Pharmacies serve consumer, business, and government markets. Each market requires different marketing strategies. This presentation describes what pharmacists need to know about B2C, B2B, and B2G marketing.

1. Business-to-
Business Marketing
David Holdford, RPh, MS, PhD
Professor, School of Pharmacy
Virginia Commonwealth University
Serving Businesses Who Serve Others

2. Most pharmacists engage in
business-to-consumer
(B2C) marketing

3. But they also serve
businesses

4. And government

5. Business-to-business
markets (called B2B)
In B2B markets, both the seller
and buyer are businesses

6. Examples of B2B
Wholesalers serve pharmacies, MD offices,
hospitals, & other health care businesses
Pharmacies serve pharmacy benefit managers
(PBMs) & health insurance companies
Consulting companies serve pharmaceutical
companies and government
Pharmacies serve local employers
Software companies provide software and
platforms to health care providers

7. Business-to-government
markets (called B2G)
In business-to-government
marketing, the buyers are local,
state, or federal governmental
entities
This presentation will emphasize B2B

8. Examples of B2G
Business services provided to:
Medicare,
Medicaid,
Veterans Administration, or
Department of Defense

9. DIFFERENCES IN
B2C VERSUS B2B
MARKETING

10. 10
Seller
Buyer
Buyer
Buyer
One Seller, Many Buyers
(e.g., Pharmaceutical Company
Selling to Retail Pharmacies)
Seller
Seller
Seller
Buyer
One Buyer, Many Sellers
(e.g., Health Care Providers
Selling to the Federal Government)
Inter-
med-
iary
Seller
Seller
Seller
Buyer
Buyer
Buyer
Many Sellers & Many Buyers With An Intermediary
(e.g., Wholesaler Mediating Transactions
Between Pharmaceutical Companies and Retailers)
Seller
Seller
Seller
Buyer
Buyer
Buyer
Many Sellers & Many Buyers With No Intermediary
(e.g., Famers Market)
In B2B,
Buyers, Sellers,
& Intermediaries
are Businesses
http://www.slideshare.net/dholdford/marketing-channels-in-pharmacy-practice

11. Typical Channels for Drugs
11
Pharmaceutical
Company
Wholesaler
Pharmacy
Patient
Pharmaceutical
Company
Patient
Pharmaceutical
Company
Patient
Pharmacy
Producer
Intermediary
Intermediary
End User
http://www.slideshare.net/dholdford/marketing-channels-in-pharmacy-practice

12. Typical Channels for Drugs
12
Pharmaceutical
Company
Wholesaler
Pharmacy
Patient
Pharmaceutical
Company
Patient
Pharmaceutical
Company
Patient
Pharmacy
Producer
Intermediary
Intermediary
End User
http://www.slideshare.net/dholdford/marketing-channels-in-pharmacy-practice
B2B
B2C

13. BUSINESSES AND
INDIVIDUAL CONSUMERS
USE DIFFERENT
PURCHASE PROCESSES

14. B2B decisions about purchases
are made by people who are held
accountable by the business
Decision makers may be detached and
less emotional in their decision making
process than in B2C because
• they use the business’s money and
• do not typically suffer the consequences
of their purchase decisions directly

15. Still, they are human beings
And human beings have feelings, emotions,
biases, worries, & concerns like everyone
Addressing those human issues is essential
in B2B marketing

16. THE B2B DECISION IS
OFTEN COMPLEX

17. B2B purchases generally
consist of a systematic assessment of
alternatives and
take many months or years to complete,
particularly if important

18. B2B purchases may include
a request for proposals (RFP),
submission & analysis of proposals, and
a negotiation of final terms for purchase

19. THE SOLUTION BEING
OFFERED IS OF
HIGH VALUE

20. The complexity of the decision and the
solution to the problem usually results in a
large price tag for the product or service
It is common for contracts for business
solutions to generate millions of dollars for
sellers
Some solutions might consist of multiple sales
(e.g., prescriptions) but the sales are bundled
into one contract (e.g., contract to provide
services for 100,000 covered lives)

21. THERE ARE
MANY DECISION MAKERS

22. Big decisions are made by many
people serving multiple roles
Procurers: people who deals with the nuts and bolts of
the purchase process (e.g., check invoices, evaluate
technical specifications of contracts)
Financial advisors: people who deal with the financial
feasibility and advisability of the choice (e.g., What is the
return of investment (ROI), Can we afford it?)
End users: people who actually use the good or service
Influencers: people who can impact the decision making
process and/or the final choice define criteria’s for the
decision-making
Deciders: people with the formal and informal authority
to determine the final choice--often upper management

23. People may serve one or
many overlapping roles
It is important to identify
individuals and their
respective roles prior to
proposing a solution

24. B2B IS ABOUT
PERSONAL RELATIONSHIPS
BETWEEN PEOPLE

25. B2B marketing is built on human
interactions
Those interactions identify
needs and tailor
communications to those needs
Credibility and trust are essential
for B2B relationships to thrive

26. PERSONAL SELLING IS A
PREFERRED
PROMOTIONAL
COMMUNICATION METHOD

27. Promotional
Methods
Marketer Controlled
Oral Two Way
Personal
Communications
Personal Selling
(e.g., motivational
interviewing)
One Way Non-
personal
Communication
Advertising
(e.g., broadcast, print,
Internet)
Individualized Non-
Personal
Communication
Direct Marketing
(e.g., telemarketing,
mailings)
Communication
Designed to Promote
Immediate Action
Promotional Sales
(e.g., samples,
coupons)
Marketer Influenced
Strategies to Manage
Public Image
Public Relations
(e.g., political
advocacy)
Strategies to Manage
Word-of-mouth
Conversations
Buzz Promotion
(e.g., cultivating
thought leaders)

28. Since B2B is about personal
relationships, personal selling is
preferred
It consists of two-way communication
It allows the seller to better
understand the needs of buyers and to
tailor messages to the buyers’ needs
and wants

29. Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts
Generate WOM
among decision
makers
B2G
Same as B2B
Political
advocacy
B2C
Integrated
promotional
communications
Personal Selling is
typically part of an
integrated strategy
using other methods
too

30. Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts
Generate WOM
among decision
makers
B2G
Same as B2B
Political
advocacy
B2C
Integrated
promotional
communications
It is Often Combined with
Rebates and Discounts

31. Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts
Generate WOM
among decision
makers
B2G
Same as B2B
Political
advocacy
B2C
Integrated
promotional
communications
And Supported by Efforts
to Promote Positive Word
of Mouth from Key Opinion
Leaders

32. Best
Promotional
Methods for…
B2B
Pitching the
message one-to-
one or to groups
Offer deals like
rebates & group
discounts
Generate WOM
among decision
makers
B2G
Same as B2B
Political
advocacy
B2C
Integrated
promotional
communications
B2G Marketing Needs to
Add PA to their Portfolio
Because of the Influence of
Legislators and Regulators
in Decisions

33. OBJECTIVE MESSAGES
ARE PREFERRED OVER
EMOTIONAL ONES

34. Ultimately, decision making in
organizations is more
systematic and seeks
objective outcomes
Therefore, objective
messages backed up with
real evidence are preferred

35. A return on investment (ROI)
calculation is usually
expected by buyers to guide
their decisions
Gain from Investment – Cost of Investment
Cost of InvestmentROI =

36. Pharmaceutical companies must often
provide pharmacoeconomic information
about their products to pharmacy &
therapeutics committees in hospitals

37. Managing B2B Relationships
Pharmacists need to effectively manage
B2B relationships by
• Choosing the right business partners for
their services
• Making a case for the value they provide to
partners & the customers served by partners
• Continually working to gain and maintain their
partners' trust
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38. Summary
Pharmacists are intermediaries in most pharmacy
channels, so they often participate in B2B
relationships
Their value in B2B relationships results from how
well they serve their partners within the supply
chain
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