Pharmacy Location Analysis

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Questions and Answers

What is a characteristic of Central Business Districts (CBD) in terms of retail outlets?

High concentration of retail outlets

What is a disadvantage of locating a pharmacy in a Central Business District (CBD)?

Traffic congestion, parking problems, and crime

What type of shopping district is typically located on the outskirts of a CBD or in small neighbourhood clusters?

Secondary shopping districts

What is a benefit of planned shopping centres in terms of consumer convenience?

Provide a convenient location with easy access, ample parking, and coordinated shopping facilities Signup and view all the answers

What is a potential disadvantage for pharmacy owners in planned shopping centres?

Terms of lease contracts and uniform operating hours Signup and view all the answers

Why is location crucial for the success of a pharmacy?

Because it can affect the pharmacy's income, customer base, and competition. Signup and view all the answers

What type of location is often referred to as an 'island' location?

Suscipient (receiving) location Signup and view all the answers

What is the basic principle of locating a pharmacy?

Locate in/near high population density areas with minimal competition. Signup and view all the answers

What is the advantage of a pharmacy being close to a medical practice?

Increased prescription volume. Signup and view all the answers

What is leapfrogging in the context of pharmacy location?

A highly competitive strategy involving moving a pharmacy location closer to a medical practice. Signup and view all the answers

What is a characteristic of an island location for a pharmacy?

Single, freestanding building in a residential area Signup and view all the answers

How do dispensing doctors affect the pharmacy business?

They may dominate the prescription market around their location, making proximity to them a disadvantage. Signup and view all the answers

What is an advantage of an island location for a pharmacy?

Lower rental charges Signup and view all the answers

What is the impact of mall locations on pharmacy sales?

Pharmacies in malls tend to generate a lower percentage of sales from dispensary services. Signup and view all the answers

What type of location intercepts patrons on their way to a shopping district or centre?

Interceptive location Signup and view all the answers

What is the most important patronage motive for pharmacy customers?

Convenience. Signup and view all the answers

What type of location generates business and attracts patrons to shop?

Generative location Signup and view all the answers

What is the significance of geographical classification in pharmacy location analysis?

It helps identify areas with high population density and minimal competition. Signup and view all the answers

What is a market, in terms of pharmacy location?

Total (actual/potential) spending power of a clearly defined group of people for a given commodity Signup and view all the answers

What is a key aspect of the free enterprise system in terms of market analysis?

Suppliers compete for patronage of consumers to make profit and provide consumer-satisfaction Signup and view all the answers

What should be determined before conducting a retail site evaluation?

Consumer density and affluence Signup and view all the answers

What are the three key ingredients that define a market?

Market offering, suppliers, and consumers Signup and view all the answers

Study Notes

Location Analysis & Evaluation

A good location is crucial to the success of a pharmacy, and underestimating its importance can be a major mistake.

Basic Principles of Location

Locate in or near high population density areas with moderate competition.

Proximity to Medical Practice

Being close to a medical practice increases the potential for a pharmacy to dispense prescriptions.
Leapfrogging, where a pharmacy relocates closer to a medical practice, is considered an unethical and unprofessional strategy.
Consider the target market's viewpoint when evaluating a location.

Impact of Dispensing Doctors

Dispensing doctors can dominate the prescription market around their location, making proximity to them a potential disadvantage.

Location: Malls

Pharmacies located in shopping centers tend to generate a lower percentage of their total sales from dispensary services.

Importance of Convenience

Convenience is a crucial factor in a pharmacy's success, but it can be challenged by various factors.
Chain store pharmacies invest in market surveys before entering a new market area.

Classification of Locations

Geographical Classification

Central Business Districts (CBD): found in newer suburban sections of a city, with advantages including lower rental charges and more space for parking and expansion.
Island Location: a freestanding building in a residential area, often with a pharmacy as the main tenant.

Functional Classification

Island Location: a single, freestanding building in a residential area, often with a pharmacy as the main tenant.
Interceptive Location: intercepts patrons on their way to a shopping district or center, often near clinics or shopping centers.
Generative Location: generates business and attracts patrons, often found in CBDs or small cities.

Market Analysis

A market is defined as the total actual or potential spending power of a clearly defined group of people for a given commodity.
A market consists of three key ingredients: market offerings, suppliers, and consumers.

Market Analysis (Cont’d)

In a free enterprise system, suppliers compete for consumer patronage to make a profit and provide satisfaction.
Before selecting a trading area, determine consumer density, affluence, and other factors.

Geographical Location

Central Business Districts (CBD): high concentration of retail outlets and office buildings, with advantages including high traffic flow, but disadvantages including traffic congestion and parking problems.
Secondary Shopping Districts: located in major outlying retail districts, often with older shopping areas and traditional neighborhood pharmacies.
Planned Shopping Centres: geographic clusters of retail stores designed to attract consumers in large numbers, with integrated developments and easy access.
Island Location: a freestanding building in a residential area, often with a pharmacy as the main tenant.

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Description

This quiz assesses the importance of location in the success of a pharmacy, exploring key principles such as proximity to medical practices and population density. It also covers the conventional principles of pharmacy location and its impact on business success.