313 Marketing Midterms

TOPIC 3. Basic Needs

SUBTOPIC a. Safety Needs
Notes o Security, Safety
b. Physiological Needs
TOPIC 1 Pharmaceutical Marketing System o Food, Water, Warmth, Rest

Outline
a) Pharmaceutical Marketing
b) Needs and wants
c) Pharmaceutical Marketing in Phil. Setting
d) Pharmaceutical Markets (Traditional and Non-
traditional)
e) Marketing Management Process in Drug Industry

Pharmaceutical Marketing

A unique bundle of management decisions directed to

satisfy, delight and surprise customers in the pharmaceutical
business, their needs and wants through the exchange of
products and value with others, towards early realization of
desired goals.

Needs Wants
Medicines Generic or Branded
Local or Multinational Company
Drugstore Air-conditioned or Non-airconditioned
Glass doors or steel bars
Personnel Licensed Pharmacist
College Undergraduates
Store Front Neon Signboard
Lay Outs Acrylic Plastic
Wooden Signboard
Warehousing Single
Multiple Storey Bldg.
Product Alphabetically Arranged
Displays Therapeutic Categories

Pharmaceutical Marketing System in the Phils. setting

Needs VS Wants
 Revolves around large, medium and small drug
Core Marketing Concepts manufacturers and traders operating mostly in Metro
1. Human Needs Manila and nearby Luzon areas
2. Human Wants - expression of needs  Sources of prescriptions:
o Physicians
The needs of an individual or groups may be the same but the o Dentists
extent to which these are satisfied vary and are spelled out in  Authority endorsers:
specific wants (desires). o Pharmacists
o Pharmacy-aides
Maslow’s Hierarchy of Needs o Salesclerks
o Nurses
1. Self-Fulfillment Needs (Self-actualization)
 Pharmaceutical companies employ in their marketing
- Achieving one’s full potential, including creative
concept
activities
o Total Quality Management (TQM)
2. Psychological Needs
o Total Quality Leadership (TQL)
a. Esteem Needs
o Prestige and feeling of accomplishment  Training and development in marketing and related
b. Belongingness and Love Needs fields are done on a continuing company-to-company
o Intimate relationships or friends basis in order to deliver desired results in terms of
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sales, market growth, market share, profitability and 6. Analyze the pharmaceutical marketing data, both
leadership. from internal and external sources
7. Check and cross-check the deductions resulting from
Pharmaceutical Market the market analysis:
a. Assumptions
A. Traditional Markets b. Hypothesis
1. Drugstores (Community Pharmacy) 8. Make assumptions regarding the effect of factors that
a. Wholesalers cannot be measured or forecasted:
b. Retailers a. Government restrictions
2. Hospitals b. Health-related issues
a. IPD 9. Convert the deductions and assumptions into specific
b. OPD product and territorial area, regional forecasts and
c. ER quota: that are realistic and achievable for the period
3. Industrial clinics 10. Apply these to the company’s sales and marketing
a. PLDT operations by quarter or semester in measurable
b. San Miguel terms
c. Meralco 11. Review actual performance against targets and revise
d. PAL forecasts periodically
e. SSS
f. AFP
4. Medical Clinics/Dispensing Physician Types of Forecasting Objectives

B. Non-Traditional Markets 1. Short-term forecast – planning the overall current

1. Groceries and supermarkets policy and assessing current developments like hiring
2. Trading stores and sari-sari stores of workers or laying-off casuals
3. Non-governmental organizations (NGO) and socio- 2. Budget forecast – preparing an annual budget at the
civic charitable organizations – for medical missions, corporate or divisional level for working capital
apostolic works requirements, cash flow, quota and advertising
4. Online platforms budget
3. Long-term forecast – covers long period from 3 -30
Marketing Management Process in Drug Industry years for possible expansion and diversification

1. Analyze market opportunities – design and install

marketing research and marketing information TOPIC 2 Market Segmentation & Positioning
system to solidly back-up marketing decisions
Outline
2. Selecting target markets – choose only specific a. Market Segmentation
segments that can profitably be served better than b. Market Targeting
direct competitors c. Market Positioning
a. Demand measurement and forecasting d. Market Mix
b. Market segmentation
c. Market targeting Market Segmentation
d. Market positioning
 The process of classifying customers into groups
Steps in Forecasting with different needs, characteristics, and behavior
 A market segment consists of consumers who
1. Determine the purposes for which forecasts are to be respond in a similar way to a given set of marketing
used – production, marketing requirements, stimuli.
budgeting, etc.  Ex.:
2. Divide company products into homogenous groups o Antibiotics from MNCs
such as OTC, ethical drugs or by product divisions. o Generic antibiotics
3. Determine the factors affecting the sales of each
product category like demand, competition. Types of Market Segmentation
4. Choose the forecasting method best suited to the job
like percent to net sales. 1. Geographic Segmentation
5. Gather all the marketing data such as:  Consists of creating different groups of
a. Sales history containers based on geographic boundaries.
b. Market trends 2. Demographic Segmentation
c. Consumer attitudes and awareness for the  Dividing the market through different variables
last 3 years such as age, gender, income, etc.
3. Psychographic Segmentation
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 Consists of grouping the target audience based a. Enervon C – “Anti-stress Formula”

on their behavior, lifestyle, attitudes and b. Revicon Forte – for “Reserve energy”
interests. b) On the needs they fill or benefits they offer
4. Behavioral Segmentation a. Alaxan tablets – “muscle relaxant”
 Focuses on specific reactions and the way b. Enervon HP Powder – “body resistance
customers go through their purchasing processes. builder”
c) According to usage Neozep tablets – can be taken at
the onset of colds, for stuffy nose
Market Targeting

1. Drug products in several formulas Marketing Mix

a. Drops (pediatric market 1-9 months old)
b. Liquid (pediatric market 1- 12 yearsold) Set of controllable marketing variables that the firm blends
c. Tablet or capsules (adults market 13 yrs old to produce the response it wants in the target market.
and above)
2. Health products – all age groups 4P’s of Marketing
3. Cosmetic products – female markets, young adults)  Product – goods and services
4. Biogesic - upper class market  Price – amount of money customers have to pay to
5. Medicol -C. D, E markets obtain the product
6. Unilab Paracetamol tablets - Generic conscious  Promotion – activities that communicate the merits
market of the product
 Place – company activities that make the product
Market Positioning available and visible to target consumers at the right
place, right time, right quantity, right cost and right
Arranging a product to occupy a clear, distinctive and condition.
desirable place relative to competing products in the minds of
target consumers.
1. Mercury drug – positioned as a drug outlet that sells Managing the Marketing Efforts in the Health Care
fresh and low piced drugs and health-related products Business
: “mura na, bago pa”
2. Unilab generics – company that markets generic 1. Market leader strategies – pursue expansion,
drugs investment, innovation, assess threats, launch new
3. Medicol – positioned as effective pain reliever: “safe products
even for pregnant women” 2. Market challengers – aggressively attack
4. Biogesic – positioned as a safe and potent pain competitors to get market share, looks for weakness
reliever for paracetamol: “the world’s safest pain of market leaders
reliever” 3. Market followers – choose to follow than challenge
5. Neozep –“cold speacialist” the market leaders for a stable market
4. Market nicher – small firms that specializes in
serving niches that major competitors overlook
Product Position

A complex set of consumers’ perceptions, impressions and TOPIC 3 Product Mix

feelings that they hold for the product compared with
competing products. Outline
a) Product
These are buying-decision making; consumers organize b) Product Formats
products into categories – they POSITION products, c) Multibranding decisions
services and companies in their mind d) Packaging decisions
e) Product mix
 Target Audience f) Product lifecycle
 Unique Selling Propositions
 Product Benefits
 Competitors Product
 Promotion
 Positioning Statement Anything that can be offered to the market for attention,
use or consumption that might satisfy a need or want of the
target market.
Positioning Strategies

a) On specific product attributes Product Formats

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The dosage form of the product.  Shipping package – used to store identify and ship
 Capsules the product to target markets.
 Tablets
 Liquid  Label– consists of printed information in accordance
 Suspension to FDA labelling guidelines
 Vials or ampules
 Powder Product Mix
 Lotion
 Spray Product assortment
Set of all product lines and items that a particular seller offers
Brand or Generic Name Decision for sale to buyers.

 Brand – a name, symbol or design or combination of Antibiotics Amoxicillin

them intended to identify the goods or services. Cough-colds Carbocisteine
 Brand mark – the part of the brand that can be Analgesics Paracetamol
recognized but is not utterable such as a symbol, Vitamins / Minerals Multivitamins
design or distinctive lettering. Antihypertensive Amlodipine
 Brand name – part of the brand that can be Antihistamines Loratidine
vocalized, utterable.
 Trademark– brand or part of the brand that is given Pharmaceutical Product Life Cycle
legal protection
 Copyright – the exclusive legal right to reproduce,
publish and sell the matter and form of literary,
musical or artistic work.

Blanket Family Name

Blanket Family Name Brand Extension Decision

Enervon Family Neozep Tablet
Enervon C Tablets Neozep Syrup
Enervon C Liquid Neozep Otic
Enervon Drops Neozep Medicated Cold
Rub

Multibranding Decision
1. Introductory stage – period of very low sales
The seller develops 2 or more brands in the same drug product during the first few months
category or same generic equivalents. 2. Growth stage – period of increasing sales & profit
3. Maturity stage – slowing down of product’s sales
Advantages volume reaching a plateau or remaining at constant
 More shelf space at the selling area volumes
 Loyalty to the brand of the customers 4. Decline stage – continuous drops in sales of most
 Healthy competition within the manufacturer’s product formats and brands at a low level for many
organization year
 Attracts several target market segments

Multibranding Decision TOPIC 3 Price Mix

 Packaging– marketing activity of creatively Outline

designing and producing the appropriate container or a) Definition
wrapper for a drug product suitable to target market. b) Factors influencing price
c) Pricing problems in the Philippines
 Primary package – product’s immediate container d) Pricing strategies in drug industry
(bottle, foil pack) e) Principles in building a drug price policy

 Secondary package – material that protects the PRICE

primary package and that is thrown away when the
product is to be used like cardboard box of the bottle.  The amount of money charged for a product or
service.
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C. End users may eventually stop buying imported

 Values placed on goods and services. drug products after devaluation.

 The amount of money needed to acquire some Pricing decisions are based on competitor’s situation.
combination of other goods and its services
An intellectual guess estimates in terms of raw materials,
 The value expressed in terms of pesos or any stocks inventory, financial capabilities, technical know
other monetary medium of exchange. how, sales organizational strengths or channels of
distribution.
 The sum of the values consumers exchange for
the benefits of having or using the product or
Factors Influencing Price
service.
A. The Market for the Product
a) Bids or quotations- as used in government
1. Market appeal – attractive packaging
transactions in hospitals, industrial firms & related
2. Market characteristics – economically-priced
health agencies.
with benefits
b) Catalogue or list price– used by drug
3. Elasticity of market demand – increase in market
manufacturers in selling to trade outlets
demand due to price decrease
c) Wholesale price– when selling in bulk quantities
4. Expandability of market demand – can be
d) Retail price – used by wholesalers and retailers
achieved by implementing sales promotions and
when selling to consumers or end-users
advertising
e) Net price – cost of products plus tax
5. Pattern of income distribution – based on
f) Billing price – cost of products inclusive of raw
income status
materials, labor and overhead
a. Affluent
g) Rentals/allowance - amount paid by
b. Middle income
manufacturers to trade outlets monthly for product
c. Poverty line
displays
B. Costs of the Product
Notes
1. Lower production costs – using economies of
scale
 Who decides for the price of drug product? 2. Higher selling costs – occurs when initiating
o Marketing and Sales Managers have the massive advertising and personal selling; when
cost of operations increases
primary responsibility:
3. Joint costs – where multi-product company
 1. Initiation of price changes
allocates costs of marketing and production
 2. Price determination
 3. Formulation of price policies
 4. Price administration
Major Considerations in Setting Price

Low Price High Price

PRICING
No possible profit at this No possible demand at
Pricing is considered an art. price this price

To balance the various factors to which no price weight

Factors Affecting Price Decisions
can be attached, the objective is to optimize profit or
reduce losses or maintain market share at all cost.
Internal Factors External Factors
 Marketing  Nature of market
This is done towards the attainment of short or long range
objectives and demand
goals for a specific product or product line.
 Marketing Mix  Competition
strategy Pricing  Other
Pricing is a game!  Costs Decisions environmental
 Organization for factors
Companies are actually guessing how the market will react pricing a. Economy
to price changes such as: b. Government
A. Possible shifting to substitutes or shifting to regulations
competitor’s products.
B. Price decrease may lead to increased demand
Pricing problems in the Philippines
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When is pricing a problem to drug companies? Principles in building a drug price policy
 When a company sets price for the first time
 When inevitable circumstances lead a company to a) Price must give enough profit to keep the invested
consider initiating a price change – due to inflation capital and employed labor.
or peso devaluation
 When direct competitors initiate a price change. b) Price should be such an amount which will result
 When drug company produces several drug in placing at a profit to the firm by making the
products that have interrelated demands or costs. largest units of production in use.

c) Price should attract new capital to the industry

Pricing strategies in drug industry under normal conditions.

1. Selling below cost – not desirable but sometimes d) Increasing volume should make it possible for the
needed due to the ff. reasons: drug manufacturers either to increase the quality
a. Drug product is not selling resulting to excess without raising or reducing prices.
inventory
b. Product is expiring within 3 months to 1 year e) Average net profit over a number of years should
c. New product introduction form the basis for policy validity instead of profits
d. Loss of leaders in retailing for a single year
e. Marketing costs are too high
f. Increase in volume

2. Selling below competition – done for the purpose of:

a. Gaining fast entry into the desired market
b. Getting a bigger slice of the market
c. Satisfying management decision to dislodge
competition out of the market

3. Competitive selling – following the leader price

policy; introducing specialty drug products

4. Pricing above competition – emphasize value given

and other non price considerations like quality
assurance, after-sales-service

5. Stopping entry of competition – by setting price at

very low levels, product deals (buy 10+1)

6. Psychological pricing strategy

a. Rounded numbers like 8 or 6 create a soothing
effect compared to 7 or 4 which is angular and
creates a jarring effect
b. Small differences in price will be seen as a
bargain price e.g. P599.95 vs P600

7. Promotional pricing - for special events

8. Geographical pricing

9. Discount pricing and allowances – price reduction for

drug outlets and buyers who pay their sales promptly,
additional 3% discount can be given

10. Discriminatory pricing

a. Customer-segment pricing – for senior

citizens 20% discount