Chapter 1797 — The Situation Is Dire, Part Two
The Blossom Guardian · Page 1 of 2
In other words, a customer who bought any of those four medicines would receive a free bottle of Kang Divine Physician Golden Wound Salve or Hundred Pains Relief. And the Golden Wound Salve and Hundred Pains Relief were themselves buy two, get one free! That is to say, buy two bottles of Golden Wound Salve, or two bottles of Hundred Pains Relief, or one of each, and you would get one more bottle of either.
That being so, Fatty Lai's sales tactics were scattered to the winds. Even after the price cut, all they offered was buy one, get two — which came out one yuan dearer than Kang Divine Physician Pharmaceutical Company, with none of the flexibility of choice, and without the old-brand prestige of Kang Divine Physician besides.
Under such circumstances, Fatty Lai truly had no move left to make. The current price was still some distance from cost, but a product's launch could never be reckoned on cost alone; one had to take the wholesale price, subtract cost, then subtract channel and promotion expenses — only that was the product's final profit.
And now, with buy one get two, there was essentially nothing left to be made. You could hardly expect the retail pharmacies to sell your goods for nothing, could you? At the very least a certain margin had to be left for them, or who would carry your product?
Fatty Lai had in fact long since foreseen that Kang Divine Physician would pull a trick like this, yet there was nothing he could do about it. Dumping inventory at low prices was the only way he had left; the funds in hand were barely enough to last until this month's wages for the workers, and work on the newly built production line had long since halted.
Set against the hardship on Fatty Lai's side, the Kang Divine Physician household was celebrating. After so long under Dr. Guan's oppression, they had finally won themselves a fine comeback battle and seized back Dr. Guan's market share in one stroke.
Golden Wound Salve and Hundred Pains Relief were consumables, to be sure, but no one could buy them every day — a family might purchase them once or twice over a stretch of time. Still, in any household someone would be buying Kang Divine Physician's weight-loss pills or rheumatism ointment, or the deluxe Golden Wound Salve and the special stomach remedy, and the free gifts that came with those medicines were enough to cover the whole family's needs.
Add to that Kang Divine Physician's aggressive promotions, and hardly anyone was choosing Dr. Guan Pharmaceutical's products any longer. Looking at the mountain of stockpiled inventory, the Liu family's faces were all gloom. Most of the distributor refunds had been advanced by the Liu family, because Fatty Lai simply had no money left — every last cent was tied up in building the production line.
But however rich the Liu family was, its liquid capital was finite. Faced with a growing flood of returns, the Liu family had in one stroke emptied out its entire reserves, and this stirred up a measure of internal strife within the Liu family as well.
The first to take offense was the Liu family's second son, Liu Tianli.
"Father, Dr. Guan Pharmaceutical's bankruptcy is only a matter of time. Why are we still pouring money into it? That money is gone for good!" Watching the Liu family's savings being sunk into the venture, Liu Tianli, who managed the family's business, naturally spoke out in objection.
"Tianli, what is this compared to that?" Liu Zhenhu shook his head. "You did not attend the Great Family Assembly. You do not understand how important Wei Zhao is to our Liu family. So long as Wei Zhao returns, every problem ceases to be a problem. The money you have lost will be earned back in time."