Some marketing strategies in the sale of pharmaceuticals - a comparative study of chemical sellers and pharmaceutical firms

The pharmaceutical industry consists of manufacturers, importers, wholesalers and retailers of drugs whose businesses range from small, medium to large scale. The industry is mostly made up of privately-owned firms. GIHOC - Ghana Industrial Holding Corporation - is the only government-owned corporation that has a pharmaceutical manufacturing firm. It must be stated here that the industry is concerned with more than merely doing business in drugs to make profit. The general impression is that the drug business is very lucrative and any one with money wants to get in., forgetting or ignoring the fact that the pharmaceutical business is essentially tie practice of a profession. The practice of this profession has not been accorded its full place yet. Until recently, any one with money could establish, a pharmaceutical business thus saddling the industry, especially small and medium scale with unqualified, semi-literate or illiterate owners whose sole objective was to make profit with total disregard for whatever laws were then in existence governing the practice of the profession. The pharmacy and drugs Act (Act 64, 1961) which contains the laws governing the profession came to put some regulation into the practice of the profession. The Act (1961) categorises pharmacy business into two main groups. The first group is the licensed company whose “business, so far as concerns restricted drugs, will be carried on under the immediate supervision of a pharmacist” and the second group consists of the licensed chemical seller who “is fit to carry on a business of supplying by retail restricted drugs other that drugs of Class A and Class B.” The Act (1961) gives the definition of the terms “restricted drugs”, “Class A” and “Class B” drugs. This will be dealt with later in this chapter. For the licensed chemical seller, the Act (1961) further stipulates that the area in which the business is proposed to be carried on should “not be sufficiently served by existing facilities for the retail supply of such drugs”. From the foregoing, it is obvious that licensed chemical sellers cannot be located in urban centres and commercial areas where Pharmacy companies abound. Licensed chemical sellers are usually located in rural areas and suburbs, while Pharmacy companies — the manufacturers, wholesalers; importers and big time retailers are located in urban centres. Location in urban areas and commercial centres is of obvious advantage to pharmacy companies because the pharmacists without whom the business cannot be licensed are found in such areas; moreover, a pharmacy company will use facilities which can only be available in an urban area. A manufacturer with need facilities like water, electricity; an importer will require certain papers and documents from the various offices to get his goods cleared; a wholesaler will require adequate ware housing facilities and a big time retailer will need the brisk business activity that only an urban area or commercial centre can offer. This, though chemical sellers would wish to locate in urban areas and commercial centres and deal in all classes of drugs, the strict enforcement of the Act (1961) has prevented this from happening and chemical sellers have remained in rural areas and suburbs. It has been generally observed that in the last few years, pharmacy companies, particularly those of the small scale Retailer category have started establishing in the suburbs, that is, the outlying residential districts of urban areas and commercial centres. Thus such companies find themselves contending with chemical sellers who have been in existence fora long time said who have created niches for themselves. Such areas in Kumasi are Anloga, Asawasi and Aboabo, just to mention a few. It has also been generally observed that the chemical sellers in these suburbs appear to make more sales that are they seem to be more patronised than their pharmacy company counterparts. In Anloga for example, there are two licensed pharmacy companies co-existing with five chemical sellers. These five chemical sellers appear to be making it, while the pharmacy companies are having problems with sales growth. A pharmacy company had to close down at Aboabo and relocate elsewhere nearer the commercial centre, but the chemical sellers in the same area have not closed down yet. This dissertation is concerned with this category of pharmacy companies and chemical sellers located in the suburb (i.e. towns like Anloga, Asawasi, Aboabo) in Kumasi. It is the objective of this dissertation to find out whether it is really true those chemical sellers in these suburbs are making more sales than the pharmacy companies in the same area and also to identify and compare some of the marketing strategies used by these chemical sellers and pharmacy companies.

Source: KNUST