Performance Analysis and Recommendations: Pharmacy Category Management

This report provides a category management analysis for a pharmacy, evaluating the performance of various product categories based on metrics such as Gross Profit Margin, Stock Turnover (ST), and Labour Margin (LM). The analysis covers a range of categories including Analgesics, Baby products, Confectionary, Cosmetics, Cough and cold, Digestion, Eye and lens care, First aid and wound care, Foot care, Gifts, Hair care, Hand and nail, Home health care, Household and domestic, Oral hygiene, Perfume prestige, Sinus and allergy, Skin Care, Sun care, Vitamin and nutrition, Water, Weight Management and Home and office supplies. The report offers specific recommendations for each category, suggesting changes in stocking levels, merchandising strategies, pricing adjustments, and product placement to optimize sales and profitability. The analysis also references several research papers related to stocking policies and grazing management practices.

Running head: CATEGORY MANAGEMENT
CATEGORY MANAGEMENT
Name of the Student
Name of the University
Author Note

1CATEGORY MANAGEMENT
Category Changes and comments
Analgesics The given product has a high GP Margin of
49.55%, ST of 7.5 and a LM OF 17%. As the
climate is hot, the given product is popular.
Baby The pharmacy should ensure that they stock the
given product in high stock. The GP% is at a low of
22.82%. Hence, there could be separate section for
the given product.
Confectionary With a LM of 6.2, the GP margin is good at
36.85%. It should be disposed as not good for the
image of the company.
Cosmetics With a LM of 15.3% and ST of 1.2 then the Gross
profit % is alright. It should be gotten rid of.
Cough and cold With a LM of 18.19 LM and ST of 2.5, the stock
needs to be decreased.
Digestion The given category has products which are price
sensitive. Various supermarkets sell similar
products and then, the pricing needs to be based on
competitor pricing. The GP is 41% and hence, price
must be decreased to improve sales.
Eye and lens care The category is performing well and hence no
changes are required to be made.
First aid and wound care The GMROS is not that good and the ST is 4. The
profit margin is good at 40.51% and hence, their
performance is good. The product holds potential to
perform well. Hence, it is suggested that the
GMROS of each item is figured and the one with a
high margin needs to be given more space and a
good dressing. It is suggested that these items are
displayed on a prime position and hence, this will
lead to more prestige.
Foot care The GP margin is quite high but the GMROS is
quite low. However, with a ST of 4.36, it seems to
be underperforming. If the positioning is changed, it
might go a long way in helping to increase the
sales. All items in the product need to be examined
and the ones with the largest margin should be
displayed one.
Gifts The Gifts have not been performing well and have
lower figures in all sections like GMROI and
GMROS. Hence, it is suggested that the pharmacy
reduces the category and purchase only special gifts
which are unique for certain festivals.
Hair care The range of products occupies a huge LM and the
rest of the important dimensions are bad and
therefore, the GMROS of each bran should be
checked and the best brands be increased.
Hand and nail The given line has a good GP margin but low
GMROS. Remerchandising this category is very
crucial.
Home health care The ST, GMROS are not good. The pharmacy must
apply a differentiation strategy, increase the stock
and offer reasonable prices to improve popularity.
Household and domestic The gross profit of the given range is not good. The

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laundry powder and dishwashing liquid should be
removed and space should be given to healthcare.
Oral hygiene The condition of the given range is very bad. The
LM is only 12 as the mouthwashes have been
occupying more spaces. A solution for this may be
that just a few brands must be kept and the brands
kept must be unique.
Perfume Prestige The perfume prestige range has been performing
well and although the GP% is good, the ST is not.
Hence, the GMROS of each of the products needs
to be tracked
Sinus and allergy The given range has the highest ST; hence it can be
kept the same.
Skin Care The Skin care section has not been doing well. The
GMROS of each project should be analyzed and it
was observed that products like eczema and the
aqueous lotion need to be kept in stock always
Sun care The marketing and stocking of the given products
need to be placed in a prime position during
summer and not marketed during cold season. It has
a good GP%.
Vitamin and nutrition The given category of goods, as observed from the
given figure has not been doing well and needs to
be marketed properly.
Water As it has been observed, the ST of the given product
is reasonable and hence, no such change is required.
Weight Management The GRMROS, Gross Profit Margin and the ST
figures look commendable. However it has been
suggested that the products can be re-merchandised
and if they are placed next to nutrition and vitamin,
they will be able to perform better
Home and office supplies The Home and office supplies have a Gross Margin
of 52% which is good. Hence, no changes are
suggested in the given sector.

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References
Amit, R. K., Mehta, P., & Tripathi, R. R. (2015). Optimal shelf-space stocking policy using stochastic
dominance under supply-driven demand uncertainty. European Journal of Operational
Research, 246(1), 339-342.
Da Silva, S. C., Pereira, L. E. T., Sbrissia, A. F., & Hernandez-Garay, A. (2015). Carbon and nitrogen
reserves in marandu palisade grass subjected to intensities of continuous stocking
management. The Journal of Agricultural Science, 153(8), 1449-1463. (Da Silva et al., 2015)
McCarthy, B., Delaby, L., Pierce, K. M., McCarthy, J., Fleming, C., Brennan, A., & Horan, B. (2016). The
multi-year cumulative effects of alternative stocking rate and grazing management practices on
pasture productivity and utilization efficiency. Journal of dairy science, 99(5), 3784-3797.
McCarthy, B., Delaby, L., Pierce, K. M., McCarthy, J., Fleming, C., Brennan, A., & Horan, B. (2016). The
multi-year cumulative effects of alternative stocking rate and grazing management practices on
pasture productivity and utilization efficiency. Journal of dairy science, 99(5), 3784-3797.
Pereira, L. E. T., Paiva, A. J., Geremia, E. V., & Silva, S. C. (2015). Regrowth patterns of elephant grass
(Pennisetum purpureum Schum) subjected to strategies of intermittent stocking
management. Grass and Forage Science, 70(1), 195-204.
Roche, J. R., Ledgard, S. F., Sprosen, M. S., Lindsey, S. B., Penno, J. W., Horan, B., & Macdonald, K. A.
(2016). Increased stocking rate and associated strategic dry-off decision rules reduced the amount
of nitrate-N leached under grazing. Journal of dairy science, 99(7), 5916-5925.