Research identifies marketing mix strategy for pharmaceutical firms
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
2011-08-31
(Press-News.org) NEW YORK – August 30, 2011 – 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.
ELSE PRESS RELEASES FROM THIS DATE:
2011-08-31
An estimated 7,000 deaths and 1.3 million injuries occur each year because of medication errors in America's hospitals. Research by the Institute of Medicine suggests that a typical hospital patient is subjected to an average of at least one medication error per day.
Common Types of Medication Errors
The most common type of error is the administration of an improper dose of medication, which accounts for 41 percent of all medication error deaths. Sixteen percent of medication errors are the result of hospital staff administering the wrong drug altogether, or of using ...
2011-08-31
Can changing a single word on a sign motivate doctors and nurses to wash their hands?
Campaigns about hand-washing in hospitals usually try to scare doctors and nurses about personal illness, says Adam Grant, a psychological scientist at The Wharton School, University of Pennsylvania. "Most safety messages are about personal consequences," Grant says. "They tell you to wash your hands so you don't get sick." But his new study, which will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, finds that this ...
2011-08-31
Two studies in the latest issue of the Journal of Law and Economics cast doubt on whether sex offender registry and notification laws actually work as intended.
One study, by J.J. Prescott of the University of Michigan and Johan Rockoff of Columbia University, found that requiring sex offenders to register with police may significantly reduce the chances that they will re-offend. However the research also finds that making that same registry information available to the broader public may backfire, leading to higher overall rates of sex crime.
Meanwhile, another study ...
2011-08-31
It seems inconceivable, but surgeons sometimes operate on the wrong side of a patient's body. It is a horrible mistake that should never happen, but unfortunately it does. Nearly 40 patients across the U.S. each week will come out of surgery and learn that doctors operated on the wrong body part, wrong patient or that they completed the wrong procedure.
According to the Joint Commission Center for Transforming Healthcare, a healthcare accreditation body, wrong-site surgeries are still a problem even after the Commission set forth guidelines meant to prevent such errors ...
2011-08-31
Working with the government of Lao PDR, the Wildlife Conservation Society has helped to successfully hatch a clutch of 20 Siamese crocodiles, a species threatened across its range by hunting, habitat fragmentation and loss, and other factors.
Hatched from eggs taken from the wild and incubated at the Laos Zoo, the baby crocodiles represent a success for a new program that works to save the Siamese crocodile and the wetlands and associated biodiversity of Laos' Savannakhet Province.
The project is supported by the Savannakhet Province Agriculture and Forestry Office ...
2011-08-31
Police, firefighters, paramedics and other emergency responders risk injury and death on a daily basis. And, while the recent injuries sustained while on duty by two Maryland law enforcement officers serve as a reminder of this danger, it is important to note that the recovery period and paying medical bills after an injury may be just as great of concern as actually being injured while on duty.
While responding to a domestic violence call, an officer was shot by a man wielding a rifle. Fortunately, the officer did not sustain serious injuries.
During the same week, ...
2011-08-31
[EMBARGOED FOR AUG. 31, 2011, ARLINGTON, Va.] – Immunizations, including a yearly flu vaccine, are the best way to protect children from life-threatening pneumonia, according to new guidelines from the Pediatric Infectious Diseases Society (PIDS) and the Infectious Diseases Society of America (IDSA).
The guidelines, which are the first on diagnosing and treating community-acquired pneumonia (CAP) in infants and children, place preventing bacterial pneumonia as a top priority.
Every year, pneumonia kills more than 2 million children ages 5 years and younger worldwide. ...
2011-08-31
On August 11, 2011, two New York construction workers were sent to the Hudson Valley Hospital Center after the side of a ten-foot trench caved-in, burying one of the workers alive.
Details of the Recent Construction Accident
The crew had been finishing up a water-piping job when the trench gave way. Two coworkers and a passerby quickly rushed to the aid of the buried man in a rescue effort that a police lieutenant responding to the incident described as "heroic."
When the worker was unearthed, he was missing teeth, bleeding profusely and seemed to have ...
2011-08-31
According to the Federal Motor Carrier Safety Administration (FMCSA), commercial-vehicle accidents cost the U.S. economy more than $60 billion each year. With nearly 500,000 trucking companies and 5 million commercial drivers operating nationally, it is important to establish and maintain comprehensive safety rules to protect the public from dangerous truck accidents.
Federal Trucking Laws
There have been a number of improvements to federal motor-carrier laws in the last 25 years. Beginning with the Commercial Motor Vehicle Safety Act of 1986, national standards were ...
2011-08-31
Anyone who has driven on Arizona highways lately knows that they can be an extremely dangerous place. While you may be exercising safe driving habits, it is not uncommon to see other drivers speeding or talking on their cell phone as they drive by. Unfortunately, some of these drivers end up causing serious accidents that could change a life forever.
Before heading out on an end-of-summer road trip, there are some steps you can take to help you make it to your destination safely. Check the condition of your vehicle. Is the vehicle having any mechanical issues that may ...
LAST 30 PRESS RELEASES:
[Press-News.org] Research identifies marketing mix strategy for pharmaceutical firms
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
