Marketing Principles and Strategies

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Questions and Answers

What are the four Ps of marketing?

Product, Price, Place, Promotion (correct)

Product, Process, Place, Promotion

Product, Price, People, Promotion

Price, Place, Product, Presentation

What is meant by the term 'retail markup'?

The total cost of producing a product

The difference between the selling price and the production cost (correct)

The amount deducted from the price during discounts

The increase in price due to demand fluctuations

How do marketers determine the price of a product?

By linking it to the product's real and perceived value (correct)

By estimating consumer demand only

By averaging competitors' prices

By setting it arbitrarily to attract attention

What must marketers understand to create an effective marketing campaign?

The characteristics and qualities of the product Signup and view all the answers

What role does the life cycle of a product play in marketing?

It dictates how the product is priced, placed, and promoted Signup and view all the answers

What is one potential downside of discounting a product?

It could make the product seem less desirable. Signup and view all the answers

How does the concept of 'place' apply to marketing?

It encompasses online availability and advertising mediums. Signup and view all the answers

What do patients primarily seek when it comes to medication?

Relief from pain and improved quality of life. Signup and view all the answers

What does the product scope strategy primarily involve?

Defining the product mix and lines a company offers. Signup and view all the answers

Why is it important for the product scope strategy to be reviewed periodically?

To adapt to shifts in the marketing environment. Signup and view all the answers

What is naltrexone primarily used for?

As a narcotic antagonist Signup and view all the answers

Which of the following is a characteristic of effective product positioning?

Clarity and relevance Signup and view all the answers

What is a likely reason for repositioning a product?

A competitive entry negatively impacting market share Signup and view all the answers

How should the positioning of a product be conveyed to customers?

By being consistent across all channels Signup and view all the answers

What biological effects does cortisone have compared to dehydrocorticosterone?

Great range of biological effects Signup and view all the answers

Which strategy is exemplified by Red Bull’s marketing approach?

Emphasizing quick energy boosts Signup and view all the answers

What should a product positioning strategy primarily focus on?

Being relevant to the target audience Signup and view all the answers

What is one primary advantage of using a system of products strategy?

It helps the company gain monopolistic control. Signup and view all the answers

What is a characteristic of a product system?

It includes diverse but related items that work together. Signup and view all the answers

Which new product strategy receives the most attention in the pharmaceutical industry?

Development of truly new products. Signup and view all the answers

How can new products contribute to a company's profitability?

Through sustained innovation and market relevance. Signup and view all the answers

Which of the following is an example of a new product strategy that is widely employed?

Adaptation of successful products for a new market. Signup and view all the answers

What modification was made to morphine to create nalorphine?

Adding two carbon atoms. Signup and view all the answers

Signup and view all the answers

Study Notes

Drug Marketing & Pharmaeconomics (NP-513) Level 5

Course material covers marketing mix, principles of product research and development.
Learning objectives include identifying marketing mix elements, understanding product research & development principles, grasping different product strategies, and providing examples of various product strategies.

4Ps of Marketing

The 4Ps (Product, Price, Place, Promotion) are key considerations for successful product marketing.
They encompass consumer wants, how products meet those wants/needs, product perception, competitiveness, and company-customer interactions.
Additional Ps (People, Process, Physical Evidence) have emerged since the 1950s.

Product

Understanding the product (needs, competitive advantage, and qualities) is crucial for successful marketing campaigns.
Defining a product is key to its distribution strategy, marketing needs to understand the product life cycle.
Product type determines cost, placement, and promotion strategy. Successful products are often first in their respective categories. (e.g., Apple's touchscreen smartphone).

Price

Price is determined by consumer willingness to pay, considering real/perceived value, supply costs, competitor pricing, and retail markup.
Retail markup is the price difference between a product and its cost.
Businesses may raise prices to create luxury/exclusivity perceptions, or lower prices to increase consumer adoption.
Discounting strategies are essential to be implemented appropriate.

Place

"Place" refers to product availability (stores and online) and display strategies.
Placement extends to product advertising in appropriate media channels to reach target consumers.

Promotion

Promotion aims to convey the product need to consumers, encompassing advertising, public relations, and comprehensive media strategies.
In the digital age, promotion/placement elements are increasingly tied together to effectively target core audiences.

Principles of Product Research & Development

Patients seek pain relief, improved health, and better functioning over simply receiving medication.
Product strategies are essential components of company's overall market strategy, especially those creating new products or re-positioning existing ones.
Crucial product strategies include: Product scope strategy, new product strategy, product positioning strategy, product elimination strategy, product repositioning strategy, and diversification strategy.

Product Scope Strategy

The product scope strategy defines a company's product mix (number of product lines/items offered).
It is rooted in the company's business mission, defining product types and categories that align with the company mission.
The strategy must be finalized after careful review and must be reviewed frequently due to changing market conditions.
Examples of product scope strategy alternatives include single market approach and single product approach.

Single Market

Concentrating on a single market segment, avoidance of competition with large competitors.

Single Product

Relying on a single product, leading to specialization, improved production/efficiency; the entire business may revolve around this product.

Single Product Example

Fleets Enema.

Multimarket

Serving multiple, distinct market segments, avoiding competitive head-on confrontation, recognizing possible market differentiations e.g. prescription vs. OTC markets, hospital vs drugstore markets etc.

Total Market

Addressing the entire market spectrum, catering to many different segments, accepting that market segments may emerge/change over time.

System of Products

Introducing a system of products, increasing customer dependence on the company, limiting competition.
Successful implementation requires customer need/product function understanding.

New Product Strategy

New products are crucial for industry growth/sustained profitability, through mimicking or improving existing products, or identifying completely new products.

New Product Strategy Examples

Clozapine, a modified antipsychotic drug, expanded treatment options.
Naltrexone, a morphine antagonist, offering more effective treatment for narcotic addiction.
Cortisone, a modification of dehydrocorticosterone, improved treatment of various biological processes.

Product Positioning Strategy

Positioning is placing a brand within a specific market segment to maximize reception compared to competing products.
Adapting to heterogeneous markets, and focusing on one defined segment for success.
Positioning should match the product with the segment most likely to succeed, distinguishing it from competing brands. Clear, coherent, consistent message of the product, is essential to success

Characteristics of Good Product Positioning

Relevant to target audience.
Clearly defined.
Differentiated from competing brands
Consistent across all channels.
Believable and Trustworthy.
Examples include Red Bull’s energy drink positioning for providing an extra boost of energy, Starbucks' creation of a romantic coffee "home away from home" retail environment.

Product Repositioning Strategy

Repositioning may become necessary due to competitive pressures, shifting consumer preferences, or original positioning errors.
Perceptual mapping can help reducing risks by identifying the position of a product relative to competing products and various strengths and weaknesses.

Product Elimination Strategy

Products that lose their relevance or fail to achieve profitability may need to be eliminated from the product portfolio.
Reasons for elimination could include low profitability, stagnant/declining sales, technological obsolescence, or poor fit with company capabilities/strategic direction.
Examples include Coca-Colas's decision to discontinue the Coca-Cola Vanilla flavor - in such cases, lower-than-expected customer demand was a driving factor.

Diversification Strategy

Diversification involves venturing into new products or markets when existing product/market orientations aren't generating further opportunities for growth.
This approach is often risky; suitable only when existing options aren't meeting growth potential.
Diversification can be categorized by product category and market approach, and the approach can be evaluated in terms of expected risk level. (e.g. Coca-Cola expanding into other product categories like sparkling soft drinks, ready-to-drink coffee).
Distinguish diversification from integration and merger. Integration builds business within existing fields, whereas a merger blends different businesses/entities, integrations can or cannot result from mergers.

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Description

This quiz explores essential concepts in marketing, including the four Ps, retail markup, pricing strategies, and product lifecycle. Gain insights into how effective marketing campaigns are developed and the importance of product scope strategy. Test your knowledge on these critical marketing principles!