Marketing Principles and Strategies

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.

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!