Nowadays more and more emphasis in any company’s marketing activities is made on advertising and close interaction with advertising media due to the proven effect of rising financial returns from investments of this kind. The pharmaceutical industry is not an exception as in this sphere advertising also plays a key role in product promotion and raising sales.
As it is indicated in the study of Narayanan, Desiraju, and Chintagunta (2004), there are several ways of organizing these activities and their interactions are heterogeneous – they are called marketing-mix interactions. The authors discuss the interaction of detailing and direct-to-consumer (DTC) advertising and their effects on one another in the pharmacological sphere. The conclusion they make is that mainly DTC advertising has a positive effect on category sales, which is not similar to the total brand share, and that DTC has a stronger impact on sales than detailing (Narayanan, 2004).
The conclusion at which they arrive in the process of their empirical research is that the combination of DTC and media advertisements is highly productive in the course of marketing pharmacological products, which is essential for the arrangement of marketing strategies in pharmacological companies. In their judgment, the authors heavily rely on the works of Lehmann (2002) about financial returns from investments in advertising, Gatignon, and Hanssens(1987) defining difference between results given by constant elasticity models and marketing-mix interactions as well as Kaul and Wittink (1996) and Capon, Farley, and Hoenig (1990) about advertising interactions and their general impact on the financial success of a company (Narayanan, 2004).
The overall importance of applying marketing-mix interactions in the process of arranging marketing activities is recognized widely, which may be seen from the forum discussion of the necessity to implement search marketing in the sphere of discussed interactions of SES San Jose 2007– the statistical data says that “88% of all consumers making in-store purchases in key retail categories have conducted online research before purchase” (Putting Search into the Marketing Mix, 2007).
However, the pharmaceutical sphere of the USA is arranged differently as compared to the one of Europe. Thus, it is important to note that the previously mentioned works dedicated to marketing-mix interactions applied in the pharmaceutical segment concern the USA only. As one can see from the EurActiv Network news dedicated to the regulation of the pharmacological sphere of Europe and marketing aspects of its functioning, advertisement of medical substances in Europe experiences much stricter control and has many restrictions. As, for example, the decision of… about the necessity to eliminate advertisement of medical substances from mass media channels such as TV and radio was justified by the awaited raise in quality information received by patients on medicines they use (EU countries set to block pharma ‘ads plan’ 2009). However, the absence of an opportunity to advertise the product properly may negatively affect sales, which is an unusual way of conducting business affairs for US entrepreneurs.
Another peculiarity of the European attitude to pharmacological advertising is the complication caused by increased patenting and quality assessment procedures initiated by the investigation held in the sector on the issue of ensuring fair competitiveness:
“EU officials suggested further cases could follow, saying the new report would pave the way for increased regulatory scrutiny of settlement agreements in which brand-name companies pay generics manufacturers for not competing with them” (Big pharma expresses relief over EU inquiry, 2009).
This way it becomes clear that the process of marketing pharmacological products and advertising them in Europe is built up very differently from the USA, which may create unexpected complications for the US manufacturers who are used to a wider range of marketing opportunities. All these peculiarities have to be thoroughly considered before deciding on entering the European market by a US pharmacological firm.
References
- ‘Big pharma expresses relief over EU inquiry’ 2009, EurActiv Network.
- ‘EU countries set to block pharma ‘ads plan’ 2009, EurActiv Network.
- Narayanan, S, Desiraju, R, & Chintagunta, PK 2004, ‘Return on investment implications for pharmaceutical promotional expenditures: the role of marketing-mix interactions’, Journal of Marketing, no. 68 (4), pp. 90–105.
- ‘Putting Search into the Marketing Mix’ 2007, Search Engine Roundtable Web.