Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Research identifies marketing mix strategy for pharmaceutical firms

31.08.2011
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.

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 comprised 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.

About Columbia Business School

Led by Dean Glenn Hubbard, the Russell L. Carson Professor of Finance and Economics, Columbia Business School is at the forefront of management education for a rapidly changing world. The school's cutting–edge curriculum bridges academic theory and practice, equipping students with an entrepreneurial mindset to recognize and capture opportunity in a competitive business environment. Beyond academic rigor and teaching excellence, the school offers programs that are designed to give students practical experience making decisions in real–world environments. The school offers MBA and Executive MBA (EMBA) degrees, as well as non–degree Executive Education programs. For more information, visit www.gsb.columbia.edu.

Sona Rai | EurekAlert!
Further information:
http://www.columbia.edu

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: The pyrenoid is a carbon-fixing liquid droplet

Plants and algae use the enzyme Rubisco to fix carbon dioxide, removing it from the atmosphere and converting it into biomass. Algae have figured out a way to increase the efficiency of carbon fixation. They gather most of their Rubisco into a ball-shaped microcompartment called the pyrenoid, which they flood with a high local concentration of carbon dioxide. A team of scientists at Princeton University, the Carnegie Institution for Science, Stanford University and the Max Plank Institute of Biochemistry have unravelled the mysteries of how the pyrenoid is assembled. These insights can help to engineer crops that remove more carbon dioxide from the atmosphere while producing more food.

A warming planet

Im Focus: Highly precise wiring in the Cerebral Cortex

Our brains house extremely complex neuronal circuits, whose detailed structures are still largely unknown. This is especially true for the so-called cerebral cortex of mammals, where among other things vision, thoughts or spatial orientation are being computed. Here the rules by which nerve cells are connected to each other are only partly understood. A team of scientists around Moritz Helmstaedter at the Frankfiurt Max Planck Institute for Brain Research and Helene Schmidt (Humboldt University in Berlin) have now discovered a surprisingly precise nerve cell connectivity pattern in the part of the cerebral cortex that is responsible for orienting the individual animal or human in space.

The researchers report online in Nature (Schmidt et al., 2017. Axonal synapse sorting in medial entorhinal cortex, DOI: 10.1038/nature24005) that synapses in...

Im Focus: Tiny lasers from a gallery of whispers

New technique promises tunable laser devices

Whispering gallery mode (WGM) resonators are used to make tiny micro-lasers, sensors, switches, routers and other devices. These tiny structures rely on a...

Im Focus: Ultrafast snapshots of relaxing electrons in solids

Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!

When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...

Im Focus: Quantum Sensors Decipher Magnetic Ordering in a New Semiconducting Material

For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.

Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

I-ESA 2018 – Call for Papers

12.09.2017 | Event News

EMBO at Basel Life, a new conference on current and emerging life science research

06.09.2017 | Event News

 
Latest News

Penn first in world to treat patient with new radiation technology

22.09.2017 | Medical Engineering

Calculating quietness

22.09.2017 | Physics and Astronomy

Hope to discover sure signs of life on Mars? New research says look for the element vanadium

22.09.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>