Professional Documents
Culture Documents
Introduction
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COMPANY PROFILE
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They follow the international quality standards like WHO CMP, Schedule M, USM PSA,
USA PSA as well as ISO 9001-2000
Offers Quality
Calibars quality focus encompasses all areas of operation right from procurement of the
best raw materials, to optimum manufacturing technology, to precise delivery of the
customers requirements thereby ensuring a rapid effect.
Established in 1999 Calibar Pharmaceuticals is one of the leading pharmaceutical companies
in India.
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Key Facts
It is based in India, at Surat (Gujarat) with our offices across India with head office in
Surat. Surat is given marketing department of the company.
They have a state of the art manufacturing plant.
They have a separate R&D (Research and Development) Department which works round
the clock for the development of new medicines.
The production, QC / QA have adequate qualified and FDCA approved technical
personnel.
The manufacturing facilities comply with Schedule "M",
They follow all the international standards of quality control like WHO CMP, USM PSA
and USM PSA.
It is ISO 9001-2000 Certified Company
All their products are trademark registered
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Mission
The mission of Calibar Pharmaceuticals is to create added value in healthcare industry
by focusing on our expertise in Pharmaceuticals. This commitment is reflected in our
business ethics, management culture and our social responsibility.
Values
Accountability We are honest and respectful in our actions. We adhere to the
highest ethical standards of business conduct; protecting the best interests of
employees, customers, communities and the environment. We stand behind our
products and take ownership of our efforts to bring safe, affordable new
pharmaceutical products to the market.
Innovation We feel nothing is impossible and that is why our employees take it as a
challenge to make a difference in our company and in the products we bring to
market. We continuously seek new solutions to meet the current and future needs of
our customers.
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Industry Type: -
Pharmaceuticals
Form of organization: -
Private organization
Phone No: -
+91-261-6541556, 2642432
Fax: -
+91-261-2640529
Mobile No: -
+919825136408,
Email: -
info@calibarpharma.com
Web site: -
www.calibarpharma.com
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Retailing:Retail comes from the French word retaillier which refers to "cutting off, clip and divide" in
terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small
quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring". Like
the French, the word retail in both Dutch and German (detailhandel and Einzelhandel
respectively) also refer to sale of small quantities or items.
Retailing consists of the sale of goods or merchandise from a fixed location, such as a
department store or kiosk, or by post, in small or individual lots for direct consumption by the
purchaser. Retailing may include subordinated services, such as delivery.
In commerce, a retailer buys goods or products in large quantities from manufacturers or
importers, either directly or through a wholesaler, and then sells smaller quantities to the enduser. Retail establishments are often called shops or stores. Retailers are at the end of the
supply chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy.
Shops may be on residential streets, shopping streets with few or no houses, or in a shopping
center or mall, but are mostly found in the central business district. Shopping streets may be
for pedestrians only. Sometimes a shopping street has a partial or full roof to protect
customers from precipitation. In the U.S., retailers often provided boardwalks in front of their
stores to protect customers from the mud.
Online retailing, also known as e-commerce is the latest form of non-shop retailing (Like
mail order).
Shopping generally refers to the act of buying products. Sometimes this is done to obtain
necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and
browsing and does not always result in a purchase.
Organized retailing refers to trading activities undertaken by licensed retailers, that is, those
who are registered for sales tax, income tax, etc. These include the corporate backed
hypermarkets and retail chains, and also the privately owned large retail businesses.
Unorganized retailing, on the other hand, refers to the traditional formats of low-cost
retailing, for example, the local kirana shops, owner manned general stores, paan/beedi
shops, convenience stores, hand cart and pavement vendors, etc.
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The Indian
Retail Market
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Retail is Indias largest industry, accounting for over 10 % of the countrys GDP and around
8% of the employment. Retail industry in India is at the crossroads. It has emerged as one of
the most dynamic and fast paced industries with several players entering the market. But
because of the heavy initial investments required, break even is difficult to achieve and many
of these players have not tasted success so far. However, the future is promising; the market
is growing, government policies are becoming more favorable and emerging technologies are
facilitating operations.
Retailing in India is gradually inching its way toward becoming the next boom industry. The
whole concept of shopping has altered in terms of format and consumer buying behavior,
ushering in a revolution in shopping in India. Modern retail has entered India as seen in
sprawling shopping centers, multi-storied malls and huge complexes offer shopping,
entertainment and food all under one roof.
The Indian retailing sector is at an inflexion point where the growth of organized retailing
and growth in the consumption by the Indian population is going to take a higher growth
trajectory. The Indian population is witnessing a significant change in its demographics. A
large young working population with median age of 24 years, nuclear families in urban areas,
along with increasing working-women population and emerging opportunities in the services
sector are going to be the key growth drivers of the organized retail sector in India.
Retailing is one of the pillars of the economy in India and accounts for 35% of GDP. The
retail industry is divided into organized and unorganized sectors. Over 12 million outlets
operate in the country and only 4% of them being larger than 500 sq ft (46 m) in size.
The Indian retail industry though predominantly fragmented through the owner -run " Mom
and Pop outlets" has been witnessing the emergence of a few medium sized Indian Retail
chains, namely Pantaloon Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and
Lifestyle International.
Given the attractiveness of the Indian retail sector, foreign retailers like Wal-Mart, Carrefour
SA, Europe's largest retailer and Tesco Plc, the UK's largest retailer, were keen to enter this
growing market, despite the Indian retail sector being closed to foreign direct investment
(FDI).
In the last few years, Indians have gone through a dramatic transformation in lifestyle by
moving from traditional spending on food, groceries and clothing to lifestyle categories that
deliver better quality and taste. Modern retailing satisfies rising demand for such goods and
services with many players entering the bandwagon in an attempt to tap greater opportunities.
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Looking further into consumer buying habits, purchase decisions can be separated into two
categories:
1. Status-oriented
2. Indulgence-oriented.
CTVs/LCDs, refrigerators, washing machines, dishwashers, microwave ovens and DVD
players fall in the status category. Indulgence-oriented products include plasma TVs, state-ofthe-art home theatre systems, and iPods, high-end digital cameras, camcorders, and gaming
consoles. Consumers in the status category buy because they need to maintain a position in
their social group. Indulgence-oriented buying happens with those who want to enjoy life
better with products that meet their requirements. When it comes to the festival shopping
season, it is primarily the status oriented segment that contributes largely to the retailers cash
register.
The break-up of organized retailing sales into various product categories:
Books, Music & Gifts: 3%
Mobile Handsets: 3%
Clothing & Textile: 39%
Food & Grocery: 11%
Consumer Durables: 9%
Footwear: 9%
Furniture & Furnishings: 8%
Catering Services: 7%
Jewellery & Watches: 7%
Others: 4%
Demography Dynamics:
Approximately 60 per cent of Indian population below 30 years of age.
Double Incomes:
Increasing instances of Double Incomes in most families coupled with the rise in
spending power.
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Plastic Revolution:
Increasing use of credit cards for categories relating to Apparel, Consumer Durable
Goods, Food and Grocery etc.
Urbanization:
Increased urbanization has led to higher customer density areas thus enabling retailers
to use lesser number of stores to target the same number of customers. Aggregation of
demand that occurs due to urbanization helps a retailer in reaping the economies of
scale.
Technology in Retail :
Over the years as the consumer demand increased and the retailers geared up to meet
this increase, technology evolved rapidly to support this growth. The hardware and
software tools that have now become almost essential for retailing can be divided into
3 broad categories.
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Payment
Payment through credit cards has become quite widespread and this enables a fast and
easy payment process. Electronic cheque conversion, a recent development in this
area, processes a cheque electronically by transmitting transaction information to the
retailer and consumer's bank. Rather than manually process a cheque, the retailer
voids it and hands it back to the consumer along with a receipt, having digitally
captured and stored the image of the cheque, which makes the process very fast.
Internet
Internet is also rapidly evolving as a customer interface, removing the need of a
consumer physically visiting the store.
ERP System
Various ERP vendors have developed retail-specific systems which help in integrating
all the functions from warehousing to distribution, front and back office store systems
and merchandising. An integrated supply chain helps the retailer in maintaining his
stocks, getting his supplies on time, preventing stock-outs and thus reducing his costs,
while servicing the customer better.
CRM Systems
The rise of loyalty programs, mail order and the Internet has provided retailers with
real access to consumer data. Data warehousing & mining technologies offers retailers
the tools they need to make sense of their consumer data and apply it to business.
This, along with the various available CRM (Customer Relationship Management)
Systems, allows the retailers to study the purchase behavior of consumers in detail
and grow the value of individual consumers to their businesses.
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Visual Merchandising
The decision on how to place & stack items in a store is no more taken on the gut feel
of the store manager. A larger number of visual merchandising tools are available to
him to evaluate the impact of his stacking options. The SPACEMAN Store Suit from
AC Nielsen and ModaCAD are example of products helping in modeling a retail store
design.
Investment Opportunities
Location:
With modern retail formats having made their foray into the top cities namely
Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi,
Nagpur there exists tremendous potential in two tier towns over the next 5 years.
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Rural Retail:
Retail sector offers opportunities for exploration and investment in rural areas, with
Corporates and Entrepreneurs having made a foray in the past. India's largely rural
population has caught the eye of retailers looking for new areas of growth. ITC
launched the country's first rural mall 'Chaupal Saagar', offering a diverse product
range from FMCG to electronics appliance to automobiles, attempting to provide
farmers a one-stop destination for all of their needs. There has been yet another
initiative by the DCM Sriram Group called the ' Hariyali Bazaar',that has initially
started off by providing farm related inputs and services but plans to introduce the
complete shopping basket in due course.
Wholesale Trading:
Wholesale trading also holds huge potential for growth. German giant Metro AG and
South African Shoprite Holdings have already made headway in this segment by
setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai
respectively. These new-format cash-and-carry stores attract large volumes from a
sizeable number of retailers who do not have to maintain relationships with multiple
suppliers for all their needs.
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Pharmacy retail
in India
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The Indian pharmaceutical market is the worlds 13th largest in terms of value and the 4th
largest in terms of volume. The total market size is US $ 5.7 bn (Ref: IMS Health) and
includes all the pharmaceutical products, fast moving healthcare products and some FMCG
products sold through the chemists across the country.
While all the formats of retailing have changed, be it apparel retailing, grocery retailing, fuel
retailing or jewellery retailing, somehow pharmacy retailing has not undergone changes. The
changes in the next 5 years in this business will be more than what has happened in the past
55 years. Earlier shopping was considered a headache involving running from pillar to post.
Now retailing has changed it to leisure and pleasure & its become more of an outing for the
entire family.
Pharmacy retailing has seen consolidation world over.
5 pharmacy chains control 40% of the sales in the US.
7 pharmacy chains control more than 60% of the market in UK.
A similar situation prevails in most developed nations around the world. This is a need driven
business and every family requires medicines / health related goods. So the scope of educated
people getting into the same is higher. Margins are decent and returns are good. Doctors are
getting into this business.
An average family spends 20% of its monthly wallet spend on health care, up from 10% in
1985. Pharmaceutical Retail just got an image makeover. Much like the beauty products
hitherto sold off industry shelves promised, its a whole new look. For one, new pharmacy
stores boast of excellent in store display. But thats cosmetic. What is intrinsic is that they
also promise better quality, ambience, convenience and prices. So Indian customers fed-up
and resigned to spurious, expired or poorly stored drugs are offered an option. The pharmacy
retail sector is set for a shakeup and consolidation with many organized players investing
long term in it.
Some of the change is driven by market characterized by low entry barriers and capital
requirements. Its a highly lucrative market with high margins that require low investment.
The Rs.48, 000crore Indian pharmacy sector is dominated by the highly fragmented,
unorganized players, constituting mainly the neighborhood chemist that sells medicines and
OTC drugs along with other medical equipments and accessories.
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There are currently over 8,00,000 medical shops serving the Indian market. Trade
associations and experts opine that nearly 97 99% is dominated by unorganized sector. This
is high penetration compared to other similar countries. Number of local pharmacies in India
is more than that of US, Europe and China put together for a pharmaceutical market size
which is less than a percentage of their combined market. When we compare with China,
which has approximately 2 lakh outlets for a domestic market of $15 billion, the Indian
Pharma retail with approximately 5.5 lakh retailers for $6 billion market appears highly overproliferated. However the business and the landscape are changing. There are other serious
regulatory and supervisory hurdles to be crossed before the country can really leverage the
benefits of high penetration of medical shops.
Prevalence of spurious or counterfeit drugs is high with estimates ranging from 5% to
30% of the market.
Standalone medical shops are able to avoid sales tax, this being a cash business
offering fake bills to regular customers.
The drugs are stored in sub-optimal store conditions in most places, making the
efficacy of the medicines questionable.
In such a scenario, customers are patronizing reputed chains wherever they operate. The
organized pharmacy retail is growing at 100 % per year. Last year, chains like Medicine
Shoppe grew almost by 100%.
With internet being used at a much lower level in India, internet pharmacies may be the order
of the day 5 to 10 years from now. This is going to bring about a big change in the customers
perception, cost and service levels in pharmacy retailing.
With India becoming a major destination for medical tourism, the retail medicine business
cannot remain unaffected. It has to change and adopt global standards. While India can be
considered as a developed country for IT, Health care and Pharma are still looked upon as
developing areas.
Corporates and organized pharmacies will have to drive the change like Apollo did in 1987
and the Dial for Health initiative by the Zydus group. The future of pharmacy retailing is in
for a big shakeout from all the three stakeholders; manufacturers, retailers and customers
Since all are looking at a better value for saving time, costs and delivering a better value with
fast and relevant information, there could not be a better time for the changes in pharmacy
retail.
The pharmacy market is growing at 27% annually and revenue from pharmacies is expected
to touch 50,000-crore by 2010. Other experts like Murlidharan Nair of Ernst & young say
that the sector is growing at 15% and will double its size in the next 5 years.
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Pharmacy retail
scenario
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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 in is industry. 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.
Now the question arises about 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.
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 is the core area 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.
Indias $6 billion domestic pharma retail market is in the midst of change as the old order is
giving way to the new. The crowded, neighbourhood medicine stores are being replaced by
swanky, large format pharmacy chains promoted by organized players that allow shoppers to
browse through a vast range of products including not just medicines, but also body-care
products in air-conditioned comfort.
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The entry of organized players is changing the face of the pharmacy business, which today is
highly fragmented.
According to Technopak Advisors, of the total 800,000 stores across the country, the
share of the organized market is just about three to four per cent. This is expected to
grow to about 10 per cent within the next two years as the organized players expand
fast.
According to rough estimates, organized pharmacy is expected to grow at the rate of at least
seven stores a month. The sector is seeing the entry of new players including big industrial
groups, retailers and independent entrepreneurs. New players include not just those with a
pharmaceutical or healthcare background, but corporate from other sectors too.
The Mukesh Ambani-led Reliance Group, the Aditya Birla Group, Pantaloon and Dabur,
among others, are corporates that are likely to add pharma retail to their diversified portfolios.
The existing players too are on an expansion spree.
Industry sources estimate that the sector could see investments of about $150 million over the
next couple of years. This does not include big ticket investments by the likes of Fortis
Health World (over $200 million) and a possible $630 million by Reliance Retail.
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The widespread interest in the pharmacy business is not without reason. The retail side too
has been posting high growth rates. The total retail pharmacy market will be growing at
a rate of around 15 per cent, while organized retail pharmacy will be seeing a growth of
anywhere between 35 and 40 per cent, according to Technopak Advisors.
Besides, the high margins between 25 and 35 per cent despite price controls make it a
lucrative business.
Subhiksha retail chain is one of the oldest corporate grocery chain retailers in India and the
first to start a retail pharmacy at its stores. It has over 1,100 stores as of date and plans to
open about 2,000 stores by July 2009. It has invested about $200 million so far and plans to
invest an additional $175 million. Of this, about 10 per cent has been invested in its pharmacy
business. We are extremely bullish about retail pharma, says R Subramanian, managing
director, Subhiksha.
For Fortis Health World, which kicked off operations last year, pharmacy is a logical
extension for its healthcare business, notes Shivinder Singh, principal promoter and director,
Ranbaxy Laboratories (Indias largest pharma company) and managing director, Fortis
Healthcare (a hospital chain). Fortis plans to open a chain of 1,000 stores across India by
2012, of which the promoters have committed over $200 million. We opened the first store
in July last year and are likely to close this year with 50 stores, says Ashish Pandit, CEO,
Fortis Health World.
Medicine Shoppe India is the master franchisee in India of US-based Medicine Shoppe
International, the largest franchisor of independent community pharmacies in America.
Medicine Shoppe started its operations in India in February 1999 and plans to open 1,000
stores by 2010. Apart from Tier I cities, we are also focusing on the fast growing Tier II
cities like Pune, Baroda, Nashik, Lucknow Varanasi and Mysore, says Viraj Gandhi, CEO,
Medicine Shoppe India.
An independent pharmacy retailer, the north-based Guardian Pharmacy currently has 100
stores, out of which 90 are company owned and the rest are franchises. The figure is expected
to go up to 400 stores by July 2010. The company has invested about $16 million in the
stores so far. We plan to invest an additional $50 million by July 2010, says Ashutosh
Garg, chairman and managing director, Guardian Life Care. Guardian has been posting a
growth of 200 per cent each year and expects turnover to jump from nearly $20 million to
$100 million within the next two years.
Other pharmacy chains too have planned major expansions. Delhi-based pharma retail store
98.4 Degrees, for instance, announced the opening of 300 stores.
LifeKen plans to expand to 700 stores.
Med Plus, in which private equity fi rm iLabs has invested about $5.8 million, plans to set up
800 retail outlets.
Among the new players, Reliance is planning dedicated pharmacy stores, while the Aditya
Birla group is planning to have pharmacy stores within supermarkets. The increasing
competition in the sector is unlikely to result in a squeeze. There definitely is space for
many more players in the organized sector, but players must get the cost structure right, says
Subramanian of Subhiksha. This would also help them to survive the wave of consolidation
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that is likely to sweep the sector in the future. Almost all the major foreign players are
eagerly waiting for policy changes to enter India. Currently, regulations permit 100 per cent
foreign direct investment (FDI) only in single brand stores. Pharma retail falls into the
multi-brand category, according to Technopak Advisors.
Alliance Boots, a UK-based $27.5 billion pharma, health and beauty retail major, is said to be
planning its entry in the Indian retail market.
Besides, local pharmacists too are learning to adapt themselves to new ways to ensure
survival. For instance, pharma retailers in Ahmedabad in Gujarat have joined hands to start a
retail pharmacy chain called Healthcare Pharmacy. They have opened a dozen stores in
Ahmedabad.
Pharmacies are also tying up with retailers to ensure wider distribution across new
geographies. Apollo has tied up with Indian Oil Corporation (a Fortune 500 company) to set
up convenience stores across its retail gas stations in India.
Pharma companies like The Himalaya Drug Company are opening stores in malls of large
retailers to showcase their products at exclusive stores. There exist huge opportunities in the
rural markets where healthcare facilities are minimal. While the poor would obviously go to
the public healthcare facilities, affluent consumers in rural areas are under serviced at present.
Realising the need to cater to this significant segment, many firms are customizing their
offerings for rural areas.
Apollo Pharmacy, for instance, has tied up with ITC E-choupals (Choupal Sagar) and Godrej
Aadhaar to provide quality medicines to rural India.
Guardian has joined hands with DCM Shriram to set up its Aushadhi chain of rural pharma
retail outlets within the Haryali Kisan Bazaars, the rural initiative of DCM Shriram.
Medicine Shoppe plans to open 350 Sehat stores (Sehat is a low cost clinic adjacent to the
shop, present mainly in low income areas) in the next four years. The demand for medicines
is likely to increase as diseases are diagnosed earlier, says Gandhi of Medicine Shoppe
India. T
he retail revolution sweeping across the country is changing the way Indians go about their
healthcare spends. Consumers are now willing to pay a little more for convenience and
quality. The growth of the organized sector ends in a win-win situation for both retailers and
customers. While the former have their eyes on the growing bottom-lines, customers are
assured that the drugs they buy are genuine. In the future, India will continue to be seen as a
promising market for pharma retailers as it has a large middle income consuming population
that will increase its spending on healthcare and medicines as it ages.
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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.
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.
Product
Price
Place
Promotion
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THE new age pharmacies believe in offering enhanced service to customers. Most of them
have introduced several value-added schemes like free home delivery of medicines, roundthe-clock service, prescription reminder service, loyalty programmes with reward points,
information centers and help lines for queries related to medication that are at times answered
by doctors, free health camps and free health newsletters and healthcare books at the stores.
Some like Apollo Pharmacy also offer free health insurance for regular customers. Modern
pharmacies have leveraged technology to scale up faster, have greater control over their
businesses with a dynamic and real time view of operations.
Besides, modern pharmacies are also moving towards offering e-prescription based services
by effective use of technology. This is especially useful in servicing overseas clients.
The Fortis Health World stores also have a diagnostic centre that acts as a collection facility
for SRL Ranbaxy, a chain of clinical reference laboratories owned by the promoters of
Ranbaxy. Customers can also book appointments with the Outpatients Department (OPD) at
Fortis Hospitals.
Apart from the sale of drugs to consumers, pharmacies also sell surgical and other health,
beauty and body-care products like soaps and shampoos, hair oils and baby care products.
Many also stock alternative medicines like homeopathy and ayurvedic products. Thus, these
outlets strive to be one stop shops for all beauty and health-care needs of the customers.
Guardian is the first among pharmacy chains to have launched a number of private label
products in the personal care and personal hygiene space. ``We are in the process of
launching a number of other quick selling products under the Guardian brand, says Ashutosh
Garg, CMD, Guardian Life Care.
The biggest draw of the organized pharmacies is that customers are assured of the quality of
medicines and other products. As each strip is bar coded, customers need not worry about
counterfeits or expired medicines at the time of purchase, says Ashish Pandit, CEO, Fortis
Health World.
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PHARMACY has lately seen the entry of top Indian corporates with mega plans. Reliance
Retail Ltd., a 100 per cent subsidiary of Reliance Industries, is planning to set up 1,200 super
speciality stores called Reliance Wellness, over the next two to three years. The Wellness
stores will offer health foods, personal care and healthcare products. Currently, seven stores
have been set up three each in Hyderabad and Bangalore and one in Mumbai and plans
are on the anvil to set up 30 stores shortly. Reliance Retail plans to invest $6.3 billion in the
retail business including investments across several retail segments.
Pharmacies are increasingly becoming an important part of most multi-format retailers.
More supermarkets launched by Aditya Birla Retail will house a pharmacy apart from the
usual product categories available in the supermarket including fruits and vegetables,
personal care and household general merchandise. Aditya Birla Retail intends to be among
the leading players in India, says Sumant Sinha, CEO of the firm. The group ultimately
plans to have a national presence in both the supermarket and hypermarket formats.
Pantaloons foray in pharmacy is through Tulsi, the Medicine Bazaar, a pharmacy housed
within Big Bazaars and Food Bazaars at over 35 locations all over India. It allows customers
the convenience of having their wellness needs met while they shop.
Dabur India has announced its foray in the retail business through a wholly owned subsidiary,
H&B Stores Ltd. The company plans to invest over $35 million to open a chain of 160 stores
by 2010 across the country under the brand name new-u.
Besides, companies like The Himalaya Drug Company, which specialises in ayurvedic
products, are opening stores to showcase and sell their products. We have 100 outlets
currently and plan to double the number over the next two years, according to a
spokesperson of the company.
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Literature review
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But this construct is criticized for theoretical and operational issues. It seems that this
construct is industry specific and country specific. The validity and the reliability (Brown et
al., 1993) of the difference between expectations and performance have questioned and
several authors have suggested that perceptions scores alone offer a better indication of
service quality (Cronin and Taylor, 1992; Teas, 1993), and application of SERVQUAL is not
possible in new services, but only for existing ones.
However, SERVQUAL seems to be a useful scale to use in measuring service quality by
making appropriate adjustments for industry and country contextual effects. It has been
proven the validity and reliability across a large range of service contexts. Tyre Shop
(Carman, 1990), discount and department stores (Finn and Lamb, 1991; Teas, 1993), medical
services (Brown and Swartz, 1989), hospitals (Babakus and Mangold, 1992), higher
education (Boulding et al., 1993), are some of the services where SERVQUAL was applied.
Dabholkar et al., (1996) reported that in many services the SERVQUAL must be adapted
with more or less items, with different group of factors.
The perceived performance model deviates from the above model in that expectations play a
less significant role in satisfaction formation. The model performs especiallly well in
situations where a product/service performs so positively that the customers expectations get
discounted in her/his postconsumption reaction to the product/service. Increasingly,
researchers (Mittal and Lassar, 1996; Olsen, 2002) are simply measuring perceptions
(SERVPERF) as indicators of service quality (ignoring expectations completely) and are
finding good predictive power in their studies. Some researchers (Babakus and Botler, 1992;
Cronin and Taylor, 1992) have compared computed difference scores with perceptions to
conclude that perceptions are a better predictor of service quality than disconfirmation.
A study by Churchill and Suprenant (1982) also partially supports the efficacy of using only
performance perceptions to measure service quality. Below, we report, some studies that we
investigated and uses the SERVPERF or modified scales that seem to be according to
SERVQUAL. As it is seen in table 1, the diversity of studies applied to many different
service industries, results on a great acceptability of this constructs. Many other studies are
made but those seem to us the more approachable with the study on pharmacies satisfaction.
Only a few numbers of studies are made with the focalization on health industry and a
smaller number (almost rare) of those on pharmacies. The study reported in pharmacy
industry is only about the pharmacist service, not on the pharmacy as a store (Schommer and
Wiederholt, 1994).
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Another problem is what attributes does contain a service quality scale. We know that
customers of services observe and evaluate the production process as they experience the
service they receive (Parasuraman, Zeithaml, and Berry, 1988). Berry et al., (1985) argued
that service quality attributes of search, experience, and credence, are used by consumers to
evaluate service quality. Search attributes, such as physical facilities, appearance of personnel
and suppliers image can be considered before consuming the service. Experience attributes,
like responding quickly to a request and performing a service at the agreed time are assessed
on the basis of the actual service experience. Credence attributes like financial security of an
investment cannot be determined even after repeated use of service. In our study we have the
preoccupation to incorporate these attributes on the construction of the scale.
Page 34
Customer Satisfaction
As concluded by the literature review Customer Satisfaction is a summary affective response
of varying intensity, with a time-specific point of determinate and limited duration, directed
toward focal aspects of product acquisition and/or consumption. Some researchers (Cronin
and Taylor, 1992; Taylor and Baker, 1994) treat service quality and customer satisfaction as
distinct constructs, in the sense that service quality is an attitude while customer satisfaction
is often a transaction-specific measure.
Customer satisfaction has been defined in various ways, but the conceptualization, which
appears to have achieved the widest acceptance, is that satisfaction is a post-choice evaluative
judgment of a specific transaction. Fornell (1992) suggests that satisfaction can be viewed
directly as an overall feeling.
Satisfaction is related closely to, but is not the same as, the customers general attitude
toward the service. The key to distinguishing satisfaction from attitude is that satisfaction
assessments relate to individual transactions whereas attitudes are more general (in Bitner,
M.J. (1990). Similarly, one interpretation suggests that satisfaction can be distinguished from
perceived quality. Parasuraman, Zeithaml, and Berry (1998) define perceived (service)
quality as the consumers judgement about a firms overall excellence or superiority. This
definition suggests that perceived quality is similar to an individuals general attitude toward
the firm (Zeithaml, 1988).
Another question with customer satisfaction is the study of antecedents and consequences
(Anderson and Sullivan, 1993). They had found that customer satisfaction is best specified as
a function of perceived quality and disconfirmation and quality has a greater impact on
satisfaction and repurchase intentions than quality which exceeds expectations. More
important, they had found that elasticity of repurchase intentions with respect to satisfaction
is lower for firms that provide high expectations. In table 2 we resume some studies that we
have analyzed to achieve a construct that could traduce the best operationalization. There
isnt a so universal acceptable scale to the construct of customer satisfaction than for the
construct of service quality. In the operationalization of the constructs of customer
satisfaction we have adopted the scale of Bloemer and Ruyter (1998) because it seems more
adapted to pharmacy services.
Page 35
In table 1 and table 2 are focalized in the specificity of Store Image, Store Satisfaction, and
Store Loyalty. In present study, it was important to study the particular aspect of certain
services, where the concepts linked to the concept of store are important, such as physical
evidence, image, localization, and parking.
Page 36
Page 37
A focus on ones current customers, if it results in increased satisfaction, may also generate
other benefits, for example, the generation of positive word-of mouth. And with enhanced
loyalty the prevailing practice of offering costly loss leaders to generate store traffic may
become less necessary. However, how customers develop loyalty to a particular store and
how that loyalty can be maintained are open questions. An understanding of current
customers store loyalty intentions and their determinants is an important basis for the
identification of optimal retailer actions.
Loyalty is frequently defined as observed behaviour (Liljander and Strandvik 1995) or actual
behaviour that drives the performance of an industry. Repeat purchasing and purchasing
sequence are measures of actual behaviour. Loyalty is also an attitude, expressed for
example, in the willingness to recommend a service provider to other consumers (Selnes,
1993). Loyalty is also cognitive, that could be operationalized as a product or service that
comes first to mind when making a purchase decision or the product or service that is the first
choice among alternatives (Ostrowski et al., 1993), or price tolerance (Anderson, 1996;
Fornell et al., 1996). So, when defining an instrument to measure behavioural intentions
(loyalty is a positive behaviour) we must consider behavioural, attitudinal and cognitive
aspects.
Page 38
Page 39
Research
Methodology
Page 40
Research:Research is a systematic, gathering, reporting and analyzing of data about problems relating
with the marketing of goods and services and implementing it to overcome the problem.
Business research is a systematic inquiry that gives information to take business decisions.
Research helps to gather information for solving problems. Research gives an idea to solve
the problem of consumers and their satisfaction.
Assumptions
Problem Statement
The competition in the pharmaceutical retail industry is increasing on large scale. There is a
conflict between small retailers that may be called the traditional players and the growing
retail chains, which are professional players/ organized players. This research desires
information about consumer perception towards the services provided by organized retail
pharmacy chains and identifying the factors most affecting the customer satisfaction level
of customers.
Research objective
The importance of consumer satisfaction cannot be underestimated. After all, consumer
satisfaction can impact every aspect of your business from earnings to stock profits. That is
why consumer satisfaction surveys are so important. Consumer satisfaction surveys measure
and evaluate the attitudes, opinions and satisfaction levels of your consumer .This research
desires to find out the consumer satisfaction about the retail pharmacy chains which provides
more offers than the local chemists.
Hypothesis: Age of the customer has direct relationship with their satisfaction level while
purchasing from organized pharma stores.
Gender of the customer has direct relationship with their satisfaction level
while purchasing from organized pharma stores.
Education of the customer has direct relationship with their satisfaction level
while purchasing from organized pharma stores.
Page 41
Occupation of the customer has direct relationship with their satisfaction level
while purchasing from organized pharma stores.
Family income of the customer has direct relationship with their satisfaction
level while purchasing from organized pharma stores.
Various factors affecting the customer satisfaction level at the time of
purchase from organized retail pharma stores.
Research Design
A research design expresses both the structure of the research problem and the plan of
investigation used to obtain empirical evidence on the relations of the problem.
Descriptive Research Survey Method
Descriptive Research helps to describe the characteristics/profiles of a certain group, test
hypothesis generated by exploratory research, make predictions based on the relationship
between selected variables.
Data Collection
Sample Design
Target Population:
People visiting retail pharmacy chain for purchasing medicines in Surat city
Parameters of Interest:
o Gender
o Age
o Education
o Occupation
o Family income
o Quality
o Availability
o Service parameters
o Price
o Physical evidence
o Location
Page 42
Benefits of the study: Identifying the areas that needs improvement from the organized retailers perspective
Improving customer loyalty and retention
Identification of opportunities that can be source of sustainable competitive advantage
No. of respondents
174
126
GENDER
200
180
160
140
120
100
GENDER
80
60
40
20
0
Male
Female
Page 43
No. of respondents
115
132
35
18
40
20
0
18-24
25-34
35-44
45-54
Education:EDUCATION
Up to 12th Std.
Graduation
Post Graduation
PhD
No. of respondents
62
105
47
15
EDUCATION
120
100
80
60
40
EDUCATION
20
0
Upto 12th
Std.
Graduation
Post
Graduation
PhD
Page 44
Professional
Courses
Occupation:Occupation
Business
Service
Study
Housewife
No. of respondents
58
135
62
45
Occupation
150
100
Occupation
50
0
Business
Service
Study
Housewife
No. of respondents
124
63
72
31
10
15000-30000
30000-45000
Page 45
45000-60000
>60000
No. of Respondents
Highly Dissatisfied
Dissatisfied
Satisfied
Highly Satisfied
45
141
78
36
No. Of Respondents
150
100
50
No. Of Respondents
0
Highly
Dissatisfied
Dissatisfied
Satisfied
Page 46
Highly
Satisfied
Data Analysis
Page 47
Chi-square Test: Gender and satisfaction level of customer :Ho: There is no association between gender and satisfaction level of customers.
H1: There is an association between gender and satisfaction level of customers.
GENDER * SATISFACTION LEVEL Cross tabulation
SATISFACTION LEVEL
Highly
Dissatisfied
GENDER FEMALE Count
Expected Count
MALE
Count
Expected Count
Total
Count
Expected Count
Highly
Dissatisfied Satisfied Satisfied
Total
19
64
32
11
126
18.9
59.2
32.8
15.1
126.0
26
77
46
25
174
26.1
81.8
45.2
20.9
174.0
45
141
78
36
300
45.0
141.0
78.0
36.0
300.0
Chi-Square Test
Pearson Chi-Square
N of Valid Cases
Value
df
2.632
0.452
300
Interpretation:Here, the pearson chi- square at 3 degree of freedom is 2.63 & its significance value is 0.452.
Hence, we can not reject the Ho. So we can conclude that there is no association between
gender of customers and their satisfaction level.
Page 48
Age and satisfaction level of customers:Ho: There is no association between age of customers and satisfaction level of customers.
H1: There is an association between age of customers and satisfaction level of customers.
AGE * SATISFACTION LEVEL Crosstabulation
SATISFACTION LEVEL
AGE
18-24
Satisfied
Highly
Satisfied
Total
58
30
115
17.3
54.1
29.9
13.8
115.0
16
63
35
18
132
19.8
62.0
34.3
15.8
132.0
18
10
35
5.3
16.5
9.1
4.2
35.0
11
18
Expected Count
2.7
8.5
4.7
2.2
18.0
Count
45
141
78
36
300
45.0
141.0
78.0
36.0
300.0
Count
Expected Count
25-34
Count
Expected Count
35-44
Count
Expected Count
45-54
Total
Count
Expected Count
Highly
Dissatisfied
Dissatisfied
22
Page 49
Chi-Square Test
Pearson Chi-Square
N of Valid Cases
Value
df
51.556
0.000
300
Interpretation:Here, the pearson chi- square at 9 degree of freedom is 51.55 & its significance value is
0.000. Hence, we reject the Ho. So we can conclude that there is an association between age
of customers and satisfaction level of customers.
Page 50
Education and satisfaction level of customers:Ho: There is no association between education of customers and satisfaction level of
customers.
H1: There is an association between education of customers and satisfaction level of
customers.
Satisfied
Total
54
63
39.1
24
63.0
67
37
104
64.5
39.5
104.0
31
16
47
29.2
17.8
47.0
10
15
9.4
5.7
15.0
31
40
71
Expected
Count
44.1
27
71.0
Count
186
114
300
Expected
Count
186
114
300.0
Count
Expected
Count
Post graduation
Count
Expected
Count
PhD
Count
Expected
Count
Total
Page 51
Chi-Square Tests
Pearson Chi-Square
N of Valid Cases
Value
df
82.794
0.000
300
Interpretation:Here, the pearson chi- square at 9 degree of freedom is 82.79 & its significance value is
0.000. Hence, we reject the Ho. So we can conclude that there is an association between
education of customers and satisfaction level of customers.
Page 52
Occupation and Satisfaction level of customers :Ho: There is no association between occupation of customers and satisfaction level of
customers.
H1: There is an association between occupation of customers and satisfaction level of
customers.
Occupation Business
Service
Highly
Dissatisfied
Satisfied
Highly
Satisfied
Dissatisfied
Total
31
17
58
Expected Count
8.7
27.3
15.1
7.0
58.0
Count
17
61
43
13
134
20.1
63.0
34.8
16.1
134.0
Count
12
27
17
62
Expected Count
9.3
29.1
16.1
7.4
62.0
Count
12
22
12
46
Expected Count
6.9
21.6
12.0
5.5
46.0
Count
45
141
78
36
300
45.0
141.0
78.0
36.0
300.0
Count
Expected Count
Study
Housewife
Total
Expected Count
Page 53
Chi-Square Tests
Pearson Chi-Square
N of Valid Cases
Value
df
36.608
0.000
300
Interpretation:Here, the pearson chi- square at 9 degree of freedom is 36.60 & its significance value is
0.000. Hence, we reject the Ho. So we can conclude that there is an association between
occupation of customers and satisfaction level of customers.
Page 54
Income and Satisfaction level of customers :Ho: There is no association between monthly family income of customers and satisfaction
level of customers.
H1: There is an association between monthly family income of customers and satisfaction
level of customers.
INCOME <15000
Satisfied
Highly
Satisfied
Total
86
15
124
18.6
58.3
32.2
14.9
124.0
Count
10
27
22
61
Expected Count
9.2
28.7
15.9
7.3
61.0
Count
11
17
36
72
10.8
33.8
18.7
8.6
72.0
10
16
31
4.7
14.6
8.1
3.7
31.0
10
12
Expected Count
1.8
5.6
3.1
1.4
12.0
Count
45
141
78
36
300
45.0
141.0
78.0
36.0
300.0
Count
Expected Count
15000-30000
30000-45000
Expected Count
45000-60000
Count
Expected Count
>60000
Total
Count
Expected Count
Highly
Dissatisfied
Dissatisfied
23
Page 55
Chi-Square Tests
Pearson Chi-Square
N of Valid Cases
Value
df
173.949
12
0.000
300
Interpretation:Here, the pearson chi- square at 12 degree of freedom is 173.94 & its significance value is
0.000. Hence, we reject the Ho. So we can conclude that there is an association between
monthly family income of customers and satisfaction level of customers.
Page 56
Factor Analysis
Page 57
Factor Analysis
The results of KMO ( 0.615) and Bartletts test of Sphericity ( Chi square - 598.188 and
significance 0.000 ) indicate that factor analysis done with 16 variables is effective .There
were eight factors extracted by using the method of principle component analysis and rotation
method of varimax with Kaiser normalization with criteria Eigen value more than one . The
result of factor analysis is shown below.
Approx. Chi-Square
.615
598.188
df
120
Sig.
.000
Page 58
Component Matrix
Component
1
Good availability of medicine
.814
.855
medicine
Medicines available at
.710
discount
Quick Services
.523
.522
Proximity of Location
Convenient Parking
.543
Friendly Pharmacist
-.664
Competent Staff
Computerized Quick Billing
.550
System
.600
-.635
through helpline
.601
.559
.522
.606
Page 59
.513
Initial Eigenvalues
Com
pone
% of Cumulative
nt
Total Variance
%
Total
% of
Cumulative
Variance
%
Total
% of
Cumulativ
Variance
e%
2.295
14.345
14.345
2.295
14.345
14.345
2.078
12.990
12.990
1.474
9.212
23.557
1.474
9.212
23.557
1.579
9.871
22.861
1.293
8.079
31.636
1.293
8.079
31.636
1.278
7.989
30.850
1.224
7.652
39.288
1.224
7.652
39.288
1.196
7.473
38.323
1.148
7.175
46.463
1.148
7.175
46.463
1.190
7.438
45.760
1.094
6.835
53.299
1.094
6.835
53.299
1.117
6.983
52.744
1.038
6.486
59.785
1.038
6.486
59.785
1.082
6.763
59.507
1.010
6.313
66.098
1.010
6.313
66.098
1.055
6.591
66.098
.967
6.041
72.139
10
.864
5.401
77.540
11
.851
5.321
82.861
12
.791
4.947
87.807
13
.742
4.635
92.443
14
.610
3.815
96.257
15
.433
2.708
98.965
16
.166
1.035
100.000
Interpretation:-It can be concluded that these eight factors are extracted from the 16
variables explaining about 66.09% of variance.
Page 60
.906
.907
Medicines available at
discount
.706
Quick Services
.770
Proximity of Location
.704
Convenient Parking
.679
Friendly Pharmacist
.724
Competent Staff
Computerized Quick
Billing System
.919
.517
.807
-.730
.813
.504
.515
Page 61
.672
Page 62
Location
Good
Medicines
availability available
of medicine at
discount
Friendly
Pharmacist
Genuine /
Good
quality of
medicines
Free health
camps
Proximity
Medicines
of Location stored
under
good
storage
conditions
Convenient
Parking
Quality
Services
Quick
Services
Computeri
zed Quick
Billing
System
Page 63
Storage
Value
Added
Services
24- hour
service
Free
regular
reminder
service
Competent
Staff
Competent
Staff
Reliability Analysis
Page 64
To measure the reliability of items loading into one factor, cronbachs Alpha were calculated
and the result is shown below. For 4 factors, the cronbachs Alpha value is more than 0.5
indicating that the factors are consistent and reliable. For 2 factors cronbach alphas value is
less than 0.5 indicating these factors are not so reliable.
Reliability Analysis
Factors
Quality
Services
Friendly Staff
Location
Storage
Value Added Services
Cronbachs Alpha
0.885
0.521
-0.376
0.385
0.559
0.671
Page 65
No. of items
2
3
2
2
2
2
Conclusion
Page 66
From the analysis of data collected through questionnaire fill up it can be concluded that: 62% of people have negative perception towards the services of retail pharmacy
chains
38% of people have positive perception towards the services of retail pharmacy chains
There is no association between gender of customers and their satisfaction level.
There is an association between age of customers and their satisfaction level.
There is an association between education of customers and their satisfaction level.
There is an association between occupation of customers and their satisfaction level.
There is an association between monthly family income of customers and their
satisfaction level.
All the variables used for the measurement of customer satisfaction level can be
reduced into 8 factors which are labeled as follows:-
Factor
Variables
Quality
Services
Friendly Staff
Location
Storage
Value Added Services
Competent Staff
Reliability test yields that out of 8 factors quality, services, storage and value
added services are more reliable as compared to other factors for measuring the
perception of customers towards the services provided by organized retail
pharmacy chains.
Page 67
Bibliography
Page 68
BOOKS
Cooper, Donald R & Pamela S. Schindler, (2003), Business Research Methods,, 8th
edition, Tata McGraw- Hill Publishing Company Limited, New Delhi.
Kotler, Philip, Kevin lane Keller, Abraham Koshy & Mithileshwar Jha, (2007),
Marketing Management, 12th edition, Pearson education.
WEBSITES
http://www.scribd.com/doc/7685243/Retailing
http://search.dogreatgood.com/dgg_sm_addsearch/ws/results/Web/Problems%20Faced%20B
y%20Subhiksha/1/302364/RightNav/Relevance/iq=true/zoom=off/_iceUrlFlag=7?_IceUrl=tr
ue
http://en.wikipedia.org/wiki/Retailing_in_India
http://www.tsmg.com/download/article/TSMG_Tata_Review-June_2006.pdf
http://www.bharatbook.com/upload/Pharmacy-Retail-Market-India-Sample.pdf
http://www.ibef.org/download/PHARMA_RETAILING.pdf
http://en.wikipedia.org/wiki/Subhiksha
http://www.medicineshoppe.com/
http://www.dialforhealth.net/default.asp?loc=home.asp
http://shopping.guardianlifecare.com/
http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03047-usen-advocacydrugstore.pdf
http://www3.uva.es/empresa/uploads/dt_01_08.pdf
http://www.arndt-bruenner.de/mathe/scripts/engl_eigenwert.htm(calculator)
Page 69
Annexure
Page 70
Male: -
Female: -
..
25-34:-
35-44:-
..
45-54:-
..
Above 55:-
..
Graduation: -
Post graduation: -
PhD-
Professional courses: -
5. Occupation:Business: -
..
Service: -
..
Study: -
..
Housewife: -
..
15000-30000:-
30000-45000:-
..
45000-60000:-
>60000:-
..
Page 71
..
..
Traditional store: -
..
10. Rank the following in order which they affect your purchase decision while buying
from traditional/ kirana drug store.
Emergency: -
..
Convenience: -
..
Doctors influence: -
Proximity: -
..
..
11. Please rate the following parameters on the bases of expectation &performance
(according to their importance for you) while purchasing medicines from organized drug
store.
Expectation
important
Performance
Sr.
No.
Performance
Expectation
1
1
Quick services
Proximity of location
Convenient parking
Friendly pharmacist
Competent staff
Page 72
10
11
12
13
14
15
16
Page 73