The American healthcare conglomerate that uses receipts for marketing?
Scroll through to know how CVS does that!
Who is CVS?
CVS Health Corporation (formerly known as CVS Caremark Corporation) is an American healthcare conglomerate that owns CVS Drugstore, which is a retail pharmacy chain, CVS Caremark, a pharmacy care manager, and Aetna, a health insurance firm, among other firms.
A force to be reckoned with, CVS is much more than a chain of pharmacies. CVS is attempting to transform itself into a healthcare provider. After selling off certain businesses to get antitrust permission from the Justice Department, CVS completed its $70 billion purchase of health insurer Aetna.
The agreement is so significant that CEO Larry Merlo claims it would revolutionize the way health care is delivered in the United States. CVS Health will become one of the largest healthcare firms in the country due to the deal.
Mergers and Acquisitions
This is a long way from the company's humble beginnings in Woonsocket, Rhode Island.
The first Consumer Value Stores debuted in Lowell, Massachusetts, in 1963, with partners Stanley and Sidney Goldstein and Ralph Hoagland. That shop specialized in health and cosmetic items, but not in prescription medications.
In 1967, they purchased their first pharmacies, the beginning of many acquisitions that would help CVS grow into the company it is today.
To date, CVS has acquired about 15 firms, out of which 5 firms were acquired in the last 5 years. All these transactions have cemented CVS's position as a national retailer. With CVS's 2006 acquisition of MinuteClinic, a Minnesota-based chain of walk-in clinics, it came to light that CVS might have other plans.
In 2017, CVS made the largest healthcare deal in history through the much-talked-about Aetna merger. The deal was valued at $69 billion, making it the largest deal of 2017. The reasons for this vertical merger were cost-cutting and leveraging CVS’s 1,111 MinuteClinic clinics, as well as expanding a multitude of services.
CVS has acquired numerous independent pharmacies and regional businesses throughout the years, such as Caremark, Omnicare, Navarro, and Illnicare Health, among others, putting it in direct rivalry with giants like Walgreens and Rite Aid.
Rivalry With Walgreens
CVS and Walgreens have a shared history of rivalry in America. Both firms dominate the US pharmacy market. Walgreens and CVS are in control of almost 50% of pharmacies in the major 70 cities of the US, according to a study.
CVS operates through 9,700 pharmacies in the US, while Walgreens operates through 8,100 pharmacies. CVS has a strong presence in the US and Brazil, while Walgreens has cemented its position in the European market, as well as the US market.
CVS is well-known for opening pharmacies close to Walgreens, inside the same shopping malls. CVS was also accused of plagiarism after they began reselling medications without a prescription, even though Walgreens had copyrighted the idea. The disagreement escalated into a series of legal disputes that lasted several years.
When compared to CVS, Walgreens pharmacies offer more space, but CVS has a more convenient design that focuses on client comfort - broad aisles, and low shelving. Both businesses are now working hard to preserve their market positions; they face stiff competition from retail giants Walmart and Target Stores.
Companies use celebrities and public personalities to advertise to gain clients. Celine Dion is a well-known singer who represents Walgreens, whereas Al Gore, a politician and public personality, is a CVS client.
Larry Merlo, the CVS CEO, describes the CVS marketing mix as an approach called ‘Plan to Win’ for the healthcare giant to achieve its goals. Plan to Win revolves around the five main P’s – Product, Price, People, Place, and Promotion.
This marketing mix builds a comprehensive plan for CVS to build a robust and healthy business. CVS also employs many marketing strategies and campaigns, some of which have surprisingly made their way to memes on the Internet.
One such example is the long receipts provided by CVS pharmacies. The reason cited for the super long receipts provided to customers was to forge stronger ties and build connections with customers.
How is this done? CVS receipts usually include various messages, coupons, and other offers from CVS’s ExtraCare customer loyalty program. CVS Pharmacy also launched a media network recently to sell advertising to marketers directly, including consumer packaged goods (CPG) companies. The CVS Media Exchange (CMX) was created to assist advertisers in reaching customers when they are most likely to shop.
Future of CVS
CVS has been gradually shifting its primary business. The purchase of Aetna, for example, puts it in a different league entirely. But, in the end, the corporation will figure out how to become a more integral component of its customers' healthcare programs.
CVS is testing three "HealthHub" locations in Houston, which will offer a range of healthcare services and might be the pharmacy of the future.
The new HealthHubs is part of CVS (CVS) CEO Larry Merlo's ambitious aim to transform his 9,800 shops into "health care destinations." To combat competition from Amazon (AMZN) and a wave of industry mergers, CVS aims to outfit its large network of shops with a variety of health services.
In five years, CVS plans to develop a countrywide network of stores that provide far more than just shopping. Consumers will flock to the chain's physical locations, which will not just democratize healthcare, but also deliver much-needed services to more people.
It is pretty evident throughout the article that this approach by CVS is indeed one of the hits and is undoubtedly the present as well as with these ambitious plans it ensures a stellar future as well.