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Strategical plan for some large-scaled medical group

As China’s biggest traditional enterprise that produced antibiotic, with total assets of more than 10 billion Yuan, a large-scaled medical group had been on the cusp in the medical industry for many years. However, as China opens medical market all-round when entering the WTO, the competition among the domestic large-scaled manufacturing enterprises of antibiotic grew tougher day by day, the development space of this group was challenged more and more by the domestic trouble and foreign invasion, especially for its staple division of producing antibiotic –the Preparation Department.

Since 1998, profit of the group began to have large landslide. Its net profit lowered to 112 million Yuan. The proportion of net profit and income of main business dropped to less than 10% for the first time. In 1999 and 2000, though turnover of this group rose to 2,400 million Yuan, the net profit is even fewer than 100 million Yuan. The earning per share (EPS) also dropped from 0.2 to 0.03 Yuan to 0.07 Yuan. Raw materials medicine and preparation of penicillin, which accounted for nearly 40% of total sales amount but now in the centre of landslip, was certainly unable to escape the misfortune. From 1998 to 2000, the competition in international and domestic penicillin market was unusually miserable, case of dumping and demanding a lower price each other emerged in an endless stream.
How to evade the impact and pressure from the international, domestic market, and how to raise the efficiency of the domestic marketing, was put forward as the most urgent subject. In order to get out of the predicament, the group invited Cons, which was familiar with domestic medical industry operation to help it. According to the concrete reality of this group, Cons designed product lines strategy for its hundreds of varieties, carried on reasonable planning to the life cycle of key products, offered the researching and developing tactics for intact product lines, and recombined the related department and personnel, defined the duty and authority of the personnel of every department, put up marketing and selling frame again, and make near, mid and long-term development plan for the preparation division.

Particularly, Cons Company started with the most two difficult points: one is design of product line, and the other is raising marketing efficiency of preparation department to come by combining marketing.
In design of the product line, Cons proposed to fight in two fields and win two battles at the same time. One field is antibiotic product line. This group had huge producing line of penicillin, spore products and mould, but most products are outmoded in the product line. Under the enormous pressure of dumping competition, the profit was extremely thin. Though the research and development ability of this group was strong, its marketing efficiency and ability were insufficient, causing a lot of high-profit new-type products antibiotic unable to list, or unable to form the scale of marketing, could only rely on the old products to maintain the passive and vulnerable situation, couldn't form the key competitiveness of the antibiotic. Cons Company proposed it combine the outmoded products, giving up progressively the profitless products, carrying on cost accounting, controlling circulation, minimizing producing and circulating cost of the meager-profit products, strengthening support of marketing, expanding market share rapidly, making form the scale of marketing and become the pillar of profits of mid and high-profit products. Meanwhile, Cons Company also proposed developing new products to enrich and perfect composition of product line, especially cephalosporin products. The group’s spore products mainly belong to the first generation, the generation of thin profit which is of high cost and low output, Cons Company proposed developing the generation of very beginning spore products to enrich hair spore product line. The penicillin products had been the group’s traditional advantage all the time, Cons Company proposed to form brand advantage of penicillin and half formatted penicillin. Meanwhile, Cons Company proposed the group introduce quinoline Zhyuan ketone products to make intact their antibiotic product line, and then make the brand image of this group in an all-round way, promoting the key competitiveness of the whole antibiotic product line.

On another battle line, Cons made plan again for the products besides its antibiotic products, including traditional Chinese medicine products and Western medicine products, confirmed the corresponding brand association, for instance old series, series of medicine always on the alert of the family and etc., in order to make this group the leading brand on " all is for human health ".

Cons Company, have followed and studied a large amount of medical marketing cases, including successful and unsuccessful ones, cases at home and abroad, for more than ten years, analyzed a large number of influential factors one by one, and have accumulated abundant medical marketing experience. For the set up of marketing framework and marketing efficiency, Cons Company proposed putting up whole marketing system again, meanwhile, Cons Company reestablished the examining system for preparation department, making clear the post description and performance examining standardization of large district manager and director.

According to Cons’ suggestion, the Preparation Division of this group medicine already set about implementing, combining its huge product line, reorganizing marketing system, make its selling efficiency raise by a large margin, and have alleviated the passive state that the market competition brings. In 2002, this group realized income of more than 3 billion Yuan from sales, among which preparation department contributed a lot.

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