2. RETAILING CONCEPT
•Distributer?
•Wholesaler?
•Retailing consists of the sale of goods or merchandise,
from a fixed location such as a department store in small
or individual lots for direct consumption by the
purchaser.
•In French, German and Dutch, Retailing means to sale in
small quantity.
3. Retailing types
There are three major types of retailing.
o The first is the market, a physical
location where buyers and sellers
converge. Usually this is done on town
squares, sidewalks or designated streets and
may involve the construction of temporary
structures (market stalls).
4. The second form is shop or store
trading
•Some shops use counter-service, where goods are out
of reach of buyers, and must be obtained from the seller.
•This type of retail is common for small expensive items
(e.g. jewellry) and controlled items like medicine
and liquor.
• Self-service, where goods may be handled and
examined prior to purchase, has become more common
since the Twentieth Century.(OTC drugs in case of
medicine)
5. oA third form of retail is virtual
retail
where products are ordered via mail, telephone or
online without having been examined physically but
instead in a catalog, on television or on a website.
6. INTRODUCTION OF
RETAILING IN PHARMA
SECTOR
• In the current globalized retail era it is very tough
task to fight and survive in the global as well as local
market.
• The Pharma sector is one among sectors which is
facing hard competition.
• By introduction of retail malls the customers are
getting all the daily use commodities under a single
roof. They are getting each and everything which
are basic as well as secondary requirement for a
high, middle and lower class segment of global
society.
7. • Now the question arises what will be the
future of small retailer in pharma
industry?
• The answer is considering that pharma retailing
is clubbed with fast moving consumer goods
retailing in most cases. The consumer is getting
everything in air conditioned environment –
fruits, garments, healthcare articles as well as
fulfilling other essential requirements.
• So we can say it is "starting end" of small
pharma retailers.
8. MAIN ACTIVITIES INVOLVED IN
RETAILING
1. Choosing store location : Three attributes are important to all
retail locations
a. Attractiveness
b. Convenience
c. Proximity
2. Sourcing / Buying / Vendor Partnership / Supply Chain
Management
3. Achieving efficiencies in retail operations
a. Margin-Turnover position
b. Investment productivity
c. Space Productivity
d. Employee Productivity
e. Average size of transactions
9. THE VALUE CHAIN ANALYSIS
• The term Value Chain is used for adding some extra
utilities in the product and then supply / sale it to the
end user.
• The value chain activity starts at the time of production
and ends not after selling but continues till the
consumption by the customer.
• It includes different services provided by retailer / whole
seller or manufacturer to the end-user customer.
• The value chain of a pharmaceutical company also
consists of all physical and technological distinct
activities within the organization that add value to the
consumers experience.
10. • India is now considered as a fastest developing
economy in the world.
• India is developing in every area of economy i.e
in education, technology, agriculture, power
generation, Information technology, space
technology, development in roads, railways and
airways etc.
• We consider trade and commerce are the core
areas of any country, here we consider retailing
has to be given more emphasis as it is the subject
of every common man in India today.
11. AN ILLUSTRATION OF SUBHIKSHA
DISCOUNT CHAIN
• Subhiksha gets about 30 days credit from
suppliers and uses about 7 days for its cycle,
saving 23 days value. Subiksha has three models
:-
1. Pharmacies only which are 150 square feet in
area.
2. Departmental stores plus pharmacies, 1000-
1200 square feet, and
3. Supermarkets plus Pharmacies, 1600-2000
square feet.
12. • To include pharmaceuticals has been a particularly good
strategic move for the store.
• Medical expense is something that most middle-class
people dread.
• By offering pharmaceuticals at all its stores at 10 percent
discount, Subhiksha has built customer loyalty.
• Subhiksha had to face furious opposition at every stage from
fellow retail traders as manufacturers and companies have
tried refusing to supply Subhiksha.
• The tactic of offering pharmaceuticals at a 10 percent discount
in particular, caused a great deal of controversy.
• Pharma companies, distributors and chemists have been up
in arms against the discounting by Subhiksha.
13. • To be able to offer such a high level of discount and
still be profitable, Subhiksha needed two things,
1. Command large volumes to enable volume
discounts from Manufacturers.
2. Slash overheads and inventory costs.
• The Subhiksha Stores have none of the frills of the
large outlets.
• They are simple, functional outlets, directly
operated, not franchised and comparatively small.
14. • The Subhiksha format rests on two main planks
1. Lower prices
2. Neighbourhood stores
• Subhiksha believes that the MRP is just a cap on
prices and prefers to sell everything at less then
MRP.
• It manages to provide discounts in the range of
10 percent on nearly all products.
• Subhiksha's appeal to the average middle class
household is considerable, the price savings
mean a lot for them.
16. In Pharma Retailing there are two
types of sectors :
1. Organised Pharma Sector :
Pharma chains like Apollo Pharmacy ,Med
plus, Subhiksha, Hetero Etc.
2. Unorganised Pharma Sector :
Unknown and Small retail outlets.
17. Organized sector:
• The organized pharma chains are generally
owned by large and Established business houses
which have decades of experience in handling
large Industries, organized businesses etc.
• They have expertise in Trading various Drugs,
Manufacturing Drugs, Processing , Packaging ,
Logistics Handling , Inventory Management,
cold storages etc.
18. • These players are high end and deal in bulk
quantities of raw-materials, Processing of raw
materials to finished drug formulations.
Branding the finished products then packaging
and labeling the drugs and they have expertise in
using all tools of marketing mix- i.e
• 1. Product
2. Price
3. Place
4. Promotion
5. Service etc.
19. Advantages to
Organized Pharma
Sectors/ Pharma chains
• 1. Economies of scale :
• 2. Technology driven :
20. • 3. Retailing their own pharma brands/generic
brands along with competitors brands :
• 4. Passing advantages to patients and consumers
21. • 5. Increase in market share and profits :
• 6. Discount parameter :
22. Unorganized sector:
• The second type of pharma retailers are the
individual outlets i.e small retail medical shops
23. DISADVANTAGES TO SMALL RETAILERS
• 1. No economies of scale to small medical
stores : These small stores buy in small quantities
from drug distributors with higher prices with no
schemes thereby it reduces profit margins
• 2. Small geographic area : These small retail
medical shops operate from small lanes and by-
lanes where it could cater to limited range of
patients who belong to that surroundings only. This
results in lower turnover of sales resulting in lower
profits.
24. • 3. No home delivery services : These small
medical shops generally run on low man power
or some times run as a family business and
therefore cannot effort to hire persons for home
delivery of medicines.
• 4. Winding up of medical shops : Not
withstanding the business threats from large
pharma chain stores most of these stores close
their stores by sustaining huge loses.
25. • 5. Losses from expiry of medicines : New
formulas are frequently launched into the market
and doctors always want to try new formulas on
patients thereby sales of old formulas are slowed
down which causes huge quantity of expires of
medicines which in turn result in heavy loses.
• 6. Discounts can not be offered : Small
medical shops buy in smaller quantities and cannot
avail the advantage of various schemes on quantity
purchases, there by their unit purchase prices are
higher and can not offer discount to patients/
customers.
28. The market is highly fragmented and dominated by
the
unorganized sector
29.
30.
31.
32. THE APOLLO HOSPITAL ENTERPRISE
• In the field of pharma retail the Apollo Hospital
enterprise is doing its business with more than 642
pharmacies across the country with an aim to reach
1000 units at the end of profit year 2008.
• Last year Apollo added 262 pharmacies and gained the
profit of Rs.8.8 crore.
• In 2009, they have aim to reach Rs.16 crore for the year
2008-09.
33. The following Chart Shows the Growth of Apollo
Pharmacy’s YoY Growth in Store Adittion
34. • The share of organized retail in the total market is likely
to grow many fold from 2% in the starting years.
• The latest Indian retail review shows that in the year
2010 this rate was 20% because growth is attracting new
players in the market.
• So in conclusion we can say that though there is hike in
retail market and specially in organized retail. Then we
have what will be future of unorganized small retailers.
• I am using the sentence for small retailers of famous
Hindi Novelist - Premchand "Kisaan ab apni hi zameen
par mazdoor bankar reh jayega.
