A Study Of B Company (China) Marketing Channel Design

The Chinese pharmaceutical market had become the second largest market in the world;it only lags behind the United State.China's pharmaceutical companies have developed rapidly driven by the huge market demand.Consequently,The demand for advanced production equipment and international brand equipment has also increasing.In particular,the demand for international brands equipment has grown quickly,It is attributed to the reason which is most of the medicine formulation and medicine production processes on the market are sourced from foreign pharmaceutical companies,So it is more simple to guarantee the product quality with same equipment and same process while local company produce similar medicine;On the other hand,the China Food and Drug Administration(CFDA)released a new GMP regulation in 2010 for pharmaceutical companies,The GMP standards in this version have been substantially raised up to the same level as Europe from very low standards and it required all pharmaceutical companies have to pass mandatory certification which requires pharmaceutical companies equipped with high level of production equipment and quality control instruments.These factors have contributed to the rapid increase in demand for high-end pharmaceutical equipment in China.Therefor,China has become a key market for international brand equipment manufacturers in recent years.For foreign equipment manufacturers who want to sale machine in China,distribution channels in China are a top priority issue for it is successful in the market.An effective distribution channels probably have even become a source of competitive advantage for many companies in the Chinese market.This thesis investigates the channels of different international brands in the Chinese market and found that most company's channel structures are old-fashioned that keep the same patent for many years;the aging of the channels also led to an adverse position in the competitiveness of manufacturers.Among those companies,company B is the most typical example;B Company is a world-renowned aseptic pharmaceutical machinery manufacturer.It has leading position in the European market and the U.S.market.B Company entered Chinese market as early as 1990,but till now,its sales channel has always maintained the model of exclusive agent and has not changed for years.Competitor's business in China has surpassed company B in recent years by channel structure redesign.This is a typical case of channel design errors,so Company B was chosen as the object of case analysis for this thesis.This thesis uses the case study method.The basic idea of writing is to clarify the issues faced by company B through Interviews and Field Study.Analyze the external marketing environment and existing channel conditions;finally put forward an optimal channel design solution.The research scheme of this paper is based on clarify the definition of channel design,and systematically summarizes the steps of marketing channel design by relevant studies of article.It also applied the classical theories and analysis tools,like SWOT and PEST,to redesign the channel structure for Company B.The research conclusion of this thesis is that: For industrial equipment companies,the marketing channels are better to apply the hybrid channel structure which combining direct sales and agents.Direct sales can use the company's own professional capabilities to serve customers and also can provide quickly respond to customers requests;The direct channel also can have marketing function such as control pricing and collect customer information;Agency can achieve better performance by their experienced local team and cover larger geographical area.This conclusion can also serves as a reference for other international brands of industrial equipment manufacturers who want to build efficiency channel in the Chinese market.