A Study on Korean Medicine Distribution Structure

Song, Yun-Go(Major in Marketing Management, Graduate School of Business Administration, Dong-A University)

This study is trying to indentify problems and to suggest method for improving and developing, by analysing Korean medecine distribution structure that is constituted by distributors, distribution channels and their inter-relationships.

Korean medicine distribution is executed by medicine distributors-producers, wholesellers, retailers and brokers. Characteristics of Korean medicine producers as a distributor are production activities of depedence on domestic demands, low self-supply rate of raw materials, small size, and small amount-many items production structure. Distributors acting as whoesellers ar compositive wholesellers, import wholesellers, producer wholesellers and hospital supplying wholesellers. In medicine distributing, retailers are drug-stores, which is relatively poor and it's margin is at low level. The greatest characteristic of Korean medicine distribution channels is that it is very complex and extremely diversificated.

Analysing this Korean medicine distribution structure, some problems are indentifyed. Korean medicine producers functinal problems are extreme production and sales promotion, strong competitions among the similarities, two competing characteristics of sales promotion stratege and various discounts and special sale. Promles in functions of wholesellers are weak functional diversification, strong legal regularions, expansions of direct transactions and weakness of financial structure.

Retailer's functional problems are extreme density of drug-stores and capital weakness Finally, problmes in distribution channels and their complexity and very large distribution cost.

To solve these problems, refinement in distribution channels diversified is needed and distributing function of wholesellers needs to be strengthened. In improving and developing medicine distribution structure, standard retail pricing should be introduced institutionally, and seperating medical task from medicine treatment task should be executed.