Research On The Marketing Strategy Of K Company's Health Products in China
Nov 25, 2024
Abstract
In recent decades, with the continuous improvement of China's economic level, people's living standards have been significantly improved, and consumption demand and structure have also changed. After meeting the basic needs of daily clothing, food, housing and transportation, people further enhance their happiness in life through daily health care, which has become The goals that many people seek most are, in short, "better health, younger, and more beautiful." There are many methods for daily health care, and "health products" must be an inevitable topic among them.
NEW HERB CISTANCHE IS SOLD BY FACTORY IN CHINA
K Company, founded in 1980 and headquartered in Los Angeles, USA, is a world-renowned nutritional supplement and weight management company dedicated to bringing consumers a healthier and happier life experience. After entering the Chinese market in 2005, it obtained the national "Direct Selling Business License" (commonly known as the "Direct Selling License"). Performance once developed rapidly, but due to the combined impact of factors such as the impact of e-commerce and consumption upgrades, performance has declined seriously in recent years.
This article relies on marketing theories and tools to gain research insights into K Company's health care products business in China. First, it analyzes the development status and product matrix of K Company, and further analyzes the current marketing strategy status and problems through the 4PS theory; then uses the PEST model. Conduct a marketing macro-environment analysis of K Company, combined with micro-environment analysis, to provide evidence for accurately positioning marketing strategy issues. Next, use the STP theory to reposition K Company's health care products business in China, and based on this, propose a marketing upgrade plan, which mainly includes but is not limited to: product upgrade iterations, benchmarking competitor companies to set reasonable price ranges, and improving immersion We will increase online digital marketing and content marketing, seek cooperation with professional nutrition institutions, and join forces to create a more professional and attractive corporate IP for young people. Finally, rationalized suggestions were made for enterprises to implement marketing strategy guarantee measures, including four aspects: organizational management guarantee, capital and financial guarantee, scientific research and technology guarantee, and training guarantee.
Company K is an internationally renowned health care product company, and its weight management series products have ranked first in the market share in China for many years. In the increasingly fierce competition environment, how to base on one's own advantages, adapt to the current marketing environment, and adopt marketing strategies consistent with it to open up new growth points for the enterprise; it is not only crucial for the enterprise itself, but also for similar types of direct sales. It has important guiding significance for the company and the health care products industry.
Keywords: direct selling; health care products; marketing environment; marketing strategy; safeguard measures
Chapter 1 Introduction
1.1 Background of the topic
With the rapid development of my country's economy, the per capita GDP has achieved rapid growth, and the purchasing power of residents has been rapidly improved. "Being healthier, younger, and more beautiful" has become a goal widely pursued by the public; at the same time, as the pace of society continues to accelerate with economic development, people's life and work pressures are getting higher and higher. Under such a background, how to maintain health and scientific health care has become a major problem facing modern people. In the report of the 19th National Congress of the Communist Party of China, the "Healthy China Strategy" was elevated to an important part of the basic national development strategy. This is a positive response to the health needs of the people and their concerns about disease treatment, food safety, environmental pollution, etc. Raising the construction of a healthy China to a national strategic position is a sublimation of the national governance concept and national development goals, which will help promote joint actions at all levels of the country, society, individuals and families to promote health and promote health.
In the environment where the government and the industry vigorously advocate "big health", the consumption scale of my country's health care products industry has expanded year by year. It can also be seen from the data of the well-known research organization Euromonitor International that from 2015 to 2020, the sales of health care products in my country showed an upward trend year by year. After the outbreak of the epidemic in 2020, there was an increase in "retaliatory consumption", reaching 198.4 billion yuan, an increase of 11.52% year-on-year.
The combination of national strategy, epidemic catalysis, consumption upgrades, and the constant changes in people's lifestyles has made modern consumers show great enthusiasm and demand for health products. In addition to the middle-aged and elderly groups who were originally the main consumers of health products, many young people have also appeared, and health product consumption has gradually developed in the direction of universalization, multi-functionalization, and snacking.
K Company originated from the United States across the ocean. It is a world-renowned nutrition and weight management company founded in 1980. Since its establishment, K Company has always adhered to the original intention and philosophy of the founder: to improve people's lives through high-quality nutritional health foods and personalized service plans. At present, the company has many series such as weight management, dietary nutrition, fitness, personal care products, etc., and has covered more than 90 countries and regions in the world. In 2021, global net sales reached US$5.65 billion, an increase of 13.6% over the same period in 2019, setting a new record for the best annual sales performance in the company's history.
K Company's fate with the Chinese market can be traced back to 1997. As one of the first foreign-funded health care companies to enter China, it invested and built a factory in China. In October of the following year, it established a large-scale production base in Suzhou Industrial Park, Jiangsu Province, and officially completed and put into production in 2000. At present, the products produced and sold by K Company in China are mainly weight management series with protein nutrition powder as the core and other types of nutrition and health products. In 1998, the year of production, its output jumped to the top 50 health care product manufacturers in China. At the end of 2001, K Company's products began to be sold in the Chinese market. The sales volume in the first year reached 17 million yuan, demonstrating the company's strong strength. After that, its performance in China continued to grow and reached nearly 1 billion US dollars in 2018. However, after that, the performance began to decline instead of increase. Even in 2021, K Company's net sales in China were only US$600 million, a year-on-year decrease of 22.2%, and it was the region with the largest decline in its global market. The huge decline in performance has seriously deviated from the booming market, and the reasons behind it are worth exploring in depth.
At present, K Company sells its products through direct sales around the world. As a special sales model, direct sales has obvious characteristics and industry imprints; how to capture the psychology of consumers and adapt to the development of a networked and information-based society at a time when the Internet is developed, e-commerce is rising, and consumer personalization is constantly improving is also worth exploring for enterprises and industries.
1.2 Research Purpose
This paper takes K Company's health care products business in China as the object, and studies its marketing strategy by analyzing various marketing environment factors. The main purposes are as follows:
First, comprehensively operate the marketing theories and tools learned and mastered in the MBA course, such as PEST analysis method, marketing 4P strategy, 4C theory and the most core STP theory in marketing, etc., put the above discussion into practical cases, sort out the current situation of K Company through professional theories and tools, sort out the internal and external environment and marketing factors, and provide a solid theoretical basis for the proposed marketing strategy.
Secondly, through marketing theory tools, combined with the current development status of competitors in the health care products industry, deeply insight and analyze the problems existing in K Company's existing marketing strategy, and further formulate improvement plans for marketing strategies. At the same time, formulate safeguards for the implementation of marketing strategies, so as to truly empower enterprises, improve marketing efficiency, and play a practical effect.
1.3 Research significance
I am currently engaged in regional sales management of K Company. Through daily work summary and field observation and visit, I analyzed the marketing environment of China's health care products market through PEST analysis method, and then analyzed K Company's current marketing strategy, summarized its potential opportunities in marketing, and put forward corresponding suggestions in the optimization of marketing strategy, and put forward corresponding safeguard measures; it has great theoretical and practical significance.
First of all, the theoretical significance is that the domestic health care products market is currently showing explosive growth, with many industry brands and low concentration, and various brands play their strengths through various channels; as a direct sales company that occupies half of the traditional sales share, how to actively transform in the era of digitalization and informatization and meet the challenges of e-commerce brands and emerging brands, there is little relevant theoretical research. Taking K Company as an example, this paper, relying on the existing research theoretical results, brings information and ideas that are in line with the current actual situation to enterprises in transition.
Secondly, it is of practical significance. As an individual health care product company, its main business purpose is to provide products that meet or exceed consumer demand and achieve corporate profitability. In such an era of rapid information growth and consumer demand upgrades, companies should make decisions based on "principles". The basic "principles" of marketing are the classic STP and 4P theories and related derivative theories.
This paper takes K Company as the research object, showing the development process of a traditional health care product company and the challenges and bottlenecks it encounters. And through scientific theoretical basis and rigorous research process, it proposes marketing solutions, which have rich practical significance for corporate decision-making. By reshaping its marketing strategy, it can help companies strengthen their brand image, attract more sellers to buy products, and enhance customer loyalty, thereby achieving stable growth in revenue and profit margins and realizing the company's long-term development path.
1.4 Research methods and content
1.4.1 Research methods
This paper mainly studies the marketing problems of K Company through literature research, field investigation and data analysis methods, as follows:
Literature research method: Collect relevant documents with keywords "marketing" and "health products" from online databases such as CNKI and VIP and provincial, municipal and school libraries, organize and process the data, and refer to and identify them in combination with the core theory of marketing, learn from the excellence of existing research results, and provide information support and theoretical basis for problem analysis and marketing strategy formulation.
Field investigation method: Visit K Company's business premises, conduct in-depth interviews with company managers, department heads and front-line employees, and collect first-hand data and information in the front line of marketing, fully understand and grasp the real status of K Company in all aspects of marketing, and summarize the problems of current marketing strategies through analysis and induction.
Data analysis method: By analyzing the main operating KPIs over the years and combining the different development stages of the company's life cycle, propose solutions to K Company's marketing strategy problems.
1.4.2 Research Content
Chapter 1 is the introduction. The main content of this chapter is to explain the background significance and research purpose of this paper research; at the same time, it summarizes the research ideas and methods used in the article.
Chapter 2 is a theoretical and literature review. The content of this chapter is mainly to analyze relevant theories and research materials, including but not limited to PEST analysis theory, marketing 4PS theory and community marketing theory; at the same time, it fully understands the research materials in the field of international and domestic health care product marketing. So as to ensure that the research process and results of the article can be based on a scientific and rigorous theoretical foundation.
Chapter 3 is an analysis of the current situation and existing problems of K Company. The main content of this chapter is to introduce the profile of K Company, covering the company's history and development, the company's scale and current situation, and the company's main business; at the same time, it disassembles the current status of K Company's marketing strategy in detail, and further analyzes the difficulties and challenges currently encountered by the company in the marketing end.
Chapter 4 is a marketing environment analysis. This chapter uses two tools, the PEST model and the marketing micro-environment analysis theory, to analyze the current marketing environment of K Company from both macro and micro levels. Thus, the challenges and opportunities faced by the company in the marketing environment are summarized, and the foundation for the formulation of marketing strategies is laid.
Chapter 5 is a marketing strategy based on STP analysis. The content of this chapter is based on one of the classic theories of marketing--STP theory. Combined with the results of the marketing environment analysis in the previous chapter, the market segments, target markets, and market positioning of K Company are re-sorted, so as to provide a basis for the formulation of specific marketing strategies.
Chapter 6 is a marketing strategy combination of K Company. This chapter uses the marketing theory tools with 4PS as the core, and based on the conclusions of the marketing environment and marketing positioning analysis, it formulates specific marketing strategies from the dimensions of products, prices, channels, and promotions in detail. Comprehensively enhance the competitiveness of the company's marketing end, so as to achieve a leap in development.
Chapter 7 is a guarantee measure. The content of this chapter provides support and guarantee for the precise implementation of marketing strategies from all aspects and angles. There are mainly several key aspects such as organizational management guarantee, financial guarantee, scientific and technological guarantee, and training system guarantee.
Chapter 8 Conclusion and Outlook. This chapter summarizes the entire article, summarizes the shortcomings, and looks forward to the future development of K Company and this field.
