Lecture 5 (marketing & sales) Flashcards
What is the definition of marketing according to the American Marketing Association?
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value to customers, clients, partners and society at large.
Who is the father of modern marketing?
Philip Kotler
What is the definition of marketing according to Philip Kotler?
Marketing is the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit.
Give a short definition of marketing.
Meeting the needs of your customers at a profit
What is ‘industry’ and ‘market’?
industry - a collection of sellers
market - a collection of buyers
industry communicates with market and the market provides the industry with the information –> exchange of goods/services and money
What is ‘marketing mix’?
A set of marketing tools to pursue marketing objectives in the Target Market
What are the 4Ps of marketing mix?
Product
Price
Promotion
Place
What are the constituents of ‘product’?
Product variety
Quality
Design
Features
Brand Name
What are the constituents of ‘price’?
List price
Discounts
Payment period
Credit terms
What are the constituents of ‘promotion’?
Sales promotion
Advertising
Sales force
Public relations
Direct marketing
What are the constituents of ‘place’?
channels
coverage
locations
What is brand equity?
customers’ perceived value of and experiences with the brand /company of a particular product or service
high perception = positive brand equity
What is the advantage of having a positive brand equity?
- increase market share
- charge premium prices
- easier to expand product line due to positive brand experience and association
How have marketing philosophies evolved?
The production concept –>
The product concept–>
The selling concept–>
The marketing concept
What is the production concept?
consumers primarily prioritize the availability of products and competitive pricing
–> Businesses focus on improving production efficiency, reducing costs, and ensuring broad distribution
What are some examples of ‘the production concept’?
wide range of affordable goods available on sites like Amazon and Taobao
What is the product concept?
Assumes consumers favor products that offer high quality, outstanding performance, and innovative features.
–> companies to focus on developing superior products.
What are some examples of ‘the product concept’?
high-end luxurious brands like Louis Vuitton and Gucci, as well as prestigious watches such as Patek Philippe and Rolex.
What is the ‘selling concept’?
companies need to aggressively sell and promotion their products to stimulate more buying. ie to sell what they make rather than what market wants
What are some examples of ‘the selling concept’?
advertisements. Personal selling , special deal / bonus promotion.
What is the ‘marketing concept’?
To find the right customers and fill their needs with the right products / services
What are the differences between the selling concept and the marketing concept?
Selling focuses on the needs of the seller
Marketing focuses on the needs of the buyer.
What are difference in starting point, focus, means and ends between the selling concept and the marketing concept?
selling concept:
starting –> factory
focus –> products of sellers
means –> heavy selling and promoting
ends –> profits through high sales volume
marketing concept:
starting –> target market
focus –> customer needs
means –> integrated marketing
ends –> profits through customer satisfaction
What are the 4 key pillars of marketing?
- target marketing
- customer needs
- Integrated marketing with cross-functional teams
- Profitability
How to carry out ‘integrated marketing with cross-functional teams’?
Utilize all the company’s departmental resources to serve the customers needs – teamwork amongst all departments.
–> Sales force and marketing team work together
–> Marketing and sales department to be embraced by other departments
Give an example where marketing and sales teams work with other teams to carry out integrated marketing.
work with financial dept to design special payment terms for key customers, Manufacturing dept to incorporate input from M&S to produce more convenient packings for customers
What are the major market segmentation variables?
- demographic
- geographic
- psychographic
- Behavioural
Why is it important to identify market segments?
Companies cannot serve all customers, as they are too numerous and diverse in their buying behaviour.
What does a market segment consist of?
customers who share similar set of wants
In evaluation and choosing the market segments, what must a company look at?
segments’ attractiveness and company’s objectives and resources.
What is meant by demographic?
age, family size, gender, income, education.
religion
What is meant by geographic?
Nations, States, regions, population, language, climate
What is meant by psychographic?
Personality traits, lifestyles, values
Give examples of some divisions under ‘psychograhic’ segment?
“Thinkers” for durability, functionality, value in products.
“Experiencers”: young, impulsive, seek variety, excitement . Spend more on fashion, socializing activities.
What is meant by behavioural segment?
Behavioral traits( profiles) of customers when they make purchasing decisions
e.g. purchase behaviour based on price / prefer brands .Buying habits like more buying in special occasions Xmas
What are the segmentations in pharma market?
1 demographic
2. medical specialties
3. govt vs private sector
4. high potential (heavy users) vs low potential
5. Innovators (KOL) vs followers (early adopters/later adopters)
What is the STP marketing model?
Segmentation (divide market into segments)
Target markets (select attractive segments)
Positioning (position product in target market)
What is meant by ‘positioning’?
Positioning is the act to differentiate the specific product attributes ( features, quality , benefits) to occupy a distinctive place in the target market.
–> distinct benefits
What is corporate strategic planning?
An organization’s process of defining its strategic direction, making decisions and optimize resource allocation to pursue strategic objectives
What are the key activities of strategic planning?
-Assessing individual business strength (growth rate, Market share, profitability) and identify strategic businesses for investment
-For each identified strategic business, develop strategy and allocate resources
What are the key activities of strategic planning for a biopharma company?
- Identify and establish strategic business units(SBUs)
- assigning resources to each SBU.
- Planning for new business, downsize / terminate older business
- sell older business to another
company
5.SBU planning - identify and establish marketing pan for each key product
What are some strategic business units (SBUs) in a biopharma company?
Cardiology BU, Oncology BU, Women Healthcare BU
Each strategic business unit (SBU) requires its own business strategy.
True or False
True
What is meant by ‘a marketing plan’?
A comprehensive document which summarizes the situation about the target market and indicates how the company plans to reach its marketing objectives
–> direction and focus for a product
–> tactical guidelines for marketing program
–> financial allocations
What period does a marketing plan cover?
One year for new product, with forecast up to 5 years
One year for existing product, with forecast up to 2-3 years
What are the contents of a marketing plan?
- executive summary and table of contents
- current market situation
- customers
- product
- situation analysis (SWOT analysis)
- objectives
- marketing strategy
- action plans
- financial projection
-implementation and control
What is SWOT analysis?
Strength, Weakness, Opportunity, Threat
What does the marketing strategy entail?
- introduction strategy and pricing strategy
- advertising and promotion
- communication strategy ( positioning statement, unique selling points)
- sales force promotion
-distribution channels
What is market research?
The process of collecting vital information about the potential customers of target market, market situation and competition
What are some questions that are to be answered during a market research?
How big is the market?
Whats happening in the market now?
Who are our customers?
Who are our competitors and what are they doing?
What is the economic environment and government policy?
What is the market research process?
- Define the research objectives
- Develop Research plan (primary vs secondary data)
- collect info and data compilation
- analyse data using statistic models
- present findings to management and make recommendations
- company will weigh and make decision
What is PLC?
Product Life Cycle
What does the product life cycle consist of?
Introduction
Growth
Maturity
Decline
What happens at the introduction stage of PLC?
Slow sales growth, heavy promotional expenses, high initial distribution cost, profit nonexistent/negative.
What happens at the growth stage of PLC?
Rapid increase in sales with more customers if product proven to be a success.
High promotional expenses
Increase in distribution network
What happens at the maturity stage of PLC?
Sales growth rate slows down.
Flat promotional expenses/Reduced.
Profit stabilize/falls because of increased competition
Objectives: to maintain marketshare
What is the objective during maturity stage of PLC?
to maintain marketshare
What happens at the decline stage of PLC?
Sales goes down, reduction in promotional expenses.
–> profit slows down
What are the different strategies at the introduction stage of PLC?
- rapid-skimming strategy
- slow-skimming strategy
- rapid-penetration strategy
- slow-penetration strategy
What is the rapid-skimming strategy of the introduction stage of the PLC?
High price and high promotional expenses
–> lots of noise and high awarenedd
-Most of the innovative pharma products with high sales expectations employ this strategy
What is the slow-skimming strategy of the introduction stage of the PLC?
High price and low promotional expenses.
What is the slow-skimming strategy suitable for?
For a niche market / limited market size like rare diseases
e.g. Roaccutane (Roche) for severe form of acne, Kaftrio for Cystic fibrosis
Give example of 2 products that were introduced using the slow-skimming strategy
- Roaccutane (Roche) for severe form of acne, promoted initially to dermatologists only.
- Kaftrio for Cystic fibrosis - ultra high price at 275K euros per patient per year (orphan drug for rare disease)
What introduction strategy is suitable for a niche market product or a limited market size product?
slow-skimming strategy
What is the rapid-penetration strategy of the introduction stage of the PLC?
Competitive pricing, heavy promotion to get fast market penetration and market share.( market is large)
What kind of a product is rapid-penetration strategy acceptable for?
Product with improved formula/improved product profile can employ this strategy when introducing a slightly better product and the market demand is huge
e.g. AstraZenica launching Crestor to compete with Lipitor to dominate statin market
Give example of a product that was introduced using the rapid-penetration strategy
AstraZenica launching Crestor to compete with Lipitor to dominate statin market
What is the slow-penetration strategy of the introduction stage of the PLC?
Low price, low promotion expenses
What kind of a product is slow-penetration strategy used for?
generic products ,due to the limited market size, generic companies often employ this strategy for low price / low volume products to realise more profit
e.g. off- patent antibiotics. Anti- inflammatory drugs NSAIDs
What strategies are employed during the growth stage of PLC?
- Improves product quality / add new features
- Enter new market segments
- Changes in advertising / promotion campaigns
What strategies are employed during the maturity stage of PLC?
- Product modifications
–> new formulations e.g. from once daily
formulation to once weekly - Marketing mix modifications
–> reduce prices but avoid price war with
competitors
–> sales promotion and advertising to
maintain customers
What strategies are employed during the decline stage of PLC?
- harvesting –> no more promotional expenses while maintaining same price
- for mega sales products: Pay to delay strategy to keep generics off the market (considered unethical) or legal action on patent infringement
- discount/price reduction
-divesting the product: delete product or sell to other company
What is the direct to consumer (DTC) marketing model promotion channels?
- direct to consumer advertising targeting patients
- Internet targeting patients + doctors
- sales force, conferences, symposiums, MCM targeting doctors
What is multi channel marketing (MCM)?
-use of integrated communications to reach and influence customer
-Using digital communication + sales rep calls
-Using both digital and non digital promotion
What is MCM in simple terms?
Multi-Channel Marketing Is the Use of
digital and non-digital communications
to reach and Influence our customers
What is omnichannel marketing?
Start from taking customer – centric view and understand/anticipate their needs
To engage customers across a combination of channels –> channels are fully integrated –> content in one channel connect to content in another
What do physicians value in terms of marketing?
personal contacts(reps) and rely on biopharma companies support.
Collaboration between which 2 depts is required in order to successfully promote pharma products?
sales team and marketing team
What is pull marketing and push marketing in pharma industry?
Part of direct to consumer marketing
pull marketing –> generate more customer awareness and demand
push marketing –> promotion to medical professionals
