One of the biggest
differentiations of pharmaceutical companies are their patents. Their patents
hold the most value when it comes to product distribution, but when the patents
begin to expire; competition heightens when generics appear on the shelves. A
battle between brands versus generics ensues and differentiation becomes
extremely important for the companies.
Product
strategy is a way which companies help their products have a longer market
life. When a companies product’s sales begin to slow down due to generics
coming out, the company will find other clinical usages for the drug, thus
strengthen its market life. Also, advertising directly to consumers helps to
promote the product so that patients would be encouraged to ask their
physicians to prescribe them that product. For example, my company,
AstraZeneca, has a drug called Nexium which topped advertisement to consumers
at about 255 millions of dollars, increasing public awareness and sales.
Altering
product form can also differentiate companies, just by simply changing the form
of the medication; like from a liquid to a tablet. Giving consumers a variety
of one product can help differentiate a company from a generic, as well as
brand loyalty. Brand loyalty stems from experience of using a product and
having a good reaction toward it. This gives the consumer a tendency to buy
from the brand rather than the generic, in fear of the generic not having the
same effect.
In the end, pharmaceutical company
differentiation is really based on how the companies promote and differentiate
their products. The more they make their drugs have more benefits, the more
likely consumers will buy that drug.
Dubey,
Rajesh. "Journal of Medical Marketing:Device, Diagnostic and
Pharmaceutical Marketing." SAGE. SAGE, n.d. Web. 24 Oct 2012.
<http://intl-mmj.sagepub.com/content/9/2/104.full.pdf html>.
Behner,
Peter. "2012 Healthcare - Pharmaceutical Industry Perspective." Booz&co..
Booz&co, 07 2011. Web. 24 Oct 2012.
<http://www.booz.com/global/home/what_we_think/featured_content/perspectives_12/health_pharmaceutical_2012/49983621>.
I find this post very beneficial because I think it focuses on what is actually working in the current market in terms of advertising. Which so happens to be a departure from the traditional means of distributing drugs; having to distribute it directly to the physicians. Also one thing that you pointed out is the way in which they differentiate their product from generic brands by providing it in many forms, gives these companies a more competitive edge which I think is worth investing in regardless of generic companies, who might not be able to target as many customers.
ReplyDeletePatent differentiation is a very relevant differentiation in the pharmaceutical industry. Consumers want to have the best available product for their needs, and with the increased production of generics, brand name products have more competition now than ever.
ReplyDelete