HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND FINANCE
DISTRIBUTION CHANNEL MANAGEMENT
PROPOSING THE STRATEGIC DIRECTIONS OF DISTRIBUTION
CHANNELS IN LINE WITH PRODUCT AND HUMAN RESOURCES OF
BUSINESS IN THE NEW NORMAL OPERATING CONDITIONS OF THE COVID PANDEMIC Group member: BUM BÚM
Trần Thảo Ngân _ 205040006
Mai Ngọc Mỹ Quyền _ 205041060
Phạm Thái Ngọc Châu _ 205040487
Đỗ Hà Thanh Vân _ 205041100 1
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1. Reasons for choosing the topic 5 2. Research scope 6 3. Structure of the report 6
CHAPTER I: ACTIVITIES OF PHARMACY PHARMACEUTICAL JOINT STOCK COMPANY BEFORE COVID 7 1.1. Company overview 7
1.1.1. Company history and development 7 1.1.1.1. History begins 7 1.1.1.2. Development process 7 1.1.2. Vision and Mission 8 1.2. Revenue 8 1.3. Competitor 9
1.4. Marketing activities of Pharmacy Pharmaceutical Joint Stock Company 11 1.4.1. Customer Segmentation 11 1.4.2. Marketing- Mix 12 1.4.2.1.PRODUCT 12 1.4.2.2.PRICE 12 1.4.2.3.PLACE 13 1.4.2.4.PROMOTION 14
CHAPTER II: ACTIVITIES OF PHARMACITY PHARMACEUTICAL COMPANY AFTER COVID 17
2.1. Impact of COVID on the pharmaceutical market 17 3
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2.1.1. Impact on the retail market 17 2.1.1.1 Situation 17 2.1.1.2. The reason 18
2.1.2. Impact on pharmaceutical businesses 19
2.1.2.1 Sales operation strategy 20 2.1.2.2. People 20
2.1.2.3. Distribution channel system 21 2.2. Market analysis 22 2.3.1. SWOT analysis 22 ● Strength 24 ● Weaknesses 26 ● Opportunities 26 ● Threats 27 2.3.2. Comment 28
2.3.3. Pharmaceutical retail market forecast 29
CHAPTER III: DISTRIBUTION STRATEGY AFTER THE EPIDEMIC 31 3.1. Strategic planning 31
3.2. Distribution channel strategy (Place) 35
3.3. Product strategy (product) 36
3.4. Human resource strategy (people) 36 CONCLUSION 38 REFERENCES 38 4
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Mức độ hoàn thành nhiệm vụ Phạm Thái Ngọc Châu 100% Lâm Gia Hân 100% Trần Thảo Ngân 100% Mai Ngọc Mỹ Quyền 100% Đỗ Hà Thanh Vân 100% 5
Downloaded by VietJack TV Official (vietjackvideos@gmail.com) INTRODUCTION
1. Reasons for choosing the topic
COVID-19 has become the biggest global health crisis in the past 100 years. It is
affecting everyone in many ways. The retail industry, especially the retail of
pharmaceuticals and foodstuffs, is one of the essential service industries with a high risk
of infection due to contact with hundreds of thousands of visitors every day.
Looking back at the recent outbreaks of epidemics, the case of zoning F0 to shop at
wholesale markets and retail stores often occurs, greatly affecting business activities. At
wholesale markets such as Thu Duc, Binh Dien, and Hoc Mon, there are 12,000 - 15,000
visitors per day. Therefore, once an infection occurs here, the number of related cases is very large.
Medical facilities and pharmaceutical retailers are playing a particularly important role in
the long-term fight against the Covid-19 epidemic. Therefore, once the medical facilities
and pharmaceutical retailers are penetrated by Covid, it can create a "domino effect" that
negatively affects many other industries. Therefore, this "shield" also needs to receive
maximum attention and protection from ministries and agencies. 2. Research scope
- Content: Product distribution strategy of Pharmacity Pharmaceutical Joint Stock
Company before and after the Covid-19 pandemic
- Space: Pharmaceutical distribution market in Vietnam - Time: From 2019 to 2022 3. Structure of the report
In addition to the introduction and conclusion has three chapters:
● Chapter 1: Activities of Pharmacy pharmaceutical joint stock company before covid. 6
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● Chapter 2: Activities of Pharmacy pharmaceutical joint stock company after covid.
● Chapter 3: Distribution strategy after the epidemic. 7
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CHAPTER I: ACTIVITIES OF PHARMACY PHARMACEUTICAL JOINT STOCK COMPANY BEFORE COVID 1.1. Company overview
1 .1.1. Company history and development 1.1.1.1. History begins
Pharmacity – one of the first brands to lay the foundation for the pharmaceutical retail
industry in Vietnam. From a small store established in 2011, by 2018 Pharmacity became
the first pharmacy chain to surpass more than 100 stores and maintain its position as the
largest pharmacy chain in Vietnam so far.
Mr. Chris Black - the founder of the company, is an American pharmacist with many
years of experience working in Vietnam. With his passion and creativity, he founded
Pharmacity and brings the best value to consumers.
Owning a network of 1,000 GPP-qualified pharmacies nationwide and a team of nearly
4,600 trusted pharmacists, providing leading medical and healthcare products at the most competitive prices 1.1.1.2. Development process
Through many ups and downs, with constant efforts and determination, Pharmacity has
had 100 pharmacies opened in Ho Chi Minh City and Binh Duong with several
professional staff, and dedicated service.
March 18, 2022 - Pharmacity, the leading retail pharmacy chain in Vietnam, announced
that it is about to open its 1,000th pharmacy in Ho Chi Minh City, marking an important
milestone towards its goal of having 5,000 pharmacies nationwide. China by 2025. 8
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Pharmacity is making great strides on its journey to conquer the fastest-growing
pharmaceutical market in Asia today.
In the future, Pharmacity will continue to expand the system throughout the country and
become a chain of semi-modern pharmacies, bringing the best experience to customers. 1.1.2. Vision and Mission
Vision: to build the most modern and convenient pharmacy chain, ensuring a full supply
of medicines to consumers. A place where consumers can put their trust and health
Mission: Pharmacity aims to help improve Vietnamese health. From the way we operate
the chain, to serving our customers, the strategy has consistent elements that we always
appreciate: convenience; serving the people's health care needs; putting the human factor
at the center, and making a long-term commitment to the public 1.2. Revenue
As of the end of 2021, Pharmacist's equity is VND2,565 billion, compared with only
VND405 billion the previous year. Equity increased sharply despite the company's
continued loss, partly due to the increase in charter capital from VND 528 billion to VND
927 billion and mainly due to the increase in equity surplus from VND 888 billion to VND 3,012 billion.
Three years ago, Pharmacity was invested by Mekong Capital but did not disclose the
amount. Then by 2020, this chain raised about VND 730 billion in Series C round. Next,
at the beginning of last year, the parent company, Maroon Bells, also issued more than
VND 1,000 billion of convertible bonds to have resources for the expansion. of Pharmacity. 9
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Nguồn: Lấy tại trang: cafebinz.vn 1.3. Competitor
In addition to Pharmacity, in the fierce competition to expand the pharmacy chain, the
names Long Chau and An Khang are emerging with increasing expansion thanks to the
support of businesses with strong financial potential. behind. Usually, these stores are
present in densely populated places, locations near hospitals, and the number of
consumers in these areas is high. ● L ong Chau pharmacy
FPT Retail has announced its plan to enter the pharmaceutical retail industry with the
purchase of Long Chau pharmacy and expanding the number to 400 stores in 2022. In
addition, before being acquired by FPT, Long Chau established close links with hospitals 10
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in HCMC, allowing pharmacies to more accurately forecast regional demand for each drug.
In terms of competitive advantage, Long Chau pharmacy has over 12,000 SKUs, much
higher than about 1,000~2,000 SKUs of small pharmacies. This allows the company to
meet the growing demand for chronic diseases (diabetes, cardiovascular, and cancer),
which grows with longevity and disposable income. The wide selection helps Long Chau
pharmacies generate a much higher revenue than other pharmacies. ● A n Khang pharmacy
Also in 2017, MWG acquired the chain of 14 An Khang drug stores. However, it was not
until the fourth quarter of 2021, when the shift from traditional to modern channels
became clearer, that MWG accelerated the opening of a new chain of An Khang
drugstores and switched to full ownership in November. 2021 - raising ownership rate from 49% to 99%.
An Khang pharmacy chain currently has more than 600 stores, covering 33 provinces and
cities across the country. MWG aims to have 800 and 2,000 An Khang stores,
respectively, by the end of 2022 and 2023.
In terms of competitive advantage, although An Khang's number of SKUs may not be as
many as Long Chau's, according to SSI Research's assessment, MWG's financial position
is much safer (MWG's D/E ratio at the time). Q2/2022's score is 1x, while FPT's D/E as
of Q2 2022 is 2.8x), which allows the company to speed up new openings to catch up with FPT. 11
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Nguồn: Lấy tại trang: nhipsongkinhdoanh.vn
1.4. Marketing activities of Pharmacy Pharmaceutical Joint Stock Company 1 .4.1. Customer Segmentation
- By geographic region: Pharmacity currently focuses on the domestic
pharmaceutical retail market in Vietnam. Specifically, in the domestic market,
Pharmacity mainly focuses on urban areas, where the population is concentrated
- According to sociological characteristics: Medicine is an essential commodity for
everyone, regardless of age, and gender,...
- According to psychology, and behavior: Pharmaceuticals is a specific industry,
which directly affects the health and life of users. Therefore, consumers tend to 12
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choose reputable, original, branded pharmacies that are known and trusted by many people. 1 .4.2. Marketing- Mix 1.4.2.1.PRODUCT
With the particularity of pharmaceutical retail, Pharmacist's target customers are very
wide because pharmaceuticals are an essential and indispensable item in everyone's life,
regardless of age, gender, or job,...
Pharmacity operates under the motto: products with a vision, services with a heart. The
above orientation is demonstrated by Pharmacity in the transparent and clear
management of the pharmacy chain, from the origin of the drug to the stages of
preservation according to GSP standards. Pharmacity provides a complete and rich range
of pharmaceuticals from Western to Eastern medicine
At Pharmacity, drugs are purchased directly from the manufacturer and have genuine
distribution without going through any intermediaries. This ensures the quality and origin
of the drug, and at the same time can provide the most reasonable price to customers
Pharmacity pharmacists are focused on professional training along with a dedicated
attitude to customer service, which is what Pharmacity aims to do, always trying to bring
the best experience to customers. 1.4.2.2.PRICE
Because Pharmacity imports drugs directly from manufacturers, drug prices at drugstore
chains are always stable and reasonable. Besides, Pharmacity regularly has discount
programs and incentives. This is considered one of the strengths of Pharmacity that
traditional pharmacies find it difficult to compete with 13
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In 2021, Pharmacity opened 200 pharmacies, increasing the number to 700 units, but still
did not meet the plan of 1,000 stores set out earlier.
By March, Pharmacity reached the milestone of 1,000 stores and currently has increased
to 1,143 pharmacies meeting GPP standards (Good Pharmacy Practices) nationwide.
Thus, the Pharmacy's number of stores continues to lead the market and is far ahead of its
nearest competitor, Long Chau, with only 546 stores by the end of the first quarter or 400 by the end of 2021.
Nguồn: Lấy tại trang: academia.edu 14
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Nguồn: Lấy tại trang: cafef.vn
In addition to providing rulers directly at the store, Pharmacity also builds its own e-
commerce website (pharmacity.vn) to help customers easily order medicines. With this e-
commerce site, Pharmacity provides nationwide service. At the same time, Pharmacity
also regularly implements free shipping policies to attract customers 1.4.2.4.PROMOTION
From 2017 until now, Pharmacity has been promoting marketing activities and spreading
images closer to consumers. Pharmacity implements a variety of communication forms
from the press, and TVC advertising to promotions, and public relations. 15
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Nguồn: Lấy tại trang: pharmacity.vn
Nguồn: Lấy tại trang pharmacity.vn 16
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Nguồn: Lấy tại trang pharmacity.vn
CHAPTER II: ACTIVITIES OF PHARMACITY PHARMACEUTICAL COMPANY AFTER COVID
2.1. Impact of COVID on the pharmaceutical market
2 .1.1. Impact on the retail market 2.1.1.1 Situation 17
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The Covid epidemic was first detected at the end of 2019 in Wuhan, China, and quickly
spread worldwide with the name "Covid pandemic". WHO has identified COVID-19 as
being transmitted from person to person through respiratory droplets. To prevent the
spread of the disease at such a fast pace that it is difficult to cope with the epidemic,
governments have proposed many countermeasures such as blockade measures, travel
restrictions, border closures, and bans. declare a state of emergency, impose a curfew or
use social distancing measures to protect the health of individuals and communities.
However, despite the prevention efforts in various ways by countries along with the
appearance of anti-Covid vaccines, the Covid epidemic not only shows no signs of
decline but also appears to have more variants. new by transforming the structure and
spreading speed. From the outbreak to December 2022, more than 655 million people
have been infected, including nearly 6 million deaths worldwide. In Vietnam, the
Government has issued many strong measures to limit the spread of the disease through
each outbreak, the total number of cases is now 11,523,567 million people with 43,181 deaths.
The COVID-19 epidemic has had a strong impact not only on social life but also on the
economy around the world, with an impact that can shake most industries and fields, not
to mention the market. retail school. However, retail channels are still asserting an
important role in making the connection between production and consumption required,
contributing to attracting the attention of supply chains in production and consumption,
especially. What kind of goods and equipment elements in the shop scene was forced to close
The survey results of Vietnam Report Joint Stock Company (Vietnam Report) for
businesses in the retail industry showed that nearly 42% of businesses were seriously
affected by the Covid-19 pandemic; 50% of enterprises rated the impact as moderately
severe and more than 8% of enterprises had little or no significant impact. 18
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Retail sales of goods reached VND 291.8 trillion, down 5.5% and down 11.4%; revenue
from accommodation and food services reached VND 21.2 trillion, down 22.4% and
down 53.8%; tourism revenue reached 133 billion dong, down 4.8% and down 92.6%;
other service revenue reached 26.3 trillion dong, down 22.4% and down 43%.
In the first 7 months of 2021, the total retail sales of consumer goods and services
reached VND 2,791.3 trillion, up 0.7% over the same period last year (decreased by 0.5%
in the same period in 2020). , excluding the price factor, it decreased by 0.74% (in the
same period in 2020 it decreased by 5.20%). 2.1.1.2. The reason
During the period of the COVID-19 epidemic in the developing phase of the outbreak,
the Vietnamese government took many measures to limit the spread such as blocking
some areas with many cases, restricting travel, and ordering Number 16 to implement
social distancing across 4 regions of the country to protect people's health. Along with the
reduction in spending of the majority of employees when they have to quit their jobs due
to the outbreak, leading to reduced income, tight spending, and less shopping, it has a
significant impact on the revenue of businesses. in the retail industry. In addition, many
internal difficulties of each enterprise such as shortage of business capital, and the order
to close the border, hinder the supply chain when most of the sources of goods and raw
materials for production are mostly of origin. from China or the interruption of businesses
importing goods from other countries
2 .1.2. Impact on pharmaceutical businesses
In the first 8 months of 2021, SSI Research estimates that total pharmaceutical sales in
Vietnam have decreased by 11% compared to the same period last year, of which revenue
from retail drug stores decreased by 3% over the same period and sales in hospitals down
16% compared to estimates from listed pharmaceutical companies and drug tender data
from the Vietnam Drug Administration 19
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Tight distancing measures, especially in the southern provinces, have caused disruptions
in drug supply and distribution. Southern pharmaceutical companies such as IMP, DHG,
and OPC had to cut production by 20-30% in July and August to comply with the
government's "three places" social distancing requirements.
In addition, many hospitals in the South have been converted into Covid-19 treatment
centers, causing a significant drop in pharmaceutical revenue, as the hospital channel
accounts for more than 60% of the industry's demand.
The prolonged wave of the COVID-19 epidemic has more or less affected all businesses,
employees, and social life. However, a part of businesses is still "driving" through the
epidemic waves with flexible, timely, and creative response strategies.
Pharmacity, the leading pharmaceutical retail chain in Vietnam, has maintained its
leading position throughout the epidemic period, in addition to being continuously
committed to accompanying the Vietnamese government and people to overcome the
epidemic period. disease with many practical actions
2.1.2.1 Sales operation strategy
Faced with challenges from the speed of disease spread and tight distancing measures,
Pharmacity is always looking for a flexible and timely response to maintain the
pharmaceutical supply chain operation. Accordingly, this business diversified sales
channels via phone, Extra Care application, website, and chat application. At the same
time, Pharmacity also cooperates with the militia to deliver goods to people. At the same
time, responding to the call of the Hanoi Department of Health, this pharmacy retail chain
also increased its opening hours 24/7 at 5 major pharmacies in the capital to serve people during the peak period. 20
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Pharmacity always ensures the full and diverse supply of immune system booster
products, and timely updates on Covid-19 treatment and prevention drugs with the "price
lock" campaign - a commitment not to increase the price of all products. All products at
Pharmacity's pharmacy chain during the period of social distancing ensure that the
pharmacy chain is always stable in price. Pharmacity also cooperates with the
Department of Industry and Trade to carry out a campaign to supply agricultural products
with stable prices in Ho Chi Minh City.
By successfully developing product lines under the brand name Pharmacity, the
pharmacy chain helps customers to choose more flexible quality products at economical
and stable prices. The company remains steadfast with its mission of providing "good and
cheap medicine" to people while maintaining jobs and stable income for thousands of pharmacists in Vietnam. 2.1.2.2. People
Chris Blank, Founder, and CEO of Pharmacity Group shared, as the largest pharmacy
chain in Vietnam with more than 4000 employees, Pharmacity pharmacists are also
facing a great risk of infection. when every day has to come into contact with many
customers with symptoms of infection. He said that protecting the team of pharmacists at
pharmacies is contributing to reducing the risk of infection in the community, reinforcing
the strength of the country's "shield" against the epidemic, contributing to maintaining the
"capacity and resources' for basic medical care, and ensuring medical personnel in urgent situations.
Despite many impacts on the supply chain during the epidemic period, the pharmacy
system is committed to not cutting staff and workers' income and has many solutions to
ensure safety and care. well-being for employees, notably: putting 100% of employees in 21
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PTI's health care insurance plan; Supplementing welfare policies for "frontline"
pharmacists at pharmacies as well as employees in company warehouses, adding support
packages for employees who are applying "3 on the spot"
2.1.2.3. Distribution channel system
Since the end of August until now, TP. Ho Chi Minh City and many other provinces and
cities are going through the quarantine period, the pharmaceutical retail sector also
applies tighter regulations to control the epidemic such as: implementing "3 places" at
pharmacies and central warehouses. heart; “1 route 2 destinations” for employees who cannot stay at work…
In the face of changes in operation, revenue, and additional costs of equipping facilities to
be eligible to open, many businesses choose to "hibernate" and wait until the social
distance is over. However, clearly defining its role of "serving the community", the
largest pharmacy retail chain today Pharmacity, and its staff chose to maintain operations with many flexible solutions.
More than 90 employees in Pharmacity's supply chain team chose to apply "3 on-site" for
3 months to maintain transportation and distribution activities for the Company's
pharmacy chain to serve customers and the community.
The COVID-19 epidemic has directly affected the operation of the supply chain and the
pharmacy expansion plan of Pharmacity. Due to social distancing and travel restrictions
across the country, Pharmacity has also launched online shopping and home delivery
services for prescriptions and healthcare items on the website. http://www.pharmacity.vn
and Pharmacity application to ensure that customers can conveniently learn and choose to
shop for quality and safe drug products as well as health care products right at home. This
convenient service will be crucial if Vietnam faces another health crisis. 22
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Nguồn: younetmedia.com-Xu hướng thảo luận người dùng
According to a survey conducted by BEAN in February 2020, Pharmacity ranked first in
the brand recognition rankings with 74% of 179 survey participants knowing about them.
According to a survey by YouNet Media from May 1, 2020, to July 31, 2020, in nearly
22,700 discussions, Pharmacy is the most mentioned name thanks to exciting
promotional activities on the fanpage.
Pharmacity's products are diverse, including domestic and foreign brands such as
prescription drugs, functional foods, health and beauty care products, and household
products such as toothpaste and eyewash. 23
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Considered the first retailer in the pharmaceutical sector that both meets Vietnam's
regulations and generates good profits, Pharmacity has successfully attracted an
investment capital of 31.8 million USD from the company. Mekong Capital private
equity. Their revenue in 2019 is estimated to increase by 129% compared to 2018,
reaching about 38.7 million USD.
SWOT analysis (SWOT) is an important factor to create the business strategy of
enterprises. Through SWOT analysis, businesses will see their goals as well as factors
inside and outside the organization that can positively or negatively affect the goals set by
the business. In the process of planning, SWOT analysis plays the role of the most basic
and effective tool to help businesses have an overall view, not only of the business itself
but also of the factors that always affect and decide the decision. for the success of the business.
Assessment of strengths (Strengths) and weaknesses (Weaknesses) also known as internal
analysis such as human resources, finance, technology, reputation, reputation,
relationships, culture, and traditions of the organization... This assessment is only
relative, mainly compared with the common ground
Analysis of opportunities (Opportunities) and threats (Threats) is also called external
analysis because those factors are related to the external environment. Aspects related to
opportunities and threats can be caused by fluctuations in the economy (growth or
recession), and changes in government policies (in favor of or against the business
sector). dynamics of the business), the competitive balance changes (the loss or
appearance of a competitor)... If this analysis is done carefully and wisely, the strategies
proposed will be able to seize opportunities and be ready to deal with possible threats.
From the SWOT analysis, it is possible to create a SWOT matrix to help provide strategic solutions. 24
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1/ The ability to distribute medicine to everyone
With more than 7,800 items (including 300 branded Pharmacity products and exclusive
brands) and more than 900 retail stores stretching from the South to the North, customers
only need 10 minutes to drive to easily access the stores. Pharmacity's products
2/ Commitment to bring the cheapest price:
With the message "Save more - Live healthier", Pharmacity is always committed to
bringing high-quality products at the cheapest prices. Programs such as discounts,
coupons, or attractive gifts take place continuously to stimulate the shopping needs of customers.
In particular, recently, this pharmacy chain also launched a program of Cashback for the
difference if customers find the products purchased at Pharmacity have lower prices in the market.
3/ Pay attention to the quality and price of the drug
This development orientation is reflected in the way the company manages the chain of
activities, from the transparency of the origin of drugs to the method of storing drugs
properly, meeting environmental conditions, and being professionally monitored. Karma.
Products at Pharmacity stores are also purchased directly from legitimate and genuine
manufacturers and distributors instead of buying through wholesalers or a third party, to
ensure the source of good quality products. with the most reasonable cost to the customer. 4/ Focus on customer care: 25
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Pharmacity always aims to bring the best experience to customers. With the motto
"Cheap but must be clean", this pharmacy has brought an extremely spacious, airy, and
tidy space, helping customers feel comfortable shopping.
In particular, Pharmacity focuses on building a loyal customer system Extra Care with a
database of up to 3.5 million people. Such a big data system gives Pharmacity many
advantages in researching to meet customer needs and improve sales.
5/ Strategy to expand the number of stores:
Pharmacity plans to expand the chain up to 1000 stores to facilitate 90% of Vietnamese
people to access the pharmacy within 10 minutes by motorbike. That is the reason that
Pharmacity pharmacies are always located in prime locations such as road surfaces or
large intersection corners, densely populated areas.
Owning a large number of stores is a way to help Pharmacity improve the brand's
presence in the eyes of customers, and thereby beat smaller competitors such as Long
Chau with 200 stores or Medicare with 84 stores. products, both in terms of awareness and market share. ● Weaknesses
1/ Strongly increasing the number of stores while the inventory is small and overloaded:
The fact that the retail pharmaceutical market in Vietnam is forecasted to continue to
grow with drug spending per capita up to USD 163 by 2025, will bring certain
advantages to Pharmacity in developing its chain stores.
However, recently, due to the sharp increase in the number of stores, while the inventory
is small and overloaded, Pharmacity has suffered heavy losses of more than 194 billion
dong after the first 6 months of 2020. The debt ratio will also increase sharply to VND
1,360 billion corresponding to the increase in equity 26
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2/Pharmacity App does not work optimally:
To meet the online shopping behavior of today's consumers, the Pharmacity chain of
pharmacies has invested heavily in the development of the Relex Solutions application.
This is a retail platform that harnesses AI artificial intelligence to optimize product
distribution. At the same time, the application also can predict the shopping needs of
customers; thereby assisting Pharmacity in coordinating appropriate products and enhancing the user experience.
This unit has deployed sales on websites, e-commerce sites, and applications.
(Pharmacity App). However, at this time, the application is not widely used ● Opportunities
1/ Introduced to Existing Customers
Through Pharmacity's activities during the epidemic period with the community, it is not
difficult for this retail pharmacy chain to gain new customers with many different
segments but also retain loyal customers.
2/ Taking advantage of the Internet and social networks
With the characteristics of the pharmaceutical retail industry and the diversity of
customers, Pharmacity is almost universal. To reach the maximum number of potential
customers, the company has chosen different media such as advertising, promotion, and public relations.
Pharmacity promotes itself through TVC images and videos posted on TV, Youtube
channels, Fanpage, signs, .. Quality products, and dedicated service 27
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The Vietnamese pharmaceutical market is considered to be becoming increasingly
attractive, with an estimated revenue of $6.5 billion in 2019, up 10.17% year-on-year
($5.9 billion). Meanwhile, spending on healthcare is expected to double from $170 in 2017 to $400 by 2027.
Large domestic corporations such as The Gioi Di Dong and FPT Retail have ventured
beyond the traditional business to enter the retail pharmaceutical market. Specifically,
Mobile World acquired 40% of An Khang's shares and FPT took over the Long Chau chain.
These are two drugstore chains that have a steady flow of customers and therefore they
are also promoting competition in the pharmaceutical retail market. While Long Chau
continues to expand the number of stores (it is expected to reach the milestone of 500 by
the end of 2021), An Khang drugstore chain has also accelerated by setting up
pharmacies at Bach Hoa Xanh stores.
2/ Challenges also come from Vietnamese customers habits:
In purchasing medicines, they often go to familiar stores and are significantly influenced
by word of mouth. In discussions compiled by YouNet Media, consumers still have
complaints about the service at Pharmacity
Therefore, not only need to stop creating awareness (through chain expansion), but
Pharmacity also needs to retain customers by building programs to deal with this negative feedback. 2 .3.2. Comment
After the terrible outbreak of the COVID-19 epidemic, Pharmacity has maintained its
position as one of the leading retail pharmacy chains in Vietnam, with agile and 28
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innovative strategies during the epidemic period, and after becoming one of the leading
retail pharmacy chains in Vietnam. about the "new normal". In addition, businesses have
a change in the SWOT model, which helps them come up with a new strategy that will
work well for the time following the impending pandemic. ● Strength High trust
During the Covid-19 pandemic, Pharmacity always ensures the full and diverse supply of
immune-boosting products, and timely updates on drugs to treat and prevent Covid-19
with the "price lock" campaign. - ensure that the pharmacy chain is always stable in terms
of prices. By successfully developing product lines under the brand name Pharmacity, the
pharmacy chain helps customers to choose more flexible quality products at economical and stable prices.
Along with strategies to quickly access customer feedback, that is the strength that makes
many consumers choose Pharmacity. ● Opportunity
Changes in customer consumption
Vietnam is no exception when it comes to the effects of the Covid-19 pandemic and its
accompanying difficult consequences. In particular, people not only suffer direct losses in
terms of health, and mental health, but also economic difficulties. It is the change in times
that has changed the top concerns of consumers in the Vietnamese market, most notably the health story.
According to Deloitte's Vietnam Consumer Survey in 2021, under the impact of the
Covid-19 pandemic, consumer behavior has had a big change - an increase in monthly
spending on healthcare products. strong. Although Covid-19 is one of the "pushes" to
promote people to pay more attention to their health, even before the pandemic occurred,
people's sense of health improvement was already a factor. trend. This means that 29
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Vietnamese people will be better prepared and actively seek protection for themselves and their families
2 .3.3. Pharmaceutical retail market forecast
Quy mô thị trường Dược phẩm Việt Nam, 2018 – 2026 Nguồn: viracresearch.com
After the Covid-19 pandemic, the issue of consumer health care being put on top is also a
potential market for retail to develop. Accordingly, the healthcare and retail
pharmaceutical industries will grow rapidly and become increasingly competitive
The World Bank (WB) forecasts that the number of people aged 65 and over in Vietnam
will more than double by 2040, accounting for 18% of the total population, boosting
healthcare spending. Therefore, the growth of spending on pharmaceuticals in Vietnam is
still very positive, especially in a market as fragmented and full of potential as pharmaceutical retail.
The prospect of Vietnam's pharmaceutical market is forecasted to continue to grow in
2022 & 2023, in the context that people's post-COVID-19 healthcare needs will continue
to increase. SSI Research expects that in 2022, healthcare demand will recover and grow
by 13% compared to 2021. According to FPTS analysis, pharmaceutical consumption 30
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from retail channels is estimated to increase by 5 - 8.5% over the same period. period
comes from the demand for products to prevent epidemics and improves immunity
After the epidemic, the buying trend of consumers has changed drastically, giving
priority to choosing online shopping options through applications, and websites, ...
quickly and conveniently. Large retail drugstore chains are gradually expanding their
market reach by reaching users not only directly but also through electronic screens.
CHAPTER III: DISTRIBUTION STRATEGY AFTER THE EPIDEMIC 3.1. Strategic planning
Faced with challenges from the rapid spread of the disease and tightened distancing
measures, Pharmacity always finds a flexible and timely response plan to maintain the
pharmaceutical supply chain operation to serve the community such as: diversifying sales
channels such as by phone, Pharmacity application, website, chat application; Coordinate
with military and civilian forces to deliver goods to people in "hot" epidemic areas.
Applying the 5M model: Objectives - budgets Mission - goal: 31
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Pharmacity aims to become a pharmaceutical retail chain present in the memory of
at least 50% of Vietnam's population by 2025, anyone can access the pharmacy within
just 10 minutes by car, this is the passion. Passion is also the purpose of standing with
customers of the chain to every moment, laying the foundation of health as a basic
condition to ensure the quality of life of each citizen.
-The advertising plan begins with clearly defining the advertising objective - the
informational task that the advertisement must perform. An advertising objective can be: -Create label awareness
-Information about new products
-Convince consumers of product features
-Increase sales, encourage consumers to buy products Money - advertising budget: -
Budgeting for advertising activities plays an important role in advertising
planning. The marketer can determine the budget according to his financial ability
(affordable method), the method of calculating the percentage of sales of the previous
year, or the planned sales (percentage of sales method). -
These two methods are simple and safe, but they do not see advertising as an investment but as an expense. -
Some other ways of determining the budget, such as the edge equilibrium method
competitive parity method and goal- and work-based methods present (objective and task method).
These two methods overcome the disadvantages of the two the above method, taking into
account competitive factors and ensuring that enterprises keep their stabilize market share
and achieve communication goals. 32
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Choosing the appropriate media should consider the following factors: - Advertising objective - Product life cycle – PLC - Competitive situation
- Characteristics of the medium: audience, scope of issue, cost per thousand and
The reputation of the vehicle… Message - Advertising message.
The message will create attraction for the ad, the message needs to be loved bridge:
- Advertising must have a clear idea (make customers pay attention).
- Must be unique, creative (make customers excited, impressed). - Target target customers.
- Suitable for each characteristic of each medium (newspaper, magazine, television, outdoor...).
- Ensuring the artistic and artistic character of the structure and presentation. 33
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- The message must be suitable with the cultural characteristics and legal regulations of the country Government
Measure advertising effectiveness:
Evaluate the effectiveness of advertising by survey, market research after the campaign
advertising to know the level of ad reception, insights, impressions through
messages and behavioral changes under the influence of advertising ● Implementation plan time: -
Pharmacity pharmacy chains will enter the digital transformation phase to adapt to
the market and promote customer care.
- After the Covid-19 pandemic, consumer behavior has changed. This
has brought about new changes in the retail market with 4 factors such as
- Competition: According to data updated on May 12 on the websites
of 3 companies, Pharmacity is currently leading the number of
pharmacies with 1,085 establishments. Followed by Long Chau with
579 pharmacies and finally An Khang with 292 pharmacies. The big
companies started to "accelerate" when the Covid pandemic passed,
demonstrating the opportunity of the retail pharmaceutical market
through the numbers of sales and output. The emergence of modern
pharmaceutical chains has significantly changed the game in the
retail pharmacy industry, contributing to providing quality products and professional services.
- Cost pressure: Smart consumers always choose for themselves a
place with quality products and reasonable costs.
- Customer behavior: It is the change of times that has changed the
top concerns of consumers in the Vietnamese market, most notably
the health story. They are more concerned about which drugs are beneficial to them. 34
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- The ability to reach customers: This ability is becoming more and
more developed because with the current 4.0 technology, social
networking sites, and e-commerce platforms can all be tools to reach
customers easily, with pharmaceutical products. or functional foods
are being used by people for the sake of consumers today health is
the top priority so they need a reliable source of information like
Pharmacity. vn to learn about the drug and its ingredients. ●
Pharmacity's proposed development plan
Long term - time: from October 2021 to October 2025
After the time of the Covid-19 epidemic, people almost fully
understand how important it is to protect their health, so the
level of willingness to pay for medical services, medicine,
and health-protective food can be very important. The trend is
increasing due to the improvement of per capita income and
education level in addition to the increasingly polluted living
environment, which increases many diseases.
Target: Pharmacity will own 5,000 pharmacies nationwide,
helping 50% of the Vietnamese population to access
Pharmacity brand pharmacies within 10 minutes of driving.
Short-term - time: from January 2023 to January 2024
Target: Develop many forms of incentives and discounts on
functional food products for customers with loyalty cards.
Helping customers improve their health and improve their
resistance. Create many marketing events on social
networking platforms to have a certain standing position,
make an impression on consumers through ads run on
Youtube, Facebook, newspapers large and small. 35
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3.2. Distribution channel strategy (Place)
Distribution channels also have a significant impact on promotional activities. Businesses
cannot force customers to buy a new product that is heavily advertised when the
distribution channels are too few. In addition, to reinforce promotional activities,
businesses can support and provide convenient equipment to promote products more
effectively in distribution channels.
- Present in the Vietnam market since 2011, Pharmacity is currently one of the largest
retail pharmacy chains today. The business currently has more than 200 stores nationwide
and has set a goal of reaching 1,000 pharmacies by 2021 and the next target of 5,000 pharmacies by 2025.
- Distributing stores nationwide and placing locations in fronts or intersections so that
consumers can easily identify and buy products.
- In addition, the retail pharmacy chain should focus on developing internal drugstores to
provide a comfortable and spacious space for customers to shop.
3.3. Product strategy (product)
- Promotional activities will greatly support businesses when they develop products.
It acts as a product introduction to the company. Depending on the characteristics
of different products, enterprises will have different promotional activities to match those properties.
- Since its early days of establishment, Pharmacity has constantly conducted market
research and customer needs to optimize care and consulting services in addition
to providing diverse and quality products.
- In addition, during the COVID-19 pandemic, Pharmacity has been ensuring the
full and diverse supply of immune system-boosting products, timely updating of
therapeutic and preventive medicines. Avoid COVID-19 with the “price lock”
campaign – ensuring that the pharmacy chain is always stable in terms of prices. 36
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- In particular, by successfully developing product lines under the brand name
Pharmacity, the pharmacy chain helps customers to choose more flexible quality
products at economical and stable prices in all conditions.
3.4. Human resource strategy (people)
- When going to the stores, consumers will be consulted and supported by highly
qualified pharmacists, knowledgeable about products, and most dedicated throughout the buying process.
- Despite many impacts on the supply chain during the epidemic period, the
pharmacy system is committed to not cutting staff and workers' income and has
many solutions to ensure safety and care. peaceful life for employees
- This activity will be an important step in the cooperation between the two sides,
strengthen the connection between the university and the enterprise, improve the
quality of human resource training, and create favorable conditions for enterprises
to participate. into the training process, assessing learners, training programs,
placing orders with the school to train human resources, and recruiting
- As of November 2021, Pharmacity has more than 660 GPP-standard convenient
pharmacies nationwide and is currently aiming to reach more than 1,000
pharmacies by early 2022. The Northern region is recruiting. More than 1000
young pharmacists have just graduated, full of enthusiasm to build a career together in their hometowns.
- At Pharmacity, each employee is a valuable asset that contributes to the overall
success of the pharmacy chain. Therefore, Pharmacity constantly creates an
attractive and inclusive working environment, where all employees have equal
opportunities to be trained, researched and proactive to bring out the best in each
individual. individuals and groups, as well as providing the best products and
services according to the needs of customers. ●
Analysis of revenue and profit after the plan 37
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- Despite the year 2021 with many challenges, by the end of 2021, Vietnam's
leading modern retail pharmacy chain Pharmacity has expanded its system by
more than 50% with about 800 pharmacies present nationwide. with 27 million
transactions, the number of member customers exceeded 7 million and reached a
revenue of 3,567 billion VND - double that of 2020.
- Pharmacity aims to reach 5,000 pharmacies nationwide by 2025 with the goal that
50% of Vietnamese people can access a pharmacy within 10 minutes of walking.
Pharmacity is also strengthening its digital infrastructure to prepare for the rapid
expansion and rollout of its online business in 2025. This plan is expected to help
Pharmacity reach over $3 billion in revenue and will create jobs for more than 35,000 people. CONCLUSION
Pharmacity, a chain of retail pharmacies, continues to hold its position as one of the top
pharmacies in Vietnam while operating during the most challenging period for
pharmaceutical firms in the retail sector. It enhances the current position through flexible,
creative techniques and community-focused initiatives. In order for Pharmacity to target
sustainable development towards human health and further position itself as the strongest
competitor in the retail pharmaceutical market in the future, strengths and advantages in
the product and service market need to be fully exploited and promoted while reviewing
strengths and weaknesses to improve business activities. 38
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