3. Phr_ali91@hotmail.com
The “Marketing Concept” - Key Principles
• It is easier to change the products and services of the individual manufacturer to fit the needs of the
market than it is to convince the entire market to use the products and services as the individual
manufacturer prefers them
“You can have any color car you want as long as it’s black” Henry Ford
• All the resources of the firm should be organized into a total system aimed at meeting the needs of
the consumer
• The role of marketing is to influence or direct activities from the manufacturer to the patient:
– The right products
– In the right quantity
– At the right place
– For the right price
– At the right time
3Muhammad Ali
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Marketing as an “Actualizing Process”
• Markets can be viewed as “gaps” that separate parties interested in an exchange
• Marketing removes the gaps between the parties through various actualization processes
4
Source: McInnis; “A Conceptual Approach to Marketing”
MARKET
SEPARATORS
• TIME
• SPACE
• VALUE
• OWNERSHIP
• QUANTITY
• ASSORTMENT
EXCHANGE FLOWS
• PRODUCT FLOW:
toward the consumer
• INFORMATION FLOW:
both ways
• PAYMENT FLOW:
toward the provider
• USE RIGHT:
toward the consumer
MARKETING ACTIVITIES
Assembly, transportation storage, packaging,
grading
Advertising, personal selling, publicity,
labeling, sales promotions, marketing
research, consumer complaints, drug
education programs
Credit and cash payments
Purchasing and selling, pricing, post
transactional rights
PRODUCERS
CONSUMERS
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5. Phr_ali91@hotmail.com
IT’s Role in the “Actualizing Process”
• IT can assist marketing in closing the “gaps” that separate parties interested in an exchange
• IT can make some of the “gaps” irrelevant (e.g., space and time)
5
Source: McInnis; “A Conceptual Approach to Marketing”
MARKET
SEPARATORS
• TIME
• SPACE
• VALUE
• OWNERSHIP
• QUANTITY
• ASSORTMENT
IT
• Connectivity across geographically dispersed
regions
• 24 x 7 Availability
• Enabling information access
• Enhancing personalization
Right use
Right amount
Right need
• Increasing the number of available options
Muhammad Ali
6. Phr_ali91@hotmail.com
Unique Aspects of Pharmaceutical
Marketing and Sales
• Influence of non-purchasers on the purchasing habits of the consumer
• Veto/authorization power of physicians – consumers need an authorized document to purchase a
prescription drug
• Importance of the disease to identifying and classifying markets
• Professional licensing required to stock and sell pharmaceutical products
• Records of every transaction are kept that are specific to:
– Patient
– Physician
– Product
6Muhammad Ali
7. Phr_ali91@hotmail.com
Definitions
• Market Research:
– Determination and assessment of qualitative and quantitative dimensions of a market
• Marketing Research:
– Analysis of the effects of various marketing activities of a company or its competitors
7Muhammad Ali
8. Phr_ali91@hotmail.com
Market Research
• Environmental scanning:
– Physicians
– Pharmacists
– Pharmacies
– Hospitals
• Data gathering and analysis
• Influence of unique aspects of the pharmaceutical market on market research:
– Known list of entities
– Knowledge-based decisions
– Similarities in education and thinking (professionalization)
– Availability of records for transactional activity
• Significant use of outside vendors for market research
– Syndicated services
– Custom services
8Muhammad Ali
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Questions Answered by Market Research
• Strategic Level:
– What diseases or product areas should be considered for long-term investment?
– Short-term?
– Market size or potential?
– Availability and utilization of therapies?
– Next logical steps in therapy?
– Potential market segments to be exploited:
• Disease conditions (e.g., migraine sufferers)
• Dosing preferences (inhalants vs. injections vs. patches)
– Prevalence of disorder?
– Shared conditions?
– Potential development partners?
– Potential acquisitions?
9Muhammad Ali
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Questions Answered by Market Research
• Premarketing Planning:
– What physician specialties are important in a given therapy or diagnosis?
– What patient characteristics are important?
– Who are our competitors in this market?
– How do our competitors promote their product?
– Are there unsatisfied portions of the market?
– How do physicians perceive a proposed product?
10Muhammad Ali
11. Phr_ali91@hotmail.com
Questions Answered by Market Research
• Post-marketing Monitoring:
– Adverse events
– Product sales
– Patient information (medical history)
11
This can be critical in product
defense situations!
Example: Pfizer’s defense of
Viagra when suits were filed
alleging an increased risk of
stroke.
Muhammad Ali
12. Phr_ali91@hotmail.com
Types of Market Research
12
Periodic
Surveys
Retail Pharmacy
Purchases
Hospital
Purchases
Warehouse
Withdrawals
Promotional
Media
Physician
Panels
Retail Pharmacy
Prescriptions
Retail Pharmacy
Sales
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13. Phr_ali91@hotmail.com
Types of Market Research
13
Periodic
Surveys
Retail Pharmacy
Purchases
• Measures the “inflow” of
products from the
manufacturer to the
pharmacy
• OTC
• Prescription drugs
• Indirect (through
wholesalers)
• Direct purchases from
manufacturers
Muhammad Ali
14. Phr_ali91@hotmail.com
Types of Market Research
14
Periodic
Surveys
Hospital
Purchases
Growth of pharmaceutical purchases by hospitals has
greatly exceeded purchases from pharmacies on a
proportional basis
In many communities, the hospital has become more
important in routine care
• Measures the “inflow” of
products from the
manufacturer to the hospital
• OTC
• Prescription drugs
• Indirect (through wholesalers)
• Direct purchases from
manufacturers
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15. Phr_ali91@hotmail.com
Types of Market Research
15
Periodic
Surveys
Warehouse
Withdrawals
Can be valuable in dealing with questions of
individual territory performance and potential or
different selling techniques
• Measures the “outflow” of
products from the warehouse
to all purchasers
– OTC
– Prescription drugs)
• Does not reflect direct
purchases from manufacturers
• Provides ability to analyze small
segments of the marketplace
such as zip code or territories
Muhammad Ali
16. Phr_ali91@hotmail.com
Types of Market Research
16
Periodic
Surveys Retail Pharmacy
Prescriptions
• Measures the “outflow” of
prescription drugs from the
pharmacy to consumers
• Most sensitive indicator of
prescription product
performance (factual)
• Reflects mindset of prescribers
and consumer demand
• Best indicator of marketing or
promotional effort effectiveness
• Data available at national and
sub-national levels
Muhammad Ali
17. Phr_ali91@hotmail.com
Types of Market Research
17
Periodic
Surveys
Physician
Panels
• Specialized research services to
identify patient product usage
along specific variables:
– Diagnosis
– Patient characteristics
– Location of visit
– Drugs used
– Action desired from drugs used
• Tracking of new prescriptions
over time and monitors changes
in doctor prescribing habits
Muhammad Ali
18. Phr_ali91@hotmail.com
Types of Market Research
18
Periodic
Surveys
Retail Pharmacy
Sales
• Historically used for non-
prescription pharmaceuticals
• Data typically collected for
products of interest
• Collect unit and dollar information
at the package size level
• Main use is to obtain prescription
counts by product
• Used for pricing analysis and cross-
tabulation analysis using data
warehouses
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19. Phr_ali91@hotmail.com
Types of Market Research
19
Periodic
Surveys
Promotional
Media
• Monitoring of detailing visits
to physicians by sales
representatives
• Monitoring of journal
advertising
• Monitoring of direct mail
advertising
• Physician sampling
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Sales Roles
• Detailing
– Face-to-face visits to physicians or purchasing managers (e.g., hospitals, HMOs) to present
new prescription drugs
– Influence prescribing habit
– Increase current prescription usage
– Deliver samples
– Build relationships with doctors
– Get drug into a formulary; “pull through”
• Sample Management
– Track delivery of prescription drug samples to physicians or other purchasers
23Muhammad Ali
23. Effective Detailing
24
Influences on Physician Prescribing Habits
Source: IBM Analysis
Side Effects
Drug delivery
method
Cost of drug
Efficacy Potential drug-
drug interactions
Dosage
Pay or formulary
status
Brand
Personal
preference
Patient request
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24. Phr_ali91@hotmail.com
Detailing’s Value to the Physician
25
• “I like the good, tangible information
about a new drug”
• “The samples determine what I
prescribe for the long term”
• “Samples are extremely valuable”
• “I value the relationships with them.
Overall, I am satisfied with their
service”
• “I rely on them to keep me aware of
what’s happening in the drug industry”
• “I like their presence to break up my
stressed schedule”
• “Everybody likes perks”
Comments From Physician
Interviews
• Learn new drug information
• Get drug samples
• Connect with peers or physician
thought leaders
• Receive ‘‘the perks’’
• Establish personal contact with the
drug company
• Provide “stress release”
Value of Relationship with
PharmaCos to Physicians
Source: IBM Analysis
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Detailing - Physician Concerns
26
20%
Not enough samples
28%
Not enough medical expertise
40%
Take too much time
44%
Too many from the same company
Inconvenient timing
Biased information
“What are your top complaints about detailers?
Source: The Forrester Report: “Pharma’s Detailing Overhaul”, February 2001 (IMS Health, Scott-Levin, Forrester Research, Inc); (Ziment/WebSurveyMD.com); IBM Analysis
• “I view them as the liaison but I don’t
take them at their word all the time”
• “I hate negative marketing. The lack of
objectivity is a big turnoff for me”
• “If they keep coming back with the
same information, it’s a waste of both
parties’ time”
• “I appreciate the information, but the
reps can be pushy”
• “The thing I dislike the most is when the
rep doesn’t appreciate that I am busy
and still tries to pitch the drug to me”
• “I don’t believe that someone with a
bachelor’s degree knows more about
how a drug works than I do”
Physician Comments
78%
47%
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Companies Are Experimenting
with e-Detailing
27
Source: IMS Health, iPhysicianNet website, Aptilon.com website, IBM Analysis
There have been promises made about the benefits of e-Detailing
Benefits to PhysiciansBenefits to PharmaCos
• Cost-effective: an online sales session costs about
$110 on average, compared with about $200 for a
field rep’s office visit
• Cost effective: Increased contact time per visit
allows for higher information content
• Better control of detailing content: as a result, e-
Detailing can be used as an efficient way to train
less-skilled sales reps
• Capture relevant physician practice data: with this
information, Companies can identify potential high
prescribers that sales reps can target later
• Counter detailing and off-the-label discussion: with
e-Detailing, the company’s medical experts can
speak with physicians about competing drugs’
clinical trial flaws and off-the-label prescription,
which is normally not allowed in a sales rep’s visit
• Increased sales of under-marketed drugs
• Allows physicians to see sales reps, gather
information they deem important, and to
have the flexibility and control to do it in their
own schedule
• Offers physicians a range of convenient
interactive channels
• Provides timely updated drug information
• Provides simpler sample ordering and
delivery
• Provides quality peer-to-peer discussions on
a topic that interests a physician.
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27. Phr_ali91@hotmail.com
Sample Management
• During a typical month, the average pharmaceutical sales representative will visit 150
physicians, distribute thousands of packages of drug samples.
28
* Source: IMS Health
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Sample Management and
Regulatory Requirements
The Drugs (Licensing, Registering and Advertising) Rules 1976
Provide the rules, procedures and conditions for grant of Drug Manufacturing
Licenses, registration of drugs, promotion to the professionals and
advertisement of drugs to the general public.
29Muhammad Ali
30. Phr_ali91@hotmail.com
Key Opinion Leader Management
• Expert physicians -- often called "opinion leaders" or "thought leaders" -- play critical roles
in driving pharmaceutical sales
– Have privileged access to medical information
– Company-sponsored featured speaking engagements at prestigious conferences
• Exchange ideas with other physicians regarding new products or indications or adverse
events
• Helps convince other doctors to prescribe new products and can make the difference
between a successful product launch and a major disappointment
• Program is actively integrated with marketing program:
– Physician recruitment (specialty, “name recognition”, etc.)
– Matching to appropriate marketing programs
32Muhammad Ali
31. Phr_ali91@hotmail.com
Medical Science Liaisons (“MSLs”)
• Scientific professionals
– Pharmaceutical PhD’s
– Pharmacists
– Physicians
– Nurses
• Generally have more scientific knowledge than sales representatives
• Roles:
– Support and expand sales representatives’ marketing of a product
– Be able to speak to the purchaser on a more scientific (peer) level; not on a marketing level
– Will focus on clinical information
• Focus on key opinion leaders
– Typically will only see more knowledgeable sales reps
– Organize symposia, conferences, focus groups, etc.
– Training and continuing education programs
• May be involved in setting up post launch
33Muhammad Ali