Research On Marketing Transition Of Chinese Pharmaceutical Enterprises

Since China reformed and opened up to the world, significant progress has been made in Chinese pharmaceutical industry. Now it has become one of the most active and potential industry in the whole national economic system. The marketing work of the pharmaceutical enterprises has been developed step by step. Transition issue has become one of the hot spots in the marketing area. The pharmaceutical enterprises were met by a grand challenge of reforms from old models to the new. Therefore, it is extremely important to deeply study marketing transition, whether theoretically or practically.Since the end of 1970's, the marketing theories formed in western developed market economy environment started to spread in China. They promoted the importing, using and studying of the relevant thought in Chinese market and drove the independent exploring of Chinese pharmaceutical enterprises. Hereby, this dissertation firstly makes a comprehensive review on the currently advocating marketing theories, modes and strategies in order that they can make an academic base of the research after mentioned. And then, the basic views of marketing idea transition were raised. The transition of marketing idea is the guide of strategy transition of marketing mix.Market transition is thd base and root of marketing transition. The transition of Chinese pharmaceutical market is mainly outlined as follows: the Chinese pharmaceutical market is in the state of high-speed growth and rapid changes; and it has gradually become an important part of international pharmaceutical market. Under such conditions, the Chinese pharmaceutical market began to turn from production-orientation to consumer-orientation and came into a new phase of total competition and low-profit running. The structural contradiction is still quite acute, and the state of imbalance between supply and demand leads to orderless competition. Modern pharmaceutical logistics has developed rapidly. Foreign investments entered into Chinese pharmaceutical distribution market discreetly. Through the research on every part of the drug market, it is concluded that prescription drugs in hospitals are still thd mainstream market, the dominative position of urban pharmaceutical market has not been changed at all, the OTC drug market is a high-speed developing one in recent years, and the third terminal market (TTM) based on the rural area and urban commiunities has grown up rapidly and become a bright point of the industry.The Traditional Chinese Medicine (TCM) market is an important and special part of Chinese pharmaceutical market. Nowdays, TCM industry divides into TCM agriculture, TCM manufacturing, TCM commerce and TCM knowledge industry. The characters of high differentiation and high integration are becoming more and more cleare. The embryo base of modern high-tech industry in TCM has been gradually built up. The development of modern TCM industry has become a prominent manifestation of the transition of Chinese pharmaceutical market.The research on the development history of Chinese pharmaceutical marketing indicates that although Chinese drug marketing started late, it developed rapidly. After the three former developing stages, it has eventually entered a new phase since 2006. Accordingly, the research on drug marketing has been changed from summarizing the overseas-funded enterprises' experiences and introducing foreign marketing theories in early 1990's to making the comprehensive innovative researches on our own. The development history indicated that there were different transition features of drug marketing in its different stages.Product mix and pricing strategy are the two aspects of basic contents of marketing. The product mix of a pharmaceutical manufacturer is dynamic and variable. Under the new market circumstances, the variations of pharmaceutical product mix show several new trends: raw material medicine manufacturers extend to phmarmaceutical preparation, generic medicine diverts to originally innovative drugs, and prescription drugs transform to OTC drugs. As a newly-rising pharmaceutical corporation, Tasly Group successfully transitted from a sigle product to diversified products. Price has very important effect on enterprises' marketing and consumers' behavior. Unfair price strategies and price behavior emerged in the deformed undivided system of treatment and medicine. A scientific and reasonable pricing system is lacking for the market. The drug price is falsely high and the drug expense is sustainingly undescended. The discrepancy of drug price is excessive and leads to price donfusion. In the long run, the drug price policies will tend to be standardized progressively with the establishment of scientific national drug pricing system. Every sort of roles in the pharmaceutical circulation chain pursues the suitable and reasonable profits and each company adopts favorable measures to its channels and prices. Tasly Group's pricing strategy embodies an important side of marketing strategy transition, that is to say, to keep high investment to drug innovation, gain high-efficient and excellent guaranteed quality, achieve outstanding potency ratio based on the higher prices, and both to protect consumer value and to maintain Tasly's sound development and sustainable developing capacity.The marketing channels of Chinese pharmaceutical enterprises are basically divided into two sorts: one is the direct managing mode and the other is agency mode. And the latter divides into general dealer mode and general agency mode according to their different part and role. The newly emerging alliance mode becomes a supplementary one. There are three major sorts of terminal channels in drug retail market: chain drugstores, drug supermarkets and sigle drugstores. The new markets and new bussiness patterns necessarily arouse the variation of pharmaceutical promotion strategy. There are already new changes in advertisement marketing, academic marketing, service marketing and brand marketing, etc. The content and scope of advertisement marketing will be strictly supervised and controlled, and therefore propaganda and popularization will tend to be standardized. Academic marketing will develop towards totality and systemization still as the main style of prescription drug marketing. The progress of service marketing consists in the diversion of marketing focus from tangible products to intangible services. Brand marketing is very important not only to OTC drugs but also prescription drugs, and especially it means that the market competition extends from products to the core competence of the corporation. The case study on Tasly Group indicates that the enterprises' marketing channels and promotion strategies have been experiencing continual transition along with the changes of drug market and the increase of corporation strength. The most important features of Tasly's channel strategies are transition from single channel to diversified ones, which are embodied in the transition from early self-constructed direct marketing channel to the multifunctional and widely covering channels and the expansion of compatibility of marketing networks by means of functional expansion, newly-built organizations, advancement to rural areas, etc. The major feature of promotion strategy is diversion from single academic marketing to integrated one.Going abroad from domestic market to international market and transiting from exports of API to overseas marketing localization of pharmaceutical preparation represent a radical trend of the marketing transition of Chinese pharmaceutical enterprises. In the long run, it is the predominant orientation of TCM internationalization for it to enter international dominant pharmaceutical markets with drug qualification. A few of famous domestic TCM corporations already began to undertake the exploration of promoting TCM to international markets. The international marketing of TCM is faced with radical transition of marketing strategies such as the diversion from product exporting to overseas marketing localization and the expansion of exports of raw materials and intermediates to TCM prparations. The three-phrase diversion of TCM, namely: (domestic) drugs-(overseas) health products or health foods-(overseas) drugs, indicates the particularity of the international marketing of TCM.The principal issue for TCM to implement international marketing is proper product strategy. The traditional TCM products should be transformed into modern TCM products with higher technological contents and international standard certification. Their technological standard, environmental standard and quality standard should be raised even if they are exported as food supplements. The right target markets are chose according to the different product position and the proper channel strategies are selected by the enterprises' strength. There are commonly two international marketing strategies of TCM; one is to sale as health food or nutritional supplements, the other is to carry out international certification and registration as normal drugs. Tasly Group has constructed two marketing channels of TCM; one is international distribution and the other is international direct marketing. Tasly takes Composite Salvia Dropping Pill as the main product and adopts the international distribution strategy with the high-end drive of certification and registration and the base of export trade. And moreover, Tasly started the international direct marketing with the strategy of experiencing & training in connection with the consuming characteristics of local ailing and sick residents in Afirica and Southeast Asia.