Featured Research

from universities, journals, and other organizations

Research identifies marketing mix strategy for pharmaceutical firms

Date:
August 30, 2011
Source:
Columbia Business School
Summary:
A new research model depicts that detailing, relationships between sales representatives and medical doctors, is an extremely effective long-term marketing tool, while sampling has a stronger, short-term effect.

Research in Marketing Science by Professor Kamel Jedidi, John A. Howard Professor of Business, Marketing, Columbia Business School; Professor Oded Netzer, Philip H. Geier Jr. Associate Professor, Marketing, Columbia Business School; and Professor Ricardo Montoya, Department of Industrial Engineering, University of Chile, Santiago, Chile, reveals how pharmaceutical managers can maximize the return on marketing investments -- by determining the physicians to target as well as when and how to target them.

Related Articles


The researchers investigate the effectiveness of detailing -- salesforce representatives visits to the doctor office to discuss specific drugs, and sampling -- free drug samples of the drug offered to the physicians to promote the drug, on the pharmaceutical firm's long-term profitability. The researchers find that both detailing and sampling have an enduring effect. The effect of these marketing actions can last up to 10 months after the marketing effort. The researchers' framework provides implications for customer management and maximizing long-run profitability.

The researchers aimed to determine if marketing actions, specifically detailing and sampling, influence physician's behavior, and if they had a short or long-term impact. To reach their findings, the team used an econometric model that accounts for dynamics in customer behavior and the short and long-term impacts of marketing actions. The study's data composed of physician-level new prescriptions as well as detailing and sampling activities doctors received over a 24-month period after the launch of a new drug used to treat a medical condition in postmenopausal women.

Through the econometric model, the researchers segment the physicians into three prescription behavior states. Over time physicians transition between the prescription behavior states. Detailing was particularly effective as an acquisition tool, moving physicians from the inactive state, whereas sampling is mostly effective as a retention tool, keeping physicians in a high prescription-behavior state. Professor Jedidi explains, "A possible explanation for this result is that when physicians are in the inactive use state, they are more receptive to new information about the drug. Then, as they move to the frequent state and are familiar with the drug, physicians can primarily benefit from receiving free samples to encourage them to keep prescribing the drug."

Furthermore, the study demonstrates that ignoring the dynamics in physician-buying behavior and the long-term effects of marketing activities leads to suboptimal allocation of marketing interventions, which has applications to marketers in other fields. Professor Netzer elaborates, "In this research we address key managerial questions, including what are the short and long-term effects of marketing activities and how a firm should target its marketing efforts. Companies spend more than $150 billion a year on direct marketing in the United States alone. To optimally allocate marketing efforts across customers, a firm needs to consider the evolution of its customers over time."

The study highlights the possible substantial financial implications from simultaneously accounting for the dynamics in consumer behavior and the long-term effect of marketing actions when allocating marketing resources.


Story Source:

The above story is based on materials provided by Columbia Business School. Note: Materials may be edited for content and length.


Cite This Page:

Columbia Business School. "Research identifies marketing mix strategy for pharmaceutical firms." ScienceDaily. ScienceDaily, 30 August 2011. <www.sciencedaily.com/releases/2011/08/110830165011.htm>.
Columbia Business School. (2011, August 30). Research identifies marketing mix strategy for pharmaceutical firms. ScienceDaily. Retrieved October 31, 2014 from www.sciencedaily.com/releases/2011/08/110830165011.htm
Columbia Business School. "Research identifies marketing mix strategy for pharmaceutical firms." ScienceDaily. www.sciencedaily.com/releases/2011/08/110830165011.htm (accessed October 31, 2014).

Share This



More Mind & Brain News

Friday, October 31, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Studying Effects of Music on Dementia Patients

Studying Effects of Music on Dementia Patients

AP (Oct. 30, 2014) The University of Wisconsin-Milwaukee is studying the popular Music and Memory program to see if music, which helps improve the mood of Alzheimer's patients, can also reduce the use of prescription drugs for those suffering from dementia. (Oct. 30) Video provided by AP
Powered by NewsLook.com
Techy Tots Are Forefront of London's Baby Show

Techy Tots Are Forefront of London's Baby Show

AP (Oct. 28, 2014) Moms and Dads get a more hands-on approach to parenting with tech-centric products for raising their little ones. (Oct. 28) Video provided by AP
Powered by NewsLook.com
Cocoa Could Be As Good For Memory As It Is For A Sweet Tooth

Cocoa Could Be As Good For Memory As It Is For A Sweet Tooth

Newsy (Oct. 27, 2014) Researchers have come up with another reason why dark chocolate is good for your health. A substance in the treat can reportedly help with memory. Video provided by Newsy
Powered by NewsLook.com
Five-Year-Olds Learn Coding as Britain Eyes Digital Future

Five-Year-Olds Learn Coding as Britain Eyes Digital Future

AFP (Oct. 27, 2014) Coding has become compulsory for children as young as five in schools across the UK. Making it the first major world economy to overhaul its IT teaching and put programming at its core. Duration: 02:19 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins