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CVS Quits Smoking

9/27/2014

 
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It’s not too difficult to do the right thing when there are few or no negative consequences.  It’s a lot harder to do the right thing when it really costs you.

CVS recently made a choice that will really cost it—perhaps as much as $2 billion/year.  After planning to do so since February, CVS stopped selling cigarettes and other tobacco products in its stores on September 2.

Does CVS’s product line elimination represent Mindful Marketing?  The knee-jerk reaction is “Yes”!  After all, how could getting rid of products that destroy people’s health and kill many of their users be anything but Mindful?

But then again, there’s the revenue.  Granted, CVS sells over $126 billion in products a year, but $2 billion is nothing to sneeze at (no pun intended).  Perhaps, therefore, CVS’s decision is more of a “Simple-Minded” one, i.e., a choice that nobly upholds societal values, but regrettably compromises stakeholder value.

CVS’s choice definitely was made with stakeholders’ interest in mind—not short-term return, but long-term value.  Even with its name (CVS Health Corporation), the company is positioning itself for the future—one in which healthy living becomes increasingly important.  Similarly, to offer products throughout much of its store that support health, then to sell others from behind the counter that destroy health, creates some pretty confusing retail branding and positioning.

CVS’s decision to drop tobacco products does represent Mindful Marketing.  Now I wonder how long it will be until the company takes a careful look at the health impact of some of its other products, e.g., king-size candy bars . . . don’t expect that decision anytime soon.
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Matthew Sider
9/29/2014 03:12:21 pm

I completely agree. How can a company that promotes healthy lifestyles sell a product that not only has no health benefits, but is also proven to cause extremely negative health consequences. I do also think that this is extremely smart on their part. The growing market in our society is "smart, healthy living" and so positioning themselves as an organization that gears itself towards healthy lifestyles is going to give them a competitive advantage over other competitors. I think that it is an interesting point that they haven't abandoned things like king sized candy bars, chips, or unhealthy food items and it does question whether they are being 100% percent honest. On the other hand, unhealthy food doesn't have the stigma that cigarettes do and therefore I think that they are perfectly okay, but they do have to keep that in mind as this market trend progesses.

Richard Prensner
9/29/2014 03:27:36 pm

To start, I agree that it was a good choice for CVS to move away from tobacco products. Removing these products from the shelves helps to resolve some of the internal dissonance CVS must have felt when selling tobacco products and health care products.

That being said, CVS needs to consider that not only will they be losing money from direct tobacco sales, but they will also be losing money from the other purchases people would have made when entering the store to buy their tobacco (whether it be a soda or perhaps placing a medication order).

Will these loses be worthwhile in the long run? Though we can't know for sure, it seems that CVS is making the right choice by following the trend to phase out products that don't align with good health practices.

Though some stake-holders may balk at the decision, the stake-holders who are not invested for the short run will most likely be glad that CVS is making this decision and creating a more sustainable future for itself.

Danielle Chun
9/29/2014 06:34:49 pm

I fully support CVS’ decision to remove all tobacco products from their shelves and I believe this provides an excellent example of “Mindful Marketing.” While this represents a potentially huge loss in terms of customers and sales, CVS is making the right stance and very clearly drawing a line in the sand.
As a corporation, an annual loss of $2 billion will certainly reduce company profits and stockholder dividends but this decision could actually work in CVS’ favor in the long run. Those in the public who understand the dangers of smoking and/or have experienced the tremendous negative effects of an addiction to tobacco might support CVS for making such a bold, potentially costly decision.
Furthermore, this decision aligns with the idea of CVS as a pharmacy and place to purchase medications and other life-enhancing products. Removing tobacco products from its stores is a clear affirmation of positive societal values and reflects the corporation’s emphasis and attitude toward the health of its customers and the general public.
CVS’ decision shows the vision of its directors and the values of the corporation. It reflects a paradigm shift in thinking in which profit is not prioritized over principles.

Breanna Klett
4/1/2015 05:18:47 pm

I am so happy that CVS decided to stop selling cigarettes. It was an oxymoron for them to sell those items in the first place. While the same argument could be made for alcohol and junk food, I think that might be taking it too far. Although those two items are unhealthy as well, they can be fine in moderation. Cigarettes however are never healthy, regardless of the quantity. Although it is a small portion of their sales, I hope that they can recover that percentage by attracting new customers to their stores with this stance against the big tobacco companies. Hopefully other health stores will follow their lead and be mindful of what they are selling and preaching.


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