Kiran Virani Project

A study on consumer perception towards the services of retail pharmacy chain
Introduction
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COMPANY PROFILE
Calibar Pharmaceuticals Pvt. Ltd
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Calibar Pharmaceuticals – a company truly dedicated to Healthcare!
At Calibar Pharmaceuticals, their focus is on developing medicines that are of highest quality
as well as affordable to the patients. They are at the forefront of providing quality
pharmaceuticals that improve the quality of lives and help people live longer and better lives.
They are a leading pharmaceutical company with a broad spectrum of innovative medical
solutions. For more than 15 years, they have been active in the discovery and development,
manufacturing and marketing of novel healthcare solutions. Their products bring significant
benefit to the patients.
Calibar Pharmaceuticals also plays a pioneering role in personalized healthcare and is

providing the products which are tailored to the needs of specific patient groups.
They follow the international quality standards like WHO CMP, Schedule ‘M’, USM PSA,
USA PSA as well as ISO 9001-2000
Your One Stop Source for Pharmaceutical Formulations
Calibar Pharmaceuticals is proud to introduce itself as a one-stop supply for all the
pharmaceutical formulation requirements. Nationwide customers can count on Calibar for
products of consistent quality, cGMP compliance, on-time delivery, world class
manufacturing procedures and most of all its cost efficiency.
Wide Range of Products
Calibar manufactures a wide range of pharmaceutical formulation products in virtually all

dosage forms. Calibar welcomes distributors, importers and agents who can be helpful to
introduce products in their markets. cGMP certified quality assurance procedures guarantee a
peak performance of all products. Calibar provides vast range of services as well as prompt
and reliable assistance for all our clients.
Offers Quality
Calibar’s quality focus encompasses all areas of operation – right from procurement of the
best raw materials, to optimum manufacturing technology, to precise delivery of the
customer’s requirements – thereby ensuring a rapid effect.
Established in 1999 Calibar Pharmaceuticals is one of the leading pharmaceutical companies

in India.
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Calibar Pharmaceuticals is an integrated pharmaceutical company and our purpose is to

provide affordable medicines. We are engaged in the research, development, manufacturing
and supply of medicines that aim to make difference in healthcare Sector.
Calibar Pharmaceuticals possesses one of the broadest product offering, a highly focused
brand portfolio and an industry leading distribution network. Calibar Pharmaceuticals excels
in providing healthcare solutions designed to fight diseases in major therapeutic areas. The
wide range of products include,
• Anti-biotic's,
• Anti-fungal & skin care,
• Anti-ulcer & anti-emetic,
• Gynaec & nutritional,
• Anti-cold, expectorant & decongestant,
• Anti-malarial,
• Anti-inflammatory,
• Soaps and more.
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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Vision & Mission
Vision
The vision of Calibar Pharmaceuticals is to become the leader in Indian
Pharmaceutical Industry by providing high quality and affordable medicines. We
want to become a Global Brand with our commitment and dedication.
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.
Commitment – We are committed to our customers, business associates as well as

employees and work to earn their trust every day. We are passionate in our pursuit of
excellence; driven by the unyielding desire to execute on our mission and to achieve
our corporate vision. This commitment extends to every one of our operations,
allowing us to achieve the highest possible standards in our processes, products and
services.
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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General information:-
Name of the company: - Calibar Pharmaceuticals Pvt. Ltd
Year of establishment: - 1999
Corporate Office: - 16/17, Royal Township, Opp. New Octroi Naka,
Surat-Kadodra Road, Saroli, Dist. Surat 395 010 Gujarat, India.
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 end-
user. 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 India’s largest industry, accounting for over 10 % of the country’s 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 m²) 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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Growth of retail in India:
An increasing number of people in India are turning to the services sector for employment
due to the relative low compensation offered by the traditional agriculture and manufacturing
sectors.
The organized retail market is growing at 35 % annually while growth of unorganized retail
sector is pegged at 6 %.
The Retail Business in India is currently at the point of inflection. Rapid change with
investments to the tune of US $ 25 billion is being planned by several Indian and
multinational companies in the next 5 years. It is a huge industry in terms of size and
according to management consulting firm Technopak Advisors Pvt. Ltd., it is valued at about
US $ 350 billion. Organized retail is expected to garner about 16-18 percent of the total retail
market (US $ 65-75 billion) in the next 5 years.
India has topped the A.T. Kearney’s annual Global Retail Development Index (GRDI) for the
third consecutive year, maintaining its position as the most attractive market for retail
investment. The Indian economy has registered a growth of 8%. The enormous growth of the
retail industry has created a huge demand for real estate. Property developers are creating
retail real estate at an aggressive pace and by 2010, 300 malls are estimated to be operational
in the country. With over 1,000 hypermarkets and 3,000 supermarkets projected to come up
by 2011, India will need additional retail space of 700,000,000 sq ft (65,000,000 m²) as
compared to today. Current projections on construction point to a supply of just 200,000,000
sq ft (19,000,000 m²), leaving a gap of 500,000,000 sq ft (46,000,000 m²) that needs to be
filled, at a cost of US$15-18 billion.
Indian market has high complexities in terms of a wide geographic spread and distinct
consumer preferences varying by each region necessitating a need for localization even
within the geographic zones. India has highest number of outlets per person (7 per thousand)
Indian retail space per capita at 2 sq ft (0.19 m²)/ person is lowest in the world. Indian retail
density of 6 percent is highest in the world. 1.8 million Households in India have an annual
income of over 45 lakh.
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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-of-
the-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 retailer’s cash
register.
The break-up of organized retailing sales into various product categories:

Ø Books, Music & Gifts: 3%
Ø Mobile Handsets: 3%
Ø Clothing & Textile: 39%
Ø Food & Grocery: 11%
Ø Consumer Durables: 9%
Ø Footwear: 9%
Ø Furniture & Furnishings: 8%
Ø Catering Services: 7%
Ø Jewellery & Watches: 7%
Ø Others: 4%
The Growth Drivers

The Indian Retail growth can be attributed to the several factors including
Ø Demography Dynamics:
Approximately 60 per cent of Indian population below 30 years of age.
Ø Double Incomes:
Increasing instances of Double Incomes in most families coupled with the rise in
spending power.
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Ø Plastic Revolution:
Increasing use of credit cards for categories relating to Apparel, Consumer Durable
Goods, Food and Grocery etc.
Ø 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.
Ø Covering distances has become easier:
With increased automobile penetration and an overall improvement in the

transportation infrastructure, covering distances has become easier than before. Now a
customer can travel miles to reach a particular shop, if he or she sees value in
shopping from a particular location.
Ø 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.
Ø Customer Interfacing Systems
• Bar Coding and Scanners
Point of sale systems use scanners and bar coding to identify an item, use pre-stored
data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a
new concept where the consumer pushes the full shopping cart through an electronic
gate to the point of sale. In a matter of seconds, the items in the cart are hit with laser
beams and scanned. All that the consumer has to do is to pay for the goods.
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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.
Ø Operation Support Systems

• 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.
• Advanced Planning and Scheduling Systems
APS systems can provide improved control across the supply chain, all the way from
raw material suppliers right through to the retail shelf. These APS packages
complement existing (but often limited) ERP packages. They enable consolidation of
activities such as long term budgeting, monthly forecasting, weekly factory
scheduling and daily distribution scheduling into one overall planning process using a
single set of data.
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Ø Strategic Decision Support Systems

• Store Site Location
Demographics and buying patterns of residents of an area can be used to compare

various possible sites for opening new stores. Today, software packages are helping
retailers not only in their location decisions but in decisions regarding store sizing and
floor-spaces as well.
• 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.
Ø Investment Opportunities
• Potential for Investment:
The total estimated Investment Opportunity in the retail sector is around US$ 5-6
Billion in the Next five years.
• 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.
• Sectors with High Growth Potential:
Certain segments that promise a high growth are
ü Food and Grocery

ü Clothing
ü Furniture and Fixtures
ü Pharmacy
ü Durables, Footwear & Leather, Watch & Jewellery
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• Fastest Growing Formats:
Some of the formats that offer good growth potential are:
ü Specialty and Super Market

ü Hyper Market
ü Discount stores
ü Department Stores
ü Convenience Stores and E-Retailing
Ø Supply Chain Infrastructure:

Supply chain infrastructure in terms of cold chain and Logistics.
• 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.
Ø 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 world’s 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 & it’s become more of an outing for the
entire family.
Pharmacy retailing has seen consolidation world over.
Ø 5 pharmacy chains control 40% of the sales in the US.
Ø 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, it’s a whole new look. For one, new pharmacy
stores boast of excellent in store display. But that’s 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. It’s a highly lucrative market with high margins that require low investment.
The Rs.48, 000–crore 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 over-
proliferated. 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.
Ø Prevalence of spurious or counterfeit drugs is high with estimates ranging from 5% to

30% of the market.
Ø Standalone medical shops are able to avoid sales tax, this being a cash business
offering fake bills to regular customers.
Ø 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 customer’s
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.
India’s $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.
Currently, the leading players in the organized pharma retail market

include corporates like:
Ø Apollo Pharmacy
Ø Fortis Health World,
Ø Discount retailer Subhiksha Retail,
Ø International drug retail chain Medicine Shoppe
Ø Pharmacy chains set up by independent retailers like,
ü Guardian Pharmacy (Guardian Life Care)
ü LifeKen (Lifetime Healthcare Pvt. Ltd.)
ü 98.4 degrees (Global Health line)
ü Care & Cure (Manipal Group)
ü Dial for Health (Zydus Cadila)
ü Planet Health (Sagar Drugs & Pharmaceuticals) and
ü MedPlus (Optival Health Solutions).
According to industry estimates, almost $120 million has been invested in retail pharmacy so
far. Apollo Pharmacy, which is part of the Apollo Hospitals group, has over 300 outlets (open
24 hours) across 17 states in India. One of the oldest corporate pharmacies, Apollo opened its
first store in Chennai in 1983.
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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 (India’s 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.
Page 24
Ø In Pharmaceutical Retailing there are two types of sectors:
1. Organized Pharmacy Sector :
Pharmacy chains like Apollo Pharmacy, Med plus, Subhiksha, Hetero Etc.
2. Unorganized Pharmacy Sector:
Independent and Small retail outlets
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.
ü Product
ü Price
ü Place
ü Promotion
Page 25
Advantages to Organized Pharmacy Sector/ Pharmacy chains

Ø Economies of scale:
The large players in pharma retail sector buy Raw material in bulk quantity, process
in bulk quantity, package in big lots, use high technology in processing, packaging
and transporting, so they get the finished drugs at the lowest possible prices.
Ø Technology driven:
These large players use modern, latest and automated machinery in manufacturing
Drugs, in Inventory management, supply chain management, use of latest display
tools, free samples to Doctors and hospitals etc.
Ø Retailing their own pharma brands/generic brands along with competitors

brands:
It helps in promoting their own brands/generic brands which can fetch more profits
using push strategy through doctors and hospitals by providing free samples,
sponsoring free treatment to patients.
Ø Passing advantages to patients and consumers:
With the optimum use of available resources and technology, some price. Advantages
can be passed over to patients
Ø Increase in market share and profits:
With all the advantages from points 1 to 4 above the pharma chains can achieve
higher market share and profits.
Ø Discount parameter:
According to the latest self-study we have found that up to 10% discount is offered by
retail pharmacy chains like Apollo, Hetero, Subhiksha and Med Plus.
Page 26
Disadvantages to small retailers

Ø No economies of scale to small medical stores :
These small stores buy in small quantities from drug distributors with higher prices
with no schemes thereby it reduces profit margins
Ø Small geographic area:
These small retail medical shops operate from small lanes and by-lanes where it could
cater to limited range of patients who belong to those surroundings only. This results
in lower turnover of sales resulting in lower profits.
Ø No home delivery services:
These small medical shops generally run on low man power or sometimes run as a
family business and therefore cannot effort to hire persons for home delivery of
medicines.
Ø Winding up of medical shops:
Notwithstanding the business threats from large pharma chain stores most of these
stores close their stores by sustaining huge loses.
Ø Losses from expiry of medicines:
New formulas are frequently launched into the market and doctors always want to try
new formulas on patients thereby sales of old formulas are slowed down which causes
huge quantity of expires of medicines which in turn result in heavy losses.
Ø Discounts can not be offered:
Small medical shops buy in smaller quantities and cannot avail the advantage of
various schemes on quantity purchases, there by their unit purchase prices are higher
and can not offer discount to patients/ customers.
Page 27
Retail pharmacy chains

“More than medicines”
Page 28
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, round-
the-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.
Page 29
Entry of major corporates:-
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.
Pantaloon’s 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.
Page 30
Literature review
Page 31
Review of conceptual issues in pharmacies service like quality, customer satisfaction,

and loyalty
The investigation about service quality and customer satisfaction has different
conceptualizations and aspects (Dabholkar, Shepherd, and Thorpe, 2000): the service quality
is captured with the perceptions model (Cronin and Taylor, 1992, 1994) or captured with the
disconfirmation model (Parasuraman, Zeithaml and Berry, 1994; Teas, 1993, 1994); with
longitudinal studies or cross-sectional ones; with factors as components or as antecedents of
service quality; service quality being the same constructs or different from customer
satisfaction.
Service Quality
It is know that, in the case of services, the criteria that customers use to evaluate service
quality is complex and difficult to determine precisely due to the fact that services are
intangibles, heterogeneous, cannot be placed in time, and production and consumption are
simultaneous (Athanassopoulos, 2001). The identification of service quality dimensions was
of primary interest to researchers (Parasuraman et al, 1985, 1991a). The development of
measurement instruments of service quality was the focus of subsequent research efforts
(Parasuraman et al, 1988, 1991b, 1993; Cronin and Taylor, 1992, 1994; Buttle, 1996;
Athanassopoulos 1998, 1999).
The first big operational debate has been focused on whether service quality should be
measured as perceptions or as disconfirmation (Cronin and Taylor, 1992, 1994; Parasuraman,
Zeithaml, and Berry, 1994; Teas, 1993, 1994). Those who favour the former approach
(Cronin and Taylor, 1992) suggest that perceptions of service quality more closely match
customer evaluations of the service provided. Those who favour disconfirmation paradigm,
such of Parasuraman et al., (1994) counter that measuring service quality, as disconfirmation
is valid and further, it allows service providers to identify gaps in the service provided. In the
disconfirmation model, Service
Quality is conceptualised as the comparison of service expectations with actual performance

perceptions (Zeithaml et al., 1996). The operationalization of it is the SERVQUAL
instrument. The main idea is that service quality is a function of the difference scores or gaps
between expectations and perceptions. Thus, Service quality is a multidimensional concept.
They find five dimensions of service quality: reliability (ability to deliver the promised
service dependably and accurately); responsiveness (willingness to help customers and
provide prompt service); assurance (ability to inspire trust and confidence); empathy
(customers are individuals); and tangibles (elements that represent the service physically.
Page 32
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 customer’s 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).
Page 33
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 supplier’s 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 customer’s 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 consumer’s judgement about a firm’s overall excellence or superiority. This
definition suggests that perceived quality is similar to an individual’s 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
isn’t 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
We consider that pharmacies tend to be considered as Stores of Pharmaceutical Products. The

attributes and the techniques (merchandizing is one of those) used in the pharmacies are more
and more likely as the used in stores. In the particularly case of Portugal, it’s not possible to
sell drugs in other stores than pharmacies, but the government has announced a law to permit
some stores to sell drugs with unnecessary prescription. When this law is applied there will
be a change in the merchandizing of drugs.
Behavioural Intentions
Several researchers make the distinction between offensive and defensive marketing policies.
According to those researchers, offensive marketing actions refer to capturing new customers
by investing in service quality, and defensive marketing actions refer to retaining existing
customers. There are compelling arguments of the superiority of the defensive marketing
over de offensive one. For example, lowering customer defections can well can have a strong
impact on a company’s profits (Reichheld and Sasser, 1990) as well as market share (Rust
and Zahorik, 1993). Relative retention has been shown to explain profits better than market
share, scale, cost position, or any other variables usually associated with competitive
advantage (Reichheld, 1996).Similarly Fornell and Wernerfelt (1987) concluded that is better
for a company to spend resources to keep existing customers than to attract new ones.
Customers who remain loyal to the company are likely to engage in favourable word-of-
mouth behavioural responses and are possible to cross-sell to theses customers or even charge
them a premium price. Customer loyalty expresses an intended behaviour related to the
product or service. This includes the likelihood of future purchases or renewal of service
contracts or, conversely, how likely it is that the customer will switch to another brand or
service provider. Customers may be loyal owing to high switching barriers related to
technical, economical or psychological factors, which make it costly or difficult for the
customer to change supplier. Customer may also be loyal because they are satisfied with the
supplier or product brand, and thus want to continue the relationship. As most barriers appear
to be of limited durability, companies tend to approach satisfaction as the only viable strategy
in the long run.
For the construction of service loyalty (…a positive behavioural intention) the constructs are
more diversified. Meanwhile the investigations of Bloemer et al. (1998), Bloemer (2002),
Bloemer and Ruyter (1998), and Zeithaml et al., (1996), are the best contributions to the
research. For Behavioural Intentions we have adopted the Scale of Zeithaml et al., (1996) In
table 3, we present studies that analyze the consequences of Customer Satisfaction. The
customer transmits their satisfaction with behaviors. Those behaviors could be such of word-
of-mouth, complaint, and loyalty.
Page 37
Favourable Behavioural Intentions
One group of behavioural intentions could be designed as positive behavioural intentions.

One of this is loyalty. Certain behaviours signal that customers are forging bonds with a
company. When customers praise the firm, express preference for the company over others,
recommend the company of service to others (Parasuraman, Berry, and Zeithaml, (1991a),
say positive things about company to others (Boulding et al. 1993), increase the volume of
their purchases, or agreeably pay a price premium (Rust and Zahorik, 1993), they are
indicating behaviourally that they hare bonding with the company. Several studies have
examined the association between service quality and more specific behavioral intentions.
Parasuraman, Berry, and Zeithaml (1991a) find a positive and significant relationship
between customers’ perceptions of service quality and their willingness to recommend the
company.
Increased customer retention has two important effects: (1) it can lead to a gradual increase in
the firm’s customer base which is vital in an era of low sales growth, and (2) the profits
earned from each individual customer grow the longer the customer remains loyal to the firm.
Existing customers also tend to purchase more than new customers (Rose, 1990). And costs
to retain customers are about 80% lower than the costs to acquire new customers.
A focus on one’s 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
customer’s 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
Unfavourable Behavioural Intentions
Customers perceiving service performance to be inferior are likely to exhibit behaviours

signalling they are poised to leave the company or spend less in the company. These
behaviours include complaining, which is viewed by many researchers as a combination of
negative responses that stem from dissatisfaction and predict or accompany defection.
Complaining behaviour itself is conceptualized as multi-faceted. According to Singh (1988),
dissatisfaction leads to consumer-complaining behaviour that is manifested in voice
responses, private responses or third-party responses. Specific indicators of unfavourable
behavioural intentions suggested by the preceding discussion include different types of
complaining (complaining to friends or external agencies) and contemplation of switching to
competitors. Another indicator of eventual defection is a decrease in the amount of business a
customer does with a company.
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
ü People are using both organized and unorganized retail sectors.

ü People are free to choose any of this retail sectors.
ü Sample represents the population.
ü An instrument has validity and is measuring the desired constructs.
ü Respondents will answer a survey truthfully.
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:-
ü Age of the customer has direct relationship with their satisfaction level while
purchasing from organized pharma stores.
ü Gender of the customer has direct relationship with their satisfaction level
while purchasing from organized pharma stores.
ü Education of the customer has direct relationship with their satisfaction level
Page 41
ü Occupation of the customer has direct relationship with their satisfaction level
ü Family income of the customer has direct relationship with their satisfaction
level while purchasing from organized pharma stores.
ü 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
ü Primary data are collected through questionnaire fill up by respondents

ü Secondary data are collected from published sources
Sample Design
ü Target Population:
People visiting retail pharmacy chain for purchasing medicines in Surat city
ü 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
Sampling Method:-
Non probability convenience sampling method
Sample Size:-
300 respondents
Benefits of the study:-
ü Identifying the areas that needs improvement from the organized retailers perspective
ü Improving customer loyalty and retention
ü Identification of opportunities that can be source of sustainable competitive advantage
Limitation of the study:-
ü Perception varies with customer to customer

ü Lack of interest from the respondents
ü Biased response from respondents may temper with the results of the study
Graphical presentation of Data:-

Gender
Gender No. of respondents
Male 174
Female 126
GENDER
200
180
160
140
120
100
80 GENDER
60
40
20
0
Male Female
Page 43
Age:-
Age (In years) No. of respondents
18-24 115
25-34 132
35-44 35
45-54 18
AGE (In Years)

140
120
100
80
60 AGE (In Years)
40
20
0
18-24 25-34 35-44 45-54
Education:-
EDUCATION No. of respondents
Up to 12th Std. 62
Graduation 105
Post Graduation 47
PhD 15
EDUCATION
120
100
80
60
40 EDUCATION
20
0
Upto 12th Graduation Post PhD Professional
Std. Graduation Courses
Page 44
Occupation:-
Occupation No. of respondents
Business 58
Service 135
Study 62
Housewife 45
Occupation
150
100
50 Occupation
0
Business Service Study Housewife
Monthly family income:-

Monthly family Income ( INR) No. of respondents
<15000 124
15000-30000 63
30000-45000 72
45000-60000 31
>60000 10
Monthly Family Income (INR)

140
120
100
80
60
40
20
0
<15000 15000-30000 30000-45000 45000-60000 >60000
Page 45
Satisfaction level:-
Satisfaction Level No. of Respondents
Highly Dissatisfied 45
Dissatisfied 141
Satisfied 78
Highly Satisfied 36
No. Of Respondents
150
100
50 No. Of Respondents
0
Highly Dissatisfied Satisfied Highly
Dissatisfied Satisfied
Page 46
Data Analysis
Page 47
Chi-square Test:-
Ø 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 Highly
Dissatisfied Dissatisfied Satisfied Satisfied Total
GENDER FEMALE Count 19 64 32 11 126
Expected Count 18.9 59.2 32.8 15.1 126.0
MALE Count 26 77 46 25 174
Expected Count 26.1 81.8 45.2 20.9 174.0
Total Count 45 141 78 36 300
Expected Count 45.0 141.0 78.0 36.0 300.0
Chi-Square Test
Asymp. Sig. (2-

Value df sided)
Pearson Chi-Square 2.632 3 0.452
N of Valid Cases 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
Highly Highly
AGE 18-24 Count 22 58 30 5 115
Expected Count 17.3 54.1 29.9 13.8 115.0
25-34 Count 16 63 35 18 132
Expected Count 19.8 62.0 34.3 15.8 132.0
35-44 Count 5 18 10 2 35
Expected Count 5.3 16.5 9.1 4.2 35.0
45-54 Count 2 2 3 11 18
Expected Count 2.7 8.5 4.7 2.2 18.0
Total Count 45 141 78 36 300
Expected Count 45.0 141.0 78.0 36.0 300.0
Page 49
Chi-Square Test
Asymp. Sig. (2-

Value df sided)
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.
Education * SATISFACTION LEVEL Cross tabulation
SATISFACTION LEVEL
Dissatisfied Satisfied Total
Education Up to 12th standards Count 54 9 63
Expected 39.1 24 63.0

Count
Graduation Count 67 37 104
Expected 64.5 39.5 104.0

Count
Post graduation Count 31 16 47
Expected 29.2 17.8 47.0

Count
PhD Count 5 10 15
Expected 9.4 5.7 15.0

Count
Professional course Count 31 40 71
Expected 44.1 27 71.0

Count
Total Count 186 114 300
Expected 186 114 300.0

Count
Page 51
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
Interpretation:-
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 * SATISFACTION LEVEL Crosstabulation
SATISFACTION LEVEL
Highly Highly
Occupation Business Count 4 31 6 17 58
Expected Count 8.7 27.3 15.1 7.0 58.0
Service Count 17 61 43 13 134
Expected Count 20.1 63.0 34.8 16.1 134.0
Study Count 12 27 17 6 62
Expected Count 9.3 29.1 16.1 7.4 62.0
Housewife Count 12 22 12 0 46
Expected Count 6.9 21.6 12.0 5.5 46.0
Total Count 45 141 78 36 300
Expected Count 45.0 141.0 78.0 36.0 300.0
Page 53
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
Interpretation:-
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 * SATISFACTION LEVEL Cross tabulation
SATISFACTION LEVEL
Highly Highly
INCOME <15000 Count 23 86 15 0 124
Expected Count 18.6 58.3 32.2 14.9 124.0
15000-30000 Count 10 27 22 2 61
Expected Count 9.2 28.7 15.9 7.3 61.0
30000-45000 Count 11 17 36 8 72
Expected Count 10.8 33.8 18.7 8.6 72.0
45000-60000 Count 1 10 4 16 31
Expected Count 4.7 14.6 8.1 3.7 31.0
>60000 Count 0 1 1 10 12
Expected Count 1.8 5.6 3.1 1.4 12.0
Total Count 45 141 78 36 300
Expected Count 45.0 141.0 78.0 36.0 300.0
Page 55
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
Interpretation:-
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 Bartlett’s 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.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of .615

Sampling Adequacy.
Bartlett's Test of Sphericity Approx. Chi-Square 598.188
df 120
Sig. .000
Page 58
Component Matrix
Component
1 2 3 4 5 6 7 8
Good availability of medicine .814
genuine/ Good quality of .855

medicine
Medicines available at .710

discount
Quick Services .523 .522
Proximity of Location
Convenient Parking
Friendly Pharmacist .543
Competent Staff -.664 .513
Computerized Quick Billing .550

System
24- hour service .600
24- hour customer support -.635

through helpline
Medicines stored under good .601

storage conditions
Home delivery on request .559
Free regular reminder service .522
Free health camps
Properly planned store layout .606

& attractive frontage
Extraction Method: Principal Component Analysis
Page 59
Total varience explained:-
Extraction Sums of Squared Rotation Sums of Squared

Initial Eigenvalues Loadings Loadings
Com
pone % of Cumulative % of Cumulative % of Cumulativ
nt Total Variance % Total Variance % Total Variance e%
1 2.295 14.345 14.345 2.295 14.345 14.345 2.078 12.990 12.990
2 1.474 9.212 23.557 1.474 9.212 23.557 1.579 9.871 22.861
3 1.293 8.079 31.636 1.293 8.079 31.636 1.278 7.989 30.850
4 1.224 7.652 39.288 1.224 7.652 39.288 1.196 7.473 38.323
5 1.148 7.175 46.463 1.148 7.175 46.463 1.190 7.438 45.760
6 1.094 6.835 53.299 1.094 6.835 53.299 1.117 6.983 52.744
7 1.038 6.486 59.785 1.038 6.486 59.785 1.082 6.763 59.507
8 1.010 6.313 66.098 1.010 6.313 66.098 1.055 6.591 66.098
9 .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
Rotated Component Matrix
Component
1 2 3 4 5 6 7 8
Good availability of .906

medicine
Genuine/ Good quality of .907

medicine
Medicines available at .706

discount
Quick Services .770
Proximity of Location .704
Convenient Parking .679
Friendly Pharmacist .724
Competent Staff .919
Computerized Quick .517

Billing System
24- hour service .807
24- hour customer support -.730

through helpline
Medicines stored under .813

good storage conditions
Home delivery on request
Free regular reminder .504

service
Free health camps .515
Page 61
Properly planned store .672

layout & attractive
frontage
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 12 iterations.
Page 62
Labeling of factors :-
Quality Services Friendly Location Storage Value Competent
Staff Added Staff
Services
Good Medicines Friendly Proximity Medicines 24- hour Competent
availability available Pharmacist of Location stored service Staff
of medicine at
under
discount
good
storage
conditions
Genuine / Quick Free health Convenient Free
Good Services camps Parking regular
quality of
reminder
medicines
service
Computeri
zed Quick
Billing
System
Page 63
Reliability Analysis
Page 64
To measure the reliability of items loading into one factor, cronbach’s Alpha were calculated
and the result is shown below. For 4 factors, the cronbach’s Alpha value is more than 0.5
indicating that the factors are consistent and reliable. For 2 factors cronbach alpha’s value is
less than 0.5 indicating these factors are not so reliable.
Reliability Analysis
Factors Cronbach’s Alpha No. of items
Quality 0.885 2
Services 0.521 3
Friendly Staff -0.376 2
Location 0.385 2
Storage 0.559 2
Value Added Services 0.671 2
Page 65
Conclusion
Page 66
From the analysis of data collected through questionnaire fill up it can be concluded that:-
Ø 62% of people have negative perception towards the services of retail pharmacy
chains
Ø 38% of people have positive perception towards the services of retail pharmacy chains
Ø There is no association between gender of customers and their satisfaction level.
Ø There is an association between age of customers and their satisfaction level.
Ø There is an association between education of customers and their satisfaction level.
Ø There is an association between occupation of customers and their satisfaction level.
Ø There is an association between monthly family income of customers and their
satisfaction level.
Ø 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 Good availability of medicine
Genuine / Good quality of medicines
Services Medicines available at discount
Quick Services
Computerized Quick Billing System
Friendly Staff Friendly Pharmacist
Free health camps
Location Proximity of Location
Convenient Parking
Storage Medicines stored under good storage
conditions
Value Added Services 24- hour service
Free regular reminder service
Competent Staff Competent Staff
Ø 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
Survey on Consumer Attitude towards Organized Retail Pharma

Sector
Dear respondents,
This research is carried out for the academic purpose. Your contribution will provide useful
information in carrying out my research project. You are requested to provide frank, honest and
unbiased answers.
The information provided by you will be treated confidentially.
1. Name: -
…………………………………………………………………………………………………
…..
2. Gender: - Male: - ……………. Female: - …………….
3. Age (In years):-
18-24:- ………….. 25-34:- ……………
35-44:- ………….. 45-54:- …………..
Above 55:- …………..
4. Education:-
Up to 12th standard: - ……………. Graduation: - ……………
Post graduation: - …………… PhD- ……………
Professional courses: - …………… Any other (specify):- ……………
5. Occupation:-
Business: - ………….. Service: - …………..
Study: - ………….. Housewife: - …………..
6. Monthly family income (In Rs.):-
Below 15000:- ………… 15000-30000:- …………
30000-45000:- ……….. 45000-60000:- …………
>60000:- …………
7. No. of family members: - …………..
Page 71
8. Average monthly spending on medicine: - ……………..
9. Usually from where do you buy medicines?
Organized retail store: - ……….. Traditional store: - ………..
10. Rank the following in order which they affect your purchase decision while buying
from traditional/ kirana drug store.
Emergency: - ……….. Convenience: - ………..
Doctor’s influence: - ………… Proximity: - ………..
Any other (specify): - ………..
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 1= Unimportant, 2= Less important, 3= Neutral, 4= Important, 5= Very

important
Performance 1= Very bad,2= Bad, 3= Can’t say, 4= Good, 5= Very good
Sr. Expectation Performance

No.
1 2 3 4 5 1 2 3 4 5
1 Good availability of medicine
2 Genuine/ Good quality of medicine
3 Medicines available at discount
4 Quick services
5 Proximity of location
6 Convenient parking
7 Friendly pharmacist
8 Competent staff
9 Computerized Quick billing system
Page 72
10 24- hour service
11 24- hour customer support through helpline
12 Medicines stored under good storage condition
13 Home delivery on request
14 Free regular reminder service
15 Free health camps
16 Properly planned store layout & attractive frontage
Page 73

Kiran Virani Project

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A study on consumer perception towards the services of retail pharmacy chain

Calibar Pharmaceuticals Pvt. Ltd

Calibar Pharmaceuticals – a company truly dedicated to Healthcare!

Calibar Pharmaceuticals also plays a pioneering role in personalized healthcare and is

Your One Stop Source for Pharmaceutical Formulations

Wide Range of Products

Calibar manufactures a wide range of pharmaceutical formulation products in virtually all

Established in 1999 Calibar Pharmaceuticals is one of the leading pharmaceutical companies

Calibar Pharmaceuticals is an integrated pharmaceutical company and our purpose is to

Vision & Mission

Commitment – We are committed to our customers, business associates as well as

Name of the company: - Calibar Pharmaceuticals Pvt. Ltd

Year of establishment: - 1999

Corporate Office: - 16/17, Royal Township, Opp. New Octroi Naka,

Surat-Kadodra Road, Saroli, Dist. Surat 395 010 Gujarat, India.

Industry Type: - Pharmaceuticals

Form of organization: - Private organization

Phone No: - +91-261-6541556, 2642432

In commerce, a retailer buys goods or products in large quantities from manufacturers or

Growth of retail in India:

CTVs/LCDs, refrigerators, washing machines, dishwashers, microwave ovens and DVD

The break-up of organized retailing sales into various product categories:

The Growth Drivers

Ø Covering distances has become easier:

With increased automobile penetration and an overall improvement in the

Ø Customer Interfacing Systems

• Bar Coding and Scanners

Internet is also rapidly evolving as a customer interface, removing the need of a

Ø Operation Support Systems

• Advanced Planning and Scheduling Systems

Ø Strategic Decision Support Systems

Demographics and buying patterns of residents of an area can be used to compare

• Sectors with High Growth Potential:

Certain segments that promise a high growth are

ü Food and Grocery

• Fastest Growing Formats:

Some of the formats that offer good growth potential are:

ü Specialty and Super Market

Ø Supply Chain Infrastructure:

Ø 5 pharmacy chains control 40% of the sales in the US.

Ø 7 pharmacy chains control more than 60% of the market in UK.

Ø Prevalence of spurious or counterfeit drugs is high with estimates ranging from 5% to

Currently, the leading players in the organized pharma retail market

Ø Fortis Health World,

Ø Discount retailer Subhiksha Retail,

Ø International drug retail chain Medicine Shoppe

Ø Pharmacy chains set up by independent retailers like,

ü Guardian Pharmacy (Guardian Life Care)

ü LifeKen (Lifetime Healthcare Pvt. Ltd.)

ü 98.4 degrees (Global Health line)

ü Care & Cure (Manipal Group)

ü Dial for Health (Zydus Cadila)

ü Planet Health (Sagar Drugs & Pharmaceuticals) and

ü MedPlus (Optival Health Solutions).

LifeKen plans to expand to 700 stores.

Ø In Pharmaceutical Retailing there are two types of sectors:

1. Organized Pharmacy Sector :

2. Unorganized Pharmacy Sector:

Independent and Small retail outlets

Advantages to Organized Pharmacy Sector/ Pharmacy chains

Ø Retailing their own pharma brands/generic brands along with competitors

Ø Passing advantages to patients and consumers:

Ø Increase in market share and profits:

Disadvantages to small retailers