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Case Review Malaysias Retail Pharmacy Marketing Essay


The report aspires to provide an overview retail pharmacy industry and examine factors that propel and restrain the marketplace, government regulations, sales styles, potential expansion and market prospect. Troubles related to the pharmaceutical retail sector will be outlined and evaluated, and insights into marketing ideas being deployed to tap into available market opportunities in Malaysia may also be discussed.

Malaysia's retail pharmacy : an overview

Malaysia comes in at fifth in professional medical expenditure when compared to select Asian countries, and is growing at approximately 13% on a yearly basis (Frost & Sullivan 2008). The full total national costs on healthcare in '09 2009 exceeded USD 7 billion, which is projected to surpass USD 10 billion by 2020. Retail pharmacy sector currently however contributes only to 17% of the total expenditure only due to restrictions regarding government policies, career workforce, and human population perception.

The retail pharmacy sector customarily can be referred to using firm size and product/service combination criteria. Sole models are comprised mainly of indie pharmacies, usually had by pharmacists. Multiple-unit pharmacy organizations, or chains, can be divided into small chain and large chain (e. g. 30 or more products).

In addition to organization size, the retail pharmacy sector can be characterized by the product/service mixture of the organizations, though there exists some blurring of this distinction. Some traditional categories include, supermarket (e. g. AEON), and, beauty and health care stores (e. g. Guardian, Watsons). Natural drug store is virtually non-existent in the Malaysian retail pharmacy sector as a result of no dispensing parting between your pharmacists and medical practitioners whereby pharmaceutical products can be sold and dispensed by medical practitioners as well. As a result, this insurance policy, have but still negatively impacting the pharmacy vocation practice and retail viability of pure medicine store in Malaysia. Therefore, current retail pharmacies generally offer both pharmaceutical and non-pharmaceutical product/services to keep up practical in Malaysian market.

The major participants in the Malaysian retail pharmacy arena are multinational firms such as GCH Retail (M) Sdn Bhd and Watsons Personal Good care Store, local companies such as Caring Pharmacy and Trustz Pharmacy, and various small independently operated pharmacies.

In 2009, the multinationals, GCH's Guardian and Watsons collectively dominated 54% of the total market share whilst 46% was divided among local retail pharmacies as shown above (Euromonitor 2010). Generally experienced in dealing with large industries, these multinational organizations set alongside the domestic counterparts, possess the experties in controlling processing, packaging, logistics, inventory management etc. Furthermore, they have got the benefits of economies of level, retailing of in-house brand, increase in market revenue and talk about, and wider discount parameter for retail professional medical products.

chapter 1

External and internal factors influencing retailer's marketing strategies

In this bearish current economic climate, retailing in Malaysia registered a downtempo in current value growth (CVG) in 2009 2009 compared to previous year but nonetheless at an optimistic tempo (Euromonitor 2010). GDP forecast was reevaluated in-may 2009 from 4% to 5% decrease for 2009 in light of deteriorating international monetary prospect (Euromonitor 2010). While consumer self-assurance dwindled, discretionary spending was reduced but made an appearance willing to spend a bit more during promotional period or considered cheaper alternatives such as mid-priced/inexpensive in-house brands or universal medications.

With ongoing urbanization tendency, higher education levels and better living requirements generated greater enthusiasm among "post downturn shopper"consumers regarding self-medication. This further strengthened the importance of retail pharmacies as consumers were able to acquire OTC professional medical, nutritional products and prescription medications from retail pharmacies.

Overall style of the retail pharmacy sector is gearing into the sales of generics and OTCs in times of recession. Price of generics are generally lower, 27%-90%, compared to branded/innovator products (Shafie & Hassali 2008). Therefore a far more cost friendlier option for consumers whilst profit margins of generics are greater than top quality/innovator products, which is favorable to suppliers - a win-win solution. However, sales of non-prescription products such as OTCs, TCMs, vitamins and supplements remain the key contributor to the retail pharmacy's income at 79%. The products similarly are finding growth in sales fueled by benefits in cough, cool and allergy remedies, amid global slowdown since 2008.

Having said so, sellers still make use of different marketing ways of identify themselves from existing rivals and attempt to reposition themselves as market leaders - some successful while some struggled. Strategies pertaining to each of the different type of organizations will be further reviewed as follow:

Strategies employed by multinational corporation

The multinationals (i. e Guardian, Watsons) took a broad variety approach by wanting to diversify from traditional dispensing services common to the idea of a pharmacy, into other other market sections regarding to basic professional medical and beauty way to permeate into wider consumer segments before recession. The merchants responded by engaging in regular special offers and expanded sales period to encourage spending and offering a mixture of both pharmaceutical services with beauty attention.

Rapid growth strategies performed by leading chained vendors resulted in a strong increase in the chained store quantities in the country. 2009 saw a slight improvement in the average selling space per shop of beauty and medical adviser retailers. More suppliers began starting stores in shopping malls which were larger than their standalone establishments. Most beauty and health specialist retailers release their retail chains in Klang Valley. That is largely anticipated to increased purchasing ability among metropolitan consumers.

Nonetheless, more beauty and medical adviser retailers are expanding outside Klang Valley to be able to serve the rising society and growing purchasing electricity of consumers in East Malaysia and supplementary states. Starting of budget in-house brand is for a wider selection of consumer portion.

Guardian: marketplace, product and services, promotion

GCH Retail (M) Sdn Bhd is a wholly-owned subsidiary of your Hong Kong founded Dairy Plantation International Holdings Ltd, detailed on the Hang up Seng Stock Exchange. Dairy Farm International Holdings Ltd is 78% held by the Jardine Matheson Group, which is detailed on the FTSE STOCK MARKET in addition to secondary listings on the Singapore Straits and Bermuda Stock Exchanges (Euromonitor 2010).

In Malaysia, the business is mixed up in procedure of Guardian pharmacy, Chilly Safe-keeping supermarket and Large hypermarket outlets. In '09 2009, as a result of its competitive outlet expansion, with 20 new Guardian shops, and proactive promotion including daily special offers boosted the company's pharmaceutical market share to 35% - Number 2. 0, occupying the most significant slice of the retail pharmacy market segment. GCH Retail's Guardian brand is leading the pack because the retail format is little by little becoming popular in Malaysia. For example, Guardian spearheaded the concept of modern retail pharmacy by giving professional assessment and service by signed up pharmacists, plus alternative health and personal care solution.

GCH Retail's in-house brand offers quality products at affordable prices because the company's in-house products are manufactured and sourced locally. In addition, the company, focusing on all consumer segment, from low to high income earners, was very aggressive to advertise its home brand products in conditions of advertising and offers, while also developing its product runs. For instance, Guardian dedicated half a page or full-page adverts in their in-store brochures or leaflets for their in-house brand products. GCH Retail's share of in-house brand products has been growing continuously largely due to growing brand recognition as well as the wider selection of items available. In response to the Malaysian government's support initiatives designed to spur small and mid-sized enterprises (SMEs) in Malaysia, it is expected that the business will continue steadily to source new products for its in-house brand lines.

External and inner factors analysis




Economic slowdown

Decentralized marketing function: inconsistent brand image


Retracted consumer spending

Increased rivalry between competitors


Import/Export: Malaysian Ringgit vs Hong Kong Dollar

Good management: able to respond to market change


Change in consumer's spending pattern

Both exterior and internal factors influence how the company decides to use. The exterior factors will be the same for all your market players.

Watsons personal good care store: target market, product and services, promotion

Watsons Personal Good care Stores (WPCS) is a subsidiary of the AS Watson Group which is completely had by the Hong Kong structured Hutchison Whampoa Ltd listed on the Hang up Seng STOCK MARKET main plank and has been around Malaysia since 1994.

Being the major beauty and health retail string in Asia, in Malaysia, with 211 outlets nationwide following successful merger and acquisition of Apex Pharmacy Sdn Bhd in Jun 2005, WPCS is one of the very most accomplished personal good care string stores (Euromonitor 2010). In '09 2009, albeit with pharmaceutical value share of 19% - Shape 2. 0, credited to increasing quantity of beauty and medical adviser retailers, WPCS continued to be the largest community pharmacy retail chain in Malaysia. Having said so, continuous marketing attempts and special offers such as tv set advertising, complimentary beauty and health information to consumers, and storewide 20% discount marketing campaign, helped restrain its semester in value share.

WPCS offers competitively priced and quality in-house brand products. Its in-house brand lines contain a larger proportion of beauty products and toiletries, throw-away newspaper products, OTC medical care products, bottled water and electric powered items, is mainly designed for mass consumers, especially the budget end of the marketplace. The business has been very energetic in moving its in-house brand. For instance, it offers dedicated more shelf space in-store because of its inhouse brand items. In conjunction with growing brand acknowledgement, and a wider selection of products, the business's show of in-house brand has grown steadily.

External and internal factors analysis




Economic slowdown

Over expansion leading to dissipated consumer services


Retracted consumer spending

Increased rivalry between competitors


Import/Export: Malaysian Ringgit vs Hong Kong Dollar

Extensive shop coverage nationwide


Change in consumer's spending pattern

Strategies employed by smaller pharmacy

Marketing style of smaller pharmacies give attention to creating good rapport with its customer base and also to provide individually personalized pharmaceutical services because of their clients to serve on the needs of determined consumer segments. The smaller suppliers responded by provided prolonged hour services for the capability of consumers after working time usage of pharmaceutical items and advice. Commitment marketing is presented to keep or increase their customer foundation in light of even more competitive environment. A commitment program may be specific to a person retailer, or an independent coalition scheme involving a few associates. The latter model is gathering popularity in Malaysia and is made in Europe, Australia and Canada. Specialized services exclusive to pharmacy such as pre-packed dosettes medications to ensure better conformity to medicine, insulin dose modifications for uncontrolled diabetes management and methadone alternative therapy for heroin based mostly patient, focus on unique patients segment that is gradually increasing.

Caring pharmacy: marketplace, product and services, promotion

Caring Pharmacy Sdn Bhd is a group of pharmacies under one banner collectively stocks the same source and inventory management similar to that of string stores, however each outlets are independently owned and controlled by pharmacists.

Caring Group currently have 46 registered pharmacists operating 40 outlets in Klang valley. Therefore providing the Group the best amount of pharmacist to outlet proportion among retail pharmacy providers in Malaysia.

With market talk about of 12% in 2009 2009 - Figure 2. 0, Caring is rising fast among the most established local community retail pharmacy. Providing expanded hour services from the first hours up to midnight became a strong strategy in establishing its market talk about as it provides time versatility to consumers. Caring offers professional consultation by authorized pharmacists on uncomplicated health conditions and medication management solutions such as pre-packed medications similar to the multi dosage Webster-Pak for the consumer's convenience.

The group has been positively promoting its pharmacist assessment service. For example, public awareness discussions by pharmacists on health topics such as hypertension, diabetes, weight-management etc. are generally planned. Launched in 2006, the first pharmacy incentive program as a factors accumulation and gift idea redemption cards with Malaysia's premier multi-party devotion program - BonusLink, empowered Caring to establish closer contact with their regular clients.

External and internal factors analysis




Economic slowdown

Too focused on local/localization growth


Retracted consumer spending

Increased rivalry between competitors


Change in consumer's spending pattern

Good corporate central value: pharmacist service for all those consumer segments


chapter 2

Strategic advice for the retail pharmacy industry

The Malaysian as well as the global economy sustained to see tough times in '09 2009. Despite an unemployment rate that was increasing and consumer spending falling, consumers continued to be largely faithful to set up pharmacy names as it pertains to rewarding their healthcare needs. Some consumers also switched to self-medication in times of modest disorders as a bid to go back to benefit fear that they could lose their jobs in the downturn. Retail pharmacies are witnessing a rise in consumer sales contribution of 0. 2% for 2009 against 2008. This was largely due to the expansion of retailers such as Watsons which drawn consumer interest for its one-stop shopping.

Offer Mix




Promotion Mix

Sales promotion


Sales force

Public relations

Target consumers

Marketing-mix strategy

Target consumers : consumer demographic outlook and lifestyle trend

In 2007, the population in Malaysia was reported to be just over 27 million which, corresponding to US Team of Economic and Social Affairs. By 2015, it's projected that Malaysia's society will reach more than 30. 7 million.

Currently, the country has relatively young inhabitants, with nearly 60% Malaysians below the age of 30 in 2007. No matter, the populace is steadily increasing age, with the median years of the population increasing from 22. 5 years in 1995 to 24. 6 years in 2007. The ageing populace in Malaysia, usually gaining more than their young counterparts and are usually relatively proven in conditions of family and home and even more aware of their health position, is likely to drive consumer medical care expenditure. Consumer of the category is expected to drive increased demand for medical and health-related products and services, including pharmaceuticals and OTC drugs, natural vitamins and dietary supplements, health refreshments and medical equipment.

On the other hand, it's projected that still over one-half of the Malaysian populace will be under 30 years-old in 2015 so, while there will be some new emphasis on products for more aged consumers, younger consumers will remain a potent power, training significant purchasing power and driving carrying on demand for the vast range of children oriented products. This group of individuals are becoming more health mindful, recent survey that 80% of fast moving consumer goods purchasers now think about their health more than they did before. Hence, this will spur demand for center health care products and effect sales in tangential sectors such as food and drinks, and medical services.

Offer Mix : Product portfolio adjustment and costs tactic

Product portfolio adjustment

As living costs, including health care costs, are anticipated to rise, consumers will be more endeavous to test economical in-house brand products and self-medicate, respectively. Additionally, more consumers understand the helpfulness of vitamin supplements and health supplements as precautionary measures against environment, diet and age-related ailments such as joint and back pain, immune systems, osteoporosis and insufficient balance nutritional values.

The relatively fast development rate of consumer health care sales was not equally propagate among in-house brand lines. It should be noted that not all categories observed higher in-house brand expansion, as some were mostly dependent on expansion by branded products. Within consumer professional medical, in-house brand product line is likely to increase in wound treatment products such as sticking plasters and topical ointment germicidal/antiseptic - Body 3. 0, especially amid an economic slowdown and an influenza A (H1N1) outbreak, respectively. Coupled with strict sign up requirements in Malaysia for many medicines, either branded or generics, in-house brand is improbable to perform well in consumer health care categories such as oral analgesics, cough, frosty and allergy (hay fever) remedies or intestinal remedies as consumers remained largely loyal to set up brands due to the fact these brands are long-time dependable labels that consumers find most effective or have simply grown accustomed to purchasing.

However, consumers will ever more demand convenient and effective products so as to meet their increasingly stressful and busy life-style. Therefore, easy to use or easy to use products such as Nexcare Acne Patch and Gaviscon Liquid Sachets are expected to draw in consumer interest, especially among the younger generation of the populace.

Retailers should expand their consumer health care product ranges to be able to maintain competitive on the market. However, merchants should concentrate on producing lower-cost and in-house top quality products such as topical ointment analgesics, antipruritics, other wound treatments, vitamins and health supplements, that enjoy strong demand among consumers.

Pricing tactic

Consumers will be doing your research to discover the best deals. It isn't necessary for sellers to trim list prices, but may offer more brief termed price marketing promotions, lower quantity threshold special discounts, provide credit to long-standing customers, and even more aggressively price smaller pack sizes. In tough times, price cuts get more consumer support than campaigns such as mail in offers and sweepstakes.

Promotion combination : conventional advertising and online marketing

Despite the growth of electronic marketing communications, printed newsletter and television set still play an important role in Malaysians' lifestyle and their quest for information and entertainment. As shown in Number 4. 0, printed out adspend dominated 54% followed by television set adspend at 37% of the total adspend respectively for the entire year 2009. Major magazines include three English-language dailies, two Malay-language dailies, five Chinese-language dailies, and two Tamil-language dailies. The Malaysian has a variety of periodicals covering lifestyle, fashion, business, and special interest matters such as sportfishing, motoring, health and wellness and childcare. Newspapers in Malaysia are usually published on the fortnight or monthly basis and are available via registration, at shops, convenience outlets and small grocery stores.

The internet has had a significant effect on Malaysia over the past several years. The amount of internet surfers grew from nearly five million users in 2000 to more than 12 million users in 2007, reflecting growth of 144%. Equally significantly, the household penetration rate of personal computers in Malaysia increased from 13. 5% in 1995 to 34. 7% in 2007. Tethered with such development, online adspend recorded 72% spike growth from 2007-2009, and it is likely to continue acquiring readership share at the trouble of printed mass media, in-line with home penetration rate of internet-enabled computers increases in Malaysia.

Mobile advertising will be in vogue as internet handheld devices gains market penetration, particularly among the younger population. Advertising websites such as Apple's iAd is a excellent example of cutting-edge mobile advertising where adverts are not merely educational but interactive as well. Advertisements of the kind, can be modified real-time by vendors with short-term sales advertising comparable to Malaysia Airline's Lunch-hour journey deals or provide interactive online shopping experience, will revolutionize standard concept of promotional advertising.

Hence, internet will impact on how vendors try to reach Malaysian consumers and, in a less significant but still growing way currently on how Malaysians shop. However, as generally in most countries, online advertising and internet retailing is likely to increase.


Consumers in Malaysia are changing their health care shopping behavior in a variety of ways at times of recession. Even though many chosen other less expensive retailers, there are some who remained faithful with their preferred sellers while reducing the number of travels and spending. They are really convenient in searching for offers and using coupons, and can purchase both in-house brands or top quality products whichever provides the best value. Classification of value is also changing. Recently, value is often perceived as quality and options, but during downturn this is synonymous with price, while moving out of tough economy, value means that consumers get what they want at the best possible price. Pharmacy vendors can capitalize on consumer's needs by giving increased individualized marketing and shopping experience. Consumers are shifting towards important and unique shopping experience, particularly in purchasing medical items.

Consumer in control

Present consumers know are clear of what they need and many should go the distance in search of the best offers, some consumers, because of the lifestyle fluidity simply require products that meet their needs. Mobile shopping would be the next frontier for merchants to venture into as on-the-go consumers who stress on shopping convenience and acceleration of transactions. Pharmacy merchants can utilize this market and formulate marketing strategies unique to dedicated mobile shoppers. Typical in-store individuals are bombarded with too much product information creating dilemma and delaying purchases. Merchants and manufacturers should collaborate to meet consumer's needs such as using attractive colors and creating simplistic presentation to accomplish consumer's seek out health care products.

Retailers diversify and re-brand to stay relevant

Pharmacy sellers diversifying into in-house products should factor in consumer's shopping inclination on established top quality medical products when formulating in-house product marketing strategies. Many consumers preserved loyalty to set up brands anticipated to familiarity to something or confident with its performance. However, in-house branded product line such as wound attention, vitamin supplements and supplements are projected to grow due to regional disease outbreak and economical downtempo. New and improve in-house product lines with convenience in mind such as topical ointment analgesics and sachet digestive remedies will appeal to consumers specially the younger customers. Stores might need to revamp certain products with new design, improve in-house brand offers and a persuasive ad-campaign, to charm to younger consumers.

Future of retail pharmacy

Retail pharmacy scenery is shifting typically attributed to financial changes, the growth of online retailing and recently mobile business. With increasing use of smart handheld devices in Malaysia, mobile advertising and business is projected to increase substantially. Retailers will have to employ a multi-channel marketing methodology. Online retailing will provide a system for merchants disseminate unique and targeted product offers for consumers to analyze, plan their shopping journeys and ultimately catch the attention of consumers into stores. Once in store, consumers can look for high quality service coupled with simplified shopping experience in conditions of product availability and simple seeking the products. Now more than ever consumers becoming more superior and informed in making choices. They really want to know the foundation of the product, what they are made of and how their lives can be improved with them. Generally, future consumer wants a simplified, customized and significant shopping experience with a give attention to value.

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