Competitive diffusion of new prescription drugs: The role of pharmaceutical marketing investment

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Title: Competitive diffusion of new prescription drugs: The role of pharmaceutical marketing investment
Authors: Ruiz-Conde, Enar | Wieringa, Jaap E. | Leeflang, Peter S.H.
Research Group/s: Investigación en Marketing
Center, Department or Service: Universidad de Alicante. Departamento de Marketing
Keywords: Trial–repeat diffusion models | Adoption rate | Repeat rate | Marketing diffusion | Pharmaceutical marketing | New prescription drugs
Knowledge Area: Comercialización e Investigación de Mercados
Issue Date: Oct-2014
Publisher: Elsevier
Citation: Technological Forecasting and Social Change. 2014, 88: 49-63. doi:10.1016/j.techfore.2014.06.006
Abstract: We investigate the impact of marketing interventions on the diffusion of new products in a competitive setting. We develop a family of trial–repeat diffusion models to identify the longitudinal effects of marketing efforts, and complement this with a cross-sectional analysis to identify the between-drug effects. We believe that we are the first to consider both longitudinal and cross-sectional marketing effects in a trial–repeat diffusion context. The models are calibrated on 34 drugs in three therapeutic categories using monthly data. Our longitudinal analyses demonstrate that the trial rate responds positively to increases in own marketing expenditures but is affected negatively by competitors' expenditures. We show how these within-drug analyses provide opportunities for accelerating the diffusion process by reallocating marketing expenditures over time. The cross-sectional analyses demonstrate that pharmaceutical marketing has both an informative and a persuasive influence on the diffusion of new drugs. We find that direct-to-consumer advertising does not affect the trial nor repeat rates during the first months after introduction. We illustrate the managerial relevance of our results and find that a reallocation of marketing budgets does not alter the saturation level, but can help in attaining this level faster. We show that this has a great effect on sales, market share and ROI.
ISSN: 0040-1625
DOI: 10.1016/j.techfore.2014.06.006
Language: eng
Type: info:eu-repo/semantics/article
Peer Review: si
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Appears in Collections:INV - Investigación en Marketing - Artículos de Revistas
INV - UA.BRANDSCIENCE - Artículos de Revistas

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