Pharmaceutical Market Segmentation (PH82)
Spending, Strategy and Implementation
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- Published 2006
- 132 Pages
- 250+ Metrics
- 75+ Charts and Diagrams
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Pharmaceutical Market Segmentation: Spending, Strategy and Implementation
Cutting Edge Information developed this study to determine how companies use segmentation in marketing and promotion. Pharmaceutical Market Segmentation examines market segmentation budgets, structures, staffing, strategies and implementation to teach you how to either enact new segmentation plans or improve existing plans. From leadership to spending to sales team implementation, this report details top companies' segmentation strategies.
Pharmaceutical Market Segmentation analyzes market segmentation metrics and strategies to provide all the steps necessary to improve market segmentation via benchmarks for excellence.
The report makes its case with market segmentation metrics and techniques in three chapters:
Chapter 1: Pharmaceutical Market Segmentation Budgets, Structure and Staffing
Details brand-level market segmentation budgets as well as physician and consumer segmentation spending. Also examines participants' market segmentation structures and staffing.
Chapter 2: Marketing Segmentation Strategy
Examines various techniques for segmenting markets and provides real companies' rankings for and reactions to each technique.
Chapter 3: Implementing and Reviewing Market Segmentation Strategies
Explains how top companies convey segmentation strategy and its impact to their sales forces. Explores how these companies ensure that they have full sales force buy-in — and ensure that segmentation is working. Finally, the chapter discusses how often and in what way companies review their segmentation strategies after a product is launched.
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Companies Included in Market Segmentation Research
- Alcon Labs
- Amgen
- AnorMED Inc.
- Bayer
- Biogen
- Bristol-Myers Squibb
- Cubist Pharmaceuticals
- Embryon Inc.
- Everett Laboratories
- Johnson & Johnson
- Novartis
- Novo Nordisk
- Otsuka America
- Purdue Pharmaceuticals
- Sanofi-Aventis
- Sanofi Pasteur
- Schwarz Pharma
- Shire Pharmaceuticals
- Taro Pharma
- Quest Diagnostics
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Pharmaceutical Market Segmentation Metrics
Executive Summary
Figure E.1: Self-Grading Overall Segmentation Performance
Figure E.2: Average Product's Market Segmentation Budget
Figure E.3: Top Spenders' Average Product's Market Segmentation Budgets
Figure E.4: Grading Segmentation Techniques
Figure E.5: Grading Behavioral Segmentation
Figure E.6: Annual Reviews and Changes to Segmentation StrategiesMarketing Segmentation Budgets, Structures and Staffing
Brand Market Segmentation Budgets
Figure 1.1: Average Products' Market Segmentation Budgets
Figure 1.2: Percent of Average Brands' Budgets Earmarked for Physician Segmentation
Figure 1.3: Average Products' Physician Segmentation Budgets
Figure 1.4: Percent of Physician Segmentation Budgets Spent on Outsourced Activities
Figure 1.5: Average Products' Consumer Segmentation Budgets
Figure 1.6: Company D's Market Segmentation Budgeting Process
Figure 1.7: Company F's Market Segmentation Budgeting Process
Figure 1.8: Company I's Market Segmentation Budgeting Process
Figure 1.9: Percent of Total Segmentation Project Time Spent on Each Step
Figure 1.10: Percent of Spending by Segmentation Project Step
Figure 1.11: Outsourcing by Project Step
Figure 1.12: Outsourcing for Questionnaire Development
Figure 1.13: Outsourcing for Data Collection
Figure 1.14: Outsourcing for Data Cleansing
Figure 1.15: Outsourcing for Data Analysis
Figure 1.16: Outsourcing for Segmenting Customer Groups
Figure 1.17: Outsourcing for Segmentation Implementation
Pharmaceutical Market Segmentation Structure
Table 1.1: Brand Level Market Segmentation Leadership
Table 1.2: Market Segmentation Task Responsibilities
Figure 1.18: Outsourcing Percentage by Project Step
Figure 1.19: Company D's Market Segmentation Process: Setting Strategy
Figure 1.20: Company D's Market Segmentation Process: Performing the Work
Figure 1.21: Company D's Market Segmentation Process: Final Approval
Figure 1.22: Company D: Communicating Segmentation to the Sales Force
Figure 1.23: Company L's Market Segmentation Process
Figure 1.24: Company F's New Product Market Segmentation Process
Figure 1.25: Company F's In-Line Product Market Segmentation Process
Figure 1.26: Average FTEs in Each Major Department Dedicated to Market Segmentation
Pharmaceutical Market Segmentation Staffing
Figure 1.27: Brand Team FTEs Dedicated to Market Segmentation
Figure 1.28: Market Research FTEs Dedicated to Market Segmentation
Figure 1.29: Sales FTEs Dedicated to Market Segmentation
Figure 1.30: Consumer Marketing FTEs Dedicated to Market Segmentation
Figure 1.31: Company B FTEs Dedicated to Market Segmentation
Figure 1.32: Company E FTEs Dedicated to Market Segmentation
Figure 1.33: Company F FTEs Dedicated to Market Segmentation
Small Pharma/Biotech Pharmaceutical Market Segmentation Budget and Structure Snapshot
Figure 1.34: Small Pharma/Biotech Average Brands' Overall Market
Segmentation Budgets
Figure 1.35: Small Pharma/Biotech Average Brands' Physician Segmentation Budgets
Table 1.3: Small Pharma/Biotech Brand Level Marketing Segmentation Leadership
Table 1.4: Small Pharma/Biotech Marketing Segmentation Task Responsibilities
European Market Segmentation Budget and Structure Snapshot
Figure 1.36: European Average Brands' Overall Market Segmentation Budgets
Figure 1.37: European Average Brands' Physician Segmentation Budgets
Table 1.5: European Brand Level Market Segmentation Leadership
Table 1.6: European Market Segmentation Task Responsibilities
Pharmaceutical Market Segmentation Strategies
Methods of Market Segmentation
Figure 2.1: Usage by Segmentation Type
Figure 2.2: Grading Segmentation Techniques
Figure 2.3: Grading Behavioral Segmentation
Figure 2.4: Grading Attitudinal Segmentation
Figure 2.5: Grading Volumetric Segmentation
Figure 2.6: Grading Psychographic Segmentation
Figure 2.7: Grading Demographic Segmentation
Figure 2.8: Grading Geographic Segmentation
Figure 2.9: Grading Longitudinal Segmentation
Timing Market Segmentation
Figure 2.10: Self-Grading of Overall Segmentation Performance
The Future of Pharmaceutical Market Segmentation
Table 2.1: Latent Class Segmentation Versus Traditional Methods
Small Pharma/Biotech Marketing Segmentation Methodology Snapshot
Figure 2.11: Small Pharma/Biotech Companies' Usage of Segmentation Methods
Figure 2.12: Small Pharma/Biotechs' Grading of Segmentation Techniques
European Market Segmentation Methodology Snapshot
Figure 2.13: European Companies' Usage by Segmentation Method
Figure 2.14: European Companies' Grading of Segmentation Techniques
Implementing and Reviewing Pharmaceutical Market Segmentation Strategies
Implementing Physician Segmentation
Figure 3.1: Company D: Communicating Segmentation to the Sales Force
Figure 3.2: Company F: Marketing Research Sells Segmentation
Figure 3.3: Company I: Trickle-Down Introduction
Figure 3.4: Company U: Sales Force Preparation in the 12 Months Before Launch
Figure 3.5: New Rep Training
Figure 3.6: Existing Rep Training
Figure 3.7: Average Number of Physician Segments Created
Reviewing Market Segmentation
Figure 3.8: Times Market Segmentation Reviewed per Year Back to Top -
Market Segmentation Report Sample
The following is an excerpt from the Executive Summary's Key Findings.
Win Sales Reps' Buy-In
While marketing, brand teams and market research are integral in the development of segmentation strategy, the sales force is the key to driving it. Without the sales teams' participation, any targeted promotions, scheduling systems, targeted presentation styles and other benefits of segmentation are worthless. While marketing must set the promotional strategy for a drug, including market segmentation strategies, it must gain sales' buy-in and hold reps and district managers for their performance in the field for segmentation to fully pay off.
The first step to winning the sales forces' support is to involve them heavily in the setting of segmentation strategy and the building of segments. At some companies, sales teams meet with marketing personnel at key steps of the segmentation process — providing feedback and offering their own insights into the progressing plans. The more innovative companies actually listen to and implement the sales teams' ideas.
Before a segmentation plan can be finalized at many of these same companies, the sales force has to approve of it. Sales leaders sit in on presentations given by market research or vendors to present final segmentation for brands. Before the plan moves forward, the brand team, sales and market research must reach a consensus on the final segmentation thus ensuring each group's full support. Naturally, these sessions involve some give and take, but in the end, ideally all the departments agree on the plan ensuring their full support.
Even after involving sales teams in the strategy setting and final segmentation process, brand teams still need impressive roll outs to ensure the buy-in of the entire sales force. Experienced market segmenters use POA meetings and training workshops to sell segmentation to the sales force. Brand directors introduce the primary strategy, reveal the segments and discuss why they have adopted the specific segmentation strategy. With this base on knowledge in place, they then discuss how the sales force will benefit from the promotional strategy within each segment.
Companies vary in their approach to disseminating the segmentation during roll out. While some companies rollout the strategy to the entire sales force, others pick top performers and influencers to learn the material and venture back to the territories to train their counterparts. Still other companies merely inform the sales leadership of the plan and let them pass on the information. Which method for disseminating the information is best for companies depends on the individual sales forces and the structures of the companies. What works best for one, may not for another.
However companies rollout their segmentation plans, following initial rollout, it is essential that district managers follow up with reps to answer questions, fine-tune tactics and ensure execution of the segmentation strategy. Reps should have as much support in the field as possible to ensure that they understand the segmentation strategy and buy-in to making it successful.
...To read more, please see the Executive Summary of Pharmaceutical Market Segmentation: Spending, Strategy and Implementation
The following is an excerpt from Chapter 2, "Market Segmentation Strategies," Section 1, "Methods of Market Segmentation."
Behavioral Segmentation
Behavioral segmentation examines targets' behavioral characteristics. For physicians, behavioral segmentation touches upon variables that other segmentation techniques overlook such as prescribing behaviors, influence networks, the factors that influence these behaviors, generic concentration, adoption and utilization habits, and brand loyalty. In regards to consumers, behavioral segmentation investigates factors such as brand loyalty, usage rates, inclination to purchase, benefits desired, user status and frequency of purchases.
The insights derived from behavioral segmentation can be extremely useful because they help companies understand what their targets are actually doing as well as some of the reasons why the targets behave the way they do. Therefore, behavioral segmentation helps uncover the what and why piece of the puzzle. Since this form of segmentation investigates behaviors, it can easily be translated into actionable efforts. A company that understands how an individual acts as well as some of the underlying reasons why — has a real opportunity to positively influence those factors and affect behaviors.
Participating companies find behavioral segmentation to be the most effective of the different techniques examined in this study. The method received a 4.5 average grading on a scale of 5, with 5 being the most effective. This noteworthy grading signifies the industry's acceptance and reliance on behavioral segmentation.
In fact, as Figure 2.3 shows, only two companies gave it a rating lower than 4 [Figure 2.3 appears in full report]. One reason companies may find behavioral segmentation to be so effective is that it not only provides good insight into targets' behaviors, but is actionable information that can help them develop more tailored promotional messages and targeted efforts. Companies not only learn who to target, but also the best way to influence their behaviors. Behavioral segmentation also drives much deeper into each segment, revealing much more useable information on them than simply classifying them based on demographics or their geography.
As with every form of segmentation there are drawbacks and disadvantages to the technique. For behavioral segmentation, data collection remains a difficult process that can be time-consuming and expensive. It also proves more difficult to implement based on the complexity of the results. Educating sales reps on each of the distinct segments and how they act can be difficult. Making sure that reps use the proper materials and sales tactics with each group is another big problem facing companies using behavioral segmentation.
...To read more, please see Chapter 2 of Pharmaceutical Market Segmentation: Spending, Strategy and Implementation
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