Chapter 8 : PLACE MIX Decisions and Strategies HAPTER OBJECTIVES The retailers, wholesalers, and large chainstore operators in the harmaceutical industry consider a number of options in the manner they isribute their products and services to attract and satisfy customers. ‘After studying this Chapter, you should be able to: 1. Explain the use and functions of drug distribution channels. 2. Identify the major channel alternatives open to a drug company. 3, Describe the techniques of selecting, motivating, and evaluating channel members. 4. Discuss the many decisions involved inthe setting up ofthe physical distribution system. 185PLACE Place, means distribution channels and physical distrib vital element of the total marketing mix, that ensures the adequate ttisa and_visibility of the right products, in the right target markers sale quantity, atthe right cos, atthe right condition, atthe right time ot hey all the time. Ving Pharmaceutical Companies Local and multinational drug companies readily make available productlinesin the traditional markets such as drugstores, hospital hate industrial clinics and dispensing physician's clinic; also, insueh no rane outletsas groceries, supermarkets, trading and. sari-sari-stores;likewise, non-governmental organizations (NGO'S), socio-cvic-eligious organ ‘conducting medical missions and in various health agencies of the Bovemaee Majority of drug companies in the Philippines employ the j large independent distributors such as Metro drug, Marsman, Philusa, Zug Pharmaand many others. United Laboratories, Inc, the: largest pharmaceut firm in the country, has it’s own distribution network Nationwide, serig, clients even in far-flung areas. DLI Generics, a local firm, whose Producisae manufactured by Drugmakers, Inc,, accepts distribution of their Productlines from private individuals and groups, or wholesalers and companies dealngin drug products or even non-related items. Drug companies normally hire the services of sales representatives) salesmen who regularly visits either or both the traditional and non-traditional markets forsales and collection purposes, in-store promotions and other servies deemed appropriate for the mutual benefit ofthe customers andl the supplies Such services as merchandising and product displays, customer assistancein inventory management and control, customer handling, effective retailing, updates on technical product information, quality control, and other: personalsu erstores thatcarry notonly pharmaceut sors’ i - gosto more nts i ‘sin their Pr selling them at wholesale or retail basis, Eachot helt pear thecompany slogan of“Murana, t nindsoftarget customers, that Mercy rewest high ality Stocks ofdrug productsin the market, which meansthat other largechainstores also sell the cheapest and newest stocks available, ance hey arenotsaying or claimingit, in the mind of the general consuming licthey don’t or may not haveit. The self-service stores pioneered by MDC, inthe process increase customer traffic ease and co;weniencein buying, outages impulse-buying, and more importantly, customers find themselves psingmore medicines, health food products and other non-drug merchandise tin their original shopping list, or in other words, customers tend to buy at (pC superstores or self-service areas, products they do not have the slightest rention of buying because of the massive merchandise displays at the selling ; and at the point-of-sales. OTC/advertised products are prominently played atthe selling area of the self-service stores and are priced reasonably. Bagopa,” acompetitive positioning ry Drug outletssell only thecheapest jholesalers and Trading Stores A number of big volume drug outlets makes available to the buying sblc, pharmaceutical products and related items, only on wholesale basis and iyno retailing. A good example is Frank Yap Enterprises in Legaspi ity, 5. who sells only atwholesale to smaller drugstores, sari-sari stores, jobbers, ddlersand the like who personally visitthestoreoutlet. Frank Yap Enterprises, the biggest wholesaler in Legaspi City that maintains two panel-van salesmen ularly distributing drug, products and similar items to retailers and other aller outlets in the outskirts of the Bicol region particularly those not being -viced by salesmen of other drug companies. ‘Thewholesalers and trading storesin Divisoria, Manila suchas: Goodwill ugstores, Surety Drug, Dyna Drug Corporation, Goodline Drugstores,ct.al cle mostly in wholesale to drugstores (even wholesalers) and other outlets Netto Manila, nearby Luzon areas, andeven fromthe Visayasand Mindanao . They are getting a bigger share in the pharmaceutical market, selling in quantities, and at a much reduced price. They operate mostly on a holesale basis and do not require so many personnel unlike the traditional holesale-retail drugstore operations. 5 in Cebu City, such as Majesty The scars tore’ wholesaler-retailer drugs ‘Ana, Ching’s Pharmacy, ‘macy, Queen’s Pharmacy, Mabuhay Botica Sta 187