Pharmaceutical Marketing

Pharmaceutical Marketing
& Core Concepts
Marketing Credo

 There is only one valid definition of

Business purpose: To create a
customer
Peter Drucker
MARKETING

Is a total system of
business related activities
designed to plan, price,
promote, and distributive want
satisfying products, goods, and
services to target markets to
achieve organizational
objectives
PHARMACEUTICAL MARKETING

A unique bundle of
management decisions directed
to satisfy, delight,
surprise customers in the
pharmaceutical business, their
NEEDS and WANTS through
exchange of products and value
with others, towards early
realization of desired goals
3 KEY ELEMENTS OF
MARKETING

1. Satisfying Customers
2. Delighting Customers
3. Surprising Customers
5 WAYS TO DIFFERENTIATE SELLING AND
MARKETING

SELLING
1. Emphasis is on the product (goods and
services
2. Company first makes the product and
then figures out how to sell it
3. Management is sales-volume oriented
4. Planning is short run oriented
5. Stresses needs of sellers
Marketing

1. Emphasis is on customers’ wants

2. Company first determines customers’
wants then figures out how to make
and deliver a product to satisfy those
needs and wants
3. Management is profit oriented
4. Planning is long run oriented
5. Stresses wants of buyers
Functions Of Marketing
1. Market Research
2. Product Planning
3. Pricing
4. Distribution
5. Promotions
6. Customer Service
Marketing Strategies Dependent on 7
Factors
 Product’s life cycle stage
 Competitor’s strategy
 Economic conditions
 Product Portfolio analysis
 Company resources
 Market research
 Market intelligence
2 Interacting Components

Company Market

Market composed of 2
interacting components

Customers
Competition
 3 C’s of Marketing
Customers

2 3

Company Competition
OBJECTIVES OF THE 3Cs OF
MARKETING
1. Customer - To competently
satisfy the needs, wants,
and expectations of
target customers
2. Competition - To outperform
them all the time
3. Company - To ensure
corporate health and profit
INPUT AND OUTPUT OF MARKETING

1. CUSTOMERS - SALES
2. COMPANY - PROFIT
3. COMPETITION - MARKET
SHARE
Marketing Effectiveness
1. BETTER THAN BEFORE
2. BETTER THAN OTHERS
3. BETTER THAN EXPECTED
9 CORE CONCEPTS OF MARKETING
1. Needs
3. Wants
3. Demands
4. Value & Cost
5. Exchange
6. Transaction
7. Relationship Marketing
8. Products
9. Markets
NEEDS. To be in want of;
requirement; the lack of useful
or desired thing
Maslow’s Hierarchy of Needs
1. Physiological or body needs
2. Security and safety needs
3. Social needs
4. Ego needs
5. Self-actualization
WANTS. To require; wish for;
something desired
Examples
1. Products
2. Pricing Schemes
3. Promotions
4. Place
5. Warehousing
DEMANDS. To ask for as a right;
to ask for with authority; a claim
VALUE. Worth; utility; precise
significance; to rate at
certain point; to regard; to
estimate
COST. The price paid; amount
demanded; a charge; a
price; equivalent amount to
obtain the product
EXCHANGE. Is the act of obtaining
a desired product for someone by
offering something in return

3 TYPES OF EXCHANGE
1. Self Sufficiency
2. Centralized
3. Decentralized
RELATIONSHIP MARKETING
Smart marketers try to build up
long term, trusting, “WIN-WIN”
relationship with valued customers,
distributors, dealers, and suppliers,
accomplished by promising and
delivering high quality products,
goods, services, and fair prices to
the other parties over time
PRODUCTS. Anything that can be
offered to target clientele to
satisfy a need and want
Kotler….
•offerings
•satisfiers
•resources
that are capable of delivering
satisfaction of a want or need
7 TYPES OF PRODUCTS
1. Physical Objects
2. Places
3. Activities
4. Persons
5. Organizations
6. Idea
7.Service
8. Information
5 LEVELS OF A PRODUCT

1. The Core Benefit

2. Generic Product
3. Expected Product
4. Augmented Product
5. The Potential Product
3 GROUPS ACCORDING TO THEIR
DURABILITY OR TANGIBILITY

1. Non-Durable Goods
2. Durable Goods
3. Services
4 TYPES OF GOODS
ACCORDING TO CONSUMER
SHOPPING HABITS

1. Convenience Goods
2. Shopping Goods
3. Specialty Goods
4. Unsought Goods
 3 Types of Services

Rented Goods
Services
Types of Owned - Goods
SERVICES Services

Non Goods
Services
 Types Of Services

RENTED  Involves the

GOODS leasing of a goods
SERVICES for a specified
period of time
 Examples: car,
hotel rooms
 Types Of Services

OWNED  Involves the

GOODS attraction or repair
SERVICES of a good owned by
the consumer
 Example: repair
services
 Types Of Services

Non -  Provides personal

GOODS services on the pan
SERVICES of the seller, it does
not involve a goods
 Examples:
accounting, legal,
consultation
Marketing Strategies
Dependent on 7 Factors
1. Product’s life cycle stage
2. Competitor’s strategies
3. Economic conditions
4. Product portfolio analysis
5. Company resources
6. Market research
7. Market intelligence
MARKET. Consists of all potential
customers sharing a particular
need and wants who might be
willing and able to engage in
exchange to satisfy that need
or wants
3 TYPES OF PHARMACEUTICAL
MARKET

1. Traditional
2. Non Traditional
3. DOH or NGOs
 THE PHARMACEUTICAL MARKETS

Traditional Markets Non-Traditional Market DOH/NGO’s

Drugstores Municipalities
Hospitals Regional Health
Groceries and
Office
Industrial clinics supermarkets
Rural Health
Medical Clinics Trading stores and
centers
Dispensing Sari-sari stores
Barangays & sitios
Physicians Botica sa bayan
The Target Consumers for Drug Products

A Upper Class
B
C Middle Class
D
E Lower Class

1. Income Level
2. Age Classification
3. Gender
4. Educational Attainment
5. Geographic locations
 Flow of Rx in the Hospital OPD

Out-Patient Department
(OPD) Hospitals
Rx generated from
Residents MDs/
Consultants

Out-Patients

Buys Rx

DRUGSTORES
 Flow of Rx in Hospital IPD
In-Patient Department
(IPD) Hospitals
Rx generated from
Residents MDs/
Consultants

In-Patient
(Confined in Hospitals)

Rx In Patient’s Chart
Served by nurses

Hospital Pharmacy
 Emergency Rooms (ER)
HOSPITALS

Rx generated from, Residents MDs/Consultants

Out-Patient In-Patient

Rx served
Rx bought/served

Emergency Rooms Emergency Rooms

(ER) Drugstores (ER)
Hospitals Hospitals

FLOW OF Rx IN HOSPITAL ERs

Pharmaceutical Marketing

THE MANAGEMENT PROCESS

IN MARKETING
MANAGEMENT
5 Major Functions Being Crucial
1. Planning
2. Organizing
3. Staffing
4. Directing
5. Controlling
Planning
 A predetermined course of action before
doing or deciding in advance what has
to be accomplished such as setting
goals, preparing budgets
 Marketing Planning Activities

Establishing sales & Establishing

Marketing Financial
Objectives Objectives

Formulating Policies, Firming Up Staffing

Procedures, Plans, & Pattern/Manpower
Programs Deployment

Providing For Capital

Additions and
Contingencies
Market Forecasts
 Are projections of the probable
characteristics of the external and
internal environment; intellectual
estimates of the market potential for
the period
 Collection
Targets

Marketing Mix Sales

Targets Forecast

KEY
OBJECTIVES
Production
Product Movement Forecast
Targets

Direct Market Growth

Contribution Targets

7 KEY OBJECTIVES IN MARKETING

MANAGEMENT
 PRODUCT FORECAST
SALES & PRODUCTION FORECAST

ANNUAL FORECAST

SEMESTRAL FORECAST

QUARTERLY FORECAST

MONTHLY FORECSAT

WEEKLY FORECAST

Logical Breakdown of Sales and Production

 THE SALES
AND COLLECTION
FORECASTS

REGIONAL/AREA
FORECASTS

TERRITORIAL/DISTRICT
FORECASTS

BY PROVINCE/CITY
FORECASTS

BY TYPE OF OUTLETS AND

MAJOR ACCOUNT FORECAST
MARKETING BUDGET ALLOCATION
PRACTICES
1. Product Research and Development
2. Marketing Research
3. Personal Selling
4. Public Relations
5. Direct Marketing
6. Advertising
7. Sales Promotion
8. Display and Merchandising
9. Displays Merchandising
10. Markets Intelligence
 SALES AND
COLLECTION
Credit terms
Discounting PROMOTIONS
MANPOWER Delivery Advertising
Recruitment/ Transportation Sampling
Selection Free goods Display
Training/ Allowances Merchandising
Development Subsidies Public Relations
Compensation Publications
Benefits
Incentives MARKETING
POLICIES
Marketing
PRODUCTS Channels
Present Lines Incentives
New lines PRICING Rebates
Innovations/ Wholesale Allowances
Improvement Retail Subsidies
Modifications List Price Recruitment
Quality Control BIDS/Quotations Selection
Sale Campaigns
 MANPOWER
REQUIREMENTS

CONTRACTUAL/
REGULAR/ CASUAL EMPLOYEES
PERMANENT •Direct Hire
EMPLOYEES •Manpower
Agency

EXECUTIVE SEARCH
HEADHUNTERS

Manpower Development
 CAPITAL ADDITIONS

MAIN OFFICE FIELD OPERATIONS

SUPPORT SUPPORT
Furniture •Vehicles
Computer/Telefax/ •Pagers/Beepers/
Copiers Cellphones
Fans/Air 2 way Radio
Conditioning units •Audio-Visual
OHP/Slide Equipment

MANUFACTURING SUPPORTS
•Equipment and machinery
•Furniture and Fixtures
•Vehicles

CAPITAL INVESTMENT SUPPORT FACILITIES

 MASTER BUSINESS MASTER
ACTION PLAN BLUEPRINT
PLAN IN
BUSINESS

CORPORATE
Marketing OPLAN
PLAN Plans MARKETING

BATTLE
BUSINESS
PLAN
PLAN
GAME PLAN
Marketing Plan

 Refers to the game plan or the

business plan for the period
inclusive of long-term and short-
term programs
7 TYPES OF PLANS
1. Purpose or Mission
2. Objectives
3. Strategies
4. Policies
5. SOPs Rules and Regulations
6. Programs
7. Budgets
THE HIERARCHY OF PLANS

PURPOSE
MISSION

OBJECTIVE
(Desired Results)

Strategies
(Long-term directions)

Policies

Procedures & Rules

Marketing Plans
(Tactical and Strategies)
BUDGETS
In quantifiable terms (annual, semester, quarter, &
month)
 S.M.A.R.T.

S.W. of MARKETING O.T. in Socio-

Company Economic,
& Products •OBJECTIVES Political,
Relative •STRATEGIES Technological
to •PROGRAMS Cultural
Competition •ACA Environment
(Internal) (External)

TARGET MARKET

KEY CONSIDERATIONS IN MARKETING PLANNING

MISSION
VISION

GOALS
OBJECTIVES

PLANS
&
PROGRAMS

GOAL
THE OVERALL PLANNING ATTAINMENT
Efficiency &
PROCESS Effectiveness
 CUSTOMER
CONCERNED
CONCERN FOR PUBLIC
EMPLOYEES IMAGE

MISSION
PHILOSOPHY STATEMENTS PRODUCTS

CONCERN FOR TECHNOLOGY

SELF
SURVIVAL
CONCEPT

LOCATION
9 COMPONENTS OF MISSION
STATEMENTS
 3 LEVELS OF GOALS
Strategic Strategic TOP
Goal Plans MANAGEMENT
organization wide

MIDDLE MNGT
Tactical Tactical Department
Goals Plans Perspective

FIRST LEVEL
Operational Operational Unit/individual
Goals Plans Perspective
 STRATEGIC GOALS

•Market Standing
•Innovation
•Human Resources
•Physical Resources
•Financial Resources
•Productivity
•Social Responsibility
•Profit Requirement

8 MAJOR AREAS FOR STRATEGIC

GOALS
 WHY ARE WE THERE?
WHERE ARE WE? •Marketing Mix
A
Standing in the Market •Major Initiatives
& Minds of Target •Relationship
Markets
Marketing

ARE WE GETTING
THERE?
H WHERE DO WE
WANT TO BE?
B Sales. Marketing,
CAN WE DO IT? G Financial, Production

WHERE DO WE
WANT TO ACHIEVE
WHAT RESOURCES F C THESE GOALS
WILL IT TAKE?
Timetable

WHO WILL E
DO IT? D HOW DO WE GET
THERE?

MARKET AUDIT PLANNING GUIDELINE

 To Ensure Early Achievement
Of Objectives at Least Cost
To Emphasize
To Offset
Well-Defined
Objectives Uncertainty

GOALS OF PLANNING

To Allow Managers “ Enough Rope To Hang

Themselves” (Freedom To Check Progress
Along The Way)

4 Reasons For Planning

 1. DIAGNOSIS
WHERE IS THE COMPANY AND WHY?

2. PROGNOSIS
WHERE IS THE COMPANY HEADED?

3. OBJECTIVES
WHERE SHOULD THE COMPANY BE HEADED?

4. STRATEGY
WHAT IS THE BEST WAY TO GET THERE?

4 STAGES OF PLANNING IN
5 Essential BENCHMARKS In
Marketing Key Objectives

1. Purpose/Expectations
2. Products/Service
Expectations
3. Customers/Client
Expectations
4. Geographic Expectations
5. Functional Expectations
 1 BUSINESS GOALS
G
O
A 2 SPECIAL PROGRAM
GOALS
L
S
3 TRAINING GOALS

3 TYPES OF GOALS
 PURPOSE
Commitment
(WHY?)

FUNCTIONAL PRODUCT
Commitment Commitment
(HOW?) (WHAT?)
MARKETING KEY
OBJECTIVES

CLIENT/CUSTOMER
SCOPE/GEOGRAPHIC
Commitment
Commitment
(WHO?)
(WHERE?)

TYPES OF MARKETING
COMMITMENTS
 COMMITMENT
ANALYSIS

1. MARKET
FORECASTS

3. The Expectations of
2. Company’s other individuals & groups
Strengths & Weaknesses in the organization

3 SOURCES OF
COMMITMENT ANALYSIS
 MARKETING GOAL
GOAL. Means something desired; a
thing for which an effort is made

MARKETING GOAL. Are the end-

results, performance
standards, planned
accomplishments you intend to
achieve over a period of time and
should satisfy the S.M.A.R.T.
PERFORMANCE STANDARDS. Are
measurable evidences that
reflect the accomplishment of the
responsibility area: these are expressed
in quantitative and
qualitative terms and illustrates cost
and percentage
4 EXAMPLES of PERFOMANCE
STANDARDS
1. Growth 3. Market share
2. Profitability 4. Direct

Contribution
Pharmaceutical Marketing

The Marketing Management

Process and Strategies
Marketing Management
Process
4 KEY ELEMENTS
1. Analyzing marketing
opportunities
2. Selecting target markets
3. Developing marketing mix
4. Managing the marketing effort
ANALYZING MARKETING
OPPORTUNITIES

1. INTERNAL ENVIRONMENT
Management information system
Marketing Plan
4 Ps of Marketing

2. EXTERNAL ENVIRONMENT
Competitors Publics
Suppliers Marketing
channels
External Variables
1. Demographic/Economic
Environment

2. Political/Legal Environment

3. Technological/Natural
Environment

4. Social/Cultural Environment
SELECTING TARGET MARKET
4 STEPS

1. Demand Measurement and

Forecasting
2. Market Segmentation
3. Market Targeting
4. Market Positioning
MARKET SEGMENTATION. Is the
process of classifying customers into
groups with different needs,
characteristics, or behavior
Is the process of identifying more
homogenous sub-markets or
segments within a market.. In order
to select target markets and
develop suitable marketing mixes
MARKET SEGMENTATION

The division of a market into

Market Segment Different homogenous
Groups of consumer

Should be…
 measurable
 accessible by communication
and distribution channels
 different in its response to a
marketing mix
 Durable (not changing to quickly)
 Substantial enough to be profitable
4 Differences In market Segments In
Identifying Characteristics Of Buyers
1. The reasons for buying or using
certain products
2. Buyer’s preferences for certain
brands of products
3. In segments of industrial
product- markets
4. Factors such as age, income, and
lifestyle
Demographic Psychographic
Factors Factors

Geographic
Factors

COMPANIES/BUSINESSES
•Products
•Pricing Decisions
•Promotions Decisions
•Place Decisions
•Marketing Objectives
•Product Positioning Strategies

3 MAJOR FACTORS IN MARKET

SEGMENTATION
10 MARKET SEGMENTATIONS STRATEGIES

CONCENTRATED BEHAVIORAL

MARKET SEGMENT
DEMOGRAPHIC
EXPANSION

PRODUCT-LINE LIFESTYLE

DIFFERENTIATED PERSONALITY

BENEFIT ORGANIZATIONAL
NEW MARKET SEGMENTATION
1. By geographic location
2. According to Age
3. According to Sex and Status
4. According to Income
5. By Psycho-social-cultural factors
6. By degree of specialization & therapeutic
categories
7. According to product formats, sizes and
supply
8. According to ownership or type of
organization
9. According to types of Business or
classification
7 ADVANTAGES OF MARKET SEGMENTATION
STRATEGIES
1. Greater profitability in satisfying diverse
demands of the marketplace
2. Increase sales by addressing the needs of target
customers
3. Helps business identify new opportunities
4. Helps firms develop new products to meet the
needs of particular target markets
5. Assists marketer in developing strategies for
brands
6. Useful in providing guidelines for product
positioning in advertising to reach target market
7. Focuses on consumer needs to maintain
competitive advantage
T THE SINGLE MARKET
A APPROACH
R
G M
E A
T R THE MULTIPLE TARGET
K MARKET APPROACH
E
T
I THE COMBINED
N
G
MARKET APPROACH

3 APPROACHES TO TARGET
MARKETING
CURRENT TARGET WHO ARE CURRENT
MARKETS TARGET MARKETS?

CURRENT LOYAL
CUSTOMERS
CURRENT AUTHORITY
ENDORSERS

CURRENT INFLUENCERS

CURRENT TERMINAL
DECISION-MAKERS

CURRENT CONSUMERS
MARKET POSITIONING. Is the place
the product occupies in
consumers’ minds relative to
competitors.
Means creating a competitive edge
Is “market - niching”
Is the “Unique Selling Proposition”
Is the battle in the consumer’s mind
Is target marketing
Refers to the “attributes ”,
“characteristics”, or “purchaser
 PRODUCT POSITIONING
COMPETITION Unique Selling proposition
Product Differentiation
“Copycats’ Purchaser’s Criteria
“Imitation” Copy Claim
“Look alike” Market niching
Distinct concept
“Me-too”

PRODUCT POSITIONING IN CONSUMER’S

MIND
 BEST
ADVANCE
ENGINEERING
PRODUCT Economy

Superior TOP OF TECHNOLOGY

THE LINE ADVANTAGE
Performance

BEST BEST
PROFIT SERVICE

BATTLE IN THE CONSUMER’S MIND

 PYREGESIC TYLENOL

AFEBRIN
TEMPRA

BIOGESIC REXIDOL

BRAND AWARENESS
LEVEL
 Mercury Watson Generic
Drugstore Drugstore Pharmacy
Drugstore

South Star Med Express

Drugstore Drugstore

Drugstore War In Consumer’s

Mind
FAMIL CREST
Tartar control w/ baking soda
Y Maximum cavity protection
Double fluoride
Complete toothpaste CLOS
Freshens breath EUP
HAPEE Anti-germicidal
Prevents bleeding gums
Fresh mint
Deep cleaning formula
GLEAM

PEPSODENT COLGATE

PURCHASER’S CRITERIA
 POSITIONING STRATEGIES
ONE SPECIFIC ON THE NEEDS THEY
PRODUCT FILL OR BENEFITS
ATTRIBUTE THEY OFFER

ACCORDING TO FOR CERTAIN

USAGE OCCASIONS CLASSES OR USERS

DIRECTLY AGAINST FOR DIFFERENT

A COMPETITOR PRODUCT CLASS

COMBINATION OF
PRODUCT CLASS
POSITIONING
AND SITUATIONS
STRATEGIES

TARGET CONSUMER’S MIND

 WAYS OF GAINING
COMPETITIVE ADVANTAGE
1. Best Technology
2. Continuous Innovations
3. High Quality Products
4. Continuous Modifications
5. Cost/Price/Best Profit
6. Being First In Introductions
7. Best Service
8. 1% Better than Competition
Pharmaceutical Marketing

MARKET FORECASTING
FORECASTING. Represent action
guides, the “Magic number”
that will show probable results of
various sales and marketing plans
and programs.
Means predicting future market
levels
The act or process of predicting, on
the basis of present trends, of
probable conditions or events
to come, as forthcoming business
activity.
3 DIMENSIONS OF FORECASTING
1. TIME
2. DIRECTION
3. MAGNITUDE
4 PURPOSES OF SALES
FORECASTING
1. The basis of a well balanced budgeting for a
given period
2. Scheduling of all production resources and
facilities
3. To plan current policy and assess current
developments
SEQUENCE OF STEPS IN
FORECASTING
1. Determine primary purpose of
forecasting
2. Group related products
3. Identify factors affecting the sales
4. Choose the forecasting methods
5. Gather available marketing data
6. Analyze all the marketing data
7. Validate all assumption and hypothesis
8. Come out with specific forecast by product area
9. Apply to company’s sales and marketing
operation
SALES FORECASTING
TECHNIQUES
1. The data question
2. The special forecast committee
3. The management estimate
4. The panel method
5. The experts’ opinions
6. The market research method
7. The buyer survey method
8. The cycle and the seasonal analysis
9. The Random factor analysis
 FORECASTING OBJECTIVES

OTHERS SHORT-TERM MACRO-

SHAPING THE FORECAST ECONOMIC
FORECAST FACTOR

LONG-TERM
FORECAST

BUDGET
FORECAST

INDUSTRY
OUTLOOK
 TOTAL INDUSTRY
DEMAND
EXPANSION
INTEREST MONEY
RATES SUPPLY

INDUSTRY
OUTLOOK
PROBABLE
EXPORTS VS. TAX
IMPORT POLICIES
CONSUMER
PRICE INDEX

RELEVANT FACTORS TO THE

BUSINESS PROSPECTS OF AN
INDIVIDUAL FIRM
 TOTAL INDUSTRY
DEMAND EXPANSION

NEW FIRMS
SUBSTITUTE INDUSTRY DURING
PRODUCT
OUTLOOK FORECAST
PERIOD

EXTENT OF
COMPETITION

INDUSTRY ANALYSIS IN
FORECASTING
 4 FACTORS THAT SHAPE A
FORECAST

1. Availability of data
2. Structure of the market
3. Other non-economic forces
4. Various Demand Elasticities
2 Methods Of Forecasting
Demand
TOP-DOWN
APPROACH
BOTTOM
APPROACH
Forecast of Generate
economic estimates of
conditions future demand
Product market in market
potential segments
Determine Add the individual
market share estimates to
Forecast arrive at overall
product sales forecast
 ECONOMIC FACTORS INFLUENCING
DEMAND FOR THE PRODUCT
Market
Indicators
Method

Population Construction trend

Trends
 Birth date
 Death rate
 Change in marital  Mushrooming of
status private/government
 Age pattern building
 Migration  Increase infrastructure
movement projects

Foreign Trade Developments

 Intense import and export activities
Pharmaceutical Marketing

THE MARKETING MIX

The 5P’s of Marketing
 Pharmaceutical Marketing

Key MARKETING Activities

Key marketing activities

Consumer Analysis

Product Planning Distribution Planning

Price Planning Promotion Planning

Key marketing activities

Examination and evaluation of

Consumer consumer characteristics,
Analysis needs, and purchase processes

Development and maintenance

Product
of products, product assortment,
Planning brands, packaging, options,
deletion of old products
Key marketing activities

Outlined price ranges and

Price levels, pricing techniques
Planning purchase terms, price
adjustments, and the use of
price as an active or passive
factor

Development and maintenance

Product
of products, product assortment,
Planning brands, packaging, options,
deletion of old products
 Key marketing activities

Establishment of channels
Distribution selections, physical distribution,
Planning inventory management,
warehousing, transportation,
allocation of goods and
wholesaling

Combination of advertising,
Promotion
publicity personal selling, and
Planning sales promotion to drive sales
revenue
MARKETING MIX. Is the set of
controllable marketing variables
that the firm blends to produce the
response it wants in the target
market

5 P’s Of Marketing
1. Product 4. Place
2. Price 5. People
3. Promotion
 PRODUCT
•Physical Objects
•Persons
•Places
•Services
•Ideas
•Organizations
•Activities
•Information
 Physical
Object
Information
Places

Persons PRODUCTS
Activities

Organizations Ideas Services

PRODUCT AS ONE OF THE 5P’s OF THE MARKETING MIX

 Securities
Trusts
Fares/Rents

Charges PRICE
Quotations

BIDS Costs Fees/Bonds

PRICE AS ONE OF THE 5P’s OF THE MARKETING MIX

 Billboards
Publicity Trimedia
Advertising

Product PROMOTIONS
Display Sampling

Public Personal
Relation Merchandising selling

PROMOTION AS ONE OF THE 5P’s OF THE MARKETING MIX

 Right Time
Right
condition Right
customers

Inventory PLACE
Warehousing Right place

Right
Quantity Transportation Right cost

PLACE AS ONE OF THE 5P’s OF THE MARKETING MIX

 PROMOTIONS
•Trimedia Advertising
•Sampling
•Personal selling
•sales promotions
•Product displays
•Merchandising
•PR and publicity
 PRICE
•Fares Securities
•Rents Trusts
•Fees Debentures
•Costs Bonds
•Quotes Charges
•Bids
 PLACE
•Right product at the
•Right quantity
Inventory
•Right place Warehousing
•Right Transportation
time
Utilization &
•Right cost Communication
are the essential
•Right condition elements of
PLACE
 PEOPLE
•The heart of products of any firm,
institution or organization
•The heart of a product and
•The heart of marketing mix
•The heart of all major undertakings
•The key factor to the company’s success
•The HUMAN ASSET as the greatest asset
•The essential ingredient in the marketing
menu
 Pharmaceutical Marketing

PRODUCT MIX
DECISIONS AND STRATEGIES
PRODUCT
Is anything that can be
offered to a market for attention,
acquisition, use, or consumption
that might satisfy and delight a
need and want of the target
clientele
 Product/Market Matrix
Existing Product New Product

Existing market Market Product

Penetration Development

Market
New Market Diversification
Development
 Product/Market Matrix

 The firm seeks to

Market achieve growth with
Penetration existing products in
their current market
segments, aiming to
increase its market
share
 Effective when the
market is growing or not
yet saturated
 Product/Market Matrix

 The firm seeks to growth

Market by targeting its existing
Development product to new market
segments
 Effective when a local or
regional business looks
to wider its market, new
market segments are
emerging due to
changes in consumer
life-style/demographics,
and innovative uses are
discovered for a mature
product
 Product/Market Matrix

 The firm develops new

Product products targeted to its
Development existing market
segments
 Effective when the firm
has a core of strong
brands
 Product/Market Matrix

 The firm seeks growth

by targeting its existing
Diversification products to new market
segments
 Diversification is utilized
so that the firm does not
become overly
dependent on one
product line
3 LEVELS
of
PRODUCT INSTALLATIONS

PACKAGING

BRAND
NAME CORE FEATURE AFTER
DELIVERY SALES
BENEFIT S
and SERVIC
CREDIT QUALITY E
STYLING

WARRANTY
What is the Buyer Really
Buying?
WHAT YOU’RE
PRODUCT SELLING

NASAL
NEOZEP DECONGESTANT

“Sell the sizzles, not the

steak”
 PRODUCT ADOPTION PROCESS

1. AWARENESS
2. INTEREST
3. EVALUATION
4. TRIAL
5. ADOPTION
3 CATEGORIES OF NEW
PRODUCT

1. INNOVATIVE PRODUCTS
2. REPLACEMENT PRODUCTS
3. IMITATIVE PRODUCTS
PRODUCT FORMAT. Means different
customers having different
tastes, varied preferences,
unlimited impressions,
differentiated perceptions and
feelings, uncertain like and dislikes,
the same needs but sophisticated
wants.
Capsules SOLUTIONS POWDERS

TABLETS
PELLETS Ointments

CREAMS
MEDICINES
LOTIONS
GRANULE
S SPRAY
Suspensions

PRODUCT FORMATS
Brand or Generic Names
Decisions

BRAND. Is a name, term, sign, symbol,

design, or combination of
these, intended to identify the
goods or services of one seller or
group of sellers and to differentiate
them from those of competitors
BRAND NAME. Is the part of a brand
that can be vocalized - is
utterable.
BRAND MARK. Is that part of a brand
which can be recognized but is
not utterable such as its symbol,
design, or distinctive coloring or
lettering
TRADEMARK. Is a brand or part of a
brand that is given legal protection.
It protects the seller’s exclusive
rights to use the brand name or
brand mark
COPYRIGHT. Is the exclusive legal right
to reproduce, publish, and sell the matter
and form of a literary, musical, or artistic work.
 TRADEMARK CAN BE RECOGNIZED
WITH PRESENCE OF ANY OF THE
FOLLOWING WORDS OR SYMBOLS ON
PRODUCT LABELS OR PACKAGE

1. Reg. Phil. Pat. Off =

registered under Phil
Patent Office
2. R = means registered
3. * = asterisk mark
4. C = copyright under
CLASSIFICATION OF BRANDS
1. According to ownership
Manufacturer’s brand
Distributor’s or Middlemen’s
2. According to extent of geographic
coverage
National brand
Private brand
3. According to number of products
covered
Individual or separate name brands
Family and Blanket brands
BLANKET FAMILY NAME
Example:
Enervon Family
BRAND EXTENSION
Examples:
Johnson’s Brand
Neozep Brand
 BRAND EXTENSION DECISION

E N E R V O N

CHOCO
TABLETS SYRUPS DROPS PWDR

ADULTS CHILDREN INFANTS FAMILY

MULTIBRANDING DECISION.
The seller develops two or more
brands in same drug product
category or the same generic
equivalents

Example:
Paracetamol Multi-
Branding Strategy of
UNILAB
Advantages of Multibranding
 More shelf space at the selling area
 Very few consumers of a drug product
are that loyal to a brand they will not
buy another
 Creating new brands develop healthy
competition
 Position brand with different benefits
and appeals
Importance of Branding
 Simplifies promotion
 Encourages repeat sales
 Provides protection against substitution
 Minimizes comparison
 Aids segmentation
 Affords greater price stability
 Prepared by many middlemen
 Paracetamol Products of
UNILAB MULTI-BRANDING
STRATEGY

BRANDS
DIVISION/SUBSIDIARY
Medicol Tablets Myra Pharma
Biogesic Tablets Biomedis
Sumagesic Tablets United
American
Pharmaceuticals
 DIFFERENCE
SIMILARITIES
1. Different Brand
1. Generically Names
equivalent
2. Different
2. Same CGMP Packaging
MULTI
3. Same Raw 3. Different Color
BRANDING
Material and Size
STRATEGY
FOR
4. Same Formula 4. Different Pricing
PARACE-
TAMOL
5. Same RM 5. Different
Source Positioning
Strategy
6. Same QC
Procedure 6. Different Target
Market
 3 DESIRABLE QUALITIES FOR A
BRAND NAME
1. It should closely suggest
something about the
product’s benefits and
qualities that the intended markets
could associate with easily
2. It should be easy to pronounce,
recognize, and remember
3. It should be distinctive to readily
arrest attention
PACKAGING DECISIONS

PACKAGING. Is a marketing
activity of creatively designing and
producing the
appropriate container or
wrapper for a product
suitable to target markets
relative to competitor’s product
The container or wrapper is the
package itself.
4 TYPES OF
A
PACKAGING
THE PRIMARY
PACKAGE

C
D THE
LABELLING SHIPPING
PACKAGE PACKAGING PACKAGE

B
THE SECONDARY
PACKAGE
Primary Package
 Immediate container
 Its corresponding label
 Examples: can holding MILO; bottle
containing Amoxicillin
Secondary Package
 Protects the primary package
 Thrown away when the product is about
to be used by the target clientele
 Examples: cardboard box containing
toothpaste, corrugated box with
styrofoam
Shipping package
 Used to primarily store, identify, and
ship the product to target markets
 Examples: wooden case; corrugated
box
Labeling
 Part of the product packaging and
consists of printed information
appearing on or within the package in
accordance to the Labeling Guidelines
PRODUCT LINE DECISIONS
PRODUCT LINE. Is a group of
products that are closely
related either because they:
1. Function in a similar manner
2. Are sold to the same customer
groups
3. Are marketed through the same
types of outlets
4. Fall within given price ranges
PRODUCT MIX DECISIONS

PRODUCT MIX. Is also known as

PRODUCT ASSORTMENT
Is the set of all product lines
and items that a particular seller
offers for sale to buyers
Features
1. Width 3. Depth
2. Length 4. Consistency
 Pharmaceutical Product Life
Cycle Strategies

MATURITY

S
A GROWTH
L DECLINE
E

INTRO

TIME

PRODUCT LIFE OBSOLESCENCE

CYCLE
MAJOR STRATEGIES IN THE GROWTH STAGE

PRODUCT
LOWERING
IMPROVEMENT
PRICES
MODIFICATION
TO PREVIOUS
LEVELS
PROMOTIONS
EFFORTS
GROWTH
STAGE
PRODUCT
POSITIONING INCREASED
LOGISTICS
ENTERING NEW MARKET SUPPORTS
SEGMENT
EXPANDED MARKET CHANNELS
INCENTIVES FOR TRADE OUTLETS
 MODIFYING PRODUCT MIX STRATEGIES
INCREASE
USAGE
PRESENT CUSTOMERS

PRODUCT RE-
NEW MIX POSITIONING
PACKAGING
NEW FORMAT STRATEGIES NEW
FORMAT

NEW USERS
NEW MARKET
SEGMENTS
STRATEGIES IN THE MATURITY STAGE

Roll back of Increased

prices by way advertising
of additional and other
discounts promotions

Increase R and D Periodically modify

budgets the market, 4P’s
3 Phases of Maturity Stage
 Growth Maturity – sales rate declines
because of distribution saturation
unwillingness of middlemen to re-sell
manufacturers product
 Stable Maturity – sales become level or at
break-even because market saturation,
unwillingness of market to buy due to loss of
interest of the product
 Decaying Maturity – sales continue to
decline; customer shift to other brands or
substitute
 STRATEGIES IN THE DECLINING STAGE

LOW MARKET PHASE-OUT

GROWTH DISCONTINUE
LOW MARKET REDUCE
SHARE PRODUCT
OFFERINGS
PRODUCTS
LOW VOLUME
LOW PROFIT REDUCE/STOP IN THE
PROMOTIONS
SLOW/NON- MARKETING
EFFORTS
DECLINING
MOVING/LESS
DEMAND
STAGE
REPLACE
LOW
WEAK
PRODUCTION
PRODUCTS
HIGH COST
FACTORS ATTRIBUTED TO SALES DECLINE

1. Rapid technological
advances
2. Changing consumer
preferences for taste,
flavors and colors
3. Adherence to safety and
efficacy
4. Price consciousness due to
inflation and deteriorating
purchasing power
Reasons Why New Products Fail
 Inadequate market analysis
 Product deficiencies
 Lack of effective marketing strategies
 Higher cost that anticipated
 Competitive strength and reaction
 Poor timing of introduction
 Technical or production problems
 Possible solutions to avoid Product
Failure
 Organizational changes aimed at
strengthening new product planning
 Better marketing research to evaluate
market needs and prospects
 Improved screening and evaluation of
ideas and products
Employing the Solutions – 3
Advantages
 Product Advantage – Emphasizing that
new product is of better quality and has a
more reasonable price than other products
 Marketing advantage – Using greater
number of distribution outlets or intensive
distribution
 Advertising Advantage – greater number
of mass media usage or effective
advertising copy structure
Steps in Product Development
Process
 Idea Generation
 Screening of Ideas
 Formal Business or Economic Analysis
 Product development
 Test marketing
 Commercialization
 PRODUCT LIFE CYCLE
CHARACTERISTICS
INTRO GROWTH MATURITY DECLINE

1. Sales PerformanceLow High Steady Very Low

2. Market Growth High Very High Steady very Low

3. Market Share Low High Low/High Very Low

4. Profit Negative Peak Levels Declining Low/Zero

5. Cash Flow Negative Moderate High Low

6. Competition Few Growing Many Rivals Declining

7. Customers Innovative Mass marketMass MarketLaggards

8. Expenses Very High Very High Low/none Very Low/N

9. Management Very High Very High Low Very Low/N

Support
 PRODUCT LIFE CYCLE RESPONSES

INTRO GROWTH MATURITY DECLINE

1. Strategy Expand Penetrate Defend Efficiency

2. Expenditures High High Falling Low

3. Emphasis Awareness Preference Loyalty selective

4. Distribution Patchy Intensive Intensive Selective

5. Price High Lower Lowest Rising

6. Products Basic Improved Different Rationalized

 NEW PRODUCT PLANNING

Idea Product Concept Business

Generation Screening Testing Analysis

Product Test Commer-

Development Marketing cialization
 NEW PRODUCT PLANNING

 Continuous, systematic
search for a new product
Idea opportunities
Generation  It involves deliberating
sources of new ideas
and methods for
generating them
 NEW PRODUCT PLANNING

 After the firm identifies

potential products, it
Product must screen them
Screening  Many companies use a
new – product screening
checklist for preliminary
evaluation
 NEW PRODUCT PLANNING

 Concept testing present

the consumer with a
proposed product and
Concept measures attitudes and
Testing intentions at this early
stage of development
 Concept testing is a
quick and inexpensive
way of measuring
enthusiasm
 NEW PRODUCT PLANNING

 BA for the reviewing

Business product concepts is much
more detailed than
Analysis product screening
 the next step is expensive
and time consuming
product development,
critical use of BA
is essential to
Eliminate marginal item
 NEW PRODUCT PLANNING

PD converts a product

idea into a physical form
Product and identifies a basic
marketing strategy
Development  It involves product
instruction, packaging,
product positioning
attitude, and usage
testing
 NEW PRODUCT PLANNING

TM involves placing a

product for sale in one or
Test more selected areas and
observing its actual
Marketing performance under the
proposed marketing
plan
 The purpose is to
evaluate the product
and pretest marketing
efforts in a setting
prior to a full
scale introduction
 NEW PRODUCT PLANNING

 after testing is completed,

the firm is ready to
Commer – introduce the product to
cialization its full target market. This
is commercialization and
correspond to the
introductory stage of the
product life cycle
 C involves implementing
a total marketing
plan and full
production
Pharmaceutical Marketing

PRICE MIX DECISIONS

AND
STRATEGIES
PRICE. The amount of money
charged for a product goods or
services
The values placed on goods and
services
The amount of money needed to
acquire some combination of
another good and its
accompanying services
The value express in terms pesos
or other monetary medium of
exchange
 PRICE PLANNING

A Price
Represents the value of a
good or services for both
the seller and the buyer

Systematic decision
Price making by an organization
Planning regarding all aspects of
pricing
 THE MANY NAMES OF PRICE
1. Bids or Quotations
2. Catalogue or List Price
3. Retail Price
4. Wholesale Price
5. Net Price
6. Billing Price
7. Rentals/Allowances
8. Charges
 Managers’ Role In Pricing

1. Initiation of Price Changes

2. Price Determination
3. Formulation of Price Policies
4. Price Administration
 WHAT IS PRICING?

PRICING PRICING IS A
IS AN ART GUESSING GAME

•To Optimize •How the Market

profit will react to price
changes?
•To reduce
losses •How
Competitors
•To maintain will react to the
Market price changes?
Shares
HOW THE MARKET WILL REACT TO A PRICE
CHANGE OF A COMPANY?

SHIFTING TO
SUBSTITUTE
PRODUCTS

MAY EVENTUALLY
A PRICE REACTIONS OF STOP BUYING
DECREASE TARGET MARKETS IMPORTED
MAY LEAD TO TO PRICE PRODUCTS
INCREASE CHANGES AFTER
DEMAND DEVALUATION

SHIFTING TO
COMPETITOR’S
PRODUCTS
 HOW COMPETITORS WILL REACT TO A
PRICE CHANGE OF OTHER COMPANIES?
FOLLOW
IMMEDIATELY
AND INITIATE
A PRICE CHANGE

WAIT FOR
DISREGARD/
OTHERS REACTIONS OF DO NOT
COMPANIES TARGET FOLLOW
TO MOVE COMPETITORS AT ALL
FIRST

TEMPORARILY
DELAY ANY
PRICE CHANGE
 Factors Affecting Price
Decisions

Consumer Competition Cost

Channel
Government
Members

Total
Effects
On Price
Decision
Consumers and Price Decisions

 The relationship
between price and
consumer purchases
CONSUMERS
and perception is
explain by 2
economic principles
 the law of demand
 The price elasticity
of demand
Competitors and Price Decisions

 Another element
contributing to the
degree of a control a
COMPETITORS
firm has over prices
is the competitive
environment within
which it operates
Channel Members and Price Decisions

 A wholesaler
 A retailer
Channel
Members
Government and Price Decisions

Price Fixing
Regulations

Government
Prohibitions against
price discrimination
among channel members

Unfair sales acts:

Predatory pricing
 Cost and Price Decisions

Cost Raw materials

And Supplies
PRICING
Labor Cost
DECISIO
N
COST
Advertising Cost

Distribution Cost
FACTORS INFLUENCING PRICE DECISIONS

PRODUCT COST
NATURE OF
MARKET DEMAND

1. Reduced Production
1. Market Appeal
Costs
2. Market Charact.
3. Demand Elasticity
2. Increased Selling
4. Market Demand
Costs
expandability
5. Income Distribution
3. Joint Costs
Pattern

Competitor’s External &

Consumer’s
Price Internal
Perception of Value
Factors
 FACTORS AFFECTING PRICE
DECISION
Internal Factors External factors

1. Corporate Vision
1. Nature of
and Mission P
Market &
2. Marketing R Demand
Objectives I
3. Marketing Mix
Strategies C 2. Competition
4. Costs I
3. Economy
5. Organization N
for Pricing G 4. Government
6. Executive
Regulation
Pricing Decision
7. Target Markets
Internal Factor 1: Product Cost
2 Common Types of setting prices
1. Mark – up
Example:
a retail price of P1,000
having a standard 10% mark-up
on sales will have a cost of P900.
2. Target Profit
Example: A manufacturer who wishes to make
a 35% return on investment (ROI) on an
invested capital of 2 million and having a
cost of P20 a unit with forecasted sales
volume of 100,000 units may compute for the
specific price level.

Target Profit = Unit cost + Target ROI x

Pricing Investment
Unit sales
= P20 + 35% x P2,000,000
100,000
= P27
UNIT COST FORMULA

Unit Cost = Variable Cost + Fixed Costs

Unit Sales
= P10 + P1,000,000
100,000
= P10 + P10
+ P20
 Characteristics of
Consumers
Classified into 3 Groups
1.Some consumers have high
search costs
2.Some consumers have low
reservation price
3.All have special transaction
costs
Internal Factor 2:
Company’s
Objectives
Classified into 3 Groups
1.Differential Pricing
Strategy
2.Competitive Strategy
3.Product Line Strategy
Pricing Strategies based on Company’s
Objectives and Consumer Characteristics

OBJECTIVE OF THE FIRM

Differential Competitive Product Line

C Pricing Pricing Pricing
H
A O
R F
A Random Price Image
C Some have high
C Search costs discounting Signaling Pricing
T O
E N Periodic Penetration/ Price
R S Some have low discounting Experience Bundling/
I U reservation price curve Premium
S M
T E Second Geographic Complemen
R All have special Market Pricing -tary Pricing
I Transaction costs
C S Discounting
S
Pricing Criteria Based on Company’s
Objectives

Objectives When to Charge When to Charge

Lower Price Higher price

Sales Volume
Turnover
FAST SLOW

Market
Dominance
LOW HIGH

Profit Objectives
LONG SHORT
TERM TERM
Pricing Criteria Based on Product Specifications

Product Specifications When to Charge When to Charge

Lower Price High Price
Product Type Commodity Patented
Product Usage Single use Multiple Use
Product Obsolescence Slow Fast
Product Appeal Price Sensitive Price Insensitive
Production Method Mass Production Custom Made
Production Quality Big Small
Production Capacity Excess Limited
Types of Service Regular Extra
Perceived Value Overpriced Underpriced
 WHEN TO MAKE A PRICING
DECISION
1. When a company sets a price for the
first time
2. When inevitable circumstances lead a
company to initiate a price
change (currency crisis)
3. When direct competition initiate a
price change
4. When a company has several
products with inter related costs
and demands (multi-branding)
IMPACT OF DEVALUATION AND CURRENCY
CRISIS SITUATION

R
E
PRICE M
•Transport •PROFIT E
•Electricity D
•Water
•IMPORTS I
•Commodities •EMPLOYMENT A
L
•Services •EXPANSION
•Interest Rates PROGRAMS M
E
Overhead Costs •PURCHASING A
•6Ms POWER S
Debt U
Cost of Imports
•REAL INCOME R

Inflation •ECONOMY E
S
Unemployment
 RETRENCHMENTS

SURVIVA PROFITABILIT
L Y
STRUCTURAL DEFERMENT/
CHANGES/ TURBULENT POSTPONE-
STREAM- MARKET MENT OF
LINING OF SITUATION MAJOR
OPERATION PROJECTS

MARKET PRODUCTIVIT
GROWTH Y
COST-CUTTING
MEASURES
 How Competitors will React to a Price
Change of Other Companies

Follow
Immediately
And Initiate
A Price change

Wait For Other Disregard/

Companies Reactions of Target Do Not
To Move First Competitors Follow
At all

Temporarily
Delay Any
Price Change
When To Increase Price
1. Inflation
2. Forex
3. Shortages
4. Product Repositioning
When To Cut Price
1. Lower Cost
2. Falling Market Shares
3. Excess Capacity
4. Excess Inventory
5. Discourage Competition
6. Socialized Pricing/Discrimination
7. New Market Segment
8. Availability of New Substitutes
9. Subsequent Sales
 TO ATTAIN TO MAXIMIZE TO GENERATE
HIGHEST QUALITY ADDITIONAL
PRODUCT IN THE
CURRENT MARKETING
MARKET PROFIT EFFORT

TO HELP TO KEEP THE

AUGMENT SALES SUPPORT OR
OF OTHER LOYALTY OF
PRODUCTS RESELLERS
PRICING
OBJECTIVES
TO HELP TO INCREASE
STABILIZE CUSTOMER
PRICE TRAFFIC

TO DETERMINE TO MAINTAIN/
TO PRE-EMPT OR IMPROVE
WHAT PRODUCT
MINIMIZE ENTRY MARKET
FEATURES WOULD
OF COMPETITION SHARE
BE OFFERED
 THE PRICE TAG LAW
R.A. 71 – Requires Price Tags
or labels to be affixed on all
articles of commerce offered
for sales at retail and
penalizing violations of such
requirement
 Price Tag
Is a device attached to a
commodity stating the
price at which it is offered
and/or displayed on stalls,
shelves, showcases,
baskets, boxes and offered
for sale at retail to the
general public should have
a price tag
Violations of the Price Tag
Law
1. Failure to affix appropriate price tags or
labels on articles offered or displayed
for sale
2. Selling of articles at prices other than
those stated on the price tag
3. Giving discount discriminately
4. Price tags or labels are not visible
5. Erasing or altering any information on
price tag or labels
Characteristics of a Price tag
 Be clearly written
 Be visible either at a distance of 3
meters or upon examination
 State the price of the commodity per
unit in pesos and in centavos, Philippine
currency
 Bear no erasures or alterations of any
sort
PRODUCT COST PLUS PRICING FREIGHT MARK-UP
BUNDLE ABSORPTION PRICING
PRICING
MARKET
SKIMMING BREAK-EVEN LOSS LEADER
SELLING PRICING PRICING
BELOW PRICING
COST
MARKET SEALED GEOGRAPHICAL
MARKET PENETRATION BID PRICING
SHARE PRICING PRICING
PRICING
BUYER OPTIONAL
ONE
COST ORIENTED ACCES-
PRICE
ORIENTED FOR- PRICING PRICING SORY
PRICING MULA STRATEGIES
DEMAND
DISCOUNT & ORIENTED
ALLOWNACE
PRICING PSYCHOLOGICAL
PRICE BARGAINING
PRICING

GOING RATE SELLING BELOW

DISCRIMINATORY
PRICING COMPETITION
PRICING
 MODEL OF BUYERS
COMPANY DECISION COMPANY
A B

OFFERING A OFFERING B

PERCEPTION

EVALUATION

BUY PREMIUM DECISION BUY REGULAR

USE USE
 PHARMACEUTICAL
MARKETING

PROMOTION MIX
DECISIONS AND STRATEGIES
PROMOTION MIX. The set of promotion
tools that the company uses to
reach the distribution channels and
the target consumers to pursue its
marketing objectives for
the period better and faster than
competition.
PROMOTION. Stands for the various
activities the company undertakes to
communicate and promote its
products to the target market
Is an exercise in communication
PROMOTION
Stands for the various activities of
the company undertakes to
communicate and promote its products
to the target market.
Is an exercise in communication.
 MARKET MIX
PEOPLE

PRODUCT PRICE
TARGET MARKET

PROMOTIONS PLACE

1. ADVERTISING
2. DIRECT MARKETING
3. SALES PROMOTIONS MARKETING
4. PR/PUBLICITIIES MIX
5. PERSONAL SELLING
 ADVERTISING
Any paid form of non personal
presentation and promotion of ideas,
goods, or services by an identified
sponsors
Informs and persuades through paid
media
Mass selling
Communication medium
 ADVERTISING FUNCTIONS

1. To make consumer aware of a

product or services or
company
2. To inform customers about
product or service benefits
3. To influence consumers to buy
4. To maintain product visibility
over time
 ADVERTISING OBJECTIVES

1. Informative Advertising
2. Persuasive Advertising
3. Comparison Advertising
4. Reminder Advertising
5. Reinforcement Advertising
 4 WAYS OF DESIGNING THE
ADVERTISING MESSAGE

1. Message Content = What to say

2. Message structure = How to say
it Logically
3. Message Forms = How to say it
symbolically
4. Message Source = Who should
say it
 ATTENTION INTEREST DESIRE ACTION
MODEL

THE MESSAGE SHOULD

GAIN AND CAPTURE “ATTENTION”

HOLD “INTEREST”

AROUSE “DESIRE”

ELICIT “ACTION”
 Qualities Of Advertising
1. Public Presentation (A Public
Mode of Communication)
2. Amplified Expressiveness
(Dramatizes message thru
colors, sounds and pictures)
3. Pervasiveness (repeating the
message over and over
again)
4. Impersonality (A monologue with
the Audience)
 MAJOR DECISIONS IN DEVELOPING
AN ADVERTISING PROGRAM

1. Objectives Setting
2. Budget Decision
3. Message Decision
4. Media decision
5. Advertising Evaluation
 3 MAJOR ADVERTISING
OBJECTIVES
1. TO INFORM
New product, New uses, Copy claim,
Price change, Company Image, Value-
added Services

2. TO PERSUADE
Brand switching, Substitution, Outright
purchase, Building Brand, Preference

3. TO REMIND
Where to buy, Sales campaign, Awareness
 5 Major Decisions In
Developing An Advertising
Program
1. MISSION What are the objectives?

2. MONEY How much can be spent?

3. MESSAGE What messages should be

sent?
4. MEDIA What media should be
used?
5. MEASUREMENT How should the results be
evaluated?
 TYPES MESSAGE CONTENT
1. The Appeal, Theme, Idea or Unique
Selling Proposition
2. Formulating the benefit, motivation,
identification
3. Rational Appeal, Audience self-interest
(Quality, Economy, Value)
4. Emotional Appeal, positive or negative (
fear, guilt, humor, love, pride, joy)
5. Moral Appeal, sense of what is right and
proper (Cleaner environment)
 STEPS IN CHOOSING ADVERTISING
MEDIA

1. Deciding on desired reach,

frequency, and impact
2. Choosing among major media
types
3. Selecting specific media vehicles
4. Deciding on media timing
5. Deciding on geographical media
allocation
 DIRECT MARKETING

Means selling products directly to

consumers using door-to door
selling
Using direct channel of distribution
such as catalogs
Direct selling through sales
representative - personal
explanation and demonstration of
a product
The use of non personal media to
contact consumers
The use of telemarketing
3 METHODS EMPLOYED IN DIRECT
MARKETING
1. Door-to-Door Sales
2. Company -Owned Retail Stores
3. Catalogs

4 ACTIVITIES HANDLED IN DIRECT

MARKETING
1. Processing of Orders
2. Keeping adequate inventory on hand
3. Transporting products to buyers
4. Maintaining hours convenient to
 3 DISTINCTIVE CHARACTERISTICS OF
DIRECT MARKETING
1. Non-public
2. Customized
3. Up-to-date

3 FORMS OF DIRECT MARKETING

1. Direct Mail
2. Catalog Retailing
3. Televised Shopping
 ADVANTAGES OF DIRECT
MARKETING
1. Provides consumers with
shopping convenience
2. Low operating expenses
because marketers do not
have the overhead of
retail stores
3. Liberal return policies
 SALES PROMOTION
Short-term incentives to encourage
trial or purchase of a product or
service
To influence the end consumers or
the ultimate purchaser/user; the
incentives are delivered either by
mass media or through in store
devices
Short term inducements for
purchasing
Ex. Of Sales Promotion
 Discount coupons for patients
 Prescription for a cause
 Gifts for the needy
 Medical Missions
 Free clinic operation
 Others – study grants, sponsorships,
honoraria,
TYPES OF SALES PROMOTION FOR
OTC/PROPRIETARY DRUGS

Discount Coupons Premium Promo

Bonus Packed offers Free Goods Promo

Piggy Back offers Rebates

Pick and Win Promo Pin Money

Raffle Promo Mystery Buyer

Pick- A- Gift “Sale” Campaign

Trading Stamps Scratch ‘N Match

 PUBLICITY/PUBLIC RELATIONS
A variety of programs designed to
promote and/or protect a
company’s image or its individual
products
To generate media exposure for the
product
Is more encompassing and deals
with the long term image of your product
A non paid media communication of
information about the
company or product generally in
 4 Categories of Public Relations
1. Financial PR
2. Government, business, and community
relations
3. Product Publicity
4. Internal Marketing

3 Channels For Gaining Publicity

1. News Release
2. Press Conference
3. Lobbying
 5 PUBLICITY STRATEGIES
1. Placement and type of new releases
or stories
2. Coverage via interviews and/or news
conferences
3. Participation in talk shows and local
interest programs
4. Visibility at conventions, seminars,
and public events
5. Public services announcements
 8 USES OF PUBLICITY
1. To announce new products, brands and
activities
2. To publicize new policies
3. To recognize employees
4. To describe research breakthroughs
5. To report financial performance
6. To maintain a certain level of positive
public visibility
7. To enhance a particular image
8. To overcome a negative image
3 DISTINCTIVE QUALITIES ON
THE APPEAL OF PUBLIC
RELATIONS

1. High Credibility
2. Off-Guard
3. Dramatization
 PERSONAL SELLING
“Face- to- Face” interaction with
one another or more prospective
purchasers for the purpose of
making sale
The oral presentation in a
conversation with one or more
purchasers for the
purpose of making a sale
The personal communication of
information to persuade a
prospective customer to buy a
goods or services
 PERSONAL SELLING

Prospecting Customer
Approach
Wants

Sales Answering
Presentation Questions

Follow
Close Up
(satis
faction,
Referrals,
Repurchase
ADVANTAGES OF PERSONAL SELLING

1. Greater Flexibility. Salespeople

can tailor sales presentations
to fit the needs and behavior of
individual customers
2. It can be focused on prospective
customers thus minimizing
wasted effort
3. It results in the actual sale
7 STEPS IN THE PERSONAL SELLING
PROCESS

BUILDING A LONG
TERM RELATIONSHIP

CLOSING

OVERCOMING OBJECTION

MAKING THE PRESENTATION

APPROACHING THE CUSTOMER

PREPARING

PROSPECTING AND EVALUATION

MERCHANDISING AND DISPLAYS
Covers every activity which helps
the dealer or outlet resell the
company’s product lines
End users have to pulled to one
side and be reminded.
FACTORS Which provide these reminders
1. Product displays
2. Merchandising paraphernalia
3. Drugstore owners, pharmacist,
personnel recommendations
DISPLAYS. “Silent Salesmen”
who push your brands even
in your absence
POSITION OF DISPLAYS
1. POP
2. On The Store Floor
3. On Preferential Shelf Space
4. In The Store Window
5. Check Out Counters
The Primary Task of Sales Display is to
SELL.
A prospective customer would silently ask
the following questions
1. Can I afford that?
2. Do I need that? What else do I need?
3. Is that good quality?
4. Should I get that one for less later?
5. How much do I need?
6. Are there other outlets that sells less?
7. Do I need to buy just one or more now?
 OBJECTIVES OF DRUGSTORES IN
RELATION TO
MERCHANDISING/DISPLAYS
1. To bring in more prospective buyers
into the store who will actually buy
2. To increase customer traffic even
during ordinary days
3. To sell the maximum range of product
line depth and width
4. To maintain or strengthen store and
brand loyalty
5. To increase average spending of target
clientele
 Pharmaceutical Marketing

PLACE MIX
DECISIONS AND STRATEGIES
 PLACE
Means distribution channels and
physical distribution
It is a very vital element of the total
marketing mix, that ensures
the adequate availability and
visibility of the right products, in
the right target markets, at
the right quantity, at
the right cost, at the right
condition, at the right time,
anytime and all the time.
 PLACE MIX DECISIONS AND
STRATEGIESCUSTTOMERS
PLACE END-USERS

Distribution/ Want product that

Market Channels are RIGHT

•Standard of quality
Making the right •Specifications in
product available terms of packaging
in the RIGHT •Formulation
and usage
•PLACE •Commercial stock
•TIME level
•Service warranties
•COST
super-value
•QUANTITY service and
•CONDITION amenities
Functions Of Marketing Channel Members

MARKETING
CHANNEL

Financing the
Physical
distribution
transport
cost & related
and storage
channel services

Implementation of Building a data bank

sales promotions of market info.
and related Inclusive of industry
marketing and competitors’
activities analysis
 Drug manufacturer

C
H
A
Local
N Drug
N Trader
E
L

1 Department of
Health, Gov’t.
Hospital

END USERS
 DRUG MANUFACTURER
C
H
A
N SALES REPS
N
E
L

2 DISPENSING
PHYSICIAN

END USERS
 DRUG MANUFACTUER
C
H
A
N
N
E
L Independent
Distributors
Retailers

END USERS
 DRUG MANUFACTURER/
C DISTRIBUTORS
H
A
N
N WHOLESALER
E
L

4
RETAILERS

END USERS
C DRUG MANUFACTURER/
H DISTRIBUTOR
A
N
N
E WHOLESALER
L

5 Jobbers

Retailers

END USERS
Pharmaceutical Drug Manufacturer
Company
National Distributor

PRIVATE Dispensing Government

Institution Physicians Distributor

Wholesaler/Retailer GOVERNMENT
Drugstore AGENCIES

PURE RETAILERS
DRUGSTORES

END USERS
 Drug Manufacturer

Independent Company
Distributors Warehouse

MERCURY DRUG CORP.

Branch operations Franchise Operations

Traditional Outlet Traditional Outlets

END
Non Traditional USERS Non Traditional
 DRUG INDUSTRY CHANNEL GEOMETRY

DRUG MANUFACTURER

SALES WHOLE- SALES

REPS SALERS REPS

DISPENSING WHOLE-
PHYSICIAN JOBBERS SALERS

GOVT.
RETAILERS RETAILERS RETAILERS AGENCIES

END USERS
 MIDDLEMEN
1. Wholesalers
2. Retailers
3. Jobbers
4. Manufacturer’s Representatives
5. Manufacturer’s Branches and
Franchises
6. Distributors and Dealers
7. Dispensing Physician
8. DOH and other Government units
9. NGO’s, Socio-Civic Charitable
Organizations
 INNOVATIVE DISTRIBUTION
CHANNELS
1. Groceries and Supermarkets
2. Trading Stores and Sari-Sari
3. Convenience Stores
4. Gasoline Stations
5. Boutique and Gift Shops
6. Post office and Air Cargo Forwarders
7. Multipurpose Hall, Villages/Subdivisions
8. Schools, Offices, Botica sa Barrio,
Botica sa Binhi
9. Clinics, Home Remedy Stores
N 1. INTENSIVE DISTRIBUTION
U
M Tapping the utmost potential of both
the traditional and non-traditional
B
sales outlets
E
R
2. EXCLUSIVE DISTRIBUTION
M
I Aggressively implementing the
D all-or-nothing exclusively arrangements
D with the outlets
L
E
M 3. SELECTIVE DISTRIBUTION
E
N Marketing efforts through
selective middlemen
 RESPONSIBILITIES OF MARKET CHANNEL
MEMBERS

MANNUFACTURERS
OR SUPPLIERS

Utmost support/co- Provide freely statistical

operation on all promo data and other market
program & campaigns information

Satisfactorily complies Periodically buy

company’s standards product lines in desired
for physical facilities quantities & frequencies

MARKET CHANNEL
MEMBERS
 FACTORS TO CONSIDER WHEN
SELECTING CHANNEL MEMBERS

1. PROFILE OF 4. ASSORTMENT OF
MEMBERS PRODUCT LINES FROM
Years in operation DIFFERENT COMPANIES
Financial Capability Related or non-related
Other Assets goods and services
Product length, width,
2. OVERALL and depth of assorted
REPUTATION AND goods
IMAGE IN THE
INDUSTRY AND 5. TRACK RECORD
COMMUNITY Sales growth
Profits
3. FUTURE GROWTH Market share
POTENTIAL AND Market Leadership
EXPANSION
CAPABILITIES 6. CUSTOMERS AND
LOCATION
 MANUFACTURER/SUPLLIERS
FREE GOODS DEAL
ADDITIONAL INCENTIVES DISCOUNTS
DISPLAY ALLOWANCES
LIBERAL CREDIT TERMS
SALES AND PROMO CONTEST
PIN MONEY AND REBATES
COOPERATIVE ADVERTSING SUBSIDIES
PRIORITY IN STOCK DELIVERIES AND
ALLOCATION OF NEW PRODUCTS
PERSONNEL TRAINING AND
DEVELOPMENT PROGRAMS

MARKETING CHANNEL MEMBERS

 7 WAYS OF MEASURING
MIDDLEMEN’S PERFORMANCE
1. Achievement of Sales Quota and Stock
Transfer Movement
2. Monthly Average Movement
3. Average Inventory Levels
4. Relationship Marketing or after Sales
Services
5. Support Provided In Company’s Sales
Promo Activities
6. Decisions Made On Damaged, Lost Or
Expired Products
7. Customer’s Delivery
 ELEMENTS OF PHYSICAL DISTRIBUTION

WAREHOUSING

INVENTORY
TRANSPORTATION MANAGEMENT

PHYSICAL
DISTRIBUTION

STORE CUSTOMER

PACKAGING RECEIVING
& MATERIALS HANDLING
Physical Distribution
 Involves the physical flow of products
 Is the development and operation of
efficient flow system for products
 Product movement from last step in
production process to point of
consumption
 From raw material;s stage, from
suppliers to final customers
Functions of Physical
Distribution System
 Identify inventory location and
warehousing system
 Establishing materials handling system
 Establishing inventory control system
 Establishing order processing steps
 Determining effective transportation
system
WAYS OF ALLOCATING PHYSICAL DISTRIBUTION
COSTS

15% ORDER
30% PROCESSING

TRANSPORTATIO COSTS
N COSTS
5%
OTHER COSTS

25% 25%
WAREHOUSIN INVENTORY
G COST COSTS
 WHAT CUSTOMERS WANT IN PHYSICAL
DISTRIBUTION

MANUFACTURERS/SUPPLIERS

ADEQUATE TECHNICAL
INVENTORIES ASSISTANCE

ABILITY TO MEET
IN-STORE
EMERGENCY STOCK
REQUIREMENTS PROMO SUPPORT

ASSSISTANCE IN
EXCELLENT AFTER
COMPUTER
SALES SERVICE INSTALLATION

LIAISON ACTIVITIES
PROMPT AND FAST
FOR LICENSING
DELIVERIES REQUIREMENTS
 MAJOR ELEMENTS OF DISTRIBUTION MIX

DISTRIBUTION MIX

ORDER
PROCESSIN WAREHOUSIN
G G
TARGET CUSTOMERS

INVENTORY TRANSPORTATIO
N
 MAJOR
INVENTORY
DECISIONS

WHAT TO WHEN TO
ORDER? ORDER?

HOW MUCH
TO ORDER?

MAJOR CONCERNS IN INVENTORY

MANAGEMENT
STOCK TURNOVER

Annual Rate of Number of Units sold during the

year stock Turnover =
(in units) Average inventory on
hand (in units)

Annual rate of Net Yearly Sales (in Pesos)

Stock Turnover =
(in units) Average Inventory on hand
(Pesos)
REORDER POINT FORMULA
REORDER PONIT = (Order Lead time X
Usage Rate) X
(Safety Stock)
Order Lead Time = is the period from the date
a sales order is placed until the needed
goods are ready for sale or use
Usage rate = means the average sales units
per day or the rate at which a product is
used in a production process.
Safety stock = is the extra merchandise kept
on hand to protect against out-of-stock
conditions resulting from
unexpectedly high demand, delivery delays
 SMALL QUANTITY OR LOW
SALES PURCHASES CAN
CAUSE THE LOSS OF VOLUME
DISCOUNTS AND
SERVICE AMENITIES

TOO HIGH INVENTORY

TURNOVER

LOW PRODUCT ASSORTMENT

CAN REDUCE SALES IF
END-USERS ARE UNABLE
TO COMPARE OR
RELATE ITEMS THAT ARE
NOT CARRIED

2 DISADVANTAGES OF TOO HIGH

TURNOVER
4 ADVANTAGES INVENTORY MANAGEMENT
OF HIGH FOR THE PERIOD
INVENTORY ARE PRODUCTIVE

HIGH MERCHANDISE
INVENTORY IS FRESH
TURNOVER

LOSSES FROM CHANGES

IN
STYLES AND PACKAGING

COCTS OF MAINTAINING
INVENTORY ARE LESSENED
TO THE MINIMUM
 REDUCING
ASSORTMENTS

ELIMINATING SLOW
MOVING OR NON
WAYS TO MOVING PRODUCTS
IMPROVE
INVENTORY
TURNOVER MAINTAINING
MINIMAL
INVENTORIES

DELIVERY ON
SCHEDULED DATES
AND TIME
FACTORS TO CONSIDER IN ORDER
SIZE
1. Inventory Turnover
2. Availability Of Quality Discount
3. Cost of Processing
4. Cost of Maintaining
TRANSPORTATION
1. Railroads
2. Motor Carriers
3. Waterways
4. Airways