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Institute of Management, Nirma University

Retail Marketing

Project Report
Comparative Study of Organized and Unorganized Pharma Retail Stores in
Ahmedabad

Submitted to Prof. Sapna Parashar


Submitted By:
Anshul Goyal
131209
MBA (FT 2013-15)

Date of Submission: 13th Sept, 2014

Table of Contents
1) Industry Overview 3
2) Sector Overview....3
3) Rationale... 5
4) Objectives .5
5) Methodology.5
6) Organized Stores...6
Apollo Pharmacy...6
Planet Health 13
Frank Ross ....20
7) Unorganized Stores...25
Nootan Medical.25
Aagasya Medical...27
8) Comparision of Organized and Unorganized Pharma Store......29
9) Beneficiary30
10) Conclusion30
11) References.31

Industry Overview
India is the fifth largest retail destination globally. The Indian retail industry has experienced
tremendous growth over the last decade with a significant shift towards organized retailing format
and development taking place not just in major cities and metros, but also in Tier II and Tier III
cities. The overall retail market in India is likely to reach Rs 47 trillion (US$ 792.84 billion) by FY
17.
Sector Overview
Market Overview:

According to Netscribes latest market research report, there has been a changing role of
pharmacy retail outlets and their gradual shift towards organized format.

Pharmacy retail industry in India is largely fragmented and unorganized.

There are about 8, 00,000 retail outlets with 60,000 distributors, out of which organized
outlets are only 20-30 %. Most organized players operate regionally.

However, with entry of branded Pharma retail chains and recent govt. decision to liberalize
FDI in retail in India will open doors for many international players to set up pharmacy retail
chains via different business models including franchising.

Growth Drivers:

Growth of Indian pharmaceutical market

Increase in average income levels & healthcare spending

Changing disease profiles

Attractive margins

Change in consumers behavior

Growth of Indian OTC market

Increase in rural penetration

Challenges:

Although the pharmacy sector in India is highly regulated, yet it tends to suffer from the
circulation of sub-standard and counterfeit drugs that hampers the retail segment of the
business. Measures are being taken by the pharmacy regulatory bodies to control the threat as
it drastically hampers revenue generation.

The government is also taking major initiatives to provide medicines at subsidized rates.

As there is long Pharma distribution and supply chain, the govt. is encouraging teleconsultation services and distribution of medicines in the rural belt.

Trends:

Loyalty Schemes

Value Added Services

Tele Consultation Service Providers

Tie-ups with retail firms

Rural Expansion

Organized retailers starting pharmacy chains

Entry of private labels

Rationale

The reason for undertaking this project is to study the scope of retail pharmacy in India as
there is tremendous growth in the pharmaceutical market. Also, to understand the retail mix
of pharmaceutical stores with the difference between the organized and unorganized retail
formats.
Objectives

Studying the retail mix of pharmaceutical stores in Ahmedabad

Comparative study of organized and unorganized pharmaceutical stores in Ahmedabad

Studying the concept of automation in organized pharmaceutical retain chains/stores

Methodology

Type of Study Observation study

Type of Data Combination of both primary and secondary data

Type of Analysis Non-parametric analysis

Sample Store in-charge

Tool used Various parameters of retail mix

In this project, I have visited to both organized and unorganized retail stores in Ahmedabad
and collected the primary data. The primary data was collected from store in-charge on the
basis of various parameters of retail mix. Also, collected some secondary data from web.
Using the collected data, I have made comparison of both organized and unorganized formats
of pharmaceutical stores.

Type of Store Drug stores comes under specialty store format.


Organized Stores
Apollo Pharmacy

Tagline A promise beyond prescriptions

Number of branches in Ahmedabad 45

Warehouse center Gota, Ahmedabad

Highest sales location Bodakdev, Ahmedabad

Type of system centralized

Average number of employees 6-8/store

Software

All Data Software (own customized ERP software)

Functions of software
Billing
Management of every detail obtained from Membership card
Monthly reminders to customer
Indent (reorder of stock with best supplier management)
Monitoring of cash and stock handling
Expiry management
Check on fast and slow moving items

Audit Team of about 5 people come to the store every year and check the store
variation by comparing the stock shown in the computer with the physical stock and
stock on paper
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Training for a new employee 11days of classroom training at Naranpura branch of


Ahmedabad which is an old admin office of Apollo and then store training of about 56months. Following things are taught generally in classroom training:

Human body system

Drug classification

Drug and brand names

Probation period 6 months

Salary structure freshers are paid around 6,500 8,000/month with increment every
year

Dress Code for an Employee

For males Apollo labeled blue shirt and black formal pent

For females no dress code as such; however, jeans not allowed

Tool for maintaining customer database membership card

Tool for increasing repeat purchase membership card as it offers discount of 10% on
medicines and 5% on consumer goods on your previous purchase

Online purchase www.apollopharmacy.in

Categories of Products

Pharmaceuticals

Wellness goods

Consumer goods

Medical devices and diagnostics

Store Format and Location

The stores are located in residential areas with many high-rise buildings in the
trading area

The target customers of the store are the educated middle and upper class
households

The trading area is expected to be about one kilometer radius from the location of
the store without prominent visibility and parking spaces.

Store Design and Layout

All Apollo stores across the country have same identity at all branches (green
color).
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The stores size varies as per the location.

The stores are not very elegant as well as not air-conditioned.

Billing counter is at the entrance itself.

Arrangement of Products

Drugs alphabetically

Separate sections for syrup, cosmetics, consumer goods

Products Handling

Low temperature products storage fridge (injectables, sterile products)

Expiry product handling sent to warehouse from where it is sent to distributor if


product is found to be appropriate. Otherwise, it is thrown off.
Medicine removed from the shelf 2month before expiry
Consumer goods removed from the shelf 1month before expiry

Type of Reordering Stock automatic

Private Apollo brand Products available are

Soap

Oil

Aloe era juice

Baby product

Profit Margin

Medicines about 20%

FMCG about 5%

Private brand about 15%

Promotions

Offer of the month (mostly on consumer goods)

Loyalty program

Healing card prepaid card with top-up bonus, discount. Bonus of Rs 50 is


provided on 1000 and 7% bonus on 3001.

Free Home Delivery

Free reminder service

A separate customer care service

24-hour service
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Social media marketing twitter, facebook, YouTube

Newsletter online

Store Visited Satellite


Name of the Store In-charge Mr. Juned Khan Pathan
Collected Data based on various parameters:

Area of store 200 sq ft

Rent Rs 25,000

Number of SKUs 6000

Footfall/day 80

Reorder of stock/day Rs 25,000

MR visits/day 1 to 2

Number of regular customers/month 100

Private brand purchase/month 25%

Number of membership cards sold/day 25

Highest sales in product categories antidiabetic, chronic disease drugs

In-store Display of Products

On RHS, first private brand category followed by men care category of products

On LHS, first Baby care category followed by skincare and women care category
of products

In-store Promotion (Convergent)

On entrance, following posters are sticked


On LHS, The Healing Card
On RHS, Offers of the month
On Front Desk, online purchase and discounts on consumer goods
especially private brands

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Store Visited Navrangpura Branch


Collected Data based on various parameters:

Area of store 200 sq ft

Rent Rs 15,000 20,000

Number of SKUs 4000-5000

Footfall/day 30

Reorder of stock/week Rs 1lac

MR visits/day 0

Number of regular customers/day 30-40

Private brand purchase/day Rs 5000

Number of membership cards sold/day 20

Home delivery 5-6/day

Managing Category

Sales 12-20,000/day, 6-8,000/weekend

Highest sales in medicine category diabetic and blood pressure drugs

Highest sales in consumer goods category Baby care (500-1000/day)

Profit margin
Medicines about 20%
FMCG about 5%
Private brand about 15%

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Planet Health

Tagline Because life is precious

Number of Branches in Ahmedabad 21

Warehouse center Ambavadi, Ahmedabad

Training center Ambavadi, Ahmedabad

Type of system centralized

Highest sales location Ambavadi, Ahmedabad

Average Number of employees 6-8

Software

Own customized ERP software

Functions of software
Billing
Management of every detail obtained from Membership card
Monthly reminders to customer
Indent (reorder of stock with best supplier management)
Monitoring of cash and stock handling
Expiry management
Check on fast and slow moving items

Training period for a new employee 1week (5days)

Dress code for an employee Planet health labeled shirt/apron

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Merchandize Mix
Type of product categories

Pharmaceuticals

Wellness goods

Consumer goods

Medical devices & diagnostics

First Level Categories

Second Level Categories

Healthcare products

Pain relief
Cough and cold
Stomach remedies
Diabetes management
First-aid
Anti-allergens and sinks
Anti-smoking
Bandages and supports

Vitamins and nutritional care products

Diet and nutrition


Vitamins
Minerals and nutrients
Other supplements

Baby care products

Accessories
Diapers and bath needs
Food and formula
Health remedies

Personal care products

Deodorants and anti-perspirants


Eye and eye care
Family planning and contraceptives
Feminine care
Foot care

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Hair and scalp care


Health appliances
Incontinence
Mouth care
Shaving needs
Beauty care products

Bath and spa


Cosmetics
Fragrance
Skincare
Manicure/Pedicure
Hairstyling and colours

Foods and snacks products

Candy and gum


General grocery

Alternative medicines and other products

Nutritional products
Hosiery
Personal gymnasium equipment
Ayurvedic preparations
Homeopathic preparations
Herbal products

Merchandize medicines; nutraceuticals, health food, and health supplements; personal


care, baby care and mother care products; pet care products, surgicals and rehabilitation
products; and health monitors and devices

Store Format and Location

The stores are located in residential areas with many high-rise buildings in the
trading area

The target customers of the store are the educated middle and upper class
households

The trading area is expected to be about one kilometer radius from the location of
the store with prominent visibility and enough parking spaces.
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Store Design and Layout

All stores have a similar identity.

The design is based on building trust among the shoppers through purity,
transparency, and openness and provides a full view of the store to passers-by, a
complete view of the layout to the customer at entry.

To facilitate the walk-through, the merchandise on display; prescription


medicines; and billing counters are to be as distant from the entry as possible.

The store looks rich, spacious, good lighting, cooling and elegant without being
opulent like a life-style store.

Arrangement of products

Drugs alphabetically

Separate sections for other products

Promotions

Schemes on Festivals

Free Home Delivery

Health Check-up Camps

Membership Program

Type of reordering stock automatic

No Online purchase option

No Private brand availability


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Store Visited Prahladnagar branch


Name of the Store In-charge Mr. Rahul Chaudhary
Collected Data based on various parameters:

Area of store 800-1000 sq ft

Number of SKUs 5000-6000

Footfall 200/day and 150/weekend

MR visits/day 1 to 2

Display of Products

Availability of Pet Care Products on shelves beside the middle lane, just near to
the entrance

Arrangement of Wellness Products and Diagnostics on shelves before the


counter

Arrangement of Medicines alphabetically behind the counter

Product Handling

Expired Products
Medicine removed from the shelf 1month before expiry
Wellness removed from the shelf 2month before expiry

Low Temperature Products Storage 2 fridge (injectables, sterile products,


vaccines)

Promotions

Schemes on Festivals (10-15% discount)

Free Home Delivery 10-15/day

Health Check-up Camp once in 3-4months

Membership Program

In-store Promotion (Convergent)

On RHS, poster of health devices was kept which mentioned the following
devices :
Blood pressure meter
Glucometer
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Weighing scale
Thermometer
Nebulizer
Cooling and Warming Pads
Walking sticks
Wheel Chairs

On LHS, a poster was kept which mentioned


Member discount
Free health card
Free home delivery
Free prescription reminder
Free health check-up & counseling

Managing Category

Sales 40,000-45,000/day, 50,000-60,000/weekend

Inventory Turnover (Frequency of Reorder)


Medicine every night
Wellness products once in 2 days

Profit Margin
Medicine 30-33%
Wellness products more than 20%

Availability of Fire Safety Tools

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Frank Ross

Tagline Trusted by doctors for over 100years

Sponsored by Emami group

Number of branches in Ahmedabad 7

Warehouse center satellite, Ahmedabad

Type of system centralized

Highest sales location VS Road, Ahmedabad

Average Number of employees 5

Software

Own customized ERP software

Functions of software
Billing
Management of every detail obtained from Membership card
Monthly reminders to customer
Indent (reorder of stock with best supplier management)
Monitoring of cash and stock handling
Expiry management
Check on fast and slow moving items

Type of Product Categories

Pharmaceuticals

Consumer goods

Surgicals

Merchandize medicines, cosmetics, surgical items, health food, baby food, oral care,
skin care, ayurvedic products

Store Format and Location

The stores are located in residential areas with many high-rise buildings in the
trading area

The target customers of the store are the educated middle and upper class
households

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The trading area is expected to be about one kilometer radius from the location of
the store with prominent visibility but not parking spaces.

Store Design and Layout

All stores have same identity.

The store is neither elegant nor ugly, air-conditioned, good lighting.

Billing counters are not at the entrance.

Type of reordering stock automatic

Online purchase option not available but going to start soon. Already started in
Kolkata

No private brand availability

No online purchase option

Availability of Fire Safety Tools

Training period for a new employee 1week

Dress code for an employee Frank Ross labeled shirt

Tool for maintaining customer database membership card

Tool for increasing repeat purchase membership card as it offers discount of 10 to 17%

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Store Visited Satellite


Name of the store in-charge Mr. Prashant Shah
Collected Data on various parameters:

Area of store 400-500 sq ft

Number of SKUs 15000 to 20,000

Footfall 300-350/day, 500/weekend

MR visits/day 0 (not allowed)

Number of regular customers/month 12-15/day

Free Home delivery/day 20-30

Highest Sales in Product Categories diabetic, asthma, blood pressure, gynecology

Seasonal Sales sales of syrup and antibiotics are very high in rainy season

Products Handling

Low Temperature Products Storage fridge (insulin, injectables, sterile


products)

Expired Product
Medicine removed from the shelf 3 months before expiry
Cosmetics removed from the shelf 2 months before expiry

Arrangement of products

Drugs alphabetically

Separate sections for syrup, cosmetics, consumer goods

Promotions

Special Discount Offers

Free Home Delivery

Membership Program

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Frank Ross Pharmacies

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Unorganized Stores
Nootan Medical

Number of employee 1

Area of store 200 sq ft

Footfall 200/day

MR visits/day 2 to 3

No computerized system

Number of regular customers/day 25-50/day, 1500/month

Type of product categories pharmaceuticals, consumer goods

Products Handling

Low Temperature Products Storage - Availability of fridge

Expiry Product Handling for Medicines removed 1month before the expiry

Arrangement of products

Medicines alphabetically

Routine products kept on counter

Type of reordering stock manual

Inventory Turnover (Frequency of Reorder)

Medicine every day

Consumer products every day

Highest sales product antibiotics

Highest sales period gap between two seasons

No Online purchase option

No Private brand availability

No availability of fire safety tools

No Home delivery

No warehouse

No promotion

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Aagasya Medicals

Number of employee 1

Area of store 150 sq ft

Footfall 50/day

No computerized system

Number of regular customers/day 200/month

Type of product categories pharmaceuticals, consumer goods

Product Handling

Storage of low temperature products - Availability of fridge

Expiry product
Medicines removed 15days before the expiry
Consumer goods removed 15days before the expiry

Arrangement of products

Medicines alphabetically

Routine products kept on front desk

Highest sales product antibiotics

Type of reordering stock manual

Inventory Turnover (Frequency of Reorder)

Medicine every day

Consumer products every day

MR visits/day 3 to 4

No Online purchase option

No Private brand availability

No availability of fire safety tools

No Home delivery

Warehouse is available at store location only

No promotion

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Comparison of Organized and Unorganized Pharma Stores

Organized Stores

Unorganized Stores

Number of SKUs is more

Number of SKUs is less

Store area is more

Store area is less

Number of employees is more than one

Number of employees is only one

Footfall is high

Footfall is low

Computerized system (own customized ERP

No computerized system

software)
Type of reordering stock is automatic

Type of reordering stock is manual

Trading area is more

Trading area is less

Availability of online visit of store

No Online search available

Private brand availability at most of the stores

No Private brand availability

Availability of fire safety tools

No availability of fire safety tools

Home delivery available

No Home delivery

Promotional activities is high

No promotion

More assortments

Less assortments

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Beneficiary

Global pharmaceutical retail chains that are looking into Indian market for expansion

Indian pharmacy chains that are planning to metamorphose their processes using technology

Students of retail management and pharmacy

Unorganized stores that are shifting towards organized format

Indian consumers who are not aware of the differences between organized and unorganized
stores

Conclusion
From the project, it is concluded that organized stores are more preferable to unorganized due to
technology used with fair billing of products, high assortments provided and promotional offers
given to the customers. Also, they are getting noticed more nowadays with the awareness of its
benefits to the consumers.

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References

http://www.ibef.org/industry/retail-india.aspx

http://www.researchonindia.com/pharmacy-retail-market-in-india-2014.html

http://www.franchiseindia.com/articles/franchise-insights/franchise-trends/Flight-ofPharma-retail-from-unorganised-to-organised-598/#.U9c-rEBG3IU

http://www.apollopharmacy.in/loyalty

http://apolloahd.com/apollo_pharmacy.php

www.planethealth.com

www.frankross.com

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