An analysis of consumer buying behaviour in retail pharmacies of South Africa

Abstract

The retail pharmacy industry in South Africa has become an over-regulated sector after the 2004 inception of the single exit price system enforced by the Department of Health. As a result, all pharmacies both independently and corporate-owned had to change their approach to growth their revenue. Promotional usage has become an integral part of this industry with a specific focus on selling FMCG lines to gain maximum gross profit from the revenue earned. In this study eight factors were identified all relating to promotional activities in retail pharmacies in South Africa, each intended to determine whether they do in fact impact on consumer behaviour in the stores. Two sections were used to accurate test the consumer behaviour in the stores. Firstly, attitudes towards a pharmacy that identified three factors namely discounts as promotional tool, in-store promotional activities and free samples and products. They explained a cumulative variance of 52% and Cronbach Alpha scored above 0.6 for all three. Secondly, behaviour towards promotional activity found five factors namely loyalty programmes and rewards, free gifts as promotional tools, in-store demonstrations, discounts and free offerings and promotional buying behaviour. They can explain a cumulative variance of 93.07% and four factors achieved Cronbach Alpha scores of above 0.7. These eight factors had high positive and negative correlations and will guide owners and managers in retail pharmacies in South Africa which promotional activities to focus on to manipulate consumer behaviour to the biggest extent possible.