In news announced by Walgreens, Walgreens Infusion was relaunched as a separate company with Madison Dearborn holding a majority interest, Chicago Tribune “Walgreens infusion unit relaunches”, by Ameet Sachdev, May 20, 2015. The new company is being remained OptionCare. Normally something like this is just viewed as another change in the healthcare landscape, but from a marketing brand perspective, I think this one is different.
And here’s why.
Let’s take the “way-back machine” (thank you Mr. Peabody and Sherman) to 2007. Walgreens was on a buying spree and was actively acquiring specialty pharmacies and infusion operations to build market heft. The OptionCare deal was the largest financial transaction that Walgreens had ever made at that time. I know the detail as I was the senior marketing manager, Walgreens Specialty Pharmacy. (And for the record, nothing that will be discussed here is insider information that is not available to the general investing public per SEC regulations.)
The OptionCare brand was retired under the brand architecture of Walgreens (single brand not a house of brands) set for Walgreens after a short period with the intentional brand transition steps- from two separate brands to a co-brand to a single brand. The unit was known as Walgreens Infusion Services.
The same was done for specialty pharmacy but a bit more difficult for at one time there were five, yes count them five, Walgreens owned Specialty Pharmacy brands in the market- Medmark, Schrafts, OptionCare, IVPCare and Walgreens Specialty Pharmacy. Eventually those too became Walgreens Specialty Pharmacy.
Anyhow, in the news article in the Chicago Tribune “Walgreens infusion unit relaunches”, there was an interesting quote from the CEO on the new unit, who was the CFO with OptionCare when it was acquired and remained all these years with the Walgreens unit. He thought it made sense to go back to a familiar brand name. From the time of the OptionCare deal in 2007 to recent history, Walgreens also acquired an additional 16 infusion pharmacies.
So the question before us after all these years, is the OptionCare brand still a familiar and relevant brand in the market? Or, is this a case of lets go back to what we were and see what happen? I would think that after 8 years and all the changes that have taken in place in healthcare market, the companies and patients that the old OptionCare provided services too, is probably not that familiar.
Regardless of the name, one would still be starting from ground zero to reestablish the brand, brand promise and brand experience. The difference being this time is that OptionCare brand may bring back both good and bad experiences and memories.
The danger in taking a nostalgic approach to a brand name in healthcare is that the internal memory of brand performance most likely out distances the current market perception and reality. Nostalgia works well for CPG brands, but I think the jury is out for healthcare brands, especially one that has been absent from the market for nearly eight years.
Is this the right name and brand strategy to take? It is if the resources are provided to rebuild the brand correctly in the marketplace, and one has the market research to back up the brand transition plan, messaging and direction. It’s the wrong decision if it based on HIPPO branding (Highest Internal Paid Persons Opinion).
After all, the healthcare market in 2007 was primarily provider-dominated in the care and treatment decision making process with little healthcare consumer input or choice. In 2015, the healthcare market is retail medicine in nature with healthcare consumer choice and involvement. The healthcare consumer is paying out of pocket for one-third the cost of care. The new drivers are cost, quality, convenience, experience and engagement of the healthcare consumer.
Is there a right time to being a healthcare brand back to market after a several year absence? Only time will tell depending greatly on the resources committed to relauching the old brand name into the market place.
Choose wisely, as back to the future does not mean how a company approaches the market to rebrand and relaunch too.