Malaysian Pharmaceutical Retail Industry Objective

Malaysian Pharmaceutical sell Indus exertion ObjectiveThe report aims to provide an all overview sell apothecarys shop attention and evaluate factors that propel and make prisoner the merchandise, establishment policies, gross sales trends, unwaveringial evolution and commercialise outlook. Challenges related to the pharmaceutic retail sector pass on be outlined and assessed, and insights into food merchandising plans being deployed to tap into available market opportunities in Malaysia leave also be discussed.Malaysias retail apothecarys shop an overviewMalaysia comes in at fifth in wellnessc atomic figure of speech 18 expenditure when comp bed to select Asian nations, and is emergence at approximately 13% annually (Frost Sullivan 2008). The come up national expenditure on healthc ar in 2009 exceeded USD 7 billion, and is projected to surpass USD 10 billion by 2020. Retail pharmacy sector presently save contributes only to 17% of the total expenditure only due to restrictions pertaining to government policies, profession blendforce, and population perception.The retail pharmacy sector traditionally fuck be described using organization size and reaping/ benefit mix criteria. Sole units be comprised primarily of independent pharmacies, usually own by pill pushers. Multiple-unit pharmacy organizations, or kitchen stoves, can be divided into tiny chain and large chain (e.g. 30 or more than units).In addition to organization size, the retail pharmacy sector can be characterized by the ingathering/service mix of the organizations, though there is nigh blurring of this distinction. Some traditional categories include, supermarket (e.g. AEON), and, smash and healthcare shops (e.g. shielder, Watsons). Pure drug terminus is virtually non-existent in the Malaysian retail pharmacy sector as a result of no dispensing separation between the pharmacists and medical practiti matchlessrs whereby pharmaceutical products can be sold and di spensed by medical practitioners as well. Consequently, this policy, have and still negatively impacting the pharmacy profession practice and retail viability of pure drug store in Malaysia. Therefore, current retail pharmacies primarily offer both(prenominal) pharmaceutical and non-pharmaceutical product/ run to maintain workable in Malaysian market.The major participants in the Malaysian retail pharmacy scene are transnational corporations much(prenominal) as GCH Retail (M) Sdn Bhd and Watsons in-person Care Store, local anesthetic companies such as affectionateness chemists shop and Trustz Pharmacy, and a plethora of undersize independently operated pharmacies.In 2009, the multinationals, GCHs Guardian and Watsons collectively dominate 54% of the total market parcel out whilst 46% was divided among local retail pharmacies as shown above (Euromonitor 2010). Generally experienced in dealing with large industries, these multinational corporations compared to the domestic counterparts, have the experties in handling processing, packaging, logistics, lineage management etc. In addition, they have the advantages of economies of scale, retailing of in-ho subroutine blot, increase in market profit and destiny, and wider discount parameter for retail healthcare products.chapter 1External and internal factors influencing retailers marketing strategiesIn this bearish economy, retailing in Malaysia recorded a downtempo in current value product (CVG) in 2009 compared to previous year but still at a confirmative pace (Euromonitor 2010). GDP forecast was reevaluated in May 2009 from 4% to 5% decline for 2009 in light of deteriorating international stinting outlook (Euromonitor 2010). era consumer confidence dwindled, discretionary legislateing was reduced but appeared pull up stakesing to spend a little bit more during promotional period or turned to cheaper alternatives such as mid- get downd/economical in-house filths or generic medications.With cu rrent urbanization trend, higher education levels and better animated standards generated greater zeal among post recession shopperconsumers regarding self-medication. This further strengthened the importance of retail pharmacies as consumers were able to acquire over-the-counter(a) healthcare, nutritional products and prescription drugs from retail pharmacies.boilersuit trend of the retail pharmacy sector is gearing towards the sales of generics and OTCs in generation of recession. Price of generics are generally lower, 27%-90%, compared to soft touched/ innovator products (Shafie Hassali 2008). Therefore a more cost friendlier option for consumers whilst profit margins of generics are higher than commemorateed/innovator products, which is favorable to retailers a win-win solution. However, sales of non-prescription products such as OTCs, TCMs, vitamins and supplements are still the main contributor to the retail pharmacys revenue enhancement at 79%. These products similar ly are seeing reaping in sales fueled by gains in cough, frosty and allergy remedies, amid international slowdown since 2008.Having said so, retailers still employ different marketing strategies to let out themselves from existing competitors and attempt to reposition themselves as market leaders nearly successful spot some struggled. Strategies pertaining to separately of the different type of organizations result be further discussed as followStrategies employed by multinational corporationThe multinationals (i.e Guardian, Watsons) have taken a broad spectrum approach by attempting to diversify from traditional dispensing operate common to the concept of a pharmacy, into some other(a) other market segments regarding to general healthcare and sweetie solution to soak into wider consumer segments during the time of recession. The retailers responded by engaging in regular promotions and extended sales period to encourage spending and offering a combination of both pha rmaceutical services with bag care.Rapid refinement strategies undertaken by atomic number 82 chained retailers resulted in a substantial escalation in the chained store numbers in the nation. 2009 saw a slight improvement in the average selling space per outlet of beauty and health medical supererogatoryist retailers. More retailers began opening stores in obtain malls which were larger than their standalone establishments. Most beauty and health specialist retailers launch their retail chains in Klang Valley. This is more ofttimes than not due to greater buy power among urban consumers.Nonetheless, more beauty and health specialist retailers are expanding outside Klang Valley in sanctify to serve the rising population and maturement purchasing power of consumers in East Malaysia and secondhand states. Launching of budget in-house brand is to cover a wider range of consumer segment.Guardian bearing market, product and services, promotionGCH Retail (M) Sdn Bhd is a wholl y- owned subsidiary of a Hong Kong based Dairy Farm International Holdings Ltd, listed on the refer Seng Stock Exchange. Dairy Farm International Holdings Ltd is 78% owned by the Jardine Matheson Group, which is listed on the FTSE Stock Exchange in addition to secondary listings on the Singapore Straits and Bermuda Stock Exchanges (Euromonitor 2010).In Malaysia, the company is baffling in the operation of Guardian pharmacy, Cold Storage supermarket and Giant hypermarket outlets. In 2009, as a result of its ravening outlet expansion, with 20 naked as a jaybird Guardian outlets, and proactive promotion including daily specials boosted the companys pharmaceutical market portion out to 35% existingize 2.0, occupying the largest cut of the retail pharmacy market segment. GCH Retails Guardian brand is leading the pack because the retail format is little by little graceful popular in Malaysia. For instance, Guardian spearheaded the concept of modern retail pharmacy by providing professional interview and service by registered pharmacists, plus holistic health and personal care solution.GCH Retails in-house brand offers quality products at affordable prices because the companys in-house products are manufactured and sourced locally. Moreover, the company, targeting all consumer segment, from low to high income earners, was very aggressive in promoting its home brand products in terms of advertising and promotions, piece of music also developing its product ranges. For instance, Guardian dedicated half a page or full-page advertisements in their in-store brochures or leaflets for their in-house brand products. GCH Retails share of in-house brand products has been poseing steadily more often than not due to developing brand recognition as well as the wider range of items available. In reaction to the Malaysian governments support initiatives designed to spur track small and medium surface enterprises (SMEs) in Malaysia, it is pass judgment that the com pany will continue to source bare-assed products for its in-house brand lines.External and internal factors analysisExternal inner(a)Threats frugal slowdownDecentralized marketing function inconsistent brand get wordWeaknessesRetracted consumer spendingIncreased rivalry between competitorsOpportunitiesImport/exportation Malaysian Ringgit vs Hong Kong DollarGood management able to respond to market change qualificationChange in consumers spending pattern twain external and internal factors influence how the company decides to operate. The external factors will be the equal for all the market players.Watsons personal care store target market, product and services, promotionWatsons Personal Care Stores (WPCS) is a subsidiary of the AS Watson Group which is wholly owned by the Hong Kong based Hutchison Whampoa Ltd listed on the Hang Seng Stock Exchange main board and has been in Malaysia since 1994.Being the largest beauty and health retail chain in Asia, in Malaysia, with 211 outlet s nationwide adjacent the successful merger and acquisition of Apex Pharmacy Sdn Bhd in Jun 2005, WPCS is one of the most accomplished personal care chain stores (Euromonitor 2010). In 2009, albeit with pharmaceutical value share of 19% Figure 2.0, due to change magnitude number of beauty and health specialist retailers, WPCS remained the largest community pharmacy retail chain in Malaysia. Having said so, continuous marketing efforts and promotions such as picture advertisements, complimentary beauty and health information to consumers, and storewide 20% discount campaign, helped restrain its fall in value share.WPCS offers competitively priced and quality in-house brand products. Its in-house brand lines consist of a larger proportion of cosmetics and toiletries, disposable paper products, OTC healthcare products, bottled water and electrical items, is mainly designed for mass consumers, in particular the budget end of the market. The company has been very active in displace its in-house brand. For example, it has dedicated more shelf space in-store for its inhouse brand items. Coupled with growing brand recognition, as well as a wider range of products, the companys share of in-house brand has grown steadily.External and internal factors analysisExternalInternalThreats scotch slowdownOver expansion resulting in dissipated consumer servicesWeaknessesRetracted consumer spendingIncreased rivalry between competitorsOpportunitiesImport/ merchandise Malaysian Ringgit vs Hong Kong DollarExtensive outlet coverage nationwideStrengthChange in consumers spending patternStrategies employed by littler pharmacyMarketing model of smaller pharmacies instruction on establishing trustworthy rapport with its customer base and to provide individually customized pharmaceutical services for their clients to cater on the needs of selected consumer segments. The smaller retailers responded by provided extended time of day services for the convenience of consumers after wo rking hours access to pharmaceutical items and advice. commitment marketing is introduced to maintain or expand their customer base in light of even more competitive environment. A loyalty architectural plan may be specific to an individual retailer, or an independent conjunction scheme involving a few partners. The latter model is gaining popularity in Malaysia and is launch in Europe, Australia and Canada. Specialized services exclusive to pharmacy such as pre-packed dosettes medications to ensure better compliance to medicine, insulin dose ad scantilyments for uncontrolled diabetes management and dolophine hydrochloride replacement therapy for heroin dependent patient, cater to singular patients segment that is gradually increasing.Caring pharmacy target market, product and services, promotionCaring Pharmacy Sdn Bhd is a group of pharmacies under one banner collectively shares the same supply and inventory management similar to that of chain stores, however each outlets are independently owned and operated by pharmacists.Caring Group soon have 46 registered pharmacists operating 40 outlets in Klang valley. Therefore talent the Group the highest number of pharmacist to outlet ratio among retail pharmacy operators in Malaysia.With market share of 12% in 2009 Figure 2.0, Caring is emerging fast as one of the most establish local community retail pharmacy. Providing extended hour services from the early hours up to midnight proved to be a potent strategy in establishing its market share as it provides time flexibility to consumers. Caring offers professional consultation by registered pharmacists on uncomplicated ailments and medication management solutions such as pre-packed medications similar to the multi dose Webster-Pak for the consumers convenience.The group has been actively promoting its pharmacist consultation service. For instance, overt awareness talks by pharmacists on health topics such as hypertension, diabetes, weight-management etc. ar e frequently organized. Launched in 2006, the first pharmacy fix program as a points accumulation and gift redemption carte du jour with Malaysias premier multi-party loyalty program BonusLink, enabled Caring to establish closer impinging with their regular clients.External and internal factors analysisExternalInternalThreatsEconomic slowdownToo focused on domestic/localization growthWeaknessesRetracted consumer spendingIncreased rivalry between competitorsOpportunitiesChange in consumers spending patternGood corporate core value pharmacist service for all consumer segmentsStrengthchapter 2Strategic recommendation for the retail pharmacy industryThe Malaysian as well as the world(a) economy continued to see tough times in 2009. patronage an unemployment rate that was on the rise and consumer spending falling, consumers remained largely loyal to set up pharmacy names when it comes to fulfilling their healthcare needs. Some consumers also switched to self-medication in times of mi nor ailments as a bid to go back up to work for fear that they might lose their jobs in the recession. Retail pharmacies are seeing an increase in consumer sales contribution of 0.2% for 2009 against 2008. This was largely due to the expansion of outlets such as Watsons which makeed consumer interest for its one-stop shopping.In 2007, the population in Malaysia was describe to be just over 27 one thousand thousand which, according to joined Nations Department of Economic and Social Affairs. By 2015, its projected that Malaysias population will reach more than 30.7 million.Currently, the country has relatively young population, with nearly 60% Malaysians below the age of 30 in 2007. Regardless, the population is steadily aging, with the median value age of the population increasing from 22.5 years in 1995 to 24.6 years in 2007. The aging population in Malaysia, usually earning more than their younger counterparts and are usually relatively established in terms of family and home and more aware of their health status, is expected to drive consumer healthcare expenditure. Consumer of this category is expected to drive increased implore for medical and health-related products and services, including pharmaceuticals and OTC drugs, vitamins and dietetical supplements, health drinks and medical equipment.On the other hand, its projected that still over half of the Malaysian population will be under 30 years-old in 2015 so, while there will be some cutting tenseness on products for older consumers, younger consumers will remain a potent force, exercising world-shattering purchasing power and driving continuing demand for the wide range of youth oriented products. This category of consumers are congruous more health conscious, recent survey that 80% of fast lamentable consumer goods shoppers now think about their health more than they did before. Hence, this will spur demand for core healthcare products and influence sales in tangential sectors such as foo d and beverages, and healthcare services.Offer Mix carrefour portfolio adjustment and pricing tacticProduct portfolio adjustmentAs living costs, including healthcare costs, are expected to rise, consumers will be more endeavous to try out economical in-house brand products and self-medicate, respectively. Additionally, more consumers understand the helpfulness of vitamins and dietary supplements as preventative measures against environment, diet and age-related ailments such as joint and back pain, immune systems, osteoporosis and lack of balance nutritional values.The relatively fast growth rate of consumer healthcare sales was not equally spread among in-house brand lines. It should be noted that not all categories saw higher in-house brand growth, as some were mostly dependent on growth by branded products. Within consumer healthcare, in-house brand product line is expected to grow in pique treatment products such as sticking plasters and local germicidal/antiseptic Figure 3 .0, especially in the midst of an economic slowdown and an influenza A (H1N1) outbreak, respectively. Coupled with strict registration ingestments in Malaysia for all medicines, either branded or generics, in-house brand is unlikely to suffice well in consumer healthcare categories such as oral analgesics, cough, cold and allergy (hay fever) remedies or digestive remedies as consumers remained largely loyal to established brands mainly because these brands are long-time trusted names that consumers find most useful or have simply grown accustomed to purchasing.However, consumers will increasingly demand convenient and effective products so as to meet their increasingly stressful and busy lifestyles. Therefore, easy to apply or easy to use products such as Nexcare Acne Patch and Gaviscon Liquid Sachets are expected to attract consumer interest, especially among the younger generation of the population.Retailers will need to expand their consumer healthcare product ranges in orde r to maintain competitive in the market. However, retailers should focus on producing lower-cost and in-house branded products such as topical analgesics, antipruritics, other hurt treatments, vitamins and dietary supplements, that enjoy strong demand among consumers.Pricing tacticConsumers will be shopping around for the best deals. It is not necessary for retailers to cut list prices, but may offer more short termed price promotions, lower quantity threshold discounts, provide credit to long-standing customers, and more precipitously price smaller pack sizes. In tough times, price cuts attract more consumer support than promotions such as mail in offers and sweepstakes. forward motion mix constituted advertising and online marketingDespite the growth of electronic communications, printed newsletter and television still play an important role in Malaysians daily life and their pursuit of information and entertainment. As shown in Figure 4.0, printed adspend dominated 54% follow ed by television adspend at 37% of the total adspend respectively for the year 2009. Major newspapers include three English-language dailies, two Malay-language dailies, five-spot Chinese-language dailies, and two Tamil-language dailies. The Malaysian has a wide range of magazines covering lifestyle, fashion, business, and special interest topics such as fishing, motoring, health and wellness and childcare. Magazines in Malaysia are usually published on a fortnight or periodic basis and are available via subscription, at retail outlets, convenience shops and small grocery stores.The internet has had a significant impact on Malaysia over the past several years. The number of internet users grew from nearly five million users in 2000 to more than 12 million users in 2007, reflecting growth of revenue%. Just as significantly, the household penetration rate of personal computers in Malaysia increased from 13.5% in 1995 to 34.7% in 2007. Tethered with such growth, online adspend recor ded 72% spike growth from 2007-2009, and is expected to continue capturing readership share at the expense of printed media, in-line with household penetration rate of internet-enabled computers increases in Malaysia.Mobile advertising will be in vogue as internet handheld devices gains market penetration, oddly among the younger population. Advertising platforms such as Apples iAd is a base example of cutting-edge mobile advertising where advertisements are not just informative but interactive as well. Advertisements of this kind, can be updated real time by retailers with short-term sales promotion similar to Malaysia Airlines Lunch-hour leakage deals or provide interactive online shopping experience, will revolutionize conventional concept of promotional advertising.Hence, internet will have an impact on how retailers attempt to reach Malaysian consumers and, in a less significant but nevertheless growing way presently on how Malaysians shop. However, as in most countries, onl ine advertising and internet retailing is expected to increase. ratiocinationConsumers in Malaysia are changing their healthcare shopping behavior in various ways at times of recession. While many opted for other more economical retailers, there are some who remained loyal to their preferred retailers while reducing the number of trips and spending. They are more comfortable in seeking out deals and using coupons, and will purchase both in-house brands or branded products whichever provides the best value. Definition of value is also changing. Previously, value is often perceived as quality and options, but during recession this is synonymous with price, while moving out of recession, value will mean that consumers get what they expect at the best possible price. Pharmacy retailers can capitalize on consumers needs by providing increased change marketing and shopping experience. Consumers are shifting towards meaningful and uncomparable shopping experience, particularly in purch asing healthcare items.Consumer in controlPresent consumers know are agnize of what they want and many will go the distance in seek of the best offers, some consumers, due to their lifestyle fluidity simply require products that satisfy their needs. Mobile shopping will be the next verge for retailers to venture into as on-the-go consumers who emphasize on shopping convenience and zipper of transactions. Pharmacy retailers can tap into this market and formulate marketing plans unique to loyal mobile shoppers. Conventional in-store consumers are bombarded with too much product information creating confusion and delaying purchases. Retailers and manufacturers should collaborate to satisfy consumers needs such as using attractive colors and creating simplistic product packaging to alleviate consumers search for healthcare products.Retailers diversify and re-brand to stay relevantPharmacy retailers diversifying into in-house product line will need to factor in consumers shopping p ick on established branded healthcare products when formulating in-house product marketing plans. many a(prenominal) consumers maintained loyalty to established brands due to familiarity to a product or confident with its effectiveness. However, in-house branded product line such as wound care, vitamin and supplements are projected to grow due to regional disease outbreak and economic downtempo. New and improve in-house product lines with convenience in intelligence such as topical analgesics and sachet digestive remedies will appeal to consumers particularly the younger customers. Retailers may need to revamp certain product lines with new design, improve in-house brand offers and a compelling ad-campaign, to appeal to younger consumers. incoming of retail pharmacyRetail pharmacy landscape is shifting largely attributed to economic changes, the growth of online retailing and more recently mobile concern. With increasing use of smart handheld devices in Malaysia, mobile advertisi ng and commerce is projected to grow substantially. Retailers will have to employ a multi-channel marketing approach. Online retailing will provide a platform for retailers disseminate unique and targeted product offers for consumers to research, plan their shopping trips and ultimately attract consumers into stores. Once in store, consumers will look for premium service coupled with simplified shopping experience in terms of product availability and ease of localisation principle the products. Now more than ever consumers becoming more sophisticated and assured in making choices. They desire to know the origin of the product, what they are do of and how their lives can be improved with them. In general, future consumer wants a simplified, personalized and meaningful shopping experience with a focus on value.