Drug Marketing & Pharmaeconomics Chapter 2

Drug Marketing & Pharmaeconomics (NP-513) Level 5

• Course: Drug Marketing & Pharmaeconomics (NP-513) Level 5
• Chapter: 2 - Marketing Mix: "Principles of Product Research & Development"
• Lecturer: Mona M. Eltamalawy, PhD

Intended Learning Outcomes

• Identify elements of the marketing mix
• Recognize principles of product research and development
• Understand different product strategies
• Give examples on different product strategies

The 4 Ps of Marketing

• The 4 Ps (Product, Price, Place, Promotion) are key considerations for successful marketing
• They encompass various factors, including consumer wants, product quality, perceived value, competition, and company interactions
• These considerations are crucial for successful marketing of products or services
• Additional Ps, like people, process, and physical evidence, have been identified since the 1950s.

Product

• Product understanding is fundamental to marketing campaigns
• Marketers define the product, its qualities, and introduce it to consumers
• Product distribution is related to its life cycle
• Product type influences pricing, placement, and promotion
• First-in-category products can be extremely successful; a great example is Apple's touchscreen phone.

Price

• Price represents the amount consumers are willing to pay for a product
• Marketers link it to the product's value, considering supply costs, seasonal discounts, and competitor pricing
• Retail markup is the difference between the product's price and its cost
• Prices can be adjusted to create the impression of luxury or exclusivity, or sometimes lowered for greater appeal
• Marketers need to determine when and how to discount products appropriately

Place

• Place relates to the product's availability—in stores and online—and its display
• Place also includes advertising in appropriate media to attract target consumers

Promotion

• Promotion aims to communicate to consumers the need for a product
• It involves advertising, public relations, and the overall media strategy to introduce and promote a product.
• Promotion and placement activities are interconnected, especially concerning digital media

Principles of Product Research and Development

• Patient needs (relief, function, better health) are foundational to drug development
• Product strategies guide market strategies in pharmaceutical industries
• Examples of product strategies include:
  • Product scope strategy
  • New product strategy
  • Product positioning strategy
  • Product elimination strategy
  • Product repositioning strategy
  • Diversification strategy

Product scope strategy

• This strategy deals with a company's product mix (product lines and items offered)
• It's guided by the business mission, defining the products and services that will become part of the mix
• This strategy requires extensive planning and is a long-term commitment with continuous reviews for changes in the environment

Product scope strategy alternatives

• Single market: Focuses on a specific segment to avoid competition with larger companies.
• Single product: Relies on a singular product's success for the entire business; effective strategy for large-scale production.

Single product example

• Fleets Enema is given as an example of a single product

Multimarket

• Multimarket strategy serves multiple distinct segments to avoid head-on competition with firms targeting entire markets
• This can cover niche markets such as prescription, OTC, hospital, or drugstores (brand name or generic)

Total Market

• The strategy involves serving the entire spectrum of the market by providing products for diverse segments
• This approach is costly and risky, so fewer companies adopt it.

System of products

• Offering a system of related products makes customers more dependent on the company
• This aids in gaining monopolistic control over the market
• It blocks competition
• The strategy requires thorough understanding of customer needs and processes related to the product.

New product strategy

• New products are crucial for sustained profitability and growth
• They can be new chemical entities, upgrades, or existing product re-brands (especially OTC)
• New product strategies may focus on imitation, improvement, or entirely novel concepts

New product strategy examples

• Minor alterations to a drug's chemical structure can significantly impact its bioactivity
• Clozapine (1989) as a modified tricyclic drug.

Product repositioning strategy

• Products may require repositioning if competitors impact their market share, consumer preferences change, or errors in previous positioning
• Perceptual mapping (a technique) helps evaluate a product in relation to competing products, identifying its advantages and disadvantages relative to those products
• Starbucks' repositioning as a coffeehouse is an example

Product Elimination strategy

• Eliminating a product may be necessary when its importance declines, falling short of expectations, or not fitting the business unit's core strengths or mission.
• The decision is complex and considers profitability, market share, and technology obsolescence

Diversification strategy

• Diversification refers to entering new products or markets

• Companies typically diversify only if their current product or market orientation doesn't provide growth opportunities.

• Coca-Cola's diversification into new beverages when facing soda decline is an example

• Diversification strategies are usually more complex and risky than other strategies.

• Mergers and integrations are different from diversification, though they can be components of it.

Explore the principles of product research and development in the context of drug marketing. This quiz covers the essential elements of the marketing mix, including the 4 Ps and additional considerations. Enhance your understanding of different product strategies and their application in the pharmaceutical industry.