Background
XYZ Ltd is a worldwide company in HK since 1981; it provides a large selection of medical products and equipment to the Hospital Authority and the private hospital via a distributor ABC Ltd. The main product and services included Hemophilia, Immune disorders, Kidney disease, Cancer, Trauma and other conditions.
In year 2004, Hong Kong Hospital Authority decided to cut down the expenditure with the influence by a huge finance deficit. It leads the medical industry facing keen competition on price deduction. In order to versus this situation, the group has to transform the business structure so as to maintain the competitiveness in the market and enhance the financial performance. (The distributor contract with ABC Ltd will complete on Oct 2006.)
The literature review found that the group should consider to changed the marketing strategies by selling product to consumer directly instead of selling product via a distributor in long run. Since the XYZ Ltd set up in Hong Kong, ABC Ltd was responsible for the distribution, most the logistic management and marketing promotional activities are handle by ABC Ltd. Therefore, there are 3 different scenarios can be adopted by the group management.
1.) Provide further discount of the admire products in the market in order to increase the sales volume and achieve the result of market penetration. (Etzel Walker Stanton. (2004) Marketing, Mcgraw-Hill )
2.) To adopt direct sales approach, the company can result a high yield from sales of the product bypass the intermediary for the long run, however, the group has to invest to the business for extending the company scales and will not recovery in short period.
3.) Increase profit margin for the some products by souring another distributor in order to versus the price deduction during the short period and starting the direct sales for some products that are easy to delivery and storage.
Research Objectives
The objective of the market report are
a.) To review business model and the operation of XYZ Ltd and search various methods to maintain profit margin when will experience price deduction competition in the market.
b.) Conduct comparative analysis to select the best method that able to generate the most profit and minimize adverse effect for the company under price deduction.
c.) Draw conclusion and recommendations regarding the applicability for improving the financial performance and developing operation system of direct sales of XYL Ltd.
Methodology
a.) The author will first conduct a review of the literature relating to the 3 scenarios and therefore to develop the academic grounding and clarify the author’s research questions.
b.) The author will proceed next to carry out primary research in XYZ Ltd to a compare the figure and consider the most effective method for XYZ Ltd. The questionnaire will be distributed to the samples (size to be agreed) of managers across the company. The financial data analysis will be used. Justification for the primary research methodology will be discussed and limitations to the research will be explored.
Project Plan
The researcher is aware that for the collection of primary and secondary data several resources are required. Access to the author’s organization XYZ Ltd has been negotiated and granted. The facilities required to gather secondary data and it’s accessibility will be uncomplicated via the web, journals and literature from the library.
The author is fully understand the necessary requirements to undertake this investigation and possesses the means to conduct it.
References and Bibliography
Etzel Walker Stanton. (2004) Marketing, Mcgraw-Hill
http://www.innovationavenue.com/print-sales-directsales.htm
http://www.innovationavenue.com/print-sales-indirectsales.htm
http://www.randburg.com/info/middleman.html
http//www.209.143.248.44/default.aspx?page=article152
Credit:ivythesis.typepad.com
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