Wednesday, July 15, 2009

e-Marketing Research Paper

Abstract
The advent of the Internet has opened a vast new frontier to marketers. The pharmaceutical industry is in its’ infancy in this area. The market audience that they must deliver to is difficult to segment. Specific physicians that treat a specific diagnosis are hard to reach. The same may be said for the patients this industry may try to market their product to. The industry has so far, focused its’ attention on a marketing mix of traditional marketing ideas such as printed materials, educational materials, and the traditional sales force. Combining the traditional methods with online information they have discovered a successful pattern. This industry has found that market positioning to be highly important as patents expires and the market is flooded with generic products.

e-Marketing Strategies Becoming More Effective in the Pharmaceutical Industry
The technology that is available today has changed the marketing strategies for most businesses. The traditional marketing methods such as of print, television, and direct mailings are being complemented with the use of e-marketing strategies. E-marketing in the healthcare arena is an information providing service. The pharmaceutical industry is currently developing ideas and strategies on how to use the Internet for marketing purposes. The following paper will discuss current and future ideas, problems, and needs of this industry’s use of the Internet as a marketing tool. William (Bill) Hokanson, Senior Sales Manager for Novartis Pharmaceutical provided a great deal of information during an interview on October 24, 2003. Mr. Hokanson deals primarily with the Oncology division of Novartis Pharmaceutical and manages a Midwest sales force of twelve sales representatives covering four states.

Traditional and e-Marketing Strategies
Today, the use of the Internet as a marketing tool is in its’ infancy for the pharmaceutical industry. Rebak (2002) states, “Since early 1996 when Claritin.com first appeared on the scene, hundred of pharmaceutical e-marketing initiatives have been launched.” Although there has been considerable change in these initiatives, there has been far too many that have not. Hokanson mentions that most oncology companies continue to consider e-marketing as part of any new product that they launch. However, e-marketing continues to be a small supplement to the traditional methods of utilizing the sales force, MD speakers, conventions, and journal advertisements to name a few. One of the reasons e-marketing is only a small part of new product launches may be the target audience. Rebak (2003) continues to state that as the web becomes less “new” the pharmaceutical industry marketer must learn how to integrate this new method into the marketing mix.

One of the most important rules of marketing is to know your target audience. The introduction of a new drug into the market causes this target audience to become very specific or segmented. Market segmentation and positioning are critical activities in product design and are crucial to ensure that product features match the requirements of the target customers (www.betterproductdesign.net). One challenge the pharmaceutical companies face with e-marketing continues to be targeting or accessing the correct physician. Hokanson speaks specifically of e-marketing to Oncologists when mentioning that advertising can be accomplished on a medical website. The question that must be answered then is, how do you determine that this particular web site is visited by the to Oncologists that you are attempting to reach? Direct market is just as perplexing as the web site advertising. If a company desires to email the physicians directly, how do you obtain their address and if you discover their address how do you determine that they will review the information?

This is where traditional marketing strategies are employed. Today most pharmaceutical companies will make available detailed information, including results of clinical trials, over the Internet. The traditional sales person will visit the specific physician; discuss the drug and deliver enough literature to create curiosity. This information will almost always contain the phrase “Additional information may be found at www.wherever.com.” Once the physician visits the web site the company may be able to gather additional information from the physician for future e-marketing use.

Another method the pharmaceutical companies use to improve success of e-marketing is including “value ads” into their online messages or advertisements. An example of a value adds would be placing a statement in their advertisement such as “Click here if you want samples of XXXXX to be delivered to you office”. The theory behind this method is if the physician makes the request, they are obviously interested in your product. The marketer then has the opportunity to gather helpful information about the particular physician at that time. The additional benefit to this method is it provides the sales representative a means to visit the physician in order to personally discuss the product in greater detail while delivering the sample drug. According to Mr. Hokanson, e-marketing by utilizing value ads such a samples or educational materials is quite successful.

Product Branding
According to Mr. Hokanson, market research indicates the “branding” of a product is improved if the physician sees a combination of pharmaceutical representatives personally detailing a product and the use of additional advertising methods such as printed materials or electronic advertisements. He points out that this market research demonstrates that if a physician observes an electronic advertisement that promotes a specific drug but the physician never discussed this drug with the sales representative, the impact of the electronic advertisement is likely to be minimal. However, if the physician discussed this drug with the sales person and sees the electronic advertisement, the recall of the drug’s attributes increases substantially.

As consumers become more familiar with information technology, they become more curious to explore or hunt for information. The Pharmaceutical industry currently provides web sites that concentrate on their products. The consumer is constantly confronted with traditional marketing that always provides them with an Internet address. They may also simply place the name of a particular drug in any search engine to locate the web site. The Internet is unique in that it can deliver on more than one objective.

The pharmaceutical industry has recognized several trends by consumers from their e-marketing attempts. Mr. Hokanson mentions that patients, like physicians, respond better to a marketing mix of traditional and e-marketing stimulations. Rebak (2003) mentions that market research has determined that the web sites provide the patient with enough information that when they see their physician they will ask them to prescribe a specific drug. Another benefit seen is that these sites can also increase the likelihood of patient compliance and persistency. This results in more sales generating added revenue. The industry is beginning to understand how the Internet can cost effectively influence, affect and change consumer behavior at different point in the healthcare decision making process.

Market Positioning
Market positioning is very important in the pharmaceutical industry. The purpose of positioning is to allow the product to be thought of, as having no substitute even is one exists, so that the brand name sticks to the physician or patient. An example of successful positioning would be brand names such as Coca Cola, McDonalds, and Kodak. Although substitutes exist for all of these products, the consumer overwhelmingly prefers them to all others. This concept is very important in the pharmaceutical industry as patents expire and a host of generic products are introduced into the market. Tylenol is would be brand name in the pharmaceutical area that has achieved successful position. The product sales have remained fairly constant even while generic acetaminophen products are available.

Conclusion
It is obvious that e-marketing is new to the pharmaceutical industry. New strategies must be developed in order to communicate the message to the target market. As new technologies become available to this industry it is important that senior management must be convinced of the importance of testing e-marketing initiatives. The limited success this industry has had in this area may cause many at that level to second guess whether or not to invest financial resources. If senior management buys into the idea and market research assists with relative results, then the result could be that financial issues will be resolved.
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1 comment:

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