The Marketing Audit

A marketing audit is asystematic,

critical,impartial

review and appraisal of the basic goals and policies of the marketing

function, and of the organization, methods, procedures, and personnel employed to implement

the policies and achieve the goals.

What is Marketing Audit

• The marketing audit is a fundamental part of the marketing planning process. It is conducted not only at the beginning of the process, but also at a series of points during the implementation of the plan. The marketing audit considers both internal and external influences on marketing planning, as well as a review of the plan itself.

The External Marketing Environment..

• What is the nature of competition in our target markets?• Our competitors’ level of profitability.• Their number/concentration.• The relative strengths and weaknesses of competition.• The marketing plans and strategies of our competition

A Review of Our Current Marketing Plan

• What are our current objectives for marketing?• What are our current marketing strategies?• How do we apply the marketing mix? (Including factors covered above in (a))• Is the marketing process being controlled effectively?• Are we achieving our marketing budget?• Are we realising our SMART objectives?• Are our marketing team implementing the marketing plan effectively?

The Marketing Audit Process (1)

1.Determining Who Does the Audit

2.Determining When and How Often Audit Is Conducted

3.Determining the Areas to Be Audited

4.Developing Audit Forms

5.Implementing the Audit

6.Presenting the Results to Management

The Marketing Audit Process (2)

1. The audit is conducted by company specialists, company division or department managers, or outside specialists.

2. It may be done at the end of a calendar year, the of the annual reporting year, or when doing a physical inventory.

3. A horizontal audit studies the overall performance of a firm, emphasizing the interrelationship of variables. A vertical audit is an in-depth analysis of one aspect of a firm’s marketing strategy.

4. Audit forms list the topics to be examined and the exact information required to evaluate each topic.

5. Implementation decisions include: the timing and duration, employee awareness, when and how audit is performed, and how the audit report will be prepared.

6. Findings and recommendations are given to management.

Consumer Behaviour

CONSUMER BEHAVIOUR

• THE BEHAVIOUR THAT CONSUMERS DISPLAY IN SEARCHING FOR, PURCHASING, USING, EVALUATING, AND DISPOSING OF PRODUCTS AND SERVICES THAT THEY EXPECT WILL SATISFY THEIR NEEDS.

• STUDY OF HOW INDIVIDUALS MAKE DECISIONS TO SPEND THEIR AVAILABLE RESOURCES <TIME… MONEY…EFFORT> ON CONSUMPTION RELATED ITEMS.

DEFINITION OF CONSUMER BEHAVIOUR

• Individual or groups of acquiring, using and disposing of products, services, ideas or experiences.

• Includes search for information and actual purchase.

• Includes an understanding of consumer thoughts, feelings and actions.

Reasons for studying consumer behavior

• To stay in business by attracting and retaining customers.

• To benefit from understanding consumer problems.

• To establish competitive advantage

STUDY OF• WHAT THEY BUY

• WHY THEY BUY IT

• WHEN THEY BUY IT

• WHERE THEY BUY IT

• HOW OFTEN THEY BUY IT

• HOW OFTEN THEY USE IT

Factors Influencing Consumer Behaviour

I. Cultural

II. Social

III. Psychological

IV. Personal

I. Cultural factorsCultural factors are coming from the different

components related to culture or cultural environment from which the consumer belongs.

Culture and societal environment:-• Culture is crucial when it comes to understanding the

needs and behaviors of an individual.• Throughout his existence, an individual will be

influenced by his family, his friends, his cultural environment or society that will “teach” him values, preferences as well as common behaviors to their own culture.

• For a brand, it is important to understand and take into account the cultural factors inherent to each market or to each situation in order to adapt its product and its marketing strategy. As these will play a

role in the perception, habits, behavior or expectations of consumers.

• McDonald’s is an example of adaptation to the specificities of each culture and each market . Well aware of the importance to have an offer with specific products to meet the needs and tastes of consumers from different cultures, the fast-food giant has for example: a McBaguette in France(with French baguette and Dijon mustard), a Chicken Maharaja Mac and a Masala Grill Chicken in India(with Indian spices).

• While all the ingredients used by McDonald’s in Arabic and Muslim countries are certified halal. The fast food chain not offering, of course any product with bacon or pork.

I. CULTURAL FACTORS

•Social factors are among the factors influencing consumer behavior significantly. They fall into three categories: reference groups, family and social roles and status.

Reference groups and membership groups :

•The membership groups of an individual are social groups to which he belongs and  which will influence him. The membership groups are usually related to its social origin, age, place of residence, work, hobbies, leisure, etc..

II. SOCIAL FACTORS

• For example, a teen may want the shoe model or Smartphone used by the group of “popular guys” from his high school in order to be accepted by this group.

• Some brands have understood this very well and communicate, implicitly or not, on the “social benefit” provided by their products.

• Many brands look to target opinion leaders (initiator or influencer) to spread the use and purchase of their product in a social group. Either through an internal person of the group when it comes to a small social group. Or through a sponsorship or a partnership with a reference leader (celebrity, actor, musician, athlete, etc..) for larger groups.

II. SOCIAL FACTORS

• Among the factors influencing consumer behavior, psychological factors can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes.

Motivation:• Motivation is what will drive consumers to develop a

purchasing behavior. It is usually working at a subconscious level and is often difficult to measure.

• Motivation is directly related to the need and is expressed in the same type of classification as defined in the stages of the consumer buying decision process.

• To increase sales and encourage consumers to purchase, brands should try to create, make

conscious or reinforce a need in the consumer’s mind so that he develops a purchase motivation. He will be much more interested in considering and buy

their products.

III PSYCHOLOGICAL FACTORS

Decisions and buying behavior are obviously also influenced by the characteristics of each consumer.

Age and way of life:• A consumer does not buy the same products or services at

20 or 70 years. His lifestyle, values , environment, activities, hobbies and consumer habits evolve throughout his life.

• For example, during his life, a consumer could change his diet from unhealthy products (fast food, ready meals, etc..) to a healthier diet, during mid-life with family before needing to follow a little later a low

• For a brand or a retailer, it may be interesting to identify, understand, measure and analyze what are the criteria and personal factors that influence the shopping behavior of their customers in order to adapt.

IV. PERSONAL FACTORS

• The family is maybe the most influencing factor for an individual. It forms an environment of socialization in which an individual will evolve, shape his personality, acquire values. But also develop attitudes and opinions on various subjects such as politics, society, social relations or himself and his desires.• But also on his consumer habits, his perception of brands and the products he buys.• We all kept, for many of us and for some products and brands, the same buying habits and consumption patterns that the ones we had known in our family.

FAMILY

• The position of an individual within his family, his work, his country club, his group of friends, etc.. – All this can be defined in terms of role and social status.

• A social role is a set of attitudes and activities that an individual is supposed to have and do according to his profession and his position at work, his position in the family, his gender, etc.. – and expectations of the people around him.

• The social role and status profoundly influences the consumer behavior and his purchasing decisions.

SOCIAL ROLES AND STATUS

• For example, a consumer may buy a Ferrari or a Porsche for the quality of the car but also for the external signs of social success that this kind of cars represents. Moreover, it is likely that a CEO driving a small car like a Ford Fiesta or a Volkswagen Golf would be taken less seriously by its customers and business partners than if he is driving a German luxury car.

• And this kind of behaviors and influences can be found at every level and for every role and social status.

• Again, many brands have understood it by creating an image associated with their products reflecting an important social role or status.

SOCIAL ROLES AND STATUS

What is Digital Marketing?

B Pharm + MBA : III Semester 2016

Marketing with the help of technology.

Digital marketing activities are: Search engine optimization (SEO) Pay Per Click(PPC) Content Marketing E-commerce marketing Social media marketing E–books, optical disks and games It also extends to non-Internet channels that provide digital media, such as mobile phones (SMS and MMS),and on-hold mobile ring tones.

What is Digital Marketing• In simplistic terms, digital marketing is the promotion of products or brands

via one or more forms of electronic media. Digital marketing differs from traditional marketing in that it involves the use of channels and methods that enable an organization to analyze marketing campaigns and understand what is working and what isn’t – typically in real time.

• Digital marketers monitor things like what is being viewed, how often and for how long, sales conversions, what content works and doesn’t work, etc. While the Internet is, perhaps, the channel most closely associated with digital marketing, others include wireless text messaging, mobile instant messaging, mobile apps, podcasts, electronic billboards, digital television and radio channels, etc.

Why Digital Marketing Is Important

• Digital media is so pervasive that consumers have access to information any time and any place they want it. Gone are the days when the messages people got about your products or services came from you and consisted of only what you wanted them to know. Digital media is an ever-growing source of entertainment, news, shopping and social interaction, and consumers are now exposed not just to what your company says about your brand, but what the media, friends, relatives, peers, etc., are saying as well. And they are more likely to believe them than you. People want brands they can trust, companies that know them, communications that are personalized and relevant, and offers tailored to their needs and preferences.

Target of Digital Marketing in Pharma

B Pharm + MBA : III Semester 2016

The implementation of digital marketing can be done on:

Health Care Professionals

Patients

Sales Team

Why Is Digital Marketing Important?

B Pharm + MBA : III Semester 2016

Since internet has become an integral part of our lives,the world of pharma is bound to have its own share of internet users.

As healthcare facilities establish point of access between physicians and sales reps , industry has turned to other promotional methods and is increasing use of e-marketing.

E-detailing and online events let the doctors update themselves whervever and whenever they want rather than meeting the sales reps in the middle of their busy schedules.

E-marketing can be carefully controlled and monitored.

Digital Marketing Strategies

B Pharm + MBA : III Semester 2016

Know Your Customer One must know that to whom you are reaching out.

If your customer is a doctor, the marketing personel may use scientific language to explain but the same may not be possible with a patient or the end user.

B Pharm + MBA : III Semester 2016

Reach your customer.

Go beyond individual channel(Physical Appearance).

Through Social Media One can the needs of their customersEg. Sanofi has its own YouTube Channel,which helps them reach their

customers and help the company generate feedback and their needs.

B Pharm + MBA : III Semester 2016

Interact with the customersEngage in Closed Loop Marketing Channels.

“Closed loop marketing”(CLM) is the process by which a pharmaceutical company develops marketing strategies and deploys them through one or more channels to reach their customers (the prescribers) and gain a sound understanding of what happens in the marketplace.

“Closing the loop” just means that sales teams report to Marketing about what happened to the leads that they received, which helps Marketing understands their best and worst lead sources.

Digital Marketing OpportunitiesMedical Portals for Health Care Professionals If implemented properly,this concept can be a benefit to

both,company as well as HCP Benefit to company:o It reduces the overhead costs as it can serve the doctors centrally.

o Establishes a communication channel between company and physician.

o Minimal effect of vacant territory i.e. Even in the absence of sales rep,all the learnings are present in the digital nervous system.

B Pharm + MBA : III Semester 2016

Benefit to the HCP:o They can update and enjoy company services at their leisure rather than having to meet a pharma

rep at rush hours.

o Updated information of drugs on his desktop/phone everyday along with all other medical updates.

o Saving time on searching for information from the internet.

B Pharm+MBA:III Semester 2016

Awareness portal for patients:

o More and more patients want to know and expect up-to-date information on their condition and treatment,as well as alternative treatment option.

o For the patients the portals are made understandable.

B Pharm+MBA:III Semester 2016

Current Scenario And ChallengesDigital marketing in any sector is a more cost effective and less time

consuming method to communicate with the customers. However,digital marketing comes with its own challenges:

Inadequate company vision: Most of the companies lack a proper vision for digital marketing solutions. The strategies are not clearly defined.A strong management is required to set out objectives.

A Digital Catastrophe : Many pharmaceutical companies have started implementing digital chanels and campaigns ; however the marketeers in the field are unable to execute an overall effective digital strategy . Increased data has resulted in difficulty of analysis.

Strict Regulations: The issue of regulations in each jurisdiction requires close examination prior to any digital campaigns being launched. Life science sector faces more regulations than any other sector. The pharmaceutical sector has to follow the FDA guidelines.

In 2010,FDA issued a warning letter to Novartis to pull back Facebook shares,as the risk information about leukemia treatment drug tasigna provided was inadequate.

Poorly maintained websites

Awareness

Knowledge

Liking

Preference

Conviction

Purchase

• To make a particular brand of a product. (It’s Ours)• Availability in market. (Its there)• To communicate point of purchase. (Where)• To project the distinctive features of the product.(Why

‘use’)• To justify the product.• To take feedback. (What do you think )• Change attitudes.• Fasten the effects process.

Contd…

Integrated Marketing Communications

Major factors affecting change toward segmented marketing

• Shift away from mass marketing• Improvements in information technology

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The New Marketing Landscape

Integrated Marketing Communications

The Shifting Marketing Communications Model

Less broadcasting and more narrowcasting• Advertisers are shifting budgets away from network television to

more targeted cost-effective, interactive, and engaging media

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Integrated Marketing Communications

The Need for Integrated Marketing Communications

Integrated marketing communication is the integration by the company of its communication channels to deliver a clear, consistent, and compelling message about the organization and its brands

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Integrated Marketing Communications

The Need for Integrated Marketing Communications

Integrated marketing communication calls for recognizing all contact points (brand contact) where the customer may encounter the company and its brands

14-14

A View of the Communications Process

Integrated marketing communication involves identifying the target audience and shaping a well-coordinated promotional program to obtain the desired audience response

Marketers are moving toward viewing communications as managing the customer relationship over time

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“ The process of developing and implementing various forms of persuasive communication programs with

customers and prospects Over Time.”

IMC is the coordination and integration of all marketing communication tools, and sources within a company

that maximizes the impact on consumers and other end users at a minimal cost

› Entails the Planning, Creation, Integration, and Implementation of Diverse Forms of Marketing Communications

› Goal of IMC is to Influence or Directly Affect the Behavior of the Targeted Audience.

› Same Communication Message through all the channels of Marketing Communications

The Need for IMC• Conflicting messages from different sources or promotional approaches can confuse

company or brand images• The problem is particularly prevalent when functional specialists handle individual forms of

marketing communications independently

Role of Integrated Marketing Communications

• Marketing communications …• are the “voice” of the brand and are a means by which it can establish a

dialogue and build relationships with consumers.

• allow marketers to inform, persuade, incentivize, and remind consumers directly or indirectly

• can contribute to brand equity by establishing the brand in memory and linking strong, favorable, and unique associations to it.

21st-Century Integrated Marketing• Integrated marketing must keep pace with the ever-changing world of

promotional innovations to help sell products and services• Communications professionals also must be familiar with infomercials, movie

and TV product placements Infomercial. Are program-length commercial TV-Movie Product Placements. Product placement in films and TV shows They are also known as “embedded advertisement” They have become a more intergraded part of movies and TV shows

Finding New Ways to Build Brands• Consumers are driving the trend

• They view brands as a form of self-expression• They know more about brands and the companies that make them• Cynicism about corporations is at an all-time high• They seek and share information with other consumers via the Internet

• Get consumers involved• Apple Computer lets consumers test products in store• Starbucks positions stores as a community gathering place

• Interaction can be the best marketing• MySpace• Facebook• Google

Benefits Of IMCIMC Provides better

Trust among consumers.Effectiveness level than single message strategies.

Brand differentiation.Connection with the company.

PROMOTION IS THE ELEMENT IN AN ORGANIZATION’S MARKETING MIX THAT SERVES TO INFORM, PERSUADE, AND REMIND THE MARKET REGARDING THE ORGANIZATION AND/OR ITS PRODUCTS.

• It includes all the means by which a company communicates directly with potential customers.

• It is an attempt to influence feelings, beliefs, or behavior.

• A blend of communication media that is targeted at creating some form of change (attitudinal / behavioural) in the target audience.

Remember Models of Consumer Buying Behaviour

Awareness

Interest

Evaluation

Trial

Adoption

Mass communication sources - television,press/magazines, radio

Mass communication sources - press/magazines television, radio

Personal sources - relatives, friends, colleagues

Personal sources - sales people, relativesfriends

Personal sources and mass media communication (for re-assurance).

KEY ELEMENTS OF THE PROMOTION MIX• Advertising - any paid form of non personal communication of ideas

goods or services delivered through selected media channels• Selling and Sales Management - the personal interface between a

company and its customers, aimed at achieving a sale. • Personal selling: The direct presentation of a product to a prospective

customer by a representative of the selling organization.• Sales promotion: Demand-stimulating activity designed to supplement

advertising and facilitate personal selling.• Public relations: A planned communication effort by an organization to

contribute to generally favourable attitudes and opinions toward an organization and its products.

• Publicity: A special form of public relations that involves news stories about an organization or its products.

• Direct marketing - Direct communication using direct mail, telephone response media and more recently the Internet

Promotional ToolsPersonal Selling

Branding

Sales Promotion

Public relations

Merchandising

Direct Marketing

ExhibitionsWord of Mouth

Internal Marketing

Corporate Image

Packaging

Sponsorship

Advertising

The Customer

Producer Wholesaler Retailer Consumer

Producer Wholesaler Retailer Consumer

PUSH STRATEGY

PULL STRATEGY

Product flow Promotion effort

• Defining marketing mix• “ Marketing Mix is the set of controllable

tactical marketing tools that the firm blends to produce the response it wants in the market. The marketing mix consists of everything the firm can do to influence the demand for its product” Kotler 12th edition

• Thus, The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market.

Marketing Mix• The concept is simple. Think about another common mix - a cake mix.

All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar!

Marketing Mix• It is the same with the marketing mix. • The offer you make to your customer can be altered by varying the

mix elements. • So for a high profile brand, increase the focus on promotion and

desensitize the weight given to price.

• Traditionally it is comprised of • Product• Price• Place ( Placement)• Promotion ( Communication)• For ease of use Mccarthy named this as 4 ps.

MARKETING MIXPRODUCT PRICE

PLACE PROMOTION

• These elements in the Marketing Mix are in the control of the marketer.

• Therefore marketing Mix is set of controllable elements ( tools) in the hands of the marketer to use to achieve desired targets.

• In other words marketing Mix is used to influence the buyer in the target market to create positive responses towards the marketers product

ELEMENTS OF EXTENDED MARKETING MIX

• People were not buying only tangible goods but they buy many services such as services from banks, insurance companies, hotels, doctors, government agencies etc.

• THEREFOREPeopleProcessesPhysical Evidence Were added to the marketing mix to accommodate the services into marketing.

People• Marketing organisation deals with many stake holders.

All of them are people• Suppliers, distributors, customers, competitors,

government, authorities and many other organisations• Their needs, values, attitudes are different• The marketer has to identify them and treat them well

to deliver the promise that he or she makes.

Process• Process is the ways and means the marketing

activity is delivered.• Efficient processes have to be adopted in

serving customers• Order taking, queuing and waiting time, issue

of estimates, completion of repairs and services, notifying customers of service completion, automation and computerization are aspects that should be dealt in processes.

• If processes fail customer dissatisfaction will appear and it will lead to loss of sales and business.

• Therefore, establishing service standards, capacity development to accommodate customer demands, managing customer contacts are process issues that a marketer should bear in mind.

Physical evidence

• “Physical evidence gives the consumer to refer to and to show other people if necessary. Since service products are usually intangible, the consumer of ( say) an insurance policy will need some written evidence of its existence in order to feel confident in the product”. Jim Blyth- 2005

• Physical evidence includes • Tangible evidence of purchase• Physical environment which surrounds the purchase

Seven Ps in the view point of marketer and the customer

• Marketer customer• Product Customers value• Price Cost• Place Convenience• Promotion Communication• People Consideration• Process Co-ordination• Physical Evidence Confirmation

7 Ps in operation

Satisfying customer needs profitably

ProductPhysical evidence

Process

PeoplePlace

Promotion

Price

Place and distribution decisions

Distribution• Most businesses are dependent on intermediaries to bring their

products to market• Used to move the customer towards the product or the product

to the customer• A set of mechanisms or networks is required via which a firm

“goes to market”• A marketing channel performs the work of moving goods from

producers to consumers • It overcomes the time, place, and possession barriers

Marketing Channel Management‘’ Marketing Channels are sets of interdependent organizations involved in the

process of making a product or service available for use or consumption.”Philip Kotler

“All the organizations through which a product must pass between its point of production and consumption“

A channel of distribution is an organized network or system of agencies and institutions, which, in combination, perform all the activities required to link producers with users and users with producers to accomplish the marketing

task

Channel Level

Manufacturer

Consumer

Level-0 Level-1 Level-2 Level-3

Channel Level• Zero level channel

• Here the goods move directly from producer to consumer. That is, no intermediary is involved. This channel is preferred by manufactures of industrial and consumer durable goods.

• One level channel• In this case there will be one sales intermediary ie, retailer. This is the most

common channel in case of consumer durable such as textiles, shoes, ready garments etc.

Channel Level• Two level channel

• This channel option has two intermediaries, namely wholesaler and retailer. The companies producing consumer non durable items use this level.

• Three level channel• This contains three intermediaries. Here goods moves from manufacture to

agent to wholesalers to retailers to consumers. It is the longest indirect channel option that a company has.

Factors Determining Length of Channel• Size of the market• Order lot size• Service requirements

Integrated Marketing Communications

IMC DefinedIntegrated Marketing Communications (IMC):

“is the coordination and integration of all marketing communications tools, avenues, and sources within a company into a seamless program that maximizes the impact on consumer and other end users at a minimal cost.”

Clow and Baack, 2004, p.8

Elements of Marketing Communications• Advertising• Sales Promotion• Personal Selling• DRM (Direct Response Marketing)• PR (Public Relations)

We will cover these in more detail…

Need for IMC• Market fragmentation has resulted in media fragmentation• Alternative media channels abound

(e.g. mags, cd catalogues, internet sites, kiosks…)• All messages seen as one single message to consumer

NOTE: IMC builds a strong brand identity in the marketplace by tying together and reinforcing all your images and messages.

(Armstrong et. al., 2007, p.470)

Promotion Mix Strategies• PUSH vs. PULL

• PUSHProducer marketing activities to Retailers and Wholesalers who resell to Consumers

• Personal selling, trade promotion by producer and personal selling, advertising and sales promotion by wholesaler/retailer…

• PULLProducer marketing activities directed at consumer to create demand from retailers and wholesalers that then creates demand from producer.

• Consumer advertising, sales promotion…

Advertising

• Mass media advertising reaches large numbers geographically dispersed at low cost per exposure with ability to repeat message with frequency

• PROCESS:1. Set objectives2. Develop strategy

• Message strategy• Message execution

• Slice of life, lifestyle, fantasy, mood, musical, symbolic, technical expertise, scientific, testimonial (see page 478-479)

3. Select media (reach, frequency, impact)4. Evaluate advertising

Sales PromotionShort term incentives designed by marketers for the purpose of encouraging the purchase of a product.

• Consumer promo tools:• Samples, coupons, rebates, price packs, premiums, ad specialties, loyalty programs, point-of-

purchase displays/demos, and contests/sweepstakes

• Business promo tools:• conventions/trade shows and sales contests

Personal Selling• Involves two way personal communications (compared to other IMC tools that

are one-way impersonal)• Organization:

• Territorial, Product, Customer types, Outside vs. inside sales, and team selling• Process:

• Prospect, pre-approach, approach, present, handle objections, close, follow-up• Relationship Marketing:

• Process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.

Types of Sales Representatives1. Deliverer 2. Order taker3. Medical Representative4. Contract Sales Person5. Retailer salesperson

Sales Tasks• Prospecting• Targeting• Communicating / Detailing• Selling• Servicing• Information gathering• Sales Order Booking• CMEs

Workload Approach to Determining Sales Force Size

• Customers are grouped into size classes• Desirable call frequencies are established• Number of accounts/doctors in each size class

multiplied by call frequency• Number of retail pharmacies targeted• Average number of calls possible per month

established• Number of reps equal to total monthly calls required

divided by number possible

Components of Sales Force Compensation• Fixed amount• Variable amount - incentives• Expense allowance• Benefits

Managing the Sales ForceRecruiting

Selecting

Training

Supervising

Motivating

Evaluating

Social Media In Pharma• Marketing: Social media can be used as another channel of

communications to share press releases on new drugs, devices, features, clinical trial results, etc. Social media also can help the industry “toot their own horn” and build trust when it comes to community service, major investments in charities and their commitment to develop new and better treatments for a particular disease process.

Social Media In Pharma• Education: Firms may offer disease-specific educational information

aimed at consumers. This information should present topics broadly and be relatively non-biased. The goal is to help patients understand their disease so that they may better engage with their healthcare providers to improve outcomes

Social Media In Pharma• Connection with Customers/Patients: One powerful way the industry

can use social media is to create patient support groups and communities. These allow like-minded patients to connect and interact—often discussing the benefits of a particular treatment, hospital, doctor, etc.

Social Media In Pharma• Connection with Physician-Customers: Pharma can conduct Twitter

chats with physician-customers, an efficient means of education without the expense (and annoyance) of drug reps in the office disrupting the flow of a busy day with patients. Pharma can engage a large number of physicians at one time with pharma’s own best and brightest scientists and researchers.

Social Media In Pharma• Clinical trials: One of the biggest barriers (and expenses) to the

completion of a clinical trial is enrollment. Nearly 30% of time is spent on recruitment and almost 40% of sites miss enrollment targets. I believe that social media can become a powerful enrollment tool. A recent study showed that social media can effectively bolster enrollment and help researchers achieve enrollment goals in less time with less expense.

Social Media In Pharma• Listening: Social listening can be very powerful. Pharma can identify

unmet needs to innovate and figure out where R&D dollars should go. By listening, an individual company can get an idea for what types of programming is already present in the social space—and how to better innovate and do something new. In addition, social listening can allow a company to learn from the mistakes of competitors.

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• Porter’s Five Forces Model

The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful, because it helps you understand both the strength of your current competitive position, and the strength of a position you're considering moving into.

Conventionally, the tool is used to identify whether new products, services or businesses have the potential to be profitable

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• Porter’s Five Forces Model• Supplier Power

• Here you assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over you, the cost of switching from one to another, and so on.

• The fewer the supplier choices you have, and the more you need suppliers' help, the more powerful your suppliers are.

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• Porter’s Five Forces Model• Buyer Power

• Here you ask yourself how easy it is for buyers to drive prices down. Again, this is driven by the number of buyers, the importance of each individual buyer to your business, the cost to them of switching from your products and services to those of someone else, and so on.

• If you deal with few, powerful buyers, then they are often able to dictate terms to you.

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• Porter’s Five Forces Model• Competitive Rivalry

• What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.

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• Porter’s Five Forces Model• Threat of Substitution

• This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it.

• If substitution is easy and substitution is viable, then this weakens your power.

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• Porter’s Five Forces Model• Threat of New Entry

• Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position.

• If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.

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Product Mix• The Product Mix as defined by AMA is “the full set of products

offered for sale by an organization. It includes all product lines and categories.

• It may be defined more narrowly in specific cases to mean only that set of products in a particular product line or a particular market.

Product Lines : x

Product Mix : y

Product Mix• Four important dimensions of a product mix can be identified.

These are: width, length, depth, and consistency.

• Product mix width -The width is all about the number of different product lines the company carries

• The product mix length refers to the total number of items a company carries within the product lines

• Product mix depth - It refers to the number of versions offered for each product in the product line.

• Consistency refers to how closely related the product lines are in terms of end use, production requirements, distribution channels or any other way

What Is a Market Segment?

A market segment consists of a group of customers who share a similar set of needs and wants.

Segmenting Consumer Markets

Geographic

Demographic

Psychographic

Behavioral

Geographic SegmentationGeographic segmentation divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods. The company can operate in one or a few areas, or it can operate in all but pay attention to local variations.

Demographic Segmentation• Age and life cycle• Life stage• Gender• Income• Generation• Social class• Race and Culture

Behavioral Segmentation Based on Needs and Benefits

Needs and BenefitsDecision RolesUser and Usage

Behavioral Segmentation: Behavioral Variables

• Occasions• Benefits• User Status• Usage Rate

• Buyer-Readiness• Loyalty Status• Attitude

STP• The market segmentation, targeting and positioning (STP)

process is a fundamental concept in understanding marketing and the strategies of firms.

The 9 steps in STP Process

Define The market• First step is to clearly define the market that the firm is interested in.

This may sound relatively straightforward but it is an important consideration.

• For example, when Coca-Cola looks at market segmentation they would be unlikely to look at the beverage market overall.

• Instead they would look at what is known as a sub-market (a more product-market definition). A possible market definition that Coca-Cola could use might be diet cola soft drinks in India.

• It is this more precise market definition that is segmented, not the overall beverage market, as it is far too generic and has too many diverse market segments

Create Market Segments• Once the market has been defined, the next step is to segment the

market, using a variety of different segmentation bases/variables in order to construct groups of consumer. In other words, allocate the consumers in the defined market to similar groups (based on market needs, behavior or other characteristics)

Evaluate the segments for viability• After market segments have been developed they are then evaluated

using a set criteria to ensure that they are useable and logical. This requires the segments to be assessed against a checklist of factors, such as: are the segments reachable, do they have different groups of needs, are they large enough, and so on.

Construct segment profiles• Once viable market segments have been

determined, segment profiles are then developed. Segment profiles are detailed descriptions of the consumers in the segments – describing their needs, behaviors, preferences, demographics, shopping styles, and so on. Often a segment is given a descriptive nickname by the organization. This is much in the same way that the age cohorts of Generation X and Generation Y have a name.

Evaluate the attractiveness of each segment• Available market data and consumer research findings are then are

added to the description of the segments (the profiles), such as segment size, growth rates, price sensitivity, brand loyalty, and so on. Using this combined information, the firm will then evaluate each market segment on its overall attractiveness. Some form of scoring model will probably be used for this task, resulting in numerical and qualitative scores for each market segment.

Select target market/s

• With detailed information on each of the segments now available, the firm then decides which ones are the most appropriate ones to be selected as target markets. There are many factors to consider when choosing a target market. These factors include: firms strategy, the attractiveness of the segment, the competitive rivalry of the segment, the firm’s ability to successfully compete and so on.

Develop positioning strategy

• The next step is to work out how to best compete in the selected target market. Firms need to identify how to position their products/brands in the target market. As it is likely that there are already competitive offerings in the market, the firm needs to work out how they can win market share from established players. Typically this is achieved by being perceived by consumers as being different, unique, superior, or as providing greater value.

Develop and implement the marketing mix• Once a positioning strategy has been developed, the firm moves to

implementation. This is the development of a marketing mix that will support the positioning in the marketplace. This requires suitable products need to be designed and developed, at a suitable price, with suitable distribution channels, and an effective promotional program.

Review performance

• After a period of time, and on a regular basis, the firm needs to revisit the performance of various products and may review their segmentation process in order to reassess their view of the market and to look for new opportunities.

Promotion

• As part of the marketing mix, promotion includes all activities that involve communicating with the customer about the product and its benefits and features. Once a company has worked on the product and price elements, it is time to start a conversation with the consumer about the product. This includes raising awareness through different mediums to increase sales, as well as to create and foster brand loyalty.

Role of Promotion• Promotion is the communication aspect of the marketing mix. It is

creating a channel for conversation with the targeted consumer base. Through promotion, the company aims to attract the customer’s attention and give them enough information about the product to foster enough interest to motivate them to purchase.

PUSH vs PULL

•© Entrepreneurial

Insights

• Push Strategies• As the name indicates, this is when the product is taken to the

customer by the company. This is mostly used when the product is an impulse purchase or if the company has an established relationship with the customer base. Companies may sell directly from their showrooms or at tradeshows etc. Essentially, there is less need to create an advertising buzz and more to make the product readily available at retail outlets and showrooms. Push marketing may focus primarily on short term sales.

• Pull Strategies• In the opposite approach, there is an attempt to pull customers towards the

brand or product. Through mass media campaigns to sales promotions and personal references, a company attempts to create brand loyalty and attractiveness. Pull strategies may attempt to focus primarily on long term brand loyalty then high sales in the short term. A lot of media hype and mass campaigns are required to create sufficient interest and encourage customers to seek out the product on their own.

The Role of Brands• Identify the maker• Simplify product handling• Organize accounting• Offer legal protection

The Role of Brands• Signify quality• Create barriers to entry• Serve as a competitive advantage• Secure price premium

What Is Branding?Branding is endowing products and services with the power of the brand.

What Is Brand Equity?Brand equity is the added value endowed on

products and services, which may be reflected in the way consumers, think, feel, and act with

respect to the brand.

Advantages of Strong Brands• Improved perceptions of

product performance• Greater loyalty• Less vulnerability to

competitive marketing actions

• Less vulnerability to crises

• Larger margins• More inelastic

consumer response• Greater trade

cooperation• Increased marketing

communications effectiveness

• Possible licensing opportunities

Brand Elements• Brand names• Slogans• Characters

• Symbols• Logos

Brand Extensions: Advantages Improved odds of new-

product success Positive feedback effects

Brand Extensions: Disadvantages• Brand dilution• Brand confusion• Damage to parent brand• Cannibalization

Product Mix• Product Mix:

• The total assortment of products and services marketed by a firm.

• Product Line:• A group of individual products that are

closely related in some way.

• Individual Product:• Any brand or variant of a brand in a

product line.

Product Mix Characteristics• Product Mix Width:

• The number of product lines in the product mix.

• Product Line Length:• The number of products in a product

line.

• Product Mix Consistency:• The relatedness of the different

product lines in a product mix.

Individual Product Strategies• Product Life Cycle (PLC):

• Describes the advancement of products through identifiable stages of their existence.

IntroductoryStage

GrowthStage

MaturityStage Decline Stage

TotalMarketSales

Time

The Product Life Cycle

IntroductoryStage

GrowthStage

MaturityStage Decline Stage

TotalMarketSales

Time

The Product Life Cycle Concept is Based on Four Premises

Products have a limited life.

Product sales pass throughdistinct stages, each with

different marketingimplications.

Profits from a product vary at different stages

in the life cycle.

Products require different strategies at different

life cycle stages.

The Diffusion ProcessInnovators

(2.5%)

Early Adopters(13.5%)

Early Majority(34%)

Late Majority(34%)

Laggards(16%)

Five Profiles of Product Adopters

The Diffusion Process

LaggardsLateMajority

EarlyMajorityEarly AdoptersInnovators

"The Chasm"

Technology Adoption Process

PLC Stages and Characteristics

Introductory Stage

• High failure rates• Little competition• Frequent product modification• Limited distribution• High marketing and production costs• Negative profits• Promotion focuses on awareness and

information• Intensive personal selling to channels

Full-Scale Launch of New Products

• Increasing rate of sales• Entrance of competitors• Market consolidation• Initial healthy profits• Promotion emphasizes brand ads• Goal is wider distribution• Prices normally fall• Development costs are recovered

Offered in more sizes,

flavors, options

Growth stage

• Declining sales growth• Saturated markets• Extending product line• Stylistic product changes• Heavy promotions to dealers and consumers• Marginal competitors drop out • Prices and profits fall• Niche marketers emerge

Many consumer products are in Maturity Stage

Maturity Stage

• Long-run drop in sales• Large inventories of

unsold items• Elimination of all nonessential

marketing expenses

Rate of decline depends on change in tastes or

adoption of substitute products

Decline Stage

PLC Length and Shape

Sales Sales Sales

TimeTime Time

Style Fashion Fad

PLC Marketing StrategiesStage Objective Marketing Strategy

Introduction Awareness & trial Communicate benefits

Growth Usage of firm’s brand Specific brand communication, lower prices, expand distribution

Maturity Maintain market share Sales promotion, drop price,Extend life cycle expand distribution, new uses

& new versions of product

Decline Decide what to do Maintain, harvest, or divestwith product

MANAGING THE PRODUCT LIFE CYCLE

Alter product qualityEnhance performance

Change appearance

• Modifying the Product

• Modifying the Market

Finding New Users Increase use Create new use situations

EXTENDING THE PRODUCT LIFE CYCLE- Repositioning

• Trading Up-add bells & whistles to raise price

• Trading Down- remove bells & whistles to lower price

• Downsizing-reduce contents but maintain price

Reacting to a Competitor’s Position-never compete head on

Catching a Rising Trend-baby aspirin is now low dose aspirin to reduce heart attacks

Changing the Value Offered

Limitations of the PLC1. The life cycle concept applies best to product

forms rather than to classes of products or specific brands.

2. The life cycle concept may lead marketers to think that a product has a predetermined life, which may produce problems in interpreting sales and profits.

3. It is only a descriptive way of looking at the behavior of a product and the life cycle can not predict the behavior of a product.