Pharmaceutical Marketing: Basic Concepts and Principles

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Marketing is a general term used to describe all the various activities involved in transferring goods and services from producers to consumers. Though commonly associated with advertising and sales promotion activities, marketing also encompasses product development, packaging, distribution channels, pricing and many other functions.

Management guru, Peter F. Drucker, claimed that marketing “is so basic it cannot be considered a separate function. … It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view.” Marketing is the source of many important new ideas in management thought and practice – such as flexible manufacturing systems, flat organisational structures and an increased emphasis on service – all of which are designed to make businesses more responsive to customers’ needs and preferences.

Marketing, mainly an American creation, is focused on Fast Moving Consumer Goods (FMCGs). However, the ideas and concepts can be, and have been applied and adapted for industrial and technical products like medicines, services, automobile, aviation, politics, etc. Pharmaceutical marketing, as a discipline increased strongly in the second decade following the Second World War, during which time thousands of new molecules entered the market, and thus “overwhelming” physicians with new scientific facts to learn in order to safely and appropriately prescribe these breakthroughs to their patients. There was a great dependence on the pharmaceutical companies’ marketing departments and their professional sales representatives to give the full information necessary to support the prescribing decision.
The marketing of medicines continued to grow strongly throughout the 1970s and 1980s. The size of pharmaceutical sales forces increased dramatically during the 1990s, as major pharmaceutical companies, seeing as a competitive necessity, sales forces were increased to match or top the therapeutic competitor, increasing frequency of visits to physicians and widening coverage to all potential customers. Marketing techniques, perceived as “excessive” and “extravagant”, resulted in regulation of pharma marketing activities and strategies in most develop countries.

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Pharma marketing essentials
What are the basic concepts of marketing, especially as it applies to pharmaceutical marketing? Before we go into this, it will be necessary to compare and contrast drugs and FMCG

What exactly is marketing in itself? Marketing is a “societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others”. This is a definition from the point of view of the society. Marketing professionals will define it as “the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals.”

In essence, marketing is intended to focus all of a company’s activities to discover and satisfy customers’ needs. Pharmaceutical marketing can be thus defined as a management process that serves to identify and meet healthcare practitioners’ and patients’ needs in a profitable way. Pharmaceutical marketing may also be considered as activities focused on making physicians (and other HCPs) as well as the general public aware of new and existing pharmaceutical brands chose the specific offering against other or similar products.

Let’s proceed to examine some marketing concepts, mostly as applied to FMCGs before we delve into its modification and adaptation for pharmaceutical marketing.

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Need: This is considered a state of deprivation or lack or absence felt or observed by human beings. It may be physical (as in food, clothing, warmth, safety), or social (lack of sense of belonging and affection), or individual ideal or idea (knowledge and self-expression/self-actualisation). It must be stated here that marketers do not create basic needs. They are there naturally and serve as a necessity for our biological and social existence well-being.

Wants: These are the exact form that our needs take in the process of fulfilling them. They are driven by many factors including culture, individual personality, socio-economic status, education, family and aspirational groups. We need food, but may want garri (in water), Chinese rice, spaghetti, Ofada rice, or delicacies from an eatery. Our need may be mobility, but what we want to execute this need for mobility can take the form of a Raleigh bicycle, a Honda motor bike, or cars like Kia Picanto, Toyota Corolla, Nissan Jeep, or a Mercedes-Benz Bullet Proof 2020 G-Wagon! All these serve the basic function of moving around but come with different specifications, in terms of functionality, lifestyle, safety, status, emotional attachment, etc.

A marketer may exert enormous influence on our choice at this point using communication and marketing tools and strategies. They are even ascribed with even power to create a want from nothing!
Demands: These are wants backed by buying power. This is the same elementary definition of effective demand as taught in secondary school economics class. No matter how a person wants your product, if he doesn’t have the money to pay for it, he is not in your target audience!
Customer value and satisfaction expectations: Value is considered to be the most exact measure of satisfaction. How much are you willing to pay (in terms of money, effort, waiting, opportunity cost, etc.) for Product A as against a functionally similar product B? This is the equivalent value of satisfaction you believe you will derive from that product, i.e., utility value to you. The table below explains the role of marketers in setting value and making commensurate expectation promises for their brand:

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Exchange and transaction: Exchange is the act of obtaining a desired object from someone by offering something in return. It implies at least two people must be involved, they must be willing to do business with each other and each with things of respective value Transaction is trading between two parties that involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement. On one hand, such activity may be without significant involvement with each other or with a lot of involvement with each other on the other hand. The latter part is the basis for relationship marketing, with a view towards long-term and mutual benefits.

Market: Markets are the actual and potential buyers of a product. At this point of our civilization, it really no more a physical space where everyone is present. More than ever, it is becoming more and more virtual! (To be continued)

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