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  • 1   Consumers 1)  Health Consciousness From SARS in 2003 to Bird Flu. in 2005, the immediate threaten of dieing accelerates the shift of consciousness of consumers ...
  • 1   Consumers

    1)  Health Consciousness

    From SARS in 2003 to Bird Flu. in 2005, the immediate threaten of dieing accelerates the shift of consciousness of consumers from remedial to preventive. Thus the idea of healthy consumption has been built in the bottom of mind of Chinese gradually, that is, we should pay more attention to our health, keeping exercise, having good sleep, balancing our diet, and supplying some health care food to improve our health condition when it is needed.


    2) Consumptive Concept

    Advertises of health products have been cultivating the consumptive idea of give presents is no better than give health. In the mean time, it has been accepted deeply by consumers that to improve our immunity or other body function by taking function foods. But at the present, consumers are lack of trust seriously in health care industry and its products at home. Consumers have begun to choose products other than health care products as healthy gifts (physical examination card, body building card and so on).

     Table 1: The Main Opinions of Consumers Show to Health Care Products

    Opinions

      Times

     Percentage %

    Propaganda Boast and inaccurate

     497

    49.4

    There are too Many Similar Products

     458

    45.5

    Prices is too High

     410

    40.7 

    Quality isnt so Good

     242

    24.0

    No Opinions

     55

    5.5

    Others

     3

    0.3


    3) Knowledge of Products

    According to the choices among specific types, consumers prefer health care foods and dietary supplements which have a clear and definite function. The market share of dietary supplement continues grow. At the influence of media and advertises, consumers are attaching importance to not only quality and brand, but function and scientific basis of health care products. In addition, because regulates to functional explanation about health foods by policy is too rigid, the consumers can hardly know how to choose health care products.

    Table2:  Results about Nutritional Knowledge of Health Products Questionnaire

    Knowledge Questions

    Correct Answer Rate %

    Whether knowing Related Regulations about Health Care Products

    49.8

    Whether knowing Marks of Health Care Products

     28.9

    Whether identify Health Care Products

     13.0

    The Relation between Diet and Disease

     92.9

    The Relation between Iron-deficiency and Anaemia 

     59.8

    Whether Children can take royal jelly

     66.0



    4) Consumptive Habits

    Due to a lot of reasons like short periods of products, most of consumers havent get into the habit of consuming health care products. There are a few consumers who take health care products of same brand for a long-time. The faithfulness to brand is rather low. But consumers also realized that some large enterprises which have standard operation are worthy to rely, and the brand realization of consumers is rather strong.

    Table3: Consumptive Action Research of Health Care Products

    Questions

    Percentage %

    To Decide the Brand before Purchasing

    85.7

    To Decide the Brand on the Spot

    7.6

    Uncertain

    6.3



    2 Government Supervising

    1) Supervising Department

    Before 2003, the supervising department is MOH (Ministry of Health), and it belongs to SFDA( State Food and Drug Administration) to charge in 2003. In addition, some departments also involving in administration of health care products such as Administration Bureau for Industry and Commerce, Administration of Quality Supervision, Inspection and Quarantine, and Ministry of Commerce.  
     
          
    2) Relevant Laws and Regulations

    Laws and Regulations related health care products include Laws of Food Health, Rules of Registration and Administration for Health Food (test), Regulation of Declare and Audit for Dietary Supplements (test), Temporary Regulation of Advertise Censor for Health Food, Administrative Regulations of Direct Sale, Regulations of forbidding Multi-layer Transit Sale, Rules of Pre-packaging Special Dietary Food Label etc.


    3) Supervising Status

    By the special administration to health food, Government departments are taking joint efforts to supervise the health food. Although division of labour begin to clear, but there still exists some problem of intersect function among departments.

    The local Food and Drug Administration lack of experiences in general. From July 1, 2005, State Food and Drug Administration begin to assign the right of health food registration to provinces, but the course of audit is rather slow.

    There are also much deficiency and gap of regulations: According to Rules of Registration and Administration for Health Food (test), the development of herbal health food has been limited a lot, with some products which has definite function and good quality being outside; Although new functions have been permitted to apply, but it cannot realize in a long time. At present we also lack of regulations for health care products and sexual health products.


    3 Enterprises

    1) Marketing tendency

    1.1 Traditional Channel

    In recent years, sale achievements of large-scaled major enterprises drop in general, while their market share rise, so as to acquire a stable market position (like JIANTE, JOINCARE,); Due to the implementation of Temporary Rules of Advertising Censor for Health Food, the advertising market worsen for some single-product enterprises which depend on advertising propaganda, and living space has been cut down a great deal; The marketing for dietary supplements shows a tendency of rising.


    1.2 Direct Sale Enterprises

    The regulation of direct sales has been forbidden by different departments after its coming on, and the upper limitation 30% for recompense also brings difficulties for reformation of enterprise. Except Avon, all the companies of direct sales are in logjam, and the sales drops a lot. In the meanwhile, the prospective of direct sale is rather large, and large numbers of enterprises have been appeal to compete direct sale certificate.


    1.3 Instructing Sale Enterprises

    The development of instructing sale stands a turning point. Beijing published firstly the rules of restricting to hold product instructing, and local governments have strengthened supervision to conference marketing consequently. On the one hand, small company is in a bad condition, which is facing the threat of bankrupting and being swallowed up by large company; the other hand, the market shrink as a whole, and many professional managers began to come out of large companies, and entered into other companies.


    1.4 Chain Company

    Chain store pattern is the most competitive among all kinds of mature management pattern. According to the experience of international market and the special situation of china, Chain management must be one of major marketing pattern for health care products in China. But at the present, its very hard for the development of chain stores of health care products, and many enterprises closed one by one.


    1.5 E-Business

    The development of E-Business is limited by the development of the whole business and the quality of stuffs. Although it hasnt taken shape, we should see the large force of this technological reform to the business. Some farseeing company which represented by EYSKJ increased their investment in E-Business again.


    1.6 Other Marketing Pattern (direct sale on TV, direct sale by databases of magazines etc.) is also marketing pattern which has big developing space. But there are such limitations as technology, logistics, accounting etc., it has a long way to go for development.


    2) Developing Tendency

    Since the opening of such regulations as Regulation of Registration Administration for Health Food, Regulation of Administration to Direct Sale and affiliated rules, the entrance is harder and supervision is more strictly, which make a lot of middle and small sized company either exit or unite. There are three major shift of investment in large enterprises:

    2.1 Some large health care enterprises came to invest other areas: such as Shi Yuzhu has invested web game.

    2.2 Some large pharmaceutical enterprises begin to invest health care products: Merro of Dalian, Xiuzheng Health Products and Haoyao Group increased their investment in health care products.

    2.3 Foreign company have invested in China market: Nu skin, which has business in china, has increased 100 million investments. Many mainstream enterprises in America have opened business offices in Beijing , Shanghai and so on.


    3) Major Problems

    3.1 The fund for research and development is short. It was caused by many reasons: company lack of fund for research and development, lack of intellectual property rights protection, and some enterprises short-sighted action by chasing over-profits.

    3.2 Overcapacity and low technology

    In order to acquire GMP, Many health food enterprises used up their resources. The throughput of enterprises is far beyond the demand of market. Due to the overdraft of their resources, the enterprises arent able to improve their technology. The hi-tech involved in the equipments is not high yet, and the technical is still low, so the statue of low-level production hasnt been changed availability.

    3.3 Unbalanced Human Resources Structure and the outflow of marketing talents

    The prime problem of human resources in health care industry is that the whole quality of stuff is low generally. At the present health care industry hasnt got enough respect, and many excellent talents dislike to enter into this field. Meanwhile, there are large quantities of talents, most of them are marketing talents, who dare to innovate and being well-trained, has been trained in health care industry and work for other industries now.


    4 Third party institution

    1) Industrial Association

    As a self-discipline management organization, China Health Care Association has come to the first stage of industry in 2004, and has become a bridge which connects governments and enterprises. Since then, great contribute has been done on such aspect as formulating industrial standards, carrying through industrial self-discipline, building system of reputation security, enhancing to build honest and trust, promoting communicating between enterprises, and participating the development for companies.

    2) Media

    Media is always pursuing the update news in market and paying attention to the tendency of industry, so it has become the major channel for companys promotion strategy. At the same time, in the series action of consolidate by functional departments of government, media makes its feeler to every hidden area. All in all, media has still played great action for the direction of consensus. 

    3) Consulting Institutions

    Based its theory on immature health care industry, consulting institutions havent surpassed the practical experience of market on their methodology. In addition, the scale of investment and accumulating for resources is limited, so the whole development is slowly. But the Shuzheng Health Consulting Company, which consisted of expert in marketing and consulting, shows its great and fast development in this field, and it has become an inneglectable force by helping the decision-making of government, enhancing the managing level of enterprises, and promoting the development of health care industry.

    4) Instructing and Training Institution

    All kind of training of certificates sprang up like mushrooms, such as training of nutritionist and training of nutrition and health care director, and it has explored new market in health care market. Before the industrial criterion and standards came out, each training institutions have taken advantage of it to snatch the share of market, so as to accumulate experience and capital in initial stage of the market.   
     

     

     

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