MARKETING

DR. SHARVIL PATIL,

ASSISTANT PROFESSOR,
POONA COLLEGE OF PHARMACY,
PUNE
• Marketing deals with identifying and meeting human and social
needs. One of the shortest definitions of marketing is ―meeting
needs profitably.
• The objective of all business enterprises is to satisfy the needs and
wants of the society. Marketing is, therefore, a basic function of all
business firms.
• When a salesperson sells washing machines, a doctor treats a patient
or a Government asks people to take their children for getting polio
drops, each is marketing something to the targets.
• Since early 1990s there has been a change in the thinking of
businessman from product orientation to consumer orientation.
Modern business concerns lay emphasis on selling satisfaction‘ and
not merely on selling products.
• The activities have to be coordinated so as to develop the marketing
mix, which provides maximum satisfaction to the customers.
• The other important functions of marketing include: buying and
assembling, selling, standardization, packing, storing,
transportation, promotion, pricing and risk bearing. Thus, the scope of
marketing is very wide and no more restricted to merely selling of products.

• Definition of Marketing
• Marketing is a social and managerial process by which individuals and groups
obtain what they need and want through creating and exchanging products
and value with others. At its simplest, marketing can be defined as
exchange transactions that take place between the buyer and the
seller. Marketing is the management function, which organizes and directs
all those business activities involved in assessing and converting customer
purchasing power into effective demand.
• As per American Marketing Association ‘Marketing is an organizational
function and a set of processes for creating, communicating and delivering
value to customers and for managing customer relationships in ways that
benefit the organization and its stake holders’.
• It is the process of discovering and translating consumer wants into
products and services. It begins with the customer (by finding their needs)
and ends with the customer (by satisfying their needs).

• COMPONENTS OF MARKETING
• a. Satisfaction of Customers: In the modern era, the customer is the
focus of the organization. The organization should aim at producing those
goods and services, which will lead to satisfaction of customers.

• b. Integrated marketing: The functions of production, finance and

marketing should be integrated to satisfy the needs and expectations of
customers.

• c. Profitable sales volume: Marketing is successful only when it is

capable of maximizing profitable sales and achieves long-run customer
satisfaction.
SCOPE OF MARKETING

• The scope of marketing can be understood in terms of functions

that an entrepreneur has to perform. These include the following:
a. Functions of exchange: which include buying and assembling
and selling

b. Functions of physical supply: include transportation, storage

and warehousing

c. Functions of facilitation: Product Planning and Development,

Marketing Research, Standardisation, Grading, Packaging,
Branding, Sales Promotion, Financing.
MARKETING CONCEPT
• Under marketing concept, the emphasis is on selling satisfaction and not
merely on the selling a product.
• The objective of marketing is not the maximization of profitable sales volume,
but profits through the satisfaction of customers. The consumer is the
pivot point and all marketing activities operate around this central point. It is,
therefore, essential that the entrepreneurs identify the customers, establish a
rapport with them, identify their needs and deliver the goods and services
that would meet their requirements.
• Customers can be described by many terms, including client, passenger,
subscriber, reader, guest, and student.
• To be fully marketing oriented, a company would have to adapt its offering to
meet the needs of each individual. In fact, very few firms can justify aiming to
meet the needs of each specific individual; instead, they target their product
at a clearly defined group in society and position their product so that it meets
the needs of that group. These subgroups are often referred to as ‘segments’
NEEDS, WANTS AND DEMANDS
• Consumers are motivated by their desire to satisfy complex needs,
and these should be the starting point for all marketing activity.
• Maslow (1943) recognized that, once individuals have satisfied
basic physiological needs, they may be motivated by higher-order
social and self-fulfillment needs.
What Is A Need?
• A need is a requirement arising out of a necessity that is essential for an
individual to exist or live a healthy life.
• The most basic needs examples include food, water, rest, clothing, shelter,
health, and reproduction. Without them, an individual might not exist.
• Characteristics Of Needs
• Needs are essential: They are necessary for survival or to prevent adverse
outcomes.
• They’re essentially universal: Usually, needs are common for everyone, like
everyone requires food, water, air, etc.
• They may be stimulated by external or internal factors: External factors
like climate change and internal factors like disability might stimulate a new
need within an individual.
• Priorities may be deferred: Needs work in a hierarchy. Higher level needs
only come into play after lower level and more important needs are fulfilled.
• Needs are interrelated: Each fulfilled need gives rise to a new need till the
What Is A Want?
• A want is a requirement arising out of the desire, aspiration, or motivation of an
individual to get satisfaction.
• These are elements that an individual desires but could live without.
• Some examples of wants include entertainment, travel, electronic devices,
fashion, etc.
• Want = Desire
• Characteristics Of Wants
• Wants are unlimited: Wants arise from experience and the available choices.
Hence, they can be unlimited.
• They arise from needs: Wants usually stem from basic needs. For example, a
want to buy a specific brand shoe arises from the need to have shoes.
• Wants compete with each other: Unlike needs, wants don’t work in a
hierarchy. They compete with each other over the limited resources of the
individual.
• Wants are not universal: Different individuals may have different wants
What Is Demand?
• When a need or a want is backed by buying power, they become
demands. That is, when a customer requires resources and is ready to
pay for it, they create a demand that requires a supply in the market.
• This demand is a combination of both needs and wants and is the
chief driver of the economy.
Need Vs Want Vs Demand In Marketing
• For example, food is a consumer need. However, a chicken burger is
considered a consumer want, as it is not necessary in order to live.
• Every marketer starts their marketing journey by developing a
product that fulfils the need of the customer. Once the need is
satisfied, the offering gets features, benefits, and other add-ons to
satisfy the wants.
• When needs and wants are combined to form an offering, they result
PRODUCT

People satisfy their needs and wants with products.

A product is anything that can be offered to satisfy a
need or want.
The concept of product is not limited to physical
objects. Anything capable of satisfying a need can
be called a product. More broadly defined, products
include experiences, persons, places, organizations,
information, and ideas.
VALUE, SATISFACTION AND QUALITY
For customers, value is represented by the ratio of perceived benefits to
price paid. Customers will evaluate benefits according to the extent to
which a product allows their needs to be satisfied. Customers also
evaluate how well a product‘s benefits add to their own well-being as
compared with the benefits provided by competitors‘ offerings
Customer perceived value = Benefits deriving from a product/ Cost of
acquiring the product
Customer satisfaction depends on a product‘s perceived performance in
delivering value relative to a buyer‘s expectations. If the product‘s
performance falls short of the customer‘s expectations, the buyer is
dissatisfied. If performance matches expectations, the buyer is satisfied. If
performance exceeds expectations, the buyer is delighted. Smart
companies aim to delight customers by promising only what they can
deliver, then delivering more than they promise.
• Customer expectations are based on past buying experiences,
the opinions of friends and market information. Marketers must
be careful to set the right level of expectations.
• If they set expectations too low, they may satisfy those who
buy, but fail to attract new customers.
• If they raise expectations too high, buyers will be disappointed.
Still most of today‘s most successful companies are raising
expectations- and delivering performance to match.
• These companies aim high because they know that customers
who are merely satisfied will find it easy to switch suppliers
when a better offer comes along. Thus, customer delight
creates an emotional tie to a product or services and this
creates high customer loyalty.
• Highly satisfied customers make repeat purchases, are less
price sensitive, remain customers longer, and talk favorably
to others about the company and its products.
• Quality has a direct impact on product or service
performance. Thus, it is closely linked to customer value and
satisfaction.
• In the narrowest sense, quality can be defined as ―freedom
from defects; however, most customer centered companies
go beyond this narrow definition of quality. Instead, quality is
defined in terms of customer satisfaction.
EXCHANGE
• An exchange process is simply when an individual or an
organization decides to satisfy a need or want by offering some
money or goods or services in exchange. It’s that simple, and you
enter into exchange relationships all the time.
• The exchange process extends into relationship marketing. With
relationship marketing we purposefully look at the long-term
relationship with our target audience, and aim to grow our business.
• Exchange is the act of obtaining a desired object from someone by
offering something in return.
• For example you go into a restaurant and order your favourite meal.
You eat the food and then you pay for it with your credit card. That’s
a basic exchange relationship.
MARKETS
• The term “market” has traditionally been used to describe a
place where buyers and sellers gather to exchange goods
and services (for example, a fruit and vegetable market or a
stock market).
• MARKETING VERSUS SELLING
WHAT IS A MARKETING ENVIRONMENT?
• A marketing environment encompasses all the internal and external factors that drive
and influence an organization's marketing activities. Marketing managers must stay
aware of the marketing environment to maintain success and tackle any threats or
opportunities that may affect their work.
A good grasp of your marketing environment helps to:
• Identify opportunities: Understanding your marketing environment helps you notice
and take advantage of market opportunities before losing your edge. For example, say
your marketing team sees an uptick in digital buying over in-shop sales. You may decide
to allocate more resources to your online marketing funnel to drive more sales.
• Identify threats: Studying your marketing environment alerts you to potential threats
which may affect your marketing activities. For example, a market leader could diversify
their product portfolio to compete with your organization. Foreknowledge of this can
help you restrategize your marketing efforts to maintain and grow your market share.
• Manage changes: Paying attention to the marketing environment also helps manage
changes and maintain growth in a dynamic economy. Marketing managers can forecast
and determine timely marketing campaign strategies by monitoring their marketing
environment.
Features of a marketing environment
• Dynamic: The factors that affect marketing environments constantly
change over time. These could be technological advancements, industry
regulations, or even customer tastes.
• Relative: Marketing environments are relative and unique to each
organization. A specific product from your company may sell quicker in the
U.S. than in Europe because of distinctions in the marketing environment.
• Uncertain: Market forces are unpredictable. Even with constant study, you
may face unexpected threats or opportunities in your marketing
operations. Adept marketers must be able to learn, pivot, and strategize
quickly to achieve their goals.
• Complex: The many internal and external forces in a marketing
environment make it complex, with various essential moving parts. For
example, you must coordinate your team’s ability and resources
with stakeholder expectations, customer satisfaction, and other ethical and
environmental concerns.
Types of marketing environments
• Internal marketing environments
• External marketing environments
 Micromarketing environment
 Macro marketing environment
Internal marketing environment
• An internal marketing environment consists of factors that fall within
your control and impact your marketing operations, including your
organization's strengths, weaknesses, uniqueness, and competencies.
• Think of essential marketing elements such as your people and teams,
the quality of your product or service, capital assets and budgets, and
company policy. Internal marketing environment factors
are controllable.
External marketing environment
• The external marketing environment includes all factors that do not
fall within your organization's control, including technological
advancements, regulatory changes, social, economic, and competitive
forces.
• These factors may be controllable or uncontrollable, but defining and
studying their changes and trends gives your business and marketing
team some power to stay the course. The external marketing
environment can be broadly categorized into micro and macro
marketing environments.
Microenvironment in marketing
• The microenvironment in marketing is closely linked to your business
and directly affects marketing operations. It includes factors like
customers, suppliers, business partners, vendors, and even
competitors. Microenvironment factors are controllable to some
macro marketing environment
• macro marketing environment is made up of all the factors
beyond the control of your organization. An easy way to
remember these factors is by using the PESTLE acronym, which
stands for:
P: Political factors
E: Economic factors
S: Social and demographic factors
T: Technological advancement factors
L: Legal and regulatory factors
E: Environmental factors
• These factors are uncontrollable and can impact your business
and marketing operations to a significant extent. Political
changes, for example, may have a massive effect on how you
can market and conduct your business in certain regions.
• Macro marketing environment is continually changing. It’s vital to
keep a close watch to identify potential threats or opportunities
to your business. For instance, an unpredictable environmental
change, like the COVID-19 pandemic in 2020, can significantly
change the way we work, market, and do business globally.
• While it's true that the macro marketing environment can
overwhelm a business and cause it to fail, it can also lead to
growth. A curious perspective and healthy company culture that
empowers employees and teams to share ideas, collaborate, and
take creative risks will position your business for success.
EXAMPLES OF A MARKETING ENVIRONMENT
• Internal marketing environment: Your internal company culture has
an impact on how your employees behave, which in turn affects your
marketing operations. An organization that emphasizes teamwork and
collaboration, for example, will have more engaged employees. This, in
turn, will help the organization perform better than competitors who do
not share these values.
• Micro marketing environment: Say your business relies on a network
of suppliers, distributors, and retailers to get your products to the
customer. It's wise to build good relationships with these vendors, as any
changes can influence your marketing strategy.
• Macro marketing environment: The shockwaves from the COVID-19
pandemic are still hitting marketers — first, social distancing and remote
work changed how we market goods and services. Now, inflation and the
rising cost of living loom large over the macro marketing environment.
BENEFITS OF MONITORING MARKETING ENVIRONMENT
• Monitoring your marketing environments empowers your business to make strategic marketing
decisions before it’s too late. Other benefits of tracking your marketing environment include:
• Being more prepared for micro- or macro-environmental changes — you work from a place of
power when you have data that positions your business marketing for success
• Gaining useful, qualitative information about your marketing environment, which helps develop
successful marketing campaign strategies
• A better understanding of your customers' needs, resulting in a more satisfactory product or
service
• Having the correct information to create marketing campaigns that do not cross legal and
regulatory policies
• More effective budgeting and allocation of marketing resources
• The ability to recognize potential threats within your marketing environment and prepare good
marketing strategies in time
• The ability to identify and leverage opportunities before your competitors
• Improving any weaknesses in your organization's marketing setup, processes, and operations
• Leveraging your unique strengths to build company reputation and successful marketing
campaigns
INDUSTRY ANALYSIS AND COMPETITION: PORTER’S FIVE FORCES

Industry analysis—also known as Porter’s Five Forces Analysis—is a very useful tool
for business strategists. It is based on the observation that profit margins vary
between industries, which can be explained by the structure of an industry.
The Five Forces primary purpose is to determine the attractiveness of an industry.
However, the analysis also provides a starting point for formulating strategy and
understanding the competitive landscape in which a company operates.

• PORTER’S FIVE FORCES ANALYSIS

The framework for the Five Forces Analysis consists of these competitive forces:
• Industry rivalry (degree of competition among existing firms)—intense competition
leads to reduced profit potential for companies in the same industry
• Threat of substitutes (products or services)—availability of substitute products will
limit your ability to raise prices
• Bargaining power of buyers—powerful buyers have a significant impact on prices
• Bargaining power of suppliers—powerful suppliers can demand premium prices
and limit your profit
• Barriers to entry (threat of new entrants)—act as a deterrent against new
• Industry analysis enables a company to develop a competitive strategy that best
defends against the competitive forces or influences them in its favor. The key to
developing a competitive strategy is to understand the sources of the competitive
forces. By developing an understanding of these competitive forces, the company
can:
• Highlight the company’s critical strengths and weaknesses (SWOT analysis)
• Animate its position in the industry
• Clarify areas where strategic changes will result in the greatest payoffs
• Emphasize areas where industry trends indicate the greatest significance as either
opportunities or threats
• The five competitive forces reveal that competition extends
beyond current competitors. Customers, suppliers,
substitutes and potential entrants—collectively referred to
as an extended rivalry—are competitors to companies within
an industry.
• The five competitive forces jointly determine the strength of
industry competition and profitability. The strongest force (or
forces) rules and should be the focal point of any industry
analysis and resulting competitive strategy.
ANALYZING CONSUMER BUYING BEHAVIOR
• How many times do you make decisions throughout the day? What should I
wear today? What perfume should I put on? What am I going to have for lunch?
• If you think about it, we make many buying decisions every day without giving
them much thought.
• Consumer behavior is the study of consumers and the processes they use to
choose, use (consume), and dispose of products and services, including
consumers’ emotional, mental, and behavioral responses. Understanding
consumer behavior is crucial for businesses to create effective marketing
strategies that can influence consumers’ decision-making processes.
Why is consumer behavior important?
• Studying consumer behavior is important because it helps marketers
understand what influences consumers’ buying decisions.
• By understanding how consumers decide on a product, they can fill in the
gap in the market and identify the products that are needed and the
products that are obsolete.
• Studying consumer behavior also helps marketers decide how to present
their products in a way that generates a maximum impact on consumers.
Understanding consumer buying behavior is the key secret to reaching
and engaging your clients, and converting them to purchase from you.
• A consumer behavior analysis should reveal:
• What consumers think and how they feel about various alternatives
(brands, products, etc.);
• What influences consumers to choose between various options;
• Consumers’ behavior while researching and shopping;
• How consumers’ environment (friends, family, media, etc.) influences their
behavior.
• Consumer behavior is often influenced by different factors. Marketers should
study consumer purchase patterns and figure out buyer trends.
• In most cases, brands influence consumer behavior only with the things they
can control; think about how IKEA seems to compel you to spend more than
what you intended to every time you walk into the store.
• So what are the factors that influence consumers to say yes? There are three
categories of factors that influence consumer behavior:
• Personal factors: an individual’s interests and opinions can be influenced by
demographics (age, gender, culture, etc.).
• Psychological factors: an individual’s response to a marketing message will
depend on their perceptions and attitudes.
• Social factors: family, friends, education level, social media, income, all
influence consumers’ behavior.
Types of consumer behavior
• There are four main types of consumer behavior:
1. Complex buying behavior
This type of behavior is encountered when consumers are buying an expensive, infrequently bought
product. They are highly involved in the purchase process and consumers’ research before
committing to a high-value investment. Imagine buying a house or a car; these are an example of a
complex buying behavior.
2. Dissonance-reducing buying behavior
• The consumer is highly involved in the purchase process but has difficulties determining the
differences between brands. ‘Dissonance’ can occur when the consumer worries that they will
regret their choice.
• Imagine you are buying a lawnmower. You will choose one based on price and convenience, but
after the purchase, you will seek confirmation that you’ve made the right choice.
3. Habitual buying behavior
• Habitual purchases are characterized by the consumer having very little involvement in the product
or brand category. Imagine grocery shopping: you go to the store and buy your preferred type of
bread. You are exhibiting a habitual pattern, not strong brand loyalty.
4. Variety-seeking behavior
• In this situation, a consumer purchases a different product not because they weren’t satisfied with
the previous one, but because they seek variety. Like when you are trying out new shower gel
What affects consumer behavior?
Many things can affect consumer behavior, but the most frequent factors influencing consumer behavior are:

1. Marketing campaigns
• Marketing campaigns influence purchasing decisions a lot. If done right and regularly, with the
right marketing message, they can even persuade consumers to change brands or opt for more
expensive alternatives.
• Marketing campaigns, such as Facebook ads for eCommerce can even be used as reminders for
products/services that need to be bought regularly but are not necessarily on customers’ top of
mind (like insurance for example). A good marketing message can influence impulse purchases.
2. Economic conditions
• For expensive products, especially (like houses or cars), economic conditions play a big part. A
positive economic environment is known to make consumers more confident and willing to
indulge in purchases irrespective of their financial liabilities.
• The consumer’s decision-making process is longer for expensive purchases and it can be
influenced by more personal factors at the same time.
3. Personal preferences
• Consumer behavior can also be influenced by personal factors: likes, dislikes, priorities, morals,
and values. In industries like fashion or food, personal opinions are especially powerful.
• Of course, advertisements can influence behavior but, ultimately, consumers’ choices are greatly
influenced by their preferences. If you’re vegan, it doesn’t matter how many burger joint ads you
see, you’re not gonna start eating meat because of that.
4. Group influence
• Peer pressure also influences consumer behavior. What our family members,
classmates, immediate relatives, neighbors, and acquaintances think or do can
play a significant role in our decisions.
• Social psychology impacts consumer behaviour. Choosing fast food over home-
cooked meals, for example, is just one such situation. Education levels and social
factors can have an impact.
5. Purchasing power
• Last but not least, our purchasing power plays a significant role in influencing our
behavior. Unless you are a billionaire, you will consider your budget before making
a purchase decision.
• The product might be excellent, and the marketing could be on point, but if you
don’t have the money for it, you won’t buy it.
• Segmenting consumers based on their buying capacity will help marketers
determine eligible consumers and achieve better results.
Customer behavior patterns
• Buying behavior patterns are not synonymous with buying habits. Habits are developed as
tendencies towards an action and they become spontaneous over time, while patterns show a
predictable mental design.
• Each customer has his unique buying habits, while buying behavior patterns are collective and
offer marketers a unique characterization. Customer behavior patterns can be grouped into:
1. Place of purchase
• Most of the time, customers will divide their purchases between several stores even if all items
are available in the same store. Think of your favorite hypermarket: although you can find
clothes and shoes there as well, you’re probably buying those from actual clothing brands.
• When a customer has the capability and access to purchase the same products in different
stores, they are not permanently loyal to any store unless that’s the only store they have
access to. Studying customer behavior in terms of choice of place will help marketers identify
key store locations.
2. Items purchased
• Analyzing a shopping cart can give marketers lots of consumer insights about the items that
were purchased and how much of each item was purchased. Necessity items can be bought in
bulk while luxury items are more likely to be purchased less frequently and in small quantities.
• The amount of each item purchased is influenced by the perishability of the item, the
purchasing power of the buyer, unit of sale, price, number of consumers for whom the item is
3. Time and frequency of purchase
• Customers will go shopping according to their feasibility and will expect service even
during the oddest hours, especially now in the era of e-commerce where everything is only
a few clicks away.
• It’s the shop’s responsibility to meet these demands by identifying a purchase pattern and
matching its service according to the time and frequency of purchases.
• One thing to keep in mind: seasonal variations and regional differences must also be
accounted for.
4. Method of purchase
• A customer can either walk into a store and buy an item right then and there or order
online and pay online via credit card or on delivery.
• The method of purchase can also induce more spending from the customer (for online
shopping, you might also be charged a shipping fee for example).
• The way a customer chooses to purchase an item also says a lot about the type of
customer he is. Gathering information about their behavior patterns helps you identify new
ways to make customers buy again, more often, and with higher values.
Customer behavior segmentation
• Customer segmentation and identifying types of buyers have always been
important. Now that personalization and customer experience are factors that
determine a business’s success, effective segmentation is even more important.
• Only 33% of the companies that use customer segmentation say they find it
significantly impactful, so it’s important to find the segmentation technique that
brings clarity and suits your business.
• Traditionally, most marketers use six primary types of behavioral segmentation.
1. Benefits sought
• A customer who buys toothpaste can look for four different reasons: whitening,
sensitive teeth, flavor, or price.
• When customers research a product or service, their behavior can reveal valuable
insights into which benefits, features, values, use cases, or problems are the
most motivating factors influencing their purchase decision.
• When a customer places a much higher value on one or more benefits over the
others, these primary benefits sought are the defining motivating factors driving
the purchase decision for that customer.
2. Occasion or timing-based
• Occasion and timing-based behavioral segments refer to both universal and personal occasions.
• Universal occasions apply to the majority of customers or target audiences. For example, holidays
and seasonal events are when consumers are more likely to make certain purchases.
• Recurring-personal occasions are purchasing patterns for an individual customer that consistently
repeat over a while. For example, birthdays, anniversaries or vacations, monthly purchases, or
even daily rituals such as stopping for a cup of coffee on the way to work every morning.
• Rare-personal occasions are also related to individual customers but are more irregular and
spontaneous, and thus more difficult to predict. For example, attending a friend’s wedding.
3. Usage rate
• Product or service usage is another common way to segment customers by behavior, based on
the frequency at which a customer purchases from or interacts with a product or service. Usage
behavior can be a strong predictive indicator of loyalty or churn and, therefore, lifetime value.
4. Brand loyalty status
• Loyal customers are a business’s most valuable assets. They are cheaper to retain,
usually have the highest lifetime value, and can become brand advocates.
• By analyzing behavioral data, customers can be segmented by their level of loyalty
so marketers can understand their needs and make sure they satisfy them.
• Loyal customers are the ones who should receive special treatment and privileges,
such as exclusive rewards programs to nurture and strengthen the customer
relationship and incentivize continued future business.
5. User status
• There are many different possible user statuses you might have depending on your
business. A few examples are:
• Non-users
• Prospects
• First-time buyers
• Regular users
• Defectors (ex-customers who have switched to a competitor).
6. Customer journey stage
• Segmenting the audience base on buyer readiness allows
marketers to align communications and personalize experiences
to increase conversion at every stage.
• Moreover, it helps them discover stages where customers are not
progressing so they can identify the biggest obstacles and
opportunities for improvement, even on post-purchase behaviors.
• Besides these traditional ways, another type of segmentation is
the RFM model. This approach is popular among eCommerce
marketers because it helps them create customer experiences
around the information they’ve got about each customer segment.
• RFM is a behavioral segmentation model and the three letters
come from Recency, Frequency, and Monetary Value.
• Here’s what these variables show you:
Recency = how recently a customer placed the last order on your website;
Frequency = how many times a customer purchased something from your website in the
analyzed period of time;
Monetary Value = how much each customer has spent on your website since the first
order.
The RFM model analysis can be executed in 2 ways:
• Manually – exporting your database in a spreadsheet and analyzing your customers following
the rules for RFM analysis;
• Automatically – through certain tools that are creating RFM dashboards.
• RFM segmentation and analysis can reveal who your most loyal and profitable customers are and
also:
• Reveal what brands and products are dragging your business down;
• Build custom recommendations for your customers;
• Solve certain Customer Experience problems.
• Before making decisions based on gut feeling regarding your customers and your audience,
observe their behavior, listen to them and build a relationship that will make them stay loyal no
matter how aggressive your competitors are.
INDUSTRIAL BUYER BEHAVIOUR

• In marketing process, there is a need to understand why customer or

buyer purchases goods and services. (B2B and B2C difference)
• Industrial buyer behaviour is understanding of how industrial
organizations purchase products and services
• industrial buying behavior can be defined as “the decision-making process
by which formal organizations establish the need for purchase products
and services and identify, evaluate, and choose among alternative brands
and suppliers”
• industrial buying is the buy of a product which is made to satisfy the
entire organization instead of satisfying just one individual.
• Industrial buying behaviour is considered as being a basic concept when
investigating buyer behaviour in organizations.
• In industrial buying situations, there is an awareness of greater use of
marketing information, bigger exploratory objective in information
• The buying decisions in industrial marketing are based on numerous
factors that include compliance with product specifications product
quality, availability, timely supply, acceptable payment and other
commercial terms cost efficacy, after-sales service rather than on
social and psychological wants.
• The buying decisions usually take more time and engage many
individuals from technical, commercial, and finance departments.
• After the initial offer made by a retailer, there are negotiations and
exchange of information between the experts and representatives
from both the purchaser and the seller organisations. Therefore,
inter-organisational contacts take place and interpersonal
relationships are developed.
• The relationships between the sellers and consumer are highly
valued and they become stable in the long run because of a high
level of interdependence.
THE ROBINSON, FARIS AND WIND MODEL
• The industrial buying process is a succession of stages which
may vary depending on which buying situation (called classes)
the particular buying firm is confronted with
• The model analyses organizational buying behaviour as
depending on the amount of experience the buyer has with
product class, the amount of information sought and the time
spent on the decision.

THE NELSON BOX MODEL

• The model is based on two important assumptions: a) That
decisions at different levels of the organization neither always
involve the same individuals nor identical work. b) That decision
taken at one level forms the basis for all subsequent decision.
The Nelson model depicts four levels of decision making in an
organization.
The general buying decision which comprises of the decision to begin a
project. It may contain the establishment of a new building, or new
product.

The actual buying decision which include selection of a definite project,

including the objectives, and project specifications.

The decision which is associated with the most suitable

suppliers/vendors and products.

The technical buying decision which engages decisions linked to the

actual mechanics of transportation, drawing up of contracts, final price
and payment negotiations and the stipulation of other feature.
SHETH MODEL
• Sheth describes that all buying decisions do not result from
organized process of decision making. Some unplanned
situational factors also affect the buying decision, such as
unpredicted situation like damage to machinery.
• The Sheth interactive model focuses on information search
and recognizes that the expectations of purchasing agents,
engineers, users and others, who are directly involved in that
act of buying and regarded as constituting the buying centre,
can be influenced by their experience.
• To develop this model, Sheth segregated organizational buyer
behaviour into three different aspects:
• The psychological world of the individual engrossed in organizational
buying. This characteristic recognizes that purchase decision in an
organization is not made by a single individual, but by members of
different departments and that the psychological make-up of the
decision makers is critical.
• The condition which precipitates joint decision making. Not all
decisions are made together. The model gives six factors which
establish whether a specific buying decision will be joint or
autonomous. Three of these factors are related to the characteristics
of the product or service and the other three are related to the
characteristics of the buyer organization.
• The Process of Joint Decision Making: The Sheth interactive
model delineated the process of joint decision making to include the
following steps: (a) Initiation of the decision to buy; (b) Gathering of
information; (c) Evaluation of alternative suppliers, and (d)
Resolution of conflict among the parties who must jointly decide.
Webster and Wind model
• Industrial buyer behaviour can be structured in to two variables such as tasks and
non-tasks. Tasks are directly associated with buying problems whereas non-tasks
variable include the aspects beyond the particular buying issues.
Webster and Wind model believes that industrial buying
behaviour is impacted by some variables. These variables are
divided into four primary categories such as environmental,
organizational, interpersonal and buying centre and individual.
The factors affecting these variables include
Buying situation
Environmental factors
Organizational factors
Interpersonal factors
Personal factors
Additional influences
The buying situation: The buying situations are developed when
employees in an organization face a problem. This occurs when a
disparity between the required outcome and the actual situation
can be solved through some buying action the process of resolving
the problem is considered as a buying procedure.
• These are identifying, evaluating and choosing among various
different suppliers. All members involved and affected in this
process are member of the buying centre. There are different types
of buying situations. Three buying situations were recognized that
include new task, modified rebuy and straight rebuy.
New Task: In this type of buying situation, either an internal
stimulus or an environmental factor causes this recognition that
lead to explore a new task product. The problem is new from the
standpoint of the buying influence and is also new compared from
other problems in the past.
• Task of that level may necessitate thorough analysis of
suppliers so that organization will search for many sources of
information and support, utilizing the complete buying process
to scrutinize alternatives.
Straight Rebuy: This buying situation is usual and has
established solutions. Straight rebuys involve basically the
reorder of a previous product. In any rebuy situation, buyer has
much significant experience. Straight rebuy is the most
widespread situation in industrial purchasing.
• Purchasing obtains information from inventory control
department to reorder the material or item and looks for
quotations from suppliers in an approved list. This situation
usually needs maintenance of product and service quality from
suppliers and extreme effort for vendors, who are willing to be
in approved list.
Modified Rebuy: This buying situation is different from the straight rebuy
because in this situation new alternatives of supplier are considered.
Modified rebuy usually happen when there is a change in selection criteria
or buyer plans to reassess some product specifications, terms of delivery,
price, contract details or even supplier.

Buying centre
• The main feature of industrial buying is a group activity. Usually people
from various areas of business and of different status contribute to the final
purchase decision. Group of individuals with a stake in the buying decision
is called buying centre
• Developing relationship with buying centre defines the victory of
partnership between marketers and corporate customers in general. There
are four vital things for the sellers to realize: (i) Who are the members of
buying centre? (ii) What kind of decisions are they responsible for? (iii)
What influence degree they obtain? (iv) What assessment criteria they use?
• The concept of buying centre is described as the representatives of
different independently operating parts of organization such as
finance, production, purchasing, engineering, human resource and etc.
Buying centres
role:
Environment Influences:
• These factors are put forth by numerous institutions and
business firms (suppliers, competitors and customers),
government, trade unions, political parties, trade
associations and professional groups
• Economic and political factors are the most powerful factors
on general business conditions. Business buyers are also
impacted by regulatory factors and changes in political
situation.
Organizational Influences:
Individual decision makers respond in a different way in industrial
buying decision due to the influences they receive there.
• Organizational environment is a direct surrounding that person
faces during his work such as office colleagues, work place, size
of the organization, its orientation, market position, vertical or
horizontal management involvement, organizational structure,
wage system and system of social guards, work conditions,
employment relationship, organizational philosophy, rules of
conduct and internal order, degree of risk aversion present in the
culture.
• organizational factors cause individual decision makers to
proceed differently than they would if they were functioning alone
or in a dissimilar organization.
Interpersonal Factor: Interpersonal
factors are mainly associated with the relationships
and interaction between members of buying centre.
• In the process of buying decision, three classes of
variables must be recognized. The first one is that to
distinguish different roles between the buying centre
members. Next is the variables performed for
interaction among individuals in the buying centre.
Lastly, identification of the dimension that makes
the group functioning.
Personal Factors- The foundation of all industrial buying
behaviour is the individual behaviour.
• The individuals in an organization are the one really
analysing, deciding and acting to execute the purchase either
in groups or alone.
• Individual or as a member of a group can describe and
analyse buying situations, decide and act. Each member of
the buying process has personal motivations, perceptions
and preferences. These are influenced by member's age,
income, education, job position, personality, attitudes toward
risks and culture.
Additional Influences (Situational): Inter-organizational
factors are regarded as the relationships between the buying
and selling organizations. The industries marketing variables
such as positioning, price or distribution and the marketing
schemes of the rivals are also important influences on
industrial buying behaviour.
INDUSTRIAL BUYER'S DECISION PROCESS
• first phase that is recognition of problem, the buying process
starts when person in organization identifies problem or need
that can be met by obtaining goods and services. The buying
centre examines their organizational needs and search for
options that are available to address those needs. The
definition stage includes several activities such as recognizing
and defining the organizational problem, defining the outlines
of the solution and specifying product or service that can satisfy
organizational needs.
• Phase two include description of need which involves
determination of traits and quantities needed. The common
attributes include reliability, durability and price. Activities in
this stage are searching of potential suppliers, proposal
solicitation, and evaluation of offers and finally selection of
most appropriate supplier.
• Phase three is product specification or delivery solution stage
which is obtaining the inputs from previous stage. The buying
organization has to develop the technical specification of the
required products. In this stage product is divided into two items.
The specification about product and items are listed.

• Phase four is supplier search among the potential sources. The

marketers have to ensure that the supplier is in the list of potential
suppliers.

• In fifth phase of Proposal solicitation, the list of capable supplier is

shortened on the basis of critical factors. After that purchasing
department ask for proposals sent by each supplier. After
evaluation, some companies are invited to give presentation.
Proposal must include all specification such as price, delivery period,
• Phase six consist of supplier selection. Each of the supplier's
presentation is rated as per definite evaluation model. Buying
organizations try to negotiate with chosen supplier for
reasonable price and terms and conditions for final selection.
Various parameters such as reliability, delivery, flexibility,
price and services are considered for supplier selection.
• In order to routine specification, the buyer negotiates the
final order, listing the technical specification; the quantity
needed and expected time of delivery.
• Final phase of purchase decision process consist of formal
and informal review and feedback of product performance as
well as merchant performance. The buyer may contact
customer and collect their responses
PHARMACEUTICAL MARKET
• Marketing Research is critical for the successful sustenance
of any product or industry and Pharmaceuticals are no
exception.
• Marketing occupies an important position in the organization,
which is in today's competition scenario, more consumer-
oriented.
• This consumer-oriented marketing is about finding the wants
of the consumer and then satisfying them through the right
product at right time and at right place. This activity of
determining and satisfying the wants in a systematic manner
is called as 'marketing research‘.
1
What is Marketing?
Marketing has been defined by the AMA as an organizational function and a set of
processes for creating, communicating and delivering value to customers and for
managing customer relationships in ways that benefit the organization and its
stakeholders.

What is Marketing Research?

The function that links the consumer, customer, and public to the marketer
through information – information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions;
monitor marketing performance; and improve the understanding of marketing as a
process.
2
Why we need Marketing Research?
• To make the “right” decisions
• To implement marketing
• To practice the marketing concept
• To make the right decisions to select the right marketing
strategy.
What are the uses of Marketing Research?
• Identify marketing opportunities and problems
• Generate, refine, and evaluate potential marketing actions
• Monitor marketing performance
• Improve marketing as a process
3
A Classification of Marketing Research:
4
Roles of Marketing Research:
• Sources of marketing research
• Marketing research involves collection, examination and analysis of data or
information related to the different aspects of the marketing effort of an
organization. There are two sources, from which the required information of
market trends can be collected,
• 1. Internal sources: The information is available in-house in form of sales
turnover, promotional costs, various budgets allocated, future plans, etc.
Internal sources of information help greatly in planning various activities.
• 2. External sources: There are two external sources from which the required
information can be collected,
• a) Primary Sources
• It generates totally new information and collected through surveys. The primary
sources of market information are,
• i. Sales representatives,
• ii. Retailers and wholesalers.
• iii. Doctors.
• iv. Consumers.
b) Secondary sources: The information is already available in
the form of publications through reports, magazines, journals etc.
There are certain agencies which gather the information after
doing the proper survey of the market and present the data in a
printed form. The main sources of secondary data for market
research are:
o Industry associations.
o Trade associations.
o Published survey.
o Govt. and international publication.
o Market research agencies like ORG-IMS, Mackenzie, Earnst and
Young etc.
o Free and paid websites.
• Functions of Marketing Research:
 It helps in exploring new markets and their demands for the products.
 It helps in estimation of potential demand for a new product.
 It helps in production planning activity.
 It is useful in improving the effectiveness of the channels and methods
of distribution.
 It helps in getting customer feedbacks for the products and to do
necessary improvements.
Qualitative and Quantitative Market Research

• In today‘s competitive environment, it is very important to create and maintain image of product in mind
of population. For that purpose, market research is one of the prerequisite. Process of market research and

method of data collection is broadly classified into two types viz. quantitative and qualitative

research.

• Both methods are associated with different method of data collection and results in different outcome.
Selection of any method depends on the need of company. Many times company use to perform both.

• Main objective behind market research is to obtain information in context with marketing of product or
services and further analysis of same which will help any company to understand the market conditions

and future of proposed product or service. Market research includes following testing;

i. Positioning research

ii. Messaging research

iii. Brand name testing

iv. Concept testing

v. Ad testing.

Data obtained in view of above point help the company to optimize marketing strategies to reach the

targeted audience and to stand in competitive market.

• Quantitative research:
• It involves the surveys and questionnaires which can be performed
by phone, face to face or even on internet. Generated data can be
easily reported through statistics.
Example, a pop-up question may appear on screen like Have
you visited any of the following site? and respondent will
answer yes or no.
• Major limitation of this method is use of pre-coded, closed ended
questions and pre-designed structure for expected responses. The
online questionnaire can only go as far as the programming will
allow, and like any other data collecting quantitative tool, has a
limited ability to probe answers.
• The main characteristic of quantitative market research is that it allows for comparisons
and trends in the data to be easily found and understood. It should also be noted that as a
result of the standardized questions, quantitative market research is a more structured
market research process and can therefore involve a larger number of respondents to
participate in the research.

• There are several different types of data collection in quantitative market research;
 Mail
 Face-to-face
 Telephone
 Email
 Online / web
It is important to carry out quantitative research before starting a new business,
launching a new product, or service as it gives factual figures and data that
highlights target market interest and can help secure investors, as the risk of
their investment is reduced as future demand is shown. It also enables managers to
compile sales forecasts and revenue. These can be done through the use of target market
response rates and any pricing information or preferences that are revealed by
respondents during the research.
Qualitative market research
• It is associated with open ended questions in any format like face-to-face
interviews, interviews via the phone, or over the web. It is flexible and interactive.
Targeted audiences may be one-on-one or groups.
• An expert moderator selects questions to obtain wide range data from respondent.
Qualitative marketing research can help explore a new market, understand
customer perceptions, as well as generate or screen ideas. It answers that age-old
question, why?
• Advantages:
1. It focuses on consumer actions, opinions, wants and needs.
2. It helps the marketer to understand why a consumer has acted and purchased in a
certain way.
3. Highlights target market opinion on the business idea, product or service.
4. It can allow a manager to alter and adapt their idea to ensure consumer
satisfaction and competitiveness within the market

• Since it involves the collection of large data, majority of the time company subject
• Different methods:
• Both quantitative and qualitative market research can be
conducted first. The method to choose first is dependent on
the following;
• Qualitative market research should be conducted before
quantitative market research if the project concept has not
previously been researched. In this situation qualitative
market research will enable the researcher to understand the
consumer‘s initial and unbiased reaction and opinions to the
new concept with no external influencers such as past
experience with similar products. It is important with a new
concept to first understand areas of improvement,
modification before moving forward towards validating the
final concept through quantitative market research.
• Quantitative market research should be conducted before qualitative
market research if the project concept has been previously
researched to some extent and some initial information from
previous research has been absorbed. By conducting quantitative
market research first, it allows a start-up or entrepreneur to
understand the current feasibility of a project before understanding
why the results read as they do.
• Quantitative market research highlights areas of further
investigation before exploring the reasons through qualitative
market research. Further to this quantitative market research allows
the researcher to gauge a general understanding of the market
before taking the time to adapt their research into a more specific
and customized survey as part of qualitative market research.
SIZE AND COMPOSITION OF PHARMACEUTICAL MARKET

• The global pharmaceutical manufacturing market size was valued at USD

405.52 billion in 2020 and is expected to grow at a compound
annual growth rate (CAGR) of 11.34% from 2021 to 2028.
• The pharmaceutical landscape has undergone a massive transformation with
the emergence of new technologies, cost-effective, and more efficient
manufacturing approaches. In addition, increasing investment flow in this
space has impacted the market growth positively.
• Manufacturing floor downtime and the production of product waste are
reduced by the implementation of robotic technology and Artificial
Intelligence (AI).
• In addition, single-use disposable solutions have gained momentum in this
industry and have replaced conventional open transfer manufacturing
techniques. Furthermore, the paradigm shift towards integrated, smart, and
data-rich paperless operations has resulted in error-free and precise
production. Such ongoing developments have propelled drug manufacturing.
Indian pharma industry landscape
• The Indian pharma industry has achieved significant growth in
both domestic and global markets during the past five decades.
From contributing just 5% of the medicine consumption in
1969 (95% share with the global pharma), the share of
“Made in India” medicines in Indian pharma market is now
a robust 80% in 2020.
• More importantly, during the same period, the country has also
established leading position in the global. The pharma sector has
been contributing significantly to India’s economic growth as one of
the top 10 sectors in reducing trade deficit and attracting the
Foreign Direct Investment (FDI). The drugs and
pharmaceuticals sector attracted cumulative FDI inflow worth
US$16.54 billion between April 2000 and June 2020. It is of prime
importance also due to the trade surplus it has been generating
• Indian pharma exports reached US$20.7b in FY2017 with year-on-
year growth of 8.4% (exports size was US$19.1b in 2019). They have
grown at a CAGR of 6.2% between 2015 and 2020. This was largely
driven by exports of generics drugs to >200 countries (including
both developed and developing markets).
• India is the source of 60,000 generic brands across 60 therapeutic
categories². The country accounts for 40% of the generics demand in
the US and ~25% of all medicines in the UK. India also fulfils about
80% of global demand for antiretroviral drugs for Acquired Immune
Deficiency Syndrome (AIDS), significantly contributing towards
increasing accessibility of AIDS treatments. Indian pharma
manufacturers export nearly half of the pharma production, both in
terms of volume and value, to the US, UK, South Africa, Russia and
other countries. However, there remains a significant opportunity,
largely untapped across Japan, China, Australia, ASEAN countries,
Middle East region, Latin Americas and other African countries.
India does have quite a few advantages, but the pharmaceutical industry needs a
proper marketing strategy to be put in place before banking on the government for
concessions9. The advantages India has are:
 Cost effective chemical synthesis: Implementation of value engineering in
chemical synthesis of various drug molecules drastically improves cost benefit. Fast
development track record
 Provides bulk drugs: Provides a vast a wide range of bulk drugs and variety of
bulk drugs and also enhances exports of sophisticated bulk drugs.
 Competent workforce: India has a pool of easily available professional expertise
with high managerial and technical competence and these professionals are
proficient in English and other international languages, which facilitates international
trading.
 Legal and financial framework: A successful 60-year-old democracy of India
supports a strong legal framework and financial markets. International business and
industry are well-established. This community also provide development framework.
 Globalization: India has a economy of the free market and supports globalization.
 Consolidation: India is now generating great opportunities from international
pharmaceutical industries.
Major Indian Drug Companies
• 1) Dr. Reddy‘s Laboratories Ltd. 2) Ranbaxy Laboratories Ltd.
3) Lupin Ltd. 4) Sun Pharmaceutical industries Ltd. 5) Cipla
Ltd. 6) Orchid Chemicals & Pharmaceuticals Ltd. 7) Nicholas
Piramal India Ltd. 8) Wockhardt Ltd. 9) IPCA Laboratories
Limited 10) Cadila Healthcare Limited
• Constant progress in the field of personalized medicines has opened up
numerous possibilities to target different health maladies and allowed the
development of patient-centric models. This progress results in a shift from large
batches to smaller batches for the development of complex medicines and
autologous patient-centric treatments. This has also encouraged the
manufacturers to redesign their supply chain to better align with the patient-
centric health care system.
• A rise in drug approvals by the regulatory bodies is expected to fuel the drug
manufacturing procedures. For instance, the FDA approved 59 drugs in 2018,
49 drugs in 2019, and 15 drugs up to April 2020. Furthermore, a large
number of ongoing clinical trials have created numerous growth opportunities
for market growth.
• Mergers & acquisitions in the pharmaceutical industry have increased in the
past few years. Most of the well-established companies are consolidating to
enhance their market position in the highly competitive environment. Whereas
small- to mid-sized pharma companies are being acquired for their innovative
capabilities. Moreover, stringent regulations to curb pharmaceutical prices have
resulted in a large number of mergers & acquisitions.
• Molecule Type Insights
• In 2020, the conventional drugs (small molecules) segment accounted for the
highest revenue share of over 65%. According to an article published in August
2019, in the pharmaceutical market, small molecule drugs account for up to
90% of the total global drug sales. This is representative of the dominance of
small molecules in the global pharmaceutical market. In addition, this is shown by
the current trends and recent approvals of drugs by regulatory bodies across the
globe.
• For instance, in 2018, 59 new drugs gained regulatory approval from the U.S. FDA,
out of which, 71 % of drugs were small molecule drugs. Small molecule drugs
represent around 60% share in comparison with large molecule drugs. Furthermore,
changing landscape of small molecules in terms of molecule potency, drug product
complexity, industry makeup, and manufacturing trends has also supported the
dominance of small molecule drugs in the pharmaceutical industry.
• Over the past few years, biologics are increasingly gaining traction with promising
efficacy for the treatment of autoimmune diseases and cancer. Owing to the
substantial investments and innovative approaches, biologics are gaining
significant attention. In early 2020, seven of the top 10 best-selling drugs were
biologics. This shows the emergence of biologics in the global market.
• Drug Development Type Insights
• The outsourcing segment dominated the market in 2020 with a revenue
share of over 54%. Several benefits associated with outsourcing
operations are expected to drive the segment growth at a lucrative pace
over the coming years. Outsourced services minimize the investments,
reduce drug development & overall costs, increase the efficiency of
manufacturing procedures, and easily comply with different regulatory
norms. Moreover, the integration of Robotic Process Automation (RPA)
by contract manufacturers efficiently accelerates the drug development
processes.
• Most of the large-scale drug manufacturers opt for in-house production
because it allows the companies to have control over the private
information associated with novel molecules. Expansion of in-house
manufacturing facilities by key firms also drives the segment growth. For
instance, in February 2021, WuXi STA; a subsidiary of WuXiAppTec;
announced to purchase a Switzerland-based manufacturing facility from
Bristol Myers Squibb. Thus, in-house manufacturing is expected to witness
significant growth in the coming years.
• Formulation Insights
• In terms of revenue, the tablets dominated the market with a share of over 26
% in 2020. This is due to the wide availability of tablets in different colors, shapes,
and sizes as well as types, such as film and enteric-coated, effervescent, and orally
disintegrating tablets. The advent of 3D-printed tablets designed for personalized
needs also boosts segment growth. For instance, in February 2020, Merck partnered
with a German firm, AMCM, to conduct clinical testing on 3D-printed tablets.
• The injectable segment is anticipated to grow at the second-fastest CAGR during the
forecast period. A rise in the number of approvals for prefilled syringes and auto-
injectors is attributed to the segment growth. Moreover, a shift in preferences
towards larger dosage volumes has resulted in an increased demand for 2.25-mL
needle syringes, which significantly contributes to the revenue generation in this
segment.
• Subcutaneous injections have gained immense popularity in recent years
among drug developers, device manufactures, and patients. Benefits associated
with these injections are self-administration, ease of use, reliability, precision, use of
fixed doses in prefilled syringes, compact design, compliance, and high patient
comfort. The advent of subcutaneous injections is expected to further propel the
growth of the injectable segment.
• Routes of Administration Insights
• The oral segment led the global market and was valued at 236.91 billion in
2020. Oral dosage forms are affordable, easy to manufacture, and patient-
friendly. In addition, the advancements in drug delivery technologies, such as
sustained release dosage formulations and targeted drug delivery, have
allowed orally administered drugs to achieve greater levels of availability in
the marketplace.
• A significant rise in the implementation of automated systems and barrier
systems, including restricted access barrier systems, and isolators, in
parenteral manufacturing, is expected to boost the parenteral segment at the
fastest CAGR over the forecast period. In addition, an introduction of a broad
range of packaging styles, such as ready-to-fill syringes, cartridges, and vials,
has hugely transformed the parenteral manufacturing sector.
• The rise in demand for innovative drug-delivery systems that better fit with
the ‘mobile lifestyle’ of patients paves a path for the high adoption of pens
and autoinjectors, which further surges the segment growth. In addition, an
increase in the outsourcing of fill-finish manufacturing services by the drug
developers boosts the revenue generation in the parenteral segment.
• Prescription Insights
• The prescription medicines segment accounted for the maximum revenue share of
84.73% in 2020 and will expand further at a steady CAGR from 2021 to 2028 due to
the growing prescription drug expenditures across the globe. According to the
American Journal of Health-System Pharmacy, the overall prescription drug spending
rose by 4-6% in 2019 in the U.S. Similarly, data from Vizient’s Pharmacy
Program stated that the hospital prescription drug spending rose by nearly
4.57% in 2020.
• Factors, such as the high demand for cost-effective treatment options and self-
medication, have hugely transformed the Over-The-Counter (OTC) medicines segment.
OTC medicines are comparatively cost and time-effective as compared to prescription
medicines. Recently, several regulatory bodies have shifted a large number of
medicines from the prescription to the OTC segment.
• As per the estimates of the Consumer Healthcare Products Association study, this
paradigm shift is expected to save around USD 20.0 billion healthcare spending
every year. This Rx-to-OTC switch is a scientifically rigorous, data-driven, and highly
regulated procedure that enables consumers to have access to a wide range of
medicines. Thus, the cost-saving benefits coupled with high public demand for OTC
medicines will propel the segment growth at the fastest growth rate from 2021 to
2028.
• Segmentation and targeting
• A market consists of people or organizations with wants, money to spend, and
the willingness to spend it. However, most markets the buyers' needs are not
identical. Therefore, a single marketing program for the entire market is
unlikely to be successful.
• A good marketing strategy begins with discovering the differences that exist
within a market, which is a process that takes time called, market
segmentation, and deciding which segments will be treated as target
markets.
• Market segmentation is customer oriented and consistent with the
marketing concept. It enables a company to make more efficient use of its
marketing resources. It targets each of the selected segments with a distinct
marketing mix after evaluating their size and potential.
• The marketer must persuade each segment's members that their product will
meet their needs better than competing products. To do so, marketers try to
create a distinct image for their products in the minds of consumers in
comparison to competing products: that is, it positions its product as filling a
special niche in the market place..
• Segmentation:
Market segmentation is defined as "the process of breaking a
product's whole, heterogeneous market into many submarkets or
segments, each of which tends to be homogeneous in all significant
aspects." Markets could be split in a variety of ways. Instead of
mentioning a single market for shoes,' for example, it may be
divided into multiple sub-markets, such as shoes for executives,
Doctors, College students etc. Geographical segmentation on the
very similar lines is also possible for certain products.
• Requirements for markets segmentation:
• The following principles must be followed for market segmentation
to be effective and result-oriented:
• (1) Segment measurability,
• (2) Segment accessibility, and (3) Segment representational ability.
• The primary goal of market segmentation is to track changing customer
behaviour trends.
• It's also worth remembering that there are various and intricate
variations in consumer behaviour. Therefore, the segments must be able
to provide precise measurements. Because of distribution, advertising
media, salesmen, and other factors, the second criteria, accessibility, is
considerably easy. Newspapers and publications can also be useful in this
regard. For instance, there are magazines aimed solely towards
teenagers, professionals, and so on.
• Benefits of segmentation
1. The manufacturer is in a better position to determine and compare his
products' marketing potential. He can determine whether or not a product
will be accepted, as well as the level of resistance to it.
2. The market segmentation result serves as a guide for adjusting
production so that manpower, materials, and other resources are used
most profitably. In other words, the organisation can effectively manage
and prioritise its resources.
3. Without losing market share, the necessary changes can be researched and
executed. As a result, a product line may be diversified or even phased out.
4. It aids in determining the most effective advertising gadgets as well as their
outcomes.
5. Appropriate scheduling for new product introductions, promotion, and other
activities might be easily determined.

• Segmentation and aggregation

• The term "market aggregation" is the polar opposite of "market segmentation."
Aggregation refers to the practice of grouping all product marketplaces into a
single mass. Instead of segmentation, production-oriented businesses
frequently use the aggregation method. In this idea, management perceives all
purchasers as a single group because they only have one product. Market
aggregation allows a company to take advantage of economies of scale in terms
of production, pricing, and physical distribution and promotion. However, the
concept's usefulness in a consumer-oriented market is debatable. When
consumers are divided into heterogeneous groups, the 'whole market' concept
Market segmentation is based on the following criteria:
• Market segmentation is the process of determining a large enough number of
common customer criteria to divide a product's total demand into
economically feasible segments.
1. Geographic segmentation: Marketers frequently find it useful to divide the
country into areas in a systematic manner. Standard regions are extensively
utilized by the government, and it facilitates the collecting of statistics, which is
one of the major benefits of adopting this scheme. Most national manufacturers
divide their sales territory into state- or district-based sales territories.
2. Demographic segmentation: This strategy divides customers into
homogeneous groups based on demographic characteristics such as age,
gender, education, income level, and so on. This is thought to be more
meaningful because the focus is ultimately on the client. Because people in the
same group can have more or less identical traits, the variables are easier to
distinguish and quantify than in the first type. For example, in the instance of
shoes, each group's needs and preferences may be assessed with more
accuracy.
(a)Age groups: Manufacturers of specific specialty items usually take into
account age groups. Toys, for Example: Even when parents make
purchases, children have a significant influence. The following is a
breakdown of the market by age groups: (I) kids, (ii) teenagers, (iii)
adults, and (IV) adults.

(b) Family life-cycle: Another way for demographic segmentation is the

family life-cycle. The term "family life cycle" refers to the several stages that
occur in the life of a typical family. 'Decision-making units' are the names
given to these steps (Dumps). The following eight stages are identified using
a widely accepted system: (i) Young, single, (ii) Young, married, no children,
(iii) Young, married, youngest child under six, (iv) Young, married, youngest
child over six, (v) Older, married with children, (vi) Older, married, no
children under eighteen, (vii) Older single, (viii) Others. Although the
distinction between young and old is not obvious, the concept serves as a
good framework for segmenting the entire population into sub-groups for
more in-depth examination.
• (c) Sex: In the consumer market, sex influences purchase
motives; for example, in many products, women demand specific
styles. A bicycle is an illustration of this. This type of
segmentation is beneficial in a variety of ways. One explanation
for this is that more women are seeking employment. This is a
blessing in disguise because a variety of new products, such as
frozen food, are now in high demand, household appliances, etc.
Successful attempts to remove barriers of discrimination against
women have generated many market opportunities.
3. Socio-psychological segmentation:
• The segmentation is based on social class, such as working class,
middle-income groups, and so on. Because marketing is
theoretically linked to one's "capacity to buy," this segmentation
is useful in determining a class's purchasing behaviours.
4. Product segmentation:
• When market segmentation is done on the basis of product
qualities that are capable of meeting particular unique needs of
customers, such a method is known as product segmentation. The
products, on this basis, are classified into:
1. High-end items, such as automobiles and apparel.
2. Maturity items, such as cigarettes and razor blades
3. High-status items, such as most luxuries.
4. Anti-anxiety items, such as medicines and soaps.
5. Products have several functions, such as fruits and
vegetables.
• The benefit of this sort of product segmentation is that it focuses on
disparities between the items that make up marketplaces. This
method is known as a sensible approach when the products
involved have significant disparities.
5. Benefit segmentation:
• Russell Hally was the first to establish the idea of benefit
segmentation. Under this method, the buyers, rather than the
demographic criteria outlined above, provide the basis of
segmentation in this strategy. Consumers are questioned in
order to determine the importance of various benefits they
may expect from a product. There are two types of benefits or
utilities: generic or primary utilities and secondary or
developed utilities. The following table would explain this
aspect.
6. Volume segmentation: Another method of segmenting the
market is by purchasing volume. The buyers in this approach are
purchasers and single unit purchasers. This research can also be
used to examine how different groups of people shop.
7. Marketing-factor segmentation: These methods of
segmentation are based on the responsiveness of purchasers
to various marketing activities. This strategy includes actions
such as price, quality, advertising, promotional gadgets, and
so on. "If a manufacturer knew that one identified group of his
consumers was more receptive to changes in advertising
expenditures than others, he may find it profitable to increase
the quantity of advertising focused at them.
• Markets created on the basis of segmentation:
• Because purchasers' characteristics are never the same, any
market can now be subdivided to a significant amount.
1. Undifferentiated marketing: When the organization's
economies of scale prevent segmentation of the market, the
complete market notion emerges. Differentiation is not required
in the case of totally standardized items with no replacements
available. Firms, such as Coca-Cola, may use mass advertising
and other mass marketing strategies in such circumstances.
2. Differentiated marketing: A company may opt to operate
in many or all market segments and develop various product-
marketing strategies. This also aids in the development of
rapport between the producer and the consumer. In recent
years, most businesses have favored a distinct marketing
strategy, owing to the wide range of consumer demand.
3. Concentrated marketing: Another alternative is to focus
your efforts on a few markets that can provide you with
prospects. 'Instead of spreading itself widely across the
market, it concentrates its forces to acquire a strong market
position in a few areas,' to put it another way. After that, new
items are launched, and test marketing is carried out, and this
strategy is implemented. This technology was used to create a
consumer product called 'Boost' by Horlicks' makers.
• Targeting
• Market segmentation highlights the company's market-segment
opportunities. The company must now assess the various
segments and determine how many and which to serve.
A. Evaluating the market segments
• The firm must consider three elements while evaluating distinct
market segments: segment size and growth, segment structural
attractiveness, and corporate aims and resources.
(a) Segment size and growth: A company's first consideration
should be whether a potential segment is the proper size and has
the right growth characteristics. Large firms prefer large-volume
sales segments and ignore minor parts. Small businesses, on the
other hand, shun enormous segments since they require too many
resources. Companies desire to grow their sales and earnings,
therefore segment expansion is a desirable trait.
(b) Segment structural attractiveness: Even if a section has
ideal size and growth, it may nevertheless be unprofitable. The
following are the five risks that a firm may face:
(i) Threat from industry competitors: If a market niche already has a
large number of competitive competitors, it is undesirable. This
situation could lead to a lot of pricing wars.
(ii)Threats from potential entrants: i.e. from new competitors who, if
they enter the market at a later time, will bring new capacity,
significant resources, and will quickly capture a piece of the
market.
(iii) Threat of substitute products: If there are too many substitute
items in a segment, it will result in brand switching, price wars, low
profits, and so on
(iv) Threat of growing bargaining power of buyers: If the
buyers have strong bargaining power, a segment is
undesirable. Buyers will try to negotiate a lower price and
demand higher quality or services, all at the expense of the
seller's profits.
(v) Threat of growing bargaining power of suppliers: If the
company's suppliers of raw materials, equipment, finance, and
other services are able to raise prices or reduce the quality or
quantity of requested goods, a segment becomes undesirable.
(c) Company objectives and resources: Even if a segment
is fundamentally attractive and has positive size and growth,
the corporation must assess its own aims and resources in
regard to that area. Some appealing sectors may be
disregarded if they do not align with the company's long-term
goals.
• Even if the segment aligns with the company's goals, it must
examine if it has the necessary expertise and resources to
succeed in it. The segment should be dismissed if the
company lacks one or more necessary competences needed
to develop superior competitive advantages.
• B. Selecting the market segments
• The organization expects to uncover one or more market sectors worth
entering as a consequence of assessing several segments. The
corporation must pick which segments to service and how many. This is
the target market selection problem. A target market is a group of buyers
who have similar demands or qualities that the company chooses to
cater to. There are five target market selection patterns that the
organization can explore.
1. Single segment concentration: In the most basic scenario, the
corporation chooses a single section. This company may have limited
capital and wish to focus on a single segment, which could be a segment
with no competitors or a suitable launching pad for subsequent segment
expansion.
2. Selective specialization: A company chooses a number of
segments, each of which is appealing and aligns with the
company's goals and resources. This' multi-segment coverage'
method provides benefit over 'single-segment coverage' in terms of
diversifying the firm's risk, i.e. the firm can continue to earn money
in other segments even if one section becomes unappealing.
3. Product specialization: Here, the company focuses on
marketing a certain product that it offers to a variety of market
sectors. The firm establishes a solid reputation in the specific
product sector as a result of this technique.
4. Market specialization: Here, the company focuses on meeting
the needs of a certain customer segment. The company establishes
a strong reputation for specializing in serving this client group, and
it becomes a channel agent for all new items that this customer
group could be interested in.
• 5. Full market coverage: Here, the company tries to provide all
customer groups with all of the products they possibly require. A full
market coverage strategy is only possible for large companies. Philips
(Electronics), HLL, etc (Consumer non-durables). Large companies that
want to go after the entire market might do so in one of two ways:
undifferentiated marketing or specialized marketing.

• Positioning
• Assume a corporation has done its homework and identified its target
market. If it is the only company that serves the target market, it will
have little trouble selling the goods at a profit-generating price.
However, if a number of firms pursue this target market and their
products are undifferentiated, most buyers will buy from the lowest
priced brand either, all the firms will have to lower their price or the
only alternative is to differentiate its service or product from that of the
competitors, thereby securing a competitive advantage and better
price and profit.
• The manner in which a company will set itself apart from
competitors must be carefully considered. Assume a scooter
manufacturer, such as Bajaj, is concerned that scooter
purchasers perceive most scooter brands to be comparable
and, as a result, choose their brand primarily based on
pricing. As a result, Bajaj may decide to differentiate the
physical qualities of its scooters.
• "Differentiation is the process of creating a set of meaningful
differences between a company's offer and those of
competitors offers”. May be Bajaj asserts that its scooter is
superior to others because of its superior fuel efficiency and
economy, LML claims greatest durability and enhanced
physical characteristics, while Vijay Super claims the highest
mileage. As a result, all scooters appeal to different
purchasers in different way.
• Any scooter company can offer this comparison chart to
potential buyers if they wish. Not all buyers will notice or be
interested in all the ways one brand differs from another.
Such firm will want to promote those few differences that will
appeal most strongly to its market should be targeted.
• Designing is the act of positioning the company's offer so that is
occupies a distinct and valued place in the target customer's minds.
Positioning calls for the company to decide how many differences and
which differences to promote to the target customers.
• How many differences to promote: Many marketers advocate
aggressively to the target market, only one benefit is being promoted.
According to Rosser Reeves, a corporation should design and stick to a
unique selling proposition (USP) for each brand. Godrej refrigerators, for
example, claim to offer automated defrost, whereas Rin claims to have
dirt-blasters. Each brand should choose an attribute and claim to be
"number one" in that category. What are some "number one" positions to
consider?
• The major ones are "best quality", "best service", "best value", ―most
advanced technology‖ etc. If a company hammers at any one of
following positioning points and delivers it properly, it will probably be
best known and recalled for this strength.
• In addition to single benefit positioning, a corporation can try
double benefit positioning, such as Colgate toothpaste, which
claims to clean teeth while also protecting the enamel. There
have even been instances of successful triple benefit
positioning, such as in the case of the machine "washes,
rinses, and even dries the clothing," according to Videocon
Washing Machines. Many people desire all three advantages,
and the challenge is to convince them that the brand delivers
all three.
• What differences to promote: A company should promote
its major strengths provided that the target market values
these strengths. The company should also recognize that
differentiation is a continuous process. It would seem that the
company should go after cost or service to improve its
market appeal relative to competitors. However, many other
• 1. How important are improvements in each of these attributes to the
target customers?
• 2. Can the company afford to make the improvements, and how fast can
it complete them?
• 3. Would the competitors also be able to improve service if the company
started to do so, and in that case, how would the company react?
• This type of reasoning can help the company choose or add genuine
competitive advantages.
• Communicating the Company's positioning: The Company must not
only create a clear positioning plan, but also successfully communicate it.
Suppose a company chooses the "best in quality" positioning strategy. It
must then make sure that it can communicate this claim convincingly.
Quality is communicated by choosing those physical signs and cuts that
people normally use to judge quality. Other marketing aspects are
frequently used to indicate quality. A high price usually indicates a high-
quality item. The product's quality image is also affected by the
packaging, distribution, advertising and promotion.
• The manufacturer‘s the perception of quality is also
influenced by reputation. In order for a quality claim to be
credible, it must be backed up by evidence surest way is to
offer "satisfaction or your money back". Smart companies try
to persuade buyers of their worth and guarantee that this
quality will be delivered or their money will be refunded.
• Motivation and Prescribing Habits of Physician
• Prescription
• The prescription is defined in the art of compounding as, ―an order written by the
physician, dentist, veterinarian or any licensed practitioner directing the
pharmacist to compound and dispense or supply medication for a period
and usually accompanied by directions for its administration or use”.
• The most common type of prescription is one that is used to: A means of
communication between the physician, patient and pharmacist.
1. Legal permission to dispense a prescribed medication. Therapeutic record source.
2. A treatment approach.
3. A method for conducting a clinical trial.
4. Prescription is really a decision of the physician for choosing between different
alternatives. If the decision is to prescribe, what therapy should be prescribed, what
drug should be prescribed, what brand should be prescribed, and so on? The choice is
either sensible or irrational. A rational buyer makes a sensible purchase with certain
goals in mind. Pharmaceutical company advertising and promotion is a valuable source
of information on new drugs.
5. Most of the drugs a physician prescribes are habitual.
6. The attendance at hospital staff meetings seems to influence the
adoption of new drug positively.
7. Formularies probably have a significant effect on prescribing.
8. Control and regulatory measures may have a positive effect on
prescribing.
9. Patients and society expect of the physician that the claims made
in the package inserts are not exaggerated in the case of ethical
drugs.
10. Use of clinical, hospital and community pharmacists for various
types of drug information.
11. Use of physician desk reference for drug information.
• Prescribing Behavioural Studies:
• Regular and continuous study of the prescribing behaviour of
physicians is essential for the pharmaceutical marketers to
formulate gainful strategies. Due to competition between
pharmaceutical companies, the prescribing behaviour of doctors
undergoes frequent and rapid changes. The studies conducted
revealed that:
1. There is a market relationship between the personal preference
for the company and the preference for a given drug for both mild
and severe conditions.
2. Preference for a given company may predispose to ‗trying out ‗a
new product, but will not necessarily influence use over a prolonged
period after the introduction of the drugs.
3. The preference for a given company will predispose the physician
not only towards trying the product, but also toward preferring it.
• Patient Compliance
• The importance of patient cooperation in the treatment process cannot be
overstated. There are several factors affecting patient compliance. A patient
will not be able to cooperate unless the first and most critical step of having
the prescription filled is taken. The expense of therapy based on the patient's
income is occasionally an issue. Drugs with a relatively high cost would
influence compliance in one or more of the following ways: Failure to have
prescription filled.
1. Inability to receive necessary refills.
2. Failure to take the medication as frequently as prescribed.
3. Premature medication discontinuation to save some part‘ for a future
episode of illness.

• On the contrary, it might be concluded that the patient who pays a high price
for a drug might treat the drug and its use with respect and therefore be
more compliant. This also means that everything else being equal, the
patient again becomes less compliant if his drug is paid by third parties.
• Patient motivation
• The mental process, or inclination, to follow the doctor's advice might be
defined as motivation. Consumer motivation may help to determine:
1. The self-medication- prescription mixture for that individual.
2. The ultimate future of drug distribution.
3. Social and legal pressure on present and future marketing system.
• Consumer Motivation: Psychological studies indicate the human activities,
including human behaviour which is directed toward satisfaction of certain
basic needs. When basic needs are fulfilled, he is then free to take care of the
next item on your to-do list:
1. The psychological needs: This category includes hunger, thirst, and sleep,
among other things. These are the most basic requirements, and unless they are
met, other needs are irrelevant.
2. The safety requirements: These are requirements for economic and social
security rather than physical safety.
3. Belonging and love are essential: The requirements for affectionate
relations with individuals and recognition in society.
4. The esteem needs: People need self-esteem, a favourable
opinion of oneself as well as the opinion of others in the
society. The fluffiness of these needs gives a sense of self-
assurance and usefulness to the world.
5. The need for self-actualisation: This is the desire to
achieve to the maximum of one‘s capabilities.
6. The desire to know and understand: This needs to the
process of searching for meaning in the things around us.
7. Aesthetic requirements: This is the desire for beauty.
• Consumer Decision Making in Health Matters
• The following is a list of decisions that an individual makes as a
result of their changing sense of well-being:
1. Extent of interference with normal activities.
2. The clarity of symptoms.
3. The symptomatic person's tolerance threshold.
4. The severity and familiarity of the symptoms Assumption
about cause.
5. Assumption about prognosis.
6. Interpersonal influence.
7. Other life crises of the symptomatic person.
8. Assumption that the condition is treatable.
9. Managing first impressions.
• These considerations play a part in the patient's complicated
decision-making process as he seeks his illness carrier.
Factors That Motivate a Prescription
• The factors that influence motivation prescriptions from
clinicians can be broadly categorized in five factor groups.
They are
1. Patient-Doctor relationship
2. Medical Representative factors
3. Promotional factors
4. Economic factors
5. Miscellaneous, which do not belong to any of the above
groups.
1. Patient-Doctor Relationship
Patient-doctor relationship is an important factor, which motivates
prescription from a physician. In the consulting room, there is a patient
of a physician and his interaction with the physician unleash the
complexities of human interaction, which overpower the rational
judgement of a physician, whether to prescribe and what to prescribe.
His scientific knowledge and training ideally should guide him to
decide whether and what to prescribe. He may rationally conclude that
a prescription is not indicated. However, at times he perceives that the
patient expects a prescription. He knows that the patient has been a
regular to his clinic and is apprehended that displeasing him by
denying a prescription may lead him to believe that the clinician is an
under-prescriber. This could possibly lose him a steady patient. His
practice could be at risk. There are sub-factors in this factor group.
They are individually dealt with, in the light of available literature,
hereunder.
a. Patient’s demand for prescription
• Physicians are under increasing pressure to fill prescriptions for patients
bent on receiving prescriptions for one of the advertised medications.
Many doctors write prescriptions that were not always warranted by the
patient‘s condition. Sometimes patient demand could be the most
frequently mentioned motivation for over-prescription of drugs.

b. Patient demand for generic prescription

• A generic drug is an un-branded drug. After the expiry of a patent, the
copy of the original patent product sold in the market a generic form of a
drug is what it's called. It is labelled using only the active pharmaceutical
ingredient (API). Hospitals and institutions buy generic drugs in bulk
quantity, and prices and margins in this market are much lower than in
the retail segment. The generic products enjoy low unit margins
compared to patented prescription drugs. It is a market with high volumes
but low margins.
• The global market of generic drugs will be $533 billion by 2021
from $352 billion in 2016 at a compound annual growth rate
(CAGR) of 8.7%, from 2016 to 2021.
• The Indian pharmaceutical companies are well positioned to
exploit the overseas generic market due to high process
development skills, and low manufacturing cost base.
• A generic pharmaceutical company, in the developed world,
wishing to market an equivalent generic to an innovator‘s
patented product uses a significantly less costly and faster
process, called the Abbreviated New Drug Application (ANDA).
• It is important to understand that the generic manufacturer
relies on the safety and efficacy data provided earlier by the
innovator. He only has to prove to the product licensing
authority that his product is technically equivalent to the
• Many Indian pharmaceutical companies have started producing generic
drugs, which are generally sold at 50% price when compared to their
equivalent branded drugs In India, the rural chemists and doctors prefer
to buy generic drugs because of the price factor.

• Patient’s favourable- unfavourable attitudes towards a drug

• Researchers have observed that less attention has been paid to patient‘s
feelings toward a treatment therapy. It is also a fact that on several
occasions the encashment of a prescription depends upon patient‘s
favourable-unfavourable attitudes toward a drug.
• A major factor for patients attachment to the drug is its familiarity and
their reliance on the drug. Such patients mostly succeed in achieving
their objective of getting a prescription for the drug during consultation,
despite the clinician‘s reluctance to prescribe. It is therefore suggested
that, if a patient has unfavourable attitude towards a drug, the clinician
will not prescribe the drug.
2. Medical representatives
• Way back in 1850, a medical detail man, for the first time in history,
knocked on the door of an American clinician and requested to spare a few
moments from his time. More than 150 years later, the dialogue, or at
times the monologue (!) still continues, and the clatter is ever increasing.
The present day medical detail man or a medical representative or a
professional sale representative (PSR) is armed with information and
specialized training, and empowered to extend favours, gifts and trinkets
to the physicians.
• Medical representatives are indisputably the single most effective tool that
the pharmaceutical companies employ to convince the physicians to
prescribe their drugs. Medical detail man is the most powerful component
of pharmaceutical promotion. A medical representative is the most direct
point of contact with the physicians the pharmaceutical industry also
supports the living of another 10,000 to 15,000 people employed as
direct-to-physician marketing specialists.
• 20 per cent of the physicians contribute to 80 percent of the
sales generated by a medical representative. Therefore a
small increase in the number of effective prescribers leads to
a major change in the volume of prescriptions. The salaries
and expenses of medical representatives remain the largest
single marketing expenditure of pharmaceutical companies.
3. Promotion
• WHO defines pharmaceutical promotion as, ―all producers' and
distributors' informative and persuasion efforts with the goal of
inducing the prescription, supply, purchase, and/or use of
pharmaceutical products drugs.‖ Thus stimulation of sales, the aim of
promotion is built in the definition of the promotion. Medical agents'
actions, as well as all other types of sales promotion, such as journal
and direct mail advertising, participation in conferences &
exhibitions, the use of audio-visual materials, the provision of drug
samples, gifts, hospitality for the medical field and seminars, etc.
• The pharmaceutical marketers have been using several tools to
effectively promote their products to the medical profession. These
tools together comprise the ‘promotion mix’. The conventional tools
are samples, gifts & trinkets, advertisement & publicity, hospitality
for the medical profession, CME programmes, seminars & workshops,
peer group influence, technical information and evidence, etc.
a. Gifts and trinkets
• It is not an uncommon site to see the doctors' tables topped with innumerable
innocuous looking items bearing brand names/logos belonging to pharmaceutical
companies. Gift relationship between the pharmaceutical industry and the
physicians is unique in the sense that what is implicit is not admitted by either side.

b. Samples
• The original intention behind distributing samples amongst physicians was to
facilitate trials on patients and providing an opportunity to the physicians to have
first-hand experience of using the drug and evaluating its efficacy. In the United
States, some doctors have admitted that they see medical representatives with a
view to receiving free samples from them. It is likely that while doing so they
perhaps dance to the tune of the pharmaceutical companies which want them to
form a habit of using their drug. Once a drug is found helpful, both the doctor and
the patient exhibit hesitation in changing over to other drug. The medical
representatives find it very expedient to provide free treatment of a costlier new
drug for a week for a patient, as they are very sure that this would be more than
compensated, when the patient on being discharged, will be recommended the
drug for use over several months.
c. Authentic information
• Educational intervention appears to positively affect the prescribing behaviour of
physicians. As earlier stated, part of the prescription process is rational, wherein
the physician tries to rely on the repertoire of his professional knowledge to find
out the most suitable drug molecule to be used in a given disease condition. So
far his concern for the patient benefit is genuine, and he will be guided by
unbiased technical information on the pros and cons of the use of a particular
medicine.
• Therefore, it is proposed that, Product information from authentic sources
positively affects the prescription behaviour of physicians.

4. Price
• Price of medicines is one of the strongest elements in pharmaceutical marketing
mix. It is also, unfortunately, the most often misused element. The supply cost of
branded drugs should include the cost of investment in research and
development, an amortization of the cost of R&D even when it fails to deliver a
commercially viable and marketable product, the cost incurred on the
establishment and maintaining the manufacturing facility, the cost of meeting
various regulatory requirements, product inputs, cost of marketing them to
• The pharmaceutical sector is unique in this regard. It is a
seller‘s market. The ultimate consumer, the patient, has no
choice in the matter of a course of treatment, as the
interface between the product and the patient is the doctor,
for whom the issues of price and affordability are secondary,
or the pharmacies whose interest is in selling medicines at
higher prices. As far as the demand part is concerned, it is up
to the marketing department of a pharmaceutical company.
As long as the marketing department is successful in
convincing the doctors that a particular drug is the best in its
segment, they continue to prescribe; and the demand
continues to exist and at times grows.
• 5. Miscellaneous factors that affect prescription behaviour
a. Feedback/reinforcement from patients
• Feedback from patients is a major factor, which reinforces the use
of a new drug. A doctor becomes aware of a new drug by journal
articles and advertisements released by pharmaceutical
companies. When a doctor faces a disease condition warranting
the use of such a drug, he considers using the drug; and with his
first use, the process of evaluation starts. If the information
received by him so far is in favour of the drug, he tries the drug on
few patients. If the outcome of the trials is positive, he will use it
in more patients. With each successful trial the doctor would be
inclined to use the drug in more number of patients. Thus
continuous reinforcement will ensure continuous use of the drug,
leading to regular prescription of the drug.
• b. Corporate image of a company or a brand
The technological advancement revolutionized Pharma
Marketing Management the industry and quality could be
easily built up in pharmaceutical products, provided that the
company producing the drugs was capable enough to afford
new technology and trained personnel. Quality can only be
infused in the products, if the producer has a clear and well-
defined intention to do so. Thus the idea of a company being
trustworthy in the matter of quality of drugs became popular.
The corporate image of a pharmaceutical producer and the
brand equity of his products could influence the prescription
habits of physicians.
c. Challenging events
• It is true that most of the changes in prescription behaviour occur after
gradual accumulation of information leading to a change. Nevertheless, at
times some shifts in the prescription behaviour are brought about abruptly
due to some challenging events encountered by the doctors.
d. Volume of patients seen by a doctor
The doctors with large practices use new drugs early in the course of
treatment and are better prescribers. The specialists and well-informed
practitioners, who are generally socially active, are too busy to devote the
required time to read medical literature to keep them update. They
therefore generally depend on the information provided by the medical
representatives and also the promotional information provided by the
pharmaceutical companies for choosing a drug for prescription. Thus it has
been largely held that the physicians who see a large number of patients
would be more favourably disposed to the pharmaceutical companies and
their medical representatives, than physicians who see a relatively fewer
number of patients.
2.5. Market analysis, market and marketing research
• For the pharmaceutical industry, environmental scanning or market
analysis can range from the macro level (movements toward self-care,
political trends) to the micro level (activities and trends within a given
market). It is at the micro level that the industry is "data rich.'' Market is
a term that may imply in a given situation. Its size and growth patterns
arc a fundamental requirement of business. Management needs to
know the characteristics of market they are in, or which they may plan
to enter.
• Once markets have been defined and characterized by market research,
the need for marketing research quickly manifests itself. Although the
two terms are often used interchangeably, it is useful to distinguish
market research-determination and assessment of the
qualitative and quantitative dimensions of a market (however
defined) from marketing research-analysis of the effects of the
various marketing activities of a firm and its competitors.
• Pharmaceutical companies produces and market two types of products.
One type is the prescription product that may be obtained by consumers only
upon the presentation of authorization by a licensed prescriber.
The other is the over-the-counter product that may be purchased without a
prescription.
The primary target of the marketing effort for prescription products is the
population of licensed prescribers in the country, rather than the consumers of the
products. This group having assumed more importance because of their increased
role as decision makers with regard to the specific brand of drug to be dispensed to
the patient. Here, too, however, the focus is on an intermediary rather than on the
ultimate consumer.
The selling of prescription pharmaceuticals to the public also involves some atypical
characteristics. Professional licensure is required for an establishment to stock and
sell prescription products. Further, the seller (or dispenser) of these products must
be licensed to do so. The selling of prescription pharmaceuticals to the public is
thus restricted to the comparatively small numbers of pharmacists and pharmacies
in the country, rather than to the substantially larger number of retailers and retail
outlets, which would normally be the case for a consumer product.
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