Strategic approaches for pharmaceutical distributors to create brand equity in the unorganized pharma retail industry in emerging economies

Abstract

Purpose

This paper investigates how stockist brand equity is created in the unorganized pharma retail sector in emerging markets despite the absence of any proactive brand-building efforts by distribution firms (stockists). In addition, this study also aims to unravel the sources of stockist brand equity.

Design/methodology/approach

Drawing from grounded theory, a qualitative research design using semi-structured interviews was conducted, and a theoretical saturation approach was used for this purpose. The retailer–stockist (business-to-business [B2B]) relationship in the Indian pharmaceutical market context was used as the study context.

Findings

The findings show that in the absence of any brand-building activities, stockists’ sales representatives play an important role in creating stockist brand awareness. In addition, word of mouth from other retailers also plays a minor role. Rational and emotional brand associations which are strong, favorable and unique are created 1) directly by the services provided by stockists, which includes product availability, deliverability, accuracy in billing and batch numbers, credit facilities and discounts, handling issues such as product expiry, and 2) indirectly by the services provided by stockists’ sales representatives which includes their frequency of visits, proactive customer orientation rather than sales orientation, fulfilling commitments and relationship with retailers. The strength of the retailer–stockist (B2B) relationship also depends on retailer-driven factors and other external factors discussed in this study.

Social implications

Strong stockist brand equity helps build trust and loyalty with pharmacies, ensuring a consistent and timely supply of medicinal products, which will benefit their end consumers or society.

Originality/value

This study identifies the antecedents determining the strength of the retailer–stockist (B2B) relationship, a precursor for establishing retailer-based stockist brand equity in the unorganized sector. This study also highlights the consequences of establishing strong retailer-based stockist brand equity.

Citation

Ponnamma Divakaran, P.K. (2024), "Strategic approaches for pharmaceutical distributors to create brand equity in the unorganized pharma retail industry in emerging economies", International Journal of Pharmaceutical and Healthcare Marketing, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJPHM-04-2023-0029