Identify key factors that drive demand for retail pharmacies

Solution

The key factors that drive the demand for retail pharmacies are :

1) Income: Since pharmaceutical products are related to health, consumers prefer to get the best healthcare treatment, hence as income rises, the demand for such products also rises.

2) Seasonal factors: Since some of the diseases get affected by seasons, the demand for medical products also gets affected by various seasons. For example, the demand for medical products rises in monsoons.

3) Health Consciousness: As consumers become more and more health conscious, they prefer organic foods and disease preventive foods. Thus, increasing health consciousness amongst consumers will lead to higher demand for retail pharmacies.

The demand is relatively inelastic because it is related to the health of a person and thus a person would have to afford it no matter what the price. The products are almost necessity products and thus are relatively inelastic.