New Look for a Generic MarketWed, 09/09/2015 - 11:05
Q: How has Farmacias GI evolved since its beginnings?
A: Farmacias GI was born in a new era of medicine. Since our origins in 1999, we identified that the fundamental element of our brand was to bring the benefits of medicine to those who needed them the most by providing attentive service. Our goal was to look after the Mexican health and economy. The Farmacias GI model includes a physicians’ office next to the pharmacy in order to provide medical attention to outpatients. These consulting rooms have allowed us to offer professional and trustworthy medical services to patients. All our doctors are qualified professionals, capable of creating and reviewing a patient’s complete medical history in order to guarantee accurate and effective treatment with products they can obtain at our pharmacies. This service is provided in a clean and comfortable environment where a patient and their family can feel treated with respect and wisdom. We currently provide more than 9 million consultations.
Q: In what way have consumer perceptions changed in relation to generic medication and how has the company adapted to the various changes undergone by the pharmacy segment?
A: We created Farmacias GI at the height of the interchangeable generics market boom. Initially the public was distrustful of generics since they were cheaper and thus perceived to be of poor quality, however gradually trust increased. Today, eight out of ten medications sold in Mexico are generics. A few years after we started, we realized that Farmacias GI needed to professionalize itself, and we enlisted the help of a consultancy to transition from being dealers to franchisors. In 2009, we joined the Mexican Association of Franchises, which allowed us to participate in international expositions and better position ourselves in the market. The latest change we have undergone is the complete reengineering of our brand. A complete analysis of the market highlighted that it is very saturated and consumers are demanding more added value. Today it is not enough to sell medication, but iintegral products and services have to be offered. Our current targets are the low to medium socioeconomic levels. Getting to know our clients means constantly performing market research to understand and satisfy their needs.
Q: What strategies did you employ in order to renew the company brand?
A: In 2012 we hired Millward Brown to help us to diagnose our brand through several market related techniques and quantitative and qualitative analysis. The results were highly interesting and motivated us to transform the way we communicate with clients, which is the pillar of the corporative identity change we are performing this year. It involves the transformation of 1,100 pharmacies, a change in our logo, and personalized marketing strategies. Now our pharmacies look very different and are larger and better supplied, allowing us to increase our sales by 25%. Also, in line with COFEPRIS regulations, we now have a regulatory affairs department that trains personnel over the whole country. Our product line started with 134 products and we have gradually increased our portfolio to levels of more than 1,000. Our products can be classified into antibiotics, generics, OTC, vitamins, nutritional supplements, medical supplies, and products for intimacy products, mothers, and children, among many others.
Q: How is the Farmacias GI franchise model structured?
A: Our headquarters are in Tlalnepantla, and we are supported by countrywide state and regional representatives with distribution centers. We train all of these representatives to lead their businesses efficiently and professionally. All merchandise is distributed to our representatives from our central headquarters from where they distribute to the franchises. In order to join our franchise model, all interested parties must undergo an integration process where we evaluate whether they are the right fit for us. All franchisees must follow our regulations and manage their units with our full support. In return Farmacias GI offers a solid corporate identity, short-term return on investment (24 months), the lowest royalty scheme in the market, large utility markets, a solid infrastructure, high demand of medical services and products, and coverage over all of Mexico. The pharmaceutical market is in constant flux. As a result Farmacias GI must continue to face the market with strong policies and strategies to analyze behavior in order to understand the needs of the industry clearly. We are facing strong national and international competition.