse and forecast.
Much consumer sentiment is the product of newspaper, television, radio and magazines headlines, stories and innate editorial biases. Accordingly, they can and do, in many instances, change daily.
This is a reality strikingly evident in the discourse between, opinions and expressed buying intentions of participants in focus groups.
One is left to conclude that consumer sentiments, to a large extent, are an “effect” rather than a “causal” factor, which must be considered in the planning of the marketing, advertising, promotions, product lines, inventory and financial forecasting of many retail businesses.
Over-riding consumer sentiment can be materially and significantly affected by the public statements of politicians, bankers and other spheres of influence.
Declarations by high profile retail industry spokespersons about price deflation, sales leakages to internet on-line retail websites and entities, rampant price discounting and a general sense of lack of consumer loyalty can influence prevailing sentiments. More disturbing, it can awaken, educate and influence consumers to consider and try competitors, substitutes and alternatives as means to satisfy their needs, wants and desires.
Compounding the issue is the lack of uniformity in such expressions, driven largely by short-term, often conflicting, self-interest.
Some industry leaders even get very sentimental about the whole issue, to their and businesses’ detriments.
Expectations of economists typically exceed the disciplines and the practitioners’ capacities, training and abilities. To expect economists to accurately forecast within .1% interest rates 12 – 24 months hence, is unreasonable and, above all else, their attempts to do so, unbelievable. So too are such forecasts.
Many economists determine their projections on established or unique modelling. Retail association spokespersons use or refer to similar templates and concepts.
Many business leaders share a general consensus that economic forecasts are inevitably wrong. The major point of disagreement is just how wrong the economists are in their forecasts.
Interestingly, a common deficiency of economic modelling is the absence of consideration of and tolerance for the role and influence of consumer sentiment.
It is estimated that the sentiment of consumers is a variable that can influence demand, and thus sales, profits and dividends, by up to 25% of standard economic forecast modelling.
Hence, it seems that consumer sentiment is something that business people, retailers in particular, cannot do with or without.
Consumer sentiment is a cruel, fickle master. It is also a rewarding but not compliant servant.
Sentiment is a filter through which consumer perceptions are developed, established and, over the short-term, sustained.
It can and does impede and block out communication. Moreover, it is often a pre-emptive factor which determines whether purchase, investment or consumption will be contemplated. That is a powerful variable which will directly and, most importantly, indirectly impact on spending patterns. Care must be taken about the capacity for mass consumer sentiments to change and to do so rapidly.
One need not look beyond the fortunes of retail brands in the “beach culture” sector of retailing to register a salutary lesson.
Consumer sentiments and their importance to all businesses underscore the importance of a principle enunciated in my co-authored book on Australian entrepreneurs which was titled, The Jindalee Factor. That was
“Plan long. Manage short”
Don’t attempt to plan in anticipation of sentiments or manage oneself around them. Consider, respect and allow for them, with appreciable tolerance for variability.
The year ahead
If one is not able to accurately and consistently forecast mass media headlines 7, 14 or 30 days ahead, then no attempt should be made to project consumer sentiments or to believe that concise sales and profit totals can be documented and “banked” in advance, based on those premises.
Likewise, economists’ statistics about the future should be studied carefully and then, in most instances, be summarily dismissed. Economics is the discipline of the allocation of scarce resources, not of declaring within .1%, the official interest rates and the All Ordinaries Index, twelve months hence.
Accept the fact that the headwinds which has been spoken and written about so freely since the onset of the Global Financial Crisis (GFC) in August 2008 will persist during 2012. They will be fluky, inconsistent in direction and in intensity and they will be compounded by the changing tides of consumer sentiments.
In short, astutely set course for the finish-line, but be flexible, malleable and responsive. Recognise the nature, role, importance of and influence of consumer sentiments. Don’t attempt to control such emotions. Rather, reach out, connect, and interact with consumers and at all times endeavour to guide (but not unjustifiably talk-up) their sentiments.
If one possesses a high tolerance of risk and has a “business auto-pilot”, then at least push the reset button.
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Contact: Kate Power