INTERNATIONAL UNIVERSITY - VIETNAM NATIONAL UNIVERSITY

School of Industrial and Engineering Management

REPORT
COURSE: Retail Management

TITLE:Analysis on the Retail Plan of Pharmacity

Lecturer: MSc. Nguyen Hoang Huy

GROUP

No. Student’s name Student’s ID

1 Lê Huỳnh Thiên Thanh IELSIU18137
2 Huỳnh Thúy Vy IELSIU18178
3 Nguyễn Hiền Đông Nghi IELSIU18094
4 Lê Hữu Hoàng Long IELSIU18071
5 Bùi Tuấn Kiệt IELSIU18059
6 Nguyễn Trần Khánh Linh IELSIU18067
7 Lê Hoàng Thảo Linh IELSIU18066
 Table of Contents
I. Introduction………………………………………………………………………3

II. Analysis……………………………………………………………………….....4

1. Propose Retail Type…………………………………………………………4

2. Target Market………………………………………………………………..4
3. Location Analysis……………………………………………………………6
4. Retailing Channels…………………………………………………………..8
5. Merchandise Mix……………………………………………………………9
6. Pricing……………………………………………………………………...11
7. Marketing Communication Mix……………………………………………16
8. Customer Service…………………………………………………………..21
9. Store layout and design…………………………………………………….27

III. Conclusion……………………………………………………………………31

IV. References…………………………………………………………………….32

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I, Introduction
Founded in November, 2011, Pharmacity is one of the leading modern retailers in the field of

pharmacy in Vietnam. It is committed to increasing the value of healthcare for its customers.

Currently, Pharmacity has a network of pharmacies throughout the districts in Ho Chi Minh City.

Pharmacity aims to reach 1,000 retail stores of pharmacies and functional foods in Ho Chi Minh

City by 2021. Along with that, in the future, Pharmacity will expand its network across the

country, always aiming to become a modern retail pharmacy, providing an optimal experience

for its customers.

At Pharmacity, every pharmacist is not only highly qualified, dedicated to the profession but also

trained to successfully complete the assigned missions, helping Pharmacity always be worthy of

customer trust.

Coming to every Pharmacity store, customers can experience and shop for the highest quality

and prestigious products in the healthcare market.

Every customer coming to Pharmacity is supported enthusiastically, given dedicated advice as a

guideline for our business activities: "Pharmacity - Dedicated service".

In order to achieve the goals set, Pharmacity has successfully devised a retail plan. Hence, this

research aims to deeply analyze its plan in a variety of aspects: propose retail type, target market,

location analysis, retailing channels, merchandise mix, pricing, marketing communication mix,

customer service, and store layout and design.

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II, Analysis
1, Propose Retail Type
Pharmacity is a chain of modern super drugstore which was founded and developed by Chris

Blank. In the common way, Pharmacity is a drugstore whose main merchandise is not different

from the others – medicines, functional foods and health care products. However, Pharmacity is

not the same with the other pharmacy, it was a combination of traditional drugstore and

convenient store that sells family essential things such as snacks, drinks, tooth brush, etc…now,

customers beside buying medicines, they also can find others things that they usually need and

use in their everyday life here. This is the new point of this chain pharmacy which can help them

to attract more customers and gain more additional profit beside the main one. Having been one

of the first modern super drugstore in Vietnam’s market, Pharmacity is now heading to be one of

the best choices for their customers due to their high quality, prestige and convenience.

2, Target Market
As a drugstore, first, Pharmacity defines their main customers are people of all ages, genders and

education levels who have the need of medicines or need an advice for their health. Due to high-

quality merchandise which mostly come from foreign brands, their price is higher than the other

traditional ones. So beside ages, genders and education levels, they also aim to high-medium

income people and the upper classes who have enough financial conditions to pay.

Discussing about trade area of Pharmacity, we have to look into to their local site,in detail, we

take Thu Duc district as a prime example. Due to the lack of the map of population rate, we

decide to find trade area by driving time (motorbike driving time).

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 Figure 1: All Pharmacity stores in Thu Duc District (Source: Pharmacity Official Website)

The primary trade area is assumed to be the area that customers just need from 1 to 5 minutes to

get to a Pharmacity store and 5 to 10 minutes for those which are in secondary trading area and

the tertiary zone for the area that takes customers more than 10 minutes to travel. Finally, we

came up with this table:

Arrival/
Linh Trung Linh Tay Linh Chieu Linh Dong Linh Xuan
Destination
Pharmacity (60 Le
Van Chi, Thu Duc, 2 9 7 14 10
HCM)
Pharmacity (247
To Ngoc Van, Thu 12 3 7 6 14
Duc, HCM)
Pharmacity (622A
Kha Van Can, Thu 14 6 8 3 12
Duc,HCM)
Table 1 : Time travelling from different places to some Pharmacity stores (Source: Google map)

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The map below illustrates the trade zones of the stores in the table above:

Figure 2: Trading area (Green zone: Tertiary, Blue zone: Secondary, Red zone: Primary)

As can be seen from the figure above, some zones are overlapping, which leads to the result that

the same customers can be served by both sites which is a kind of support when they cannot find

what they want but they can travel to the nearest store have it to check with the same travel time.

3, Location Analysis
Pharmacity Store Location: 280, Phan Xich Long Street, Ward 7, Phu Nhuan District.
Having a good location for retail is one of the crucial impacts in the case of the marketing

strategy of retail because many of the associated long-term decisions and commitments depend

on the location of the retail. Having a good location is one of c primary element in attracting

prospects and customers.

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At times, a good location can also lead to an excellent competitive advantage because in

retail marketing mix location is one of the crucial parameters and unique which cannot be copied

by competitors in any way.

Figure 3: Pharmacity Phan Xich Long.

For more than 9 years of launching and developing, Pharmacity has already had 250 stores in big

and dynamic cities like Ho Chi Minh City, Can Tho, Binh Duong, Vung Tau and Hanoi. The

company has announced plans to expand to 1,000 locations across all 63 provinces by the end of

2021.

One of the locations is examined is Pharmacity Phan Xich Long, address: 280 Phan Xich Long

Street, Ward 7, Phu Nhuan District. Phu Nhuan has long been known to be a dynamic district

with good infrastructure, crowded streets with multiple lanes, different buildings, schools and

hospitals as well as some entertainment complexes. In addition, it is the most densely populated

district in Ho Chi Minh City. Phan Xich Long in specific and ward 7 in general, thanks to recent

changes in city’s overall development orientation, has become critical area filled with offices and
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buildings, department store and lots of restaurants, dining areas and cafes. Knowing that

consumers might be inclined to patronize convenience stores located on the path of their daily

commutes is part of a reason for Pharmacity, a retail system mainly focuses on pharmaceutical

products, such as drugs, healthcare, beautycare and convenient products, locate their store in

Phan Xich Long street . This freestanding store is located at the middle of the street, where high

traffic flow is recorded for most of the rush hours. Additionally, convenience goods require easy

access to let the customer quickly make a purchase. Pharmacity took advantage of having two

fronts to create greater accessibility. A door for customers who want to get advisory and buy

drugs can use one specific door to directly meet with pharmacists, which means customers can

minimize their time of parking, thus, satisfaction gained. For ones who want to take a closer look

at other healthcare product or asking for information, a door with lots of special discounts,

promotions and sales staff are willingly to help.

4, Retailing Channels
Multi-channel retailing means that the retailer must ensure that all direct and online sales

channels are integrated and interconnected. Beware of this this, Pharmacity empower their retail

system by the integration of both traditional stores and websites. For the traditional stores,

multiple customer attraction strategies are launched daily, namely discounts for the second

products purchased, everyday low price areas, free products for every bill over 500,000 VNĐ.

For online website, online and phone call advices for prescription are considered as a

breakthrough method to attract people to visit their website. Furthermore, to provide customers

with a seamless, consistent, easy experience from search to order purchase, Pharmacity has

transparent price policies associated with detailed descriptions for every product. Clearly defined

target customer helps Pharmacity build efficient channels to serve young people who spend a

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considerate amount of time surfing a website, having easy access and navigation. One the other

hand, frequent news on healthcare, cancer prevention and nutritional information is updated to

enrich people with useful news, hence, attract potential customers. Last but not least, website

with addresses of store location all over the country gives target customers the choice of where to

buy, which is likely to optimize their experience on the most relevant sales channels based on

shopping behavior.

Figure 4: Pharmacity’s website home page.

5, Merchandise Mix
5.1. Merchandise

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 Sales
Medicine

8% 17%
43% Personal Health and
Beauty Care
32% Functional Food

Convinience
Products

Figure 5: Proportion of Pharmacity’s merchandise

Stores in the system of Pharmacity provides a great quantity of medicines including both

Western and Eastern medicines – which is the main merchandise of the stores. Besides,

Phamacity also has other categories relating to health and beauty care. The merchandise of

Pharmacity are divided into 4 main types:

• Medicines: sorted into 2 types: “Medicines with prescription” which requires strict control

and “Medicines without prescription” which requires less security. Customers can easily

find what they need in any store because of the variety in types of medicine available.

• Personal Health and Beauty Care: skin care, hair care, body wash, make up, toothbrush,

tissue… and so on

• Functional Food

• Convenience Products: milk, snack, beverage,…

Products of Pharmacity primarily focus on medicines and health care. However, Pharmacity

knows what their customers want and provides some of other merchandise such as snack or

beverage. Customers not only find medicines, but also find other essential things they need in

daily life here. These merchandise support each other and bring profitsto Pharmacity.
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 5.2. Brands
Pharmacity has its own private brand: “Pharmacity”. This is also the major brand of

Pharmacity. Except for medicines, snack and beverage, products of other types are mostly from

its private brand. With high quality and reasonable price, “Phamacity” brand achieves customer

trust and become one of the right step of Pharmacity in the competitive market.

Figure 6: Pharmacity private brand merchandises

Pharmacity also provides products of other famous brands:

• Skin care: Nivea, Acnes, Senka, Cetaphil, Olay,…
• Hair care: Dove, Lifebuoy,…
• Make up: Vichy, Maybelline,…
• Functional Food: whey,…

Figure 7: Other famous brands

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Pharmacity distributes the products of these brands wisely, with various levels from low to high

price. Customers can find products suitable for their demand with high quality and reliability.

6, Pricing
6.1Background of the research
Pricing is an essential element which contributes to the decision of customers in choosing their

buying brands. For this reason, retailers always pay a good consideration on its pricing strategy

so as to hold its competition against other retailers. As comparing prices has never been easier,

with consumers able to access this information directly from their mobile devices, developing a

good everyday pricing strategy, as well as compelling offers and monitoring competitive

activities become a must in the retailing merchandise management, not except for the case of

pharmaceutical industry. In this section, PHARMACITY’s pricing strategy will be analyzed, in

the aspects of its daily policy, pricing method, solutions for pricing competition with other

pharmacies and how it maintains the customers’ purchases.

6.2Pricing Strategy
Below are some surveys about the price comparison between Pharmacity products (including

medicine, other non-medicine and Pharmacity-owned) and products selling in other retailers as

well as other brands.

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 The Price Comparision Between
Pharmacity And Other Retailers

14%

Equal to the market

23% Lower than the market
63% Higher than the market

Figure 8: Price’s comparision between Pharmacity and others

From the chart, it can be concluded that most of the products on shelves has their prices equal to

or even lower to those of the general market.

This case may be identified as Penetration Pricing, in which retailers keep a low price for their

products for a period of time until they successfully gain the market or build brand awareness.

This reveal is appealing to customers who pay much care about price, yet medicine and

convenient products are not really price-sensitive fields, therefore the group of customers who

will be attracted by this strategy to locate their purchasing at Pharmacity are often people

interested in personal health and beauty care products.

6.3 Price competition

Together with a good pricing strategy, compelling promotions and offers must be released to

enhance the competitive capacity of the retailers. Pharmacity, as competing against other

personal medicine stores and medicine retailing brands, also introduces various price policies for

their customers:
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 Figure 9: Sales strategy
• Frequent sales at all time of the year, with direct rebates on the product prices, not only

medicine but other products as well.

Figure 10: Other strategies

• Gifts combined with purchases which are convenient stuffs that customers are likely to

obtain, such as bottles, umbrellas, pockets, etc

Figure 11: Parmacity coupons

- Coupons for bills that meet some requirements

- Good deal and low price purchasing for members of Pharmacity (via Extracare Program)

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 Figure 12: Pharmacity’s products

- Different kinds of products of Pharmacity private brands are being introduced on shelves

together with other brands, which have the lower price but the quality being ensured.

6.4 Pricing medthod

Figure 13:Pharmacity’s pricing method

Taking into consideration the business circumstances of Pharmacity and its opponents,

Pharmacity has to pay a much higher cost for maintaining its business, including the operation of

its chain of hundreds of stores, employment, transportation,…in comparision to a personal

medicine store. It is hence reasonable that Pharmacity charges high price for its products.

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However, as observed from the Pricing strategy of Pharmacity, products price are set fairly equal

to those of other retailers, which imply that a market research has been made by Pharmacity in

order to create a logic range of pricing. Therefore, this method should be identified as

Competition-based Pricing, in which business takes into account the prices of their rivals in

order to determine the price of their goods and may charge higher, lower, or equal prices as

compared to the prices of its competitors. Also, it can be implied that Pharmacity do not apply

Cost-oriented Pricing in its policy for the fact that the products price of Pharmacity are set

equally to the market, regardless of its considerable cost of operation.

6.5 Frequent Shopper Program

Figure 14 :Extra Care membership program

Pharmacity provides its frequent customers the EXTRACARE Program, in which customers

may register Pharmacity Memberships and receive some benefits which are exclusively offered

to customer members of Pharmacity, such as:

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 • Point earning for purchasing goods, followed by the classification of customers based on

their points accumulation. There are 5 levels of membership (Member, Silver, Gold,

Platinum and VIP), in each of which customers will receive different levels of preferences.

• Participation in some special offers or events of Pharmacity.

Frequent updating on information about health, promotions and offers from Pharmacity.

7, Marketing Communication Mix

7.1 Background of the research
As in other industries, marketing plays a vital role in pharmaceutical industry.Marketing, or in

another way, communication programs is the driving force retailers use to develop their brand

images and build customer loyalty.

Undoubtedly, Pharmacity cannot let themselves be the outsiders of the game named planning the

best communication mix strategies.

In this section, we will discuss about the marketing strategies that Pharmacity are using and

planning to use in the near future.

7.2 Two types of marketing strategies and the way Pharmacity take
advantages of them
7.2.1 Unpaid media
Unpaid media is any marketing tactic where retailers don’t need to pay to promote. Unpaid

media contains two phases:

• Owned media sites: free outlets retailers control in which they do not pay for basic

usage. Common channels include, but of course are not limited to, blogs, website and

social networks.

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 Figure 15: Official Facebook Page of Pharmacity: Pharmacity Super Drugstore

• Earned media: digital marketing inherited from owned-media products. These include

mentions, reviews, shares, reposts or any content created by a third publisher.

Figure 16: A customer posted her review about a piece of sunscreen produced by Pharmacity on fime.vn –

a website whose content is all about reviews

Some advantages of this method to be listed out are building relationships with prospects and
customers, adaptability and cost-effective.

7.2.2 Paid media

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Paid media is any marketing tactic where retailers pay to promote content on a third-party

channel. Paid media plans the action retailers want viewers to take. Some typical outlets are

displaying ads, paid search and sponsorships. In its most basic form, paid media drives people to

unpaid media with and objective in mind.

Figure 17: Influencer - Actor Phat La featured in promotion videos which were posted on Pharmacity Super Drugstore’s Youtube
Channel

To add up, the advertisement posted on Pharmacity Super Drug Store which is only half a minute

has got about 9 million views.

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 Figure 18: The considered-as-successful advertisement produced by Pharmacity

Also, Pharmacity offers customers from across the country the opportunity to purchase online via

website and application which is currently available on both iOS and Android foundations.

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 Figure 19: Pharmacity’s website

8, Customer Service
Customer Service is the set of activities and programs undertaken and retailers to make the

shopping experience more rewarding for the customers. Pharmacity is one of the leading

pharmacy retailers in Viet Nam and is well-known for its excellent customer service and well-

trained staff. Its aim is to treat every customer with friendly attitude and strive to resolve their

issues as efficiently as possible.

Our group would like to discuss more information about the service provided by Pharmacity to

increase the value of merchandise to customers.

8.1 Extracare program

Extracare is a preferential program exclusively for Pharmacity customers. The objectives of this

program are:

• Increasing the value of service of Pharmacity to its customers

• Proving customers with the best services and preferences from Pharmacity

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 • Maintaining a close relationship with loyal customers

The benefit that customers can receive by joining this program is that they can save a

certain amount of money from the previous purchase for the next ones. The amount of money

saved for each purchase is calculated by the formula Total cost*Ratio(dong). There are 5

levels of membership (Member, Silver, Gold, Platinum and VIP), each of which offers

customers with different levels of preferences.

When paying at Pharmacity stores, each customer can save his/her money with the Extracare

program by:

• Showing the staffs his/her phone number registered with the account

• Giving the staffs the Extracare membership card

• Showing the staff his/her QR code via Extracare app

8.2 Receiving feedbacks and complaints

When it comes to customer service, accessibility and responsiveness are the key factors.

Accessibility refers to the number of ways that customers can reach the company, while

responsiveness determines how fast and right the company deals with it. Pharmacity has gained

success in these two fields by providing its customers with a variety of channels to send

feedbacks and complaints.

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A customer can send feedbacks and complaints to Pharmacity via:

• Hotline: 18006821

• Message via Facebook (https://www.facebook.com/PharmacityVN/)

Figure 19: Pharmacity’s Facebook

• Email: cskh@pharmacity.vn
8.3 Staffs at stores
The staffs at Pharmacity stores are not only well-trained, but they are also committed to

delivering the best services to each and every customer.

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8.4 Website

Figure 20: Official Website

Customers can access Pharmacity’s website via https://www.pharmacity.vn/

On the website, there are several prominent features that assist customers, which include

• Products available at Pharmacity

Figure 21: Different types of products sold at Pharmacity

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• Useful information such as Hotline, Email, blogs that provide knowledge about health,

Social media (Facebook and Youtube)

Figure 22:Blogs providing customers with health knowledge

• Transparent Shipping policy, Return policy and in-depth details about the Extracare

program

• A chat box, which allows customers to chat with customer service staffs

Figure 23: Chat box

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8.5 Extracare app for mobile phone users

Extracare Pharmacity is an app developed by Pharmacity that

allows users of Android & IOS phones.

This shows the total score of points that a customer

has saved (1 point = 1 dong)

This shows how much money left that a customer

needs to spend to reach the next membership level

This region includes some useful features that might

come in handy for customers

This shows the customer’s QR code, which is used to

save point

This allows customers to know where to find the

nearest Pharmacity store

Figure 24: Pharmacity’s app

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8.6 Payment methods
Customers of Pharmacity can pay by:
• Cash
• Credit cards
• Payoo
• 9, Store layout and design

Figure 25: Pharmacity layout.

The image of the Pharmacity store shown by the entry gives customers a first impression of clear

and clean store with glass door, windows, and walls (Figure 2).

To offering the utilitarian benefits for the customers, Pharmacity choose the grid layout , which

makes purchasing and buying as quick and easy as possible. In order to achive that, the cash

registers (Checkout Area) are located at the entrance/exit of the store and straight shelves are

mostly used to hold and display merchandise. This leads to the fact that it provides an easy way

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to find what customers are looking for and reducing the time spent on shopping task that most do

not feel enjoyable. Furthermore, the discount product section placed at the front door to draw

customer attention and encourage buying behavior (Frontal presentation technique).

To creating a genuinely perfect store atmosphere, the decently bright white lights are set into

places, which give customers the sense of hygiene- a crutial factor for medicine or things

associated with health. Besides, it provides buyers a good look at what they are finding. What is

more, there is no scents in the store, however, pleasant music- for instance, the Chirstmas theme

song are played during December to creating delighting mood- is constantly played, which

makes customer comfortable and preventing from becoming frustrating when it comes to not

finding their desire products or queuing a long time-wasting line.

Figure 26: Pharmacity store’s front view.

Source: https://5sarchitect.com/vi/thiet-ke/thiet-ke-cua-hang-showroom/thiet-ke-noi-that-nha-thuoc-pharmacity-64.html

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Pharmarcity Web Site Design is not passable when mentioning Layout design. It appears to be

simple, friendly with eye-catching colours and realistic pictures, high-quality image of the

merchandise. It is absolutely convenient that the navigation bar has catagoried their products into

many different type such as medicine with description, health, Pharmacity private product, etc.

In addition, searching tool, definitely, exploits the advantage of navigating products to the

maximal efficentness, which is on the top of the website.

Figure27: Navigation bar, Searching bar

Furthermore, when an image of one product is clicked, the detail information (introduction,

price, etc) of the product’s page will be redirected. It comes as no surprised that similar in price

product, complementary product are suggested in a section below, which is helpful for customers

and well-thought. For example, clicking on Eticuti mask – a beauty product - will redirect the

site to its own detailed information page, providing clear image and price of the item (Figure 4).

Scrolling down to the bottom, suggested products are recommened such as Senka mask, sun-

protection scream, etc (Figure 5).

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 Figure 28: Detailed information of a product

Figure 29: Suggested products

Acknowledging the utilitarian need of buyers, Website offers online payment. This effectively

prevents the perils of long line at checkout and is ultimately convenient when credit card is

applied. Furthermore, there is a virtual cart that allowed customers to check their products and

the total payment. No doubt, payment checkout method of the site is transparent, trustworthy and

user-friendly, which are all customer want. (Figure 29)

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 \

Figure 30: Virtual Shopping Cart

III, Conclusion
This research has described the retail plan of Pharmacity in detail, which cover its policy in the

aspects of propose retail type, target market, location analysis, retailing channels, merchandise

mix, pricing, marketing communication mix, customer service, store layout and design.

Pharmacity has been proving its position through a compelling and logic strategy in all phases,

which show its dedication to provide customers with the best health care and service. However,

operating as the leading chain of medicine stores in Vietnam up to now, Pharmacity has been

also encoutering many problems of the model of business chain, such as unprofitabily due to

high operation costs, difficulties in maintaining a strong level of purchasing in all its drugstores,

complexity in management, etc. Yet, supported by different financial sources, Pharmacity is still

on its journey to fulfil its commitment of building protection for the health of people, which is

encouraged by the goverment since pharmaceutical business operating in a chain model

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facilitates the process of controlling the quality of medicine, a pressing and challenging issue of

this industry all these years

IV, References
• Pharmacity
https://www.pharmacity.vn/

• 10 Most important pricing strategies in marketing

https://www.educba.com/pricing-strategies-in-marketing/
• 4 Types of pricing methods
http://www.economicsdiscussion.net/price/4-types-of-pricing-methods-explained/3841
• Top nước rửa tay khô tốt nhất hiện nay được bộ y tế khuyên dung
https://www.bachhoaxanh.com/kinh-nghiem-hay/top-nuoc-rua-tay-kho-tot-nhat-hien-
nay-duoc-bo-y-te-khuyen-dung-1207651
• Thiết kế nội thất nhà thuốc đạt GPP – Pharmacity
https://5sarchitect.com/vi/thiet-ke/thiet-ke-cua-hang-showroom/thiet-ke-noi-that-nha-
thuoc-pharmacity-64.html
• Những điều bạn nên biết về hệ thống nhà thuốc Pharmacity
https://hellobacsi.com/benh-vien/pharmacity/
• Pharmacity phát triển chuỗi 200 nhà thuốc sau 8 năm hoạt động
https://vnexpress.net/kinh-doanh/pharmacity-phat-trien-chuoi-200-nha-thuoc-sau-8-nam-
hoat-dong-3927222.html
• CEO Pharmacity: 'Chúng tôi theo đuổi sự hài lòng của khách hàng'
https://tuoitre.vn/ceo-pharmacity-chung-toi-theo-duoi-su-hai-long-cua-khach-hang-
20190624140233222.htm

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No. Student’s name Student’s ID Distribution Percent
1 Lê Huỳnh Thiên Thanh IELSIU18137 100
2 Huỳnh Thúy Vy IELSIU18178 100
3 Nguyễn Hiền Đông Nghi IELSIU18094 100
4 Lê Hữu Hoàng Long IELSIU18071 100
5 Bùi Tuấn Kiệt IELSIU18059 100
6 Nguyễn Trần Khánh Linh IELSIU18067 100
7 Lê Hoàng Thảo Linh IELSIU18066 100

Peer Evaluation Table

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