IMPACT OF ADVERTISING ON CUSTOMER PURCHASE BEHAVIOUR IN PHARMACEUTICALS

IMPACT OF ADVERTISING ON CUSTOMER PURCHASE
BEHAVIOUR IN PHARMACEUTICALS
SUBMITTED TO THE
GOVERNMENT COLLEGE UNIVERSTY OF FASILABID
(Sub-Campus Sahiwal)
Department of
BUSINESS ADMINISTRATION
SUBMITTED BY:
AzharHussain
Under the Supervision of
DR .Ahmad nawaz
DEPARTMENT OF BUSINESS ADMINISTRATION
Government College University Sahiwal (sub-campus Sahiwal )
2017

DECLARATION
I hereby affirm that my research work entitled “Impact of Advertising on Customer
Purchase Behavior in Pharmaceuticals” for the award of Doctor of Philosophy from
Lahore University, Lahore is my own original work and has not been submitted for
Any assessment or degree/diploma or award at the University of Lahore or any other
University.
_________________________
Department of Business Administration

ACKNOWLEDGEMENT
It is with immense gratitude and pleasure that I acknowledge the help and support of
my supervisor Dr.Ahmad zaheer Nawaz Goodman in this thesis. He has been an
excellent guide, mentor and friend in this journey. I am so deeply grateful for his help,
professionalism, and valuable guidance throughout this research and through my entire
program of study that I do not have enough words to express my deep and sincere
appreciation.
I would like to thank to Dr. Ijaz Head of Department of Business Administration, and
all the respected teachers and staff of the Department for their constant support and
encouragement throughout my research work.
This thesis would not have been possible without the love and support of my family
and friends. I especially thankAtharHussain for his helpful insights and for standing by
me through good times and bad. I also acknowledge him for their best suggestions and
constant support.
Finally, I must express my very profound gratitude to my Mother,providing me with
unfailing support and continuous encouragement throughout my years of study and
through the process of researching and writing this thesis. This accomplishment would
not have been possible without them. Thank you.
AzharHussain

ABSTRACT
This study was conducted to develop a simple framework for finding out the impact of
the different kinds of advertisement and promotional tools offered by pharmaceutical
industry on the Consumer Purchase behavior and prescribing behavior of doctors. The
trend towards self-medication is likely to grow as consumers are becoming familiar
with OTC drugs, due to extensive advertising by companies. The present study intends
to explore advertising effectiveness of OTC drugs and Prescription drugs amongst
consumers and Doctors. Although there are different means of providing the
consumers with drug information, advertising seems to be one of the best way and a
powerful method of broadcasting information. The customer purchase behavior study
in Pharmaceutical advertisement is based on the consumer purchase behavior because
buying the medicine lies in the hand of customer (doctor) rather than final consumer
(patient). So the customer (doctor) acts as an indirect consumer. Due to this there are
two types of customers ear-marked in this study; one is doctor who is indirect
consumer and the other one is patient who is direct consumer. The advertisement of
Pharmaceutical was found to be persuasive. The study has given good insights for
marketers and advertisers of drugs and suggests including elements in the
advertisement that increase believability and trust of the advertisement. Results of
factor analysis revealed the view that the overall mean score of all the 27 items of
attitude towards prescription behavior was 2.96 and standard deviation 0.9091.This
indicates that pharmaceutical advertisement makes an impact on doctor prescription
behavior. Moreover the study also focused on whether the perception of physicians
towards variouspromotional tools is different with respect to demographic variables.
This research based on descriptive research or quantitative research. In this descriptive
research Cross-Sectional study used to compare demographical variables with attitude
of the respondent. Well-structured Questionnaires was developed for direct consumer
and doctors to identify important variables influencing Pharmaceutical advertising
effectiveness and purchase behavior towards medicine. Non probability systematic
convenient sampling technique has been followed. Survey was conducted and data was
analyzed on the basis of responses provided by 329 respondents as consumer and 150
respondents as Doctor. Researcher has applied factor analysis for data reduction and
ANOVA & Chi-Square test for hypothesis testing. Findings of the study can help the
marketing managers of pharmaceutical companies in designing their promotional
strategies especially for doctors and consumers. Construct validity and reliability of the
data were tested using Cronbach’s alpha coefficient. Descriptive statistics and Chi-
Square Tests for Independence were generated to study the relationship between
measures for each of the research questions and the demographics & miscellaneous
variables. Results show that advertisement is effective in affecting the decision process
and positive impression of the Consumer towards particular medicines and there is
significant association of medium of advertisement that gets the attention with
educational qualification, Occupation and age of the respondent as the Chi-square
value is significant. The Visual presentation of advertisement creates more attention
and makes their impacts in selection of medicine.

Contents
CHAPTER- 1...................................................................................................................4
INTRODUCTION...........................................................................................................7
INTRODUCTION..........................................................................................................9
Factors Influencing Consumer Behavior.......................................................................19
Reference group: ...........................................................................................................20
Family:...........................................................................................................................21
Social status and role:....................................................................................................21
Personal Factors: ...........................................................................................................21
Age and stage in life cycle.............................................................................................22
Personality and self concept:.........................................................................................22
Psychological Factors:...................................................................................................22
Motivation: ....................................................................................................................23
Perception:.....................................................................................................................23
Learning:........................................................................................................................24
Belief and Attitude: .......................................................................................................24
Psychographic Factor: ...................................................................................................24
Marketing to Physicians and Consumers ......................................................................24
Market Characteristics That Influence Promotional Strategies .....................................25
CHAPTER- 2.................................................................................................................32
REVIEW OF LITERATURE........................................................................................32
CHAPTER- 3.................................................................................................................46
RESEARCH METHODOLOGY ..................................................................................46
Scope of the research:- ..................................................................................................47
Research design:............................................................................................................47
Selected Variables .........................................................................................................49
Definitions of variables .................................................................................................50
Hypothesis .....................................................................................................................53
Hypothesis .....................................................................................................................53
Size of sample: ..............................................................................................................54
Sampling Technique:.....................................................................................................54
Survey Instrument: ........................................................................................................54
CHAPTER- 4.................................................................................................................55
Data Analysis.................................................................................................................55

Data analysis..................................................................................................................55
Reliability Test of Data .................................................................................................59
CHAPTER- 5.................................................................................................................61
DISCUSSIONS AND CONCLUSION.........................................................................61
Managerial Implications for doctors: ............................................................................63
Conclusion:....................................................................................................................63

Chapterisation Scheme
The whole study has been divided into five chapters:
Chapter 1: Introduction
Chapter 1 is the Introduction presents the meaning, features and rationale of OTC
drug advertisement, role of various communication media in buying decision process,
various factor that influence consumer purchase behavior and doctor prescription
behavior. The last section consists of the rules and regulations which controls the
Indian Drug Industry in the sales and advertisement of OTC and non OTC drugs
along with the sales and growth figures of the Indian Drug industry in various years.
Chapter 2: Review of literature
Chapter 2 consists of literature review regarding various mode of advertisement,
impact of advertisement, OTC and Prescription drugs, DTCA, Brand Advertising,
How ads can influence consumer behavior and doctor prescription behavior.
Chapter 3: ResearchMethodology:-
Chapter 3 consist of Research Methodology presents need and scope of research, pilot
study, Data collection, discussion about questionnaires, Sampling design and brief
summary of tools used for analysis
Chapter 4: Data Analysis:-
Chapter 4 presents detailed analysis of demographic variables of doctor and consumer
that influence consumer and prescription behavior, Influence of prescription decision
with advertisement, Impact of Pharmaceutical Advertisement on doctor's Prescription
behavior, Influence of Medical Representative on doctors, Importance of medium
providing information about medicines.

Chapter 5: Summary and Conclusions
Chapter 5 includes the summary and conclusions of the study of the impact of

INTRODUCTION
Advertising is used for communicating, exchanging/delivering business information to
the present and prospective customers. It usually provides information about the
advertising firm, its product qualities, place of availability of its products, etc.
Advertisement is indispensable for both the sellers and the buyers. However, it is more
important for the sellers. In the modern age of large scale production, producers cannot
think of pushing sale of their products without advertising them. Advertisement
supplements personal selling to a great extent. Advertising has acquired great
importance in the modern world where tough competition in the market and fast
changes in technology.
This research delineates that the customer purchase behavior in Pharmaceutical
advertisement is based on the consumer purchase behavior because buying the
medicine lies in the hand of customer (doctor) rather than final consumer (patient). So
the customer (doctor) acts as an indirect consumer. Due to this there are two types of
customers ear-marked in this study, one is doctor who is indirect consumer and the
other one is patient who is direct consumer. In context to the pharmaceutical industry
in India advertisements make an impact on the prescription behavior of the customer
(doctor), along with the direct consumerwho purchase the OTC drug (Over the Counter
Drug which doesn’t requiresthe prescription of the doctors.The Pharmaceutical
marketing differs from othertypes of marketing because the consumer i.e. the patients
are not the target audience, whereas the physicians prescribing the medicines are the
target audience of the pharmaceutical companies. It is the doctor who makes the
decision on behalf of the patient. Physicians are privileged with the right of
recognizing the need of their patients and recommend medications for the well-being
of their patients. Hence, the relation between the physician and pharmaceutical
companies may create a conflict between the ethical professional interest of a doctor
and his financial self-interest. The increase in incentives to attract the doctor’s
prescription behavior reflects as a rise inthe price of prescription medicines. The
pharmaceuticals resort to many ways in marketing their product. Giving away gifts,
free lunches, sponsoring education and holidays have all been criticized as
inducements which compel a doctor to prescribe without scientific basis .
A study from Canada showed that the association with pharmaceuticals leads to less
than appropriate prescribing behavior by the doctor .Many physicians, however, do not
feel that their prescriptions are influenced by gifts and other incentives provided by
pharmaceuticals. Advertising facilitates consumer choice and it also enables consumers
to purchase goods as per their budget requirement and right choice which makes
consumer happy and satisfied. A good advertising campaign involves lots of creativity
and imagination. When the message of the advertiser matches the expectations of
consumers, such creativity makes the way for successful campaign. The advertiser
expects to create a favorable attitude which leads to a favorable action. Any advertising
process attempts at converting the prospects into customers. Thus it is an indirect
salesmanship and essentially a persuasion technique and it does not attempt at

maximizing profits by increasing the cost but by promoting the sales so in this way it
won’t lead to increase the price of the product. Thus, it has a higher sales approach
rather than the higher-cost approach.
Advertisement as a non-personal presentation is different from salesmanship as latter
is personal selling whereas advertising is non-personal in character and it does not
meant for individuals but for all. There is absence of personal appeal in advertising.
There is an Identified Sponsor who may be an individual or a firm, pays for the
advertisement and the name of a reputed company may increase sales of products. In
Pharmaceutical advertising online, in print, television or radio broadcast, direct to
consumer, or direct to physician are all variations of pharmaceutical advertising.
Advertising Campaigns can be strategic and include direct marketing, billboard design,
brochure design and development, video production, medical animations and more, to
circulate information on a new drug. Promotion in one form or another is employed by
every business irrespective of the commodity it produces. However, the
pharmaceutical industry which is regulated by drug rules and medical ethics to
communicate sophisticated information on drug usage to a critical and highly qualified
audience. As a matter of fact, pharmaceutical promotion is a vital source of technical
information and makes an important contribution towards educating the profession
also towards the right usage of the drugs. It is relevant to note at this juncture that there
are three fundamental elements in product costs in any modern industry or business,
and pharmaceutical industry is no exception. These are high technology manufacturing
costs, selling/promotion costs and research and development costs. In drug industry
particularly, the products are rather numerous and diverse, indicated for a host of
disease conditions, and each product has its own promotional requirements to suit the
needs of various specialties in medical practice which further adds to the costs which
becomes more important when the industry has to serve doctors in rural areas who are
not highly qualified and yet are called upon to treat a wide variety of diseases
prevalent in the rural community.
As said before, the unique aspect of pharmaceutical promotion is the communication of
completely prescribing information on the drugs to highly qualified medical men. In
view of the advances in drug therapy witnessed during the post independence period, it
is only natural that the members of the medical profession wish to stay abreast of the
new discoveries and developments taking place in the medical world from time to
time. For such a target audience, communication about the vital information on drugs
is more than mere promotion is a service. The job of communicating information and
promoting the pharmaceutical products to the professionals is done through Medical
Representatives who plays an important role in that. It is he who details a product
thoroughly to a practicing doctor and discusses the composition, mode of action of
each ingredient, indications, dosage, side effects, precautions, contraindications, pack
and price of the product. Doctor raises several queries concerning the use of the
product in the types of patients he sees in his day-to-day practice, and thus collects
complete information on the product and its relative advantages over similar other
products in the market.

Advertising to the General Public:-The Drug & Magic Remedies(Objectionable
Advertisement) Act & Rules mentions a list of ailments for which no advertising is
permitted. It also prohibits false or misleading advertisements which, directly or
indirectly, give false impressions regarding the true character of the drug, make false
claims, or are otherwise false or misleading in any particular respect. There is an OPPI
Code of Pharmaceutical Marketing Practices, 20101, based on the IFPMA code.
Currently, there is no specific law which prohibits the advertising of prescription
drugs.
Advertising the Products in Medical Journal: - Journal advertisementsattract
attention because they are visually appealing also see them as a way of keeping
medical practice nor up-to-date. The Ethical Criteria for Medicinal Drug Promotion
developed by the World Health Organization (WHO) suggest the types of information
that, as a minimum should be contained in a journal advertisement (WHO 1988), (see
box ). The aim is to ensure that basic information needed for prescribing decisions is
present. The medicine’s International Nonproprietary Name (INN), usually the generic
name, is a key piece of information that should always be included. Generic names
help doctors and pharmacists to identify which class a medicine belongs to and can
prevent doctors from unknowingly prescribing two medicines from the same class to a
patient.
The World Health Organization’s Ethical Criteria recommend that the following
Information be included in pharmaceutical advertisements appearing in medical
Journals.
Name(s) of the active ingredient(s) using either International Nonproprietary Name
(INN)
(INN) or the approved generic name of the medicine
Brand name
Content of active ingredient(s) per dosage form or regimen
Name of other ingredients known to cause problems
Approved therapeutic uses
Dosage form or regimen
Side effects and major adverse medicine reactions
Precautions, contraindications and warnings
Major interactions

Name and address of manufacturer or distributor
Reference to scientific literature as appropriate
Direct mailing of publicity material to doctors:-It is the sending ofpublicity material
like Textual and Audio-Visual Promotional Material to Doctor. There has been a
massive growth in direct mail campaigns over the last 5 years. Direct mail allows an
organization to use their resources more effectively by allowing them to send publicity
material to a named person within their target segment.By personalizing advertising,
response rates increase thus increasing the chance of improving sales.
Medical conferences, especially for a new product: - Companies organize medical
conference to promote new products in order to provide the information like uses, dose
regimen, contradiction & adverse effect etc. to the medical practitioner.
Electronic or Broadcast Media Advertising :-Electronic or broadcastmedia consists
of (i) radio, (ii) television, (iii) motion pictures, (iv) video and (v) the internet. The
radio is audio in nature, appealing only to the sense of sound (ears). Radio advertising
is more effective in rural areas, as compared to urban regions. Television, as an
advertising medium, is more attractive and effective because it is an audio-visual
medium appealing to both the senses of sight sound (eyes and ears). Different methods,
such as spot announcements, sponsored programmes etc. are used for broadcasting
advertising messages. However, broadcasting media are very expensive form of
advertising and sometimes it also undertaken through movies, video, and the internet.
Strategies for New and Switched OTC Pharmaceutical Products:-OTCmarketing
strategies are most important and unavoidable aspect of any pharmaceutical
organization especially what happens when a pharmaceutical products losses the patent
protection, it is important to consider whether radical change is really necessary. It may
be that the pharmaceutical product is operating in a niche category that is too small to
attract challenging generic competition, at least in the short term. It could also be that
the awareness and image of the brand is so strong in patients and doctors minds that it
would retain most of its equity even after the loss of patent protection. In most cases
however, the entry of generic competitors radically alters the competitive setting and
calls for appropriate radical responses, the few major strategies available to
pharmaceutical brands facing competition from OTC and generic products are briefly
reviewed. Marketing strategies available for a prescription drug facing competition
from existing generic product involve a trade-off between brand building and price
competition.
A company can also resort to no marketing oriented strategies such as legal efforts to
extend patent protection or tactical alliances with generic makers and can
simultaneously implement different strategies, thereby creating a hybrid model. It is

nevertheless useful to review each strategy independently, starting from the most
common to the least common. Some of the strategies are discussed here
i) Low Price strategy: This strategy has the lowest potential for brand building. Onthe
other hand, narrowing the price gap with revital addresses the main problem created by
the expiry of the patent; that the equity of the brand can no longer sustain a large price
differential with what is, essentially, the same product. At the extreme, comparing the
price with the generic will make doctors, pharmacists and regulators indifferent
between the two and may force the weakest generic makers out of the business, given
their lower economies of scale. On the other hand, price competition invites retaliation
and can quickly degenerate into a price war that would kill all the profits in the
category. Another issue to be kept in mind here is that most doctors who prescribe the
drug are not aware of prices. Communicating the price to the consumers is therefore an
integral part of this strategy.
ii) Divest strategy: - It involves cutting all promotional and research
expensesonce the brand faces direct competition from revital and redirecting the
savings towards brands that are still enjoying patent protection. Sometimes, this
‘milking’ strategy actually involves price increases to take advantage of the higher
brand equity of the brand among the smaller segment of hard core loyal customers.
This strategy leads to the lowest levels of brand building as the brand is not supported
and price competition as the price advantage is not challenged. The success of this
strategy depends on the inertia of doctors, patients and the other Stakeholders. When
their motivation to switch to the newly-available generic is low, either because of low
financial incentives or strong attachment to the brand or to the value of brand equity
for funding research and development, such a strategy can deliver high profitability, at
least over the short term. As many examples have shown, it is not always easy to
convince doctors and patients to upgrade to the new patent protected drug in the
category and patenting these next-generation products is becoming increasingly hard.
One of the major drawbacks of this strategy is that it encourages generic makers to
challenge drug patents more aggressively, knowing that the market will be all theirs as
soon as they have received the green light. Introducing new and improved flavors,
packaging, or delivery systems can lead to additional emotional or functional consumer
benefits. The resulting differentiation enhances the awareness and image of the brand
and hence increases its equity. Because these innovations typically do not extend
patent life however, it is more difficult to pass the costs on to the consumer when
facing generic competition and hence, this strategy’s leads one step ahead towards
price competition. In addition, these improvements can be easily copied by generics
and thus often have only a weak impact on sales, while reducing margins. These
changes can also be perceived as marketing gimmicks and hurt the perceived scientific
integrity of the brands which Provide more value to the money.
(iii) Innovation strategysort of introducing a completely new molecule,pharmaceutical
companies can innovate by launching new forms and dosages or by demonstrating
effectiveness for new indications. They can also innovate by offering better services
for doctors and better communication on the illness and on the brand through higher

promotion by the medical representatives. Compared with the ‘Milk and Divest
strategy, this option also entails low price competition, but can improve the equity of
the off-patent brand by offering additional patent protection. On the other hand,
innovations require years of research before being authorized and, in some countries,
do not necessarily extend the duration of the patent. Provide more value for the money
introducing new and improved flavors, packaging, or delivery systems (e.g. easy to
swallow pills, or patches) can lead to additional emotional or functional consumer
benefits. The resulting differentiation enhances the awareness and image of the brand
and hence increases its equity. Because these innovations typically do not extend
patent life however, it is more difficult to pass the costs on to the consumer when
facing generic competition and hence, this strategy’s lead is one step ahead towards
price competition. In addition, these improvements can be easily copied by OTC
marketing companies and thus often have only a weak impact on sales, while reducing
margins. These changes can also be perceived as Marketing gimmicks and hurt the
perceived scientific integrity of the brand. Pharmaceutical companies can try to fight at
both ends of the market by introducing their own generic. This will reduce the
profitability of generic makers and may deter them from entering the category. On the
other hand, pharmaceutical companies have realized that producing and marketing
revival requires different skills to their traditional business and that it is difficult to be a
strong player in both business models. To overcome this difficulty, pharmaceutical
companies can license the drug before the expiry of the patent in exchange for
royalties. The new copy will typically be priced higher than a true generic, but will
benefit from first mover advantage, preferential access to raw material and
manufacturing know how, while still deterring entry from other generic makers.
Marketing approaches of Super Core Model: - In pharmaceutical marketthere has
been a significant shift from Acute towards Chronic Therapy area. Chronic segments
are driving the growth of the market as leading prescribers in these segments are
specialists as opposed to general practioners. This is evident from high growth rates
achieved by firms like anjum , Dr.Zeeshan and City pharama Ltd. who have focused
on these segments.10 Medical representatives are rearranged throughout the new
companies and more or less some of the sales representatives are afraid of losing their
job, due to the changing scenario and the possible lay offs. On the other hand, the new,
bigger, pharmaceutical companies are competing more and more with one another and
in order to stress their products might adopt a more aggressive sales strategy. For
Example: sometimes in the same geographical area there are five representatives for
just one company, or different representatives for the same drug in different settings.
As a result of the new aggressive strategy, the aggressiveness of representatives has
also been increasing, since the larger stress exerted by their companies might affect
their stay in the company. Therefore, they tend to have more frequent visits to
encourage doctors to prescribe drugs and thus increase sales. In this model medical
representatives are thekey actors. For Example: in a small oncology11 unit almost 40
sales representatives interacting with doctors, and most of them are coming for a visit
on a regular once a month basis as this is the restriction put by doctors of meeting only
once in a month that to on a fix time only, in order to stress the usefulness of their
products and push clinicians towards the use of their drugs. This means that basically

there are at least two representatives every day in busy clinic asking for a short
meeting to support their product. The pharmaceutical distribution channel is indirect
with usually three channel members i.e. depot/C&FA, stockiest and chemist and it is
shown in figure
CORE CUSTOMER
(Doctor)
END- CUSTOMER
(Patients)
NON CORE CUSTOMER
(Retailers)
CUSTOMER
(Stockiest)
CUSTOMER
(C & FA)
Fig.1.1: Pull System Working In Chronic Therapy Segment
The relationship between medical Practitioner and representatives has always been
good and pharmaceutical companies have provided and are still providing the major
economical support for customers' continuous medical education towards the new
advancements in pharmaceutical industry and it is diagrammatically represented in fig.

1.3. Something needs to be done to find a solution to this problem that takes into
account the needs of both pharmaceutical companies and their representatives on one
side and physicians on the other, for a better professional interaction so a push system
develops and in this system, doctors and retailers are the core customers and the major
thrust is given to build and retain these customers. Here retailers are also core customer
as most of the times they are substituting the products based on their own discretion.
For retaining and developing customers, the companies normally provide gifts like
sponsorship for various conferences like small gifts & sponsorship to remind the
products on daily basis.
Pharma Company
Company Depot/C&FA
Stockiest Medical Representative
Chemist
Patient Doctor
Source: GSK (Supply chain of Pakistan Pharmaceutical Industry) Fig.

Understanding Consumer Behavior:- The term consumer behavior is definedas the
behavior that consumers displays in searching, purchasing, evaluating and dispensing
of products and services that they expect will satisfy their needs. The modern day
marketing discussion centers around the need for modern marketing to be consumer
oriented and to be concerned with the needs and wishes of the consumer and thus,
studying consumer behavior is critical, for companies, in getting success of the
products in the market. The consumer is considered as king in today's scenario of
marketing. Gone are the days when manufacturers could have sold anything to the
consumers. Now a days it is consumer whose buying preferences decide what should
be manufactured, in what quantity and what should be the quality of the product more
or less it depends upon the 4p’s of marketing mix and 4c’s of consumer mix. Thus a
marketer has to take into account various factors while deciding on marketing a
product as consumers have different preferences and sometimes totally diverse
preferences. So the task of manufacture and marketer becomes onerous and therefore it
is very important to understand the consumer behavior. Understanding consumer
behavior is still arduous in the field of pharmaceuticals as the target customer is not the
end user but the influencer i.e. the doctor who generates the prescription.
Consumer Behavior in Pharma Sector: - Unlike direct 'seller to user sales'pharma
selling is a multiple tier process. Here the consumer/user is not in direct contact with
the salesman. Here the medical practitioner decides on the behalf of patient/consumer,
which product needs to be bought, in what quantity, when to be consumed and how
long to consume. Hence regular, continuous study of prescribing behavior of
physicians is very important for pharmaceutical
MedicalPractioner
Influence Feed back Feed back Influence
Salesman Consumer
Buys from Sells to Sells to Buys from
Distributor Whole seller
Retailer
The Distribution Chain

18
Consumer Pyramid:
This is a very efficient tool in the hand of the marketer to study consumer behaviour even
more closely. This pyramid has four tiers:
1. Platinum tier: - It includes heavy users/prescribes who not price sensitive areand who are
willing to try new offerings.
2. Gold tier:- They are also heavy users but are more prices sensitive. They askfor more
discounts, free samples etc. and are likely to prescribe several brands.
3. Iron tier: - It consists of customers who are spending volumes; profitabilityand prescribing
pattern do not merit special treatment from the company.
Lead tier: - It consists of customers who actually cost the company moneybecause they
claim more attention than is merited by their spending, tie up company resources and
spread negative work of mouth The four tiers described above can be compared with
traditional New Product Adoption Process. The first tier, platinum tier can be compared
with the "Innovators" as these customers are trying to experiment and accept new offering
from the companies. The next tier i.e. gold tier can be compared with "Early adopters and
Early Majority" as these customers are responsible for growth phase of a product life
cycle due to substantial use of the products. The third tier i.e. the iron tier can be
compared with "Late Majority" who have adopted the product very late in the product life
cycle and are very cautious while using the products and the brands. And the last tier i.e.
lead tier can be match up with the "Laggards" who would hardly try the product and
actually drains out the companies resources.
(Source: Consumer Behavior in Pharmaceutical Marketing)
Fig 1.8 New Product Adoption Process

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Factors Influencing Consumer Behavior
The various factors influencing consumer behavior are: -
1. Cultural factors
2. Social factors
3. Personal factors
4. Psychological factors
5. Psychographic factors
Cultural Factors: - Culture is the fundamental determinant of aperson’s want and
behavior. Companies often design specialized marketing programs to serve each
subculture. This programme is called diversity marketing. The effect of culture upon a
consumer’s behavior is considerable, and culture is a factor which has the greatest
influence. Culture creates the foundation of the individual’s values, opinions and behavior,
and is learnt from the other members of society or from school and institutions that play a
significant part of one’s environment and these traits constitute what the consumer values,
wants are and therefore do affect the way consumer acts. Culture also consists of different
subcultures that group people by their nationality, ethnicity, geographic location, religious
views or by their set of shared values. By targeting members of a specific culture or sub-
culture, businesses can tailor their marketing mix to match the needs and values of that
segment. Consumers are more prone to accept products that are in line with the values,
preferences, customs and norms of their culture. None the-less, a culture is constantly
evolving and the values, social structures, worldviews and other cornerstones of the
culture change through time. Society is divided in social classes which group members of
society that have a similar social status and a comparable behavior and these social classes
display the hierarchy of society, and are characterized by a set of factors. A common way
to determine a consumer’s social class is through the income, occupation and education
but these are only factors that influence how the person is ranked in society. To determine
the accurate social class is not always easy or obvious as the social classes can also change
through time when people climb up the corporate ladder or even change to an occupation
of a lower rank. Also, new family relationships can have a rapid change on someone’s
status and social class. For Example: The people of Germany pronounce the letter 'V' as 'F'
so while pronouncing word VICKS they call it FIX, rather than VICKS so the marketing
of VICKS in Germany led its name to be changed to suit the German Culture. Pakistani’s
are much more oriented towards ayurvedic or herbal medicines. It is in thePakistaniculture

20
to use Neem, Tulsi and Haldi etc. So, it's much easier to position non - allopathic drugs in
Pakistan because of its cultural set up.
Social Factors: - A consumers buying behavior is also affected bythe people around.
Family is a strong entity that has an influence on buying behavior. This includes both the
parents, as well as the spouse/husband and kids with whom the consumer might regularly
spend his time. Through the upbringing, parents teach their children about love, self-
esteem, economics, politics and so forth. With this guidance the influence of the parents
does not cease to affect the child even after the child no longer lives with the parents, and
therefore can have an influence on the consumers behavior throughout life. The opinion of
a spouse and kids can directly affect and guide the purchasing decision. According to
Kotler et.al. (2005) there is however, a big difference of influence by a spouse depending
on the product category, and there are several buying roles that a per-son can take on. The
buyer is not always the user, and thus the purchase may be made for someone else keeping
that person’s opinions in mind. The initiator is the one who comes up with the idea of
buying a certain product or service, whereas the influencer is the one who’s opinion matter
and is taken into consideration when making a purchasing decision. The final decision
about whether or not to buy, and how, when and what to buy is made by the decider.
The social factors which influence consumer behavior are:
i. Reference group
ii. Family
iii. Social status and role
Reference group: - A reference group consists of all the groups thathave a direct (face to
face) or indirect influence on the person's attitudes or behavior. Now these reference
groups have an opinion leader and they are the persons who offer advice or information
about a specific product or product category and suggest which brand is best. A marketer
should know how to reach and influence these opinion leaders in order to influence
consumer purchase behavior. For Example: In pharmaceutical field while marketing a
product, it is important to identify certain Key Opinion Leaders (KOL) who have
influence on the prescription pattern of other doctors in specific areas or have wider
geographical reach. If these KOL's start prescribing the product, many doctors also
prescribe the product.

21
Family: - Family is an important determinant of social factor. If thereis a physician whose
father is also a physician it is natural that he will have a liking for the same drug that his
father used to have
Social status and role: - The person’s position is defined in terms ofrole and status.
People choose products that communicate their role and status. A physician depending on
its specialty, experience and social status will go for the drug that will match his social
status. A well known renowned physician will surely go for the branded drugs rather than
generic drugs. Further prescribing pattern will also have influence depending on the types
of patient a doctor treats. For rich patients a doctor may prescribe costly products while
for a poor patient he may not do so. This means that buying capacity of patient also
influence’s the doctor’s in their prescription.
Personal Factors: - Consumers can furthermore be segmentedaccording to their personal
characteristics and personality type that shape their consumer behavior. Research can
bring out personality traits that are common for users of certain products, and thus
describe and group consumers that hold specific characteristics. Consumers can for
instance be grouped depending on if they are social, confident, aggressive or adaptable
because they may portrait similarities in behavior due to these characteristic. Not only are
personality and personal traits affecting the consumer’s behavior but also the consumer’s
self-concept. The self-concept stands for the way the consumer does see himself and the
way he evaluates his own attributes. The self concept is related to the buying behavior
seeing that an individual’s belongings often demonstrate what the person is like or how
the person is? Nevertheless, there are three types of self concepts to take into account
when drafting a marketing strategy or seeking to understand consumer behavior. The
actual self-concept does display how a person sees himself. In addition the person has an
ideal self-concept which reflects how he would ideally like to see himself. Additionally
there is the self-concept of others which shows how the person thinks that other people see
him. Thus the consumers behavior can be influenced by any of these three self-concepts
and the consumer can either act according to what he thinks he is, what he wants to be or
according to what he believes that others think he is. (Kotler et.al 2005). Depending on
how positive a consumer’s actual self concept is the better is his self-esteem.
Advertisement can have great influence and shape the consumer’s self-concept and self-
esteem as consumers compare them to what they see in advertisements. Consumers can
create a link between the advertised product and the person displayed in the
advertisement, and form their personal image of the product brand accordingly. This brand
image can then influence the decisions, the consumer makes when choosing between
available products and the level of influence
The various personal factors which influence consumer behavior are:

22
i. Age and stage in the life cycle
ii. Occupation and economic circumstances
iii. Life Style
iv. Personality and self concept
Age and stage in life cycle: - The choice of product and brand differswith age. With the
increase in age and experience of physicians, their prescribing behavior changes as they
behave as laggards in new product adoption process. Younger physicians can easily go for
new drugs or brands. Whereas the experienced doctors mostly go for renowned, well
established or well known drugs or brands. It may be easier to convince a younger doctor
to try a new product or a brand as compared to an experienced doctor as they are early
adopters. The most important determinant factor is the place of work i.e. whether he works
in a government hospital, general hospital, and private hospital or in a private clinic and
accordingly to that doctors used to prescribe drugs of different brands.
Personality and self-concept: - Personality is the individualcharacteristic that makes a
person unique as well as consistent in adjustments to the changing environment. It is an
integrated system that holds attitude, motivation and perception together. Further a doctor
that has learnt in his early stages, For Example: during study or internship, is likely to be
loyal to a particular brand rather than switching to other brand and companies should
focus on developing a self concept among doctors about a company’s products and I had
studied during my field research that the young doctors or interns, residents only prescribe
those drugs which are recommended by their seniors or by professors.
Psychological Factors: - Motivation can be used to describe one’sbehaviour and it can be
seen as the reason behind one’s actions. Motivation is what drives individuals to attain a
certain goal. When the consumer feels a need, there is tension that the consumer wants to
eliminate by satisfying that particular need. If the drive to reach that goal is strong enough
the consumer will possess a motivation that drives and pushes him towards its realization.
In accordance to a theory outlined by Sigmund Freud, consumers are not fully aware of
their true motivations and are not always able to explain them. Freud’s theory points out
that unconscious motive which have their roots in the individual’s childhood affect the
consumer’s choices. The theory also acclaims that consumers may base their product
choice on a product’s symbolic meaning, in order to be able to satisfy a desire that is not
acceptable but which the consumer can find symbolized in an acceptable product.
On the other hand, explains motivation through his hierarchic pyramid where consumers
are motivated by needs that have a different classification and that are part of a hierarchy.
With the help of the five senses; taste, smell, sight, touch and hearing, consumers interpret

23
their surroundings. With the process of choosing, organizing and interpreting stimuli
consumers create their own perception. Because the perception of a person differs to one
another, the buying behavior does as well. Consumers are drawn to products not only by
their practical function but also by the hedonic features of the product. The added value
that a competitor’s product has can simply be the emotional value that it has for the
customers.
The major physiological factors are:
i. Motivation
ii. Perception
iii. Learning
iv. Beliefs
v. Attitudes
Motivation:- A motive is an internal emerging force that orients aperson's activities
towards satisfying a need or achieving a goal. The motives may be rational or non rational.
E.g. rational motives for a doctor are price, efficacy, patient compliance and economy of a
medicine while prescribing. Non rational are prestige, comfort and pleasure. Convenience
is the factor which is both rational and non rational at the same time. Motives often
operate at subconscious level, hence are difficult to measure. For example, Nutriment is a
product marketed by big apple to be used as an additional energy supply after exercise and
play etc. as a fitness drink. But it was found that this product was heavily used by drug
addicts, as they were not able to digest a regular meal. So, the motivation to purchase
nutriment was completely different from the thinking of the company.
Perception: - It is the process by which an individual selects,organizes and interprets
information inputs to create a meaningful picture of the world. It varies from individual to
individual. One doctor might perceive a fast talking medical representative as aggressive
and insincere, another as intelligent and helpful. While prescribing a product one doctor
may not feel so.

24
Learning: - Learning involves changes in an individual's behaviorarising from
experience. Learning reflects and individual's capability to comprehend new things based
on experience .It is important that doctors learn about new products and new treatment
therapy. Pharmaceutical companies have to make a doctor learn about new therapy and
treatment options by providing relevant literature and apprising doctors about advances in
pharmaceutical sciences. For Example: Biogen used multi paged advertorials to launch
and position their product called Amevine for treatment of psoriasis. They used the
learning psychology of physicians to position their product. Some of the physicians who
are techno-savvy are also attracted by themedical representatives as they use e-Detailing
technique which is a broad and continually evolving term describing the use of electronic,
interactive media to facilitate sales presentations to physicians. Some of the
pharmaceutical companies are using this method to communicate key marketing messages
to physicians. But how many physicians want to use e-marketing as a learning tool also
attributes the success of a pharmaceutical company in adopting new methodologies of
product promotion. If doctors are not willing to adapt to evolving techniques and so the
efforts spent by a pharmaceutical company would go waste and thus understanding the
learning curve of customers is also important.
Belief and Attitude: - A belief is a descriptive thought that a personholds about
something. People's belief about a product or brand influences their buying and
prescribing decisions. If a physician has belief in the product of one company, he will
prescribe it in spite of equivalent products available from competitors. Customers begin
service experiences with some level of trust, but the quality of the delivered service
determines whether the trust level rises or falls. The customer's confidence in the service is
especially important in healthcare but whenever if a customer is unhappy with the service
offered by the sales officer of one company, he is likely to have a negative view about the
company.
Psychographic Factor:It is much more important to know what sortof patient has a
disease. This is the kind of thinking a marketer needs to have while dealing with
psychographic behavior of the consumer (Psychograph is the science of using psychology
and demographics to better understand consumer behavior). Here marketers believe that
positioning occurs not in the market place, but in the customer's mind. Psychographic
studies are mainly based on VALS (Value, Attitudes and Life Style survey).
Marketing to Physicians and Consumers :- Drug companies use advertisingand
promotions in much the same way that producers of other goods do to inform consumers
about an advertised products existence and uses and, if alternatives are available, to
persuade consumers that the advertised product is better than competing products. If
successful, advertising can spur demand for the good and therefore boost its producer’s

25
sales and profits. Pharmaceutical manufacturers incur most of the costs of producing a
drug during the research and development phases and during the process of gaining the
FDA approval to put the drug on the market. Any additional sales that advertising
generates can be highly profitable because the prices that manufacturers receive for their
products generally exceed the cost to manufacture and distribute those additional units.
Drug companies face a different task in making sales than do the producers of most
consumer goods, however because several separate actors must be persuaded that a
prescription drug merits purchasing. First, a consumer must perceive that visiting a doctor
to seek diagnosis and treatment offers a benefit. Then, following an examination to
diagnose the patient’s condition, the doctor must determine an appropriate treatment and
when warranted write a prescription. Finally, the consumer must fill that prescription for
the manufacturer to make a sale. (In many cases, the individual’s insurer can also
influence prescription drug purchases by determining whether or not to include a drug on
the formulary of drugs it covers and by deciding how large a copayment to assign to it.
Recognizing that both consumers and physicians take part in the decision to purchase a
drug, pharmaceutical manufacturers adopt different marketing strategies for reaching each
group. Direct-to-consumer advertising appears in magazines and newspapers, on
television and radio, on outdoor billboards, and increasingly online. Drug companies also
promote their products to physicians in a variety of ways. They send sales representatives
to meet with physicians, nurse practitioners, and physicians assistants in a practice called
detailing. During those sales calls, the representatives discuss drugs manufactured by their
company that are relevant to the physician’s specialties, and they may provide product
samples and reprints of academic literature that discuss their company’s products. In
addition to detailing, pharmaceutical manufacturers purchase advertisements for their
drugs in medical journals. They also sponsor professional meetings and events, both in
person and online, including some that offer physicians credit for continuing medical
education.
Market Characteristics That Influence Promotional Strategies :- Apharmaceutical
manufacturer’s decision to use DTC advertising or other types of marketing tools depends
on the potential size of the market for a given prescription drug, the current competition in
that market, and the amount of time that has elapsed since the drug received FDA
approval. Manufacturers may also choose to alter their marketing mix over time,
especially as new competitors enter the market, the manufacturer faces the end of a drugs
patent protection and the entry of generic versions on the market, or the manufacturer
introduces new dosage forms, extended release versions of a drug, or new combination
drugs. The balance of this brief focuses on those issues for the two largest components of
pharmaceutical manufacturers promotional expenditures detailing and DTC advertising.
Centered around the doctors as an important source of communication for consumers.
Found that older segments have greater faith in doctors and are less skeptical towards

26
healthcare. Regardless of whether prescription or OTCs are concerned, medical
practitioners have a unique and often multiple roles in the purchasing process of
pharmaceutical products. They may be the deciders who make the buying decision for
their patients when prescribing drugs or they may play the role of influencer or
gatekeepers in the case of OTCs or hospitals dispensaries.
The purchasing process: - The consumer evaluates different alternatives that areavailable
in the market before a consumer makes a choice of a product. During this process various
product attributes to which a consumer is associated with each product option can be
evaluated and its importance determined .The evaluation of alternatives can either be very
extensive at times and rather narrow and fast at others. Consumers can create different
rules that help and facilitate their decision making, and decreases the amount of
information that they will process. The consumer narrows down the alternatives by the
help of his or her personal heuristic rules. These rules can be of various natures and can
represent different assumptions or mindsets. They can be related to their personal beliefs
about products and companies, if they associate product familiarity with product quality,
or how they interpret product quality based on indications that they obtain from a
product’s visual appearance. Some consumers tend to judge a book by its cover and it is
common to associate high price with good quality, or to form beliefs of product attributes
based on the country of origin. Companies occasionally use advertisement to connect their
products with feeling of nostalgia, sometimes even sad longing of the past, because these
feelings that arise can influence the consumer to choose a certain product over another .In
some cases the buying behavior can turn into a habit where the consumer does not need to
put effort into making a decision. Such a buying habit can stem from a brand loyalty
where the consumer feels strongly and positively about a certain brand and thus makes
consciously a choice to buy a product of that particular brand. A personal connection to
the brand can be developed over time and reinforces the habitual buying behavior and
makes the consumer less prone to switch to any other brand. For other consumers the
habitual buying behavior does often come from inertia when the consumer is reluctant to
put effort into the decision making process. As a result the consumer develops behavior of
buying a product out of habit. Because there is not a strong personal connection to the
product or the brand itself, the consumer is prone to switch to other brand. The reason for
a change of product can be the opportunity to easily buy another product due to better
availability or price. All product purchases are not planned and the purchasing
environment can influence the consumer to buy products that the consumer was not
intended to buy. Consumers sometimes shop by impulse when they cannot resist buying a
product that they all of a sudden feel a strong desire for. The purchasing can likewise be
spontaneous, where the purchase is not planned upon but the consumer is led to buy the
product because of a re-minder in the store, because the consumer is in hurry or any other
reason that incite the consumer to buy. To measure how well advertisements affect
consumer behavior and therefore sales is not an easy task. The expenditure on

27
advertisement as well as sales results can be compared to previous experience, or different
amounts of money can be spent on advertisement in similar locations to measure
variations in the sales results that each location generates. It is known that many
consumers are unable to recall advertisements that they have been exposed to. This does
raise a concern for the advertising company, since there is reason to assume that the
consumer may not remember the product or the advertised message at point of purchase.
However, the influence on the buying behavior of a consumer that is able to recall an
advertisement is not positive in every case. Consumers tend to not only remember
advertisements that they like, that raise strong emotions or that communicate a message
that they believe in, but also advertisements that do the opposite. Those recalled
advertisements may have an unwanted effect and makes the consumer avoid that product.
The purchasing process: - The consumer evaluates different alternatives that areavailable
in the market before a consumer makes a choice of a product. During this process various
product attributes to which a consumer is associated with each product option can be
evaluated and its importance determined (Kotler et.al, 2005). The evaluation of
alternatives can either be very extensive at times and rather narrow and fast at others.
Consumers can create different rules that help and facilitate their decision making, and
decreases the amount of information that they will process. The consumer narrows down
the alternatives by the help of his or her personal heuristic rules. These rules can be of
various natures and can represent different assumptions or mindsets. They can be related
to their personal beliefs about products and companies, if they associate product
familiarity with product quality, or how they interpret product quality based on indications
that they obtain from a product’s visual appearance. Some consumers tend to judge a book
by its cover and it is common to associate high price with good quality, or to form beliefs
of product attributes based on the country of origin (Solomon et.al., 1999). Companies
occasionally use advertisement to connect their products with feeling of nostalgia,
sometimes even sad longing of the past, because these feelings that arise can influence the
consumer to choose a certain product over another (Solomon et.al., 1999). In some cases
the buying behavior can turn into a habit where the consumer does not need to put effort
into making a decision. Such a buying habit can stem from a brand loyalty where the
consumer feels strongly and positively about a certain brand and thus makes consciously a
choice to buy a product of that particular brand. A personal connection to the brand can be
developed over time and reinforces the habitual buying behaviour and makes the
consumer less prone to switch to any other brand. For other consumers the habitual buying
behavior does often come from inertia when the consumer is reluctant to put effort into the
decision making process. As a result the consumer develops behaviour of buying a
product out of habit. Because there is not a strong personal connection to the product or
the brand itself, the consumer is prone to switch to other brand. The reason for a change of
product can be the opportunity to easily buy another product due to better availability or
price (Solomon et.al., 1999). All product purchases are not planned and the purchasing

28
environment can influence the consumer to buy products that the consumer was not
intended to buy. Consumers sometimes shop by impulse when they cannot resist buying a
product that they all of a sudden feel a strong desire for. The purchasing can likewise be
spontaneous, where the purchase is not planned upon but the consumer is led to buy the
product because of a re-minder in the store, because the consumer is in hurry or any other
reason that incite the consumer to buy (Solomon et.al., 1999). To measure how well
advertisements affect consumer behavior and therefore sales is not an easy task. The
expenditure on advertisement as well as sales results can be compared to previous
experience, or different amounts of
money can be spent on advertisement in similar locations to measure variations in the
sales results that each location generates (Kotler et.al., 2005). It is known that many
consumers are unable to recall advertisements that they have been exposed to. This does
raise a concern for the advertising company, since there is reason to assume that the
consumer may not remember the product or the advertised message at point of purchase.
However, the influence on the buying behaviour of a consumer that is able to recall an
advertisement is not positive in every case. Consumers tend to not only remember
advertisements that they like, that raise strong emotions or that communicate a message
that they believe in, but also advertisements that do the opposite. Those recalled
advertisements may have an unwanted effect and makes the consumer avoid that product
(Solomon et.al., 1999).
The Role of the Consumer (Patient):- Physicians have traditionally treatedpatients
largely as passive participants in a process that affects patients’ health outcomes. This
model is appropriate for diseases that are acute (For Example: a broken leg) and for
patients who believe that the doctor knows best. However, patients now have access to
detailed information about diseases and medications, and are increasingly inclined to
assert their perspectives especially for chronic diseases. This suggests a multi agent
prescription decision and follow up process that includes compliance with the prescribed
course of therapy.
The Prescription Decision: - Given that many diseases are chronic in nature,
theassumption that there exists a single agent (Physician or Consumer) maximizing their
utility seems strong. There exists some research that demonstrates that the tradeoffs made
by physicians in prescribing a course for a patient do not necessarily align themselves with
patient preferences (Fraenkelet.al., 2004). An open area of research therefore is the
development and testing of models that incorporate the utilities of both the physician and
patient in arriving at the prescription decision. For example: Misra (2004) allows two
types of physicians those who strongly value patient utility and those who value it less and
for two types of patients new and continuing. He then specifies a model that maximizes
utility for the physician-patient combination. The design of systems that allow patients to
have a bigger say in the choice of therapy is another open area of research. A system like

29
this should be based around a model that is able to elicit patient preferences for various
attributes of a therapy in real time, quantify the tradeoffs and suggest the most preferred
treatment for a patient based on a patient/disease/time specific utility function (methods to
calibrate such functions are well known in the medical and marketing literatures).
The Role of Price: - The increased expenditure for drug promotion will affect theprice of
the prescription drugs and this in turn will have an adverse impact on the expenses on
health care. In India same molecules are sold by different pharmaceuticals under different
brand names. To cite an example: there are over hundred and forty brands of omeprazole a
proton pump inhibitor available in India used for stomach ulcer. How does a doctor select
a brand? What are the factors that influence the prescription behavior of the doctor? What
is the influence of pharmaceutical marketing on prescription behavior? There are no
recently published studies that have addressed the factors that influence the prescription
behavior of physicians in Pakistan.
This study also aims to identify the factors that influence the prescription behavior of
physicians.
Branding in Pharmaceutical Marketing:- Branding is a key issue in thepharmaceutical
industry; product managers have evolved into brand managers and are beginning to
understand the dynamics of brand equity that lie at the heart of product development and
marketing. However, with no established 'best practices' in brand management, those
tasked with steering brands around the various hurdles and challenges presented by
pharmaceutical markets must use all available learning and experience to help in building
the leading brands of the future. Branding in pharmaceutical industry largely depends on
the type of product. Branding strategies for Over-the-Counter (OTC) drugs would differ
from branding strategies for Prescription drugs. Pharmaceutical products are no longer just
drugs, they are brands. Though as a brand, it is possible to communicate a promise, an
essence, and aspiration which build loyalty. In the past and even today, pharmaceutical
industry branding is not prominent compared with the business-to-business and in
consumer segments but largely by choice. For decades, a pharmaceutical Companies
brand
Branding in Pharmaceutical Marketing:- Branding is a key issue in thepharmaceutical
industry; product managers have evolved into brand managers and are beginning to
understand the dynamics of brand equity that lie at the heart of product development and
marketing. However, with no established 'best practices' in brand management, those
tasked with steering brands around the various hurdles and challenges presented by
pharmaceutical markets must use all available learning and experience to help in building
the leading brands of the future. Branding in pharmaceutical industry largely depends on
the type of product. Branding strategies for Over-the-Counter (OTC) drugs would differ
from branding strategies for Prescription drugs. Pharmaceutical products are no longer just
drugs, they are brands. Though as a brand, it is possible to communicate a promise, an
essence, and aspiration which build loyalty. In the past and even today, pharmaceutical

30
industry branding is not prominent compared with the business-to-business and in
consumer segments but largely by choice. For decades, a pharmaceutical Companies
brand.Thus a marketer has to take into account various factors while deciding on
marketing a product as consumers have different preferences and sometimes totally
diverse preferences. So the task of manufacture and marketer becomes onerous and
therefore it is very important to understand the consumer behavior. Understanding
consumer behavior is still arduous in the field of pharmaceuticals as the target customer is
not the end user but the influencer i.e. the doctor who generates the prescription.
Marketing to Physicians and Consumers: - Drug companies use advertisingand
promotions in much the same way that producers of other goods do to informconsumers
about an advertised products existence and uses and, if alternatives are available, to
persuade consumers that the advertised product is better than competing products. If
successful, advertising can spur demand for the good and therefore boost its producer’s
sales and profits. Pharmaceutical manufacturers incur most of the costs of producing a
drug during the research and development phases and during the process of gaining the
FDA approval to put the drug on the market. Any additional sales that advertising
generates can be highly profitable because the prices that manufacturers receive for their
products generally exceed the cost to manufacture and distribute those additional units.
Drug companies face a different task in making sales than do the producers of most
consumer goods, however because several separate actors must be persuaded that a
prescription drug merits purchasing. First, a consumer must perceive that visiting a doctor
to seek diagnosis and treatment offers a benefit. Then, following an examination to
diagnose the patients condition, the doctor must determine an appropriate treatment and
when warranted write a prescription. Finally, the consumer must fill that prescription for
the manufacturer to make a sale. (In many cases, the individual’s insurer can also
influence prescription drug purchases by determining whether or not to include a drug on
the formulary of drugs it covers and by deciding how large a copayment to assign to it.
Recognizing that both consumers and physicians take part in the decision to purchase a
drug, pharmaceutical manufacturers adopt different marketing strategies for reaching
each group. Direct-to-consumer advertising appears in magazines and newspapers, on
television and radio, on outdoor billboards, and increasingly online. Drug companies also
promote their products to physicians in a variety of ways. They send sales representatives
to meet with physicians, nurse practitioners, and physicians assistants in a practice called
detailing. During those sales calls, the representatives discuss drugs manufactured by
their company that are relevant to the physician’s specialties, and they may provide
product samples and reprints of academic literature that discuss their companies products.
In addition to detailing, pharmaceutical manufacturers purchase advertisements for their
drugs in medical journals. They also sponsor professional meetings and events, both in

31
person and online, including some that offer physicians credit for continuing medical
education.
1.16 Different Marketing Strategies for Different Drugs:-
Pharmaceuticalmanufacturers use different marketing strategies for the drugs they
produce. Many drugs are promoted solely to physicians, with no attempt to reach
consumers. Others are heavily promoted to consumers and, in varying degrees, to
physicians as well. That different marketing strategies are used for different drugs is not
surprising because there is no consensus among experts about the effects of such
strategies on the sales or prices of prescription drugs. For DTC advertising, studies that
have analyzed the effects for a few specific drugs or classes of drugs have shown mixed
results; the writing and filling of prescriptions increased for some advertised drugs but
not for others. For detailing, some analyses have found positive effects on the number of
prescriptions written for the targeted drug, but others suggest that detailing’s effects are
unclear.

32
CHAPTER- 2
REVIEW OF LITERATURE
The broad reviews of literatures are:
1. Shweta Vats (2014):- A study on “impact of direct to consumer advertising
through interactive internet media on working youth”. This research paper analyzes the
effect of social media promotion of prescription medicine on behavior of working youth.
It also studies the adoption of social media by working youth for collecting information on
Prescription drugs. This study also aims at getting an insight into correlation between
demographic factors and attitude and perception for social media based prescription drug
advertisement.
2. RavindraGoyal and PranavPareek (2013) - A study on “A Review Article on
Prescription Behavior of Doctors, Influenced by The Medical Representative In
Rajasthan, India”. This study examines that Medical representatives provide incomplete
medical information to influence prescribing practices; they also offer incentives
including conference, Seminars, national and aboard sponsorship. Doctors also demand
for gifts and other incentives, they look to every medical representative as a blank cheque
for themselves, as when doctors' associations threaten to boycott companies that do not
comply with their demands for sponsorship. Manufacturers, chemists and medical
representatives use various unethical trade practices of particular interest was the finding
that chemists are major players in this system, providing drug information directly to
patients.
3. Mahmoud Abdullah Al-Areefi, Mohamed AzmiHassali, Mohamed Izham and
Mohamed Ibrahim (2013):- A study on “Physicians’ perceptions of medical representative
visits in Yemen: a qualitative study”. This paper concluded thatphysicians are aware that
the medical representatives could influence their prescribing decision; they welcome
representatives to visit them and consider receiving free samples, gifts and various kinds
of support as a normal practice. The findings provide insight into possible target areas for
educational interventions concerning pharmaceutical marketing. Such a finding will
provide the basis for policymakers in the public and private health sector in Yemen to
develop a suitable policy and regulations in terms of drug promotion. Support as a normal
practice. The findings provided insight into possible target areas for educational
interventions concerning pharmaceutical marketing. The present qualitative study found

33
that the majority of the physicians had positive interactions with medical representatives.
The physicians main reasons stated for allowing medical representatives’ visits are the
social contacts and mutual benefits they will gain from these representatives. They also
emphasized that the meeting with representatives provides educational and scientific
benefits. A few physicians stated that the main reasons behind refusing the meeting with
medical representatives were lack of conviction about the product and obligation to
prescribe medicine from the representative company. Most of the physicians believed that
they were under marketing pressure to prescribe certain Medicines.
4. Chintan H Rajani (2012):- Another study to “A study to explore scope of direct to
consumer advertisement (DTCA) of prescription drugs in India”. This study explorer the
scope of direct to consumer advertising of prescription drugs in Indian market. This study
also concluded that there are certain benefits and harm associated with DTCA. Key
benefits of DTCA are preventive care for under diagnosed conditions and patient’s
psychological confidence for improving treatments which must be balanced against
adverse factors like self medication, rising drug costs, confusion and fear of side effects
5. Lau, A., Fernandez-Luque, L. and Armayones, M. (2012): A study report on
"Social media in health what are the safety concerns for health consumers ".This paper
presented possible harm that social media can inflict on consumers when misused. Social
media has the potential to overcome many of the reading and writing barriers in health
literacy. However, due to the salient nature of social media and the social influences
surrounding its use, consumers and patients are likely to be subjected to greater risks when
unsafe content is consumed than in the pre-social media world.
6. Mackey,K. and Liang,A. (2012): A study report on "Globalization, evolution and
emergence of direct-to consumer advertising: Are emerging markets the next
pharmaceutical marketing frontier? " concluded that Pharmaceutical advertising
hasundergone a rapid evolution due to Globalization, changing patient-provider
relationships, emerging health-related technologies, growing importance and expanding
“business” of global health. Yet, pharmaceutical marketing can have adverse health and
economic outcomes, especially if left unregulated and allowed to proliferate and cross
geopolitical borders in the uncontrolled digital environment. Emerging markets may
represent the next logical step for digital DTCA proliferation, given their untapped market
potential and explosive growth, but they are especially at risk given the ambiguous
regulatory treatment of digital DTCA.
7. Myers, D. S. (2012): A study report on " Face book and Pharmaceutical
Companies: An Industry in Need of Guidance " concluded that Delayed guidance has not
stopped many of the world’s largest pharmaceutical companies from establishing a
presence on Face book. These pharmaceutical companies have been cautious in the use of

34
social media concentrating on science or social responsibility while keeping away from
user-generated content and specific product information. These companies do not
currently have Face book pages relating to any specific drug therapies. This is likely to
change if the FDA guidance provides companies the assurance that such an activity is not
a violation.
8. Zain-Ul-Abideen and Salman Saleem (2011):- A study on "Effective advertising and its
influence on consumer buying behavior”. This study investigates the relationship between
independent variables which are environmental response and emotional response with
attitudinal and behavioral aspect of consumer buying behavior, by tapping the responses
of 200 respondents using telecommunication services and indicate that there exits a weak
association between environmental response with the consumer buying behavior including
the attitudinal as well as behavioral aspects of the consumers buying behavior.
9. Gu,Williams., Aslani and Chaar (2011): A study report on " Direct–to– Consumer
Advertising of Prescription Medicines on the Internet: An Australian Consumer
Perspective " .The study aimed to investigate the DTCA encountered by Australian
consumers when searching the Internet for common health- or medicine-related questions.
The results confirmed that Australian consumers were exposed to DTCA of prescription
medicines on the Internet. Although Australia is a DTCA-restricted country, consumers
are not exempt from exposure to advertising of pharmaceutical products, including
prescription medicines, on the Internet.
10. Montoya Ricardo, OdedNetzer, and KamelJedidi (2010) - Another study on“Dynamic
Allocation of Pharmaceutical Detailing and Sampling for Long-Term Profitability". This
present a two-stage approach for dynamically allocating detailing and sampling activities
across physicians to maximize long-run profitability. In the first stage, he estimate a
hierarchical Bayesian, non homogeneous hidden Markov model to assess the short- and
long-term effects of pharmaceutical marketing activities.
11. Dhaval Dave and Henry Saffer (2010):- A study to "The impact of direct-to-
consumer advertising on pharmaceutical prices and demand". This study investigates the
separate effects of broadcast and non-broadcast DTCA on price and demand, utilizing an
extended time series of monthly records for all advertised and non-advertised drugs in
four major therapeutic classes spanning 1994-2005, a period which enveloped the shifts in
FDA guidelines and the large expansions in DTCA. The costs of DTCA result from
increased drug prices and increased use of more expensive drugs in place of equally
effective lower-priced drugs.
12. Glinert, L. (2010): A study report on " Prescription drug brand Web sites:
Guidance where none exists " .This study shows that use of the social media is a fast-
growing part of this picture. The credibility that users have been attributing to Internet

35
health information has been consistently high. Majority of the health-seekers said they
believed all or most online health information, and that they had not seen any wrong or
misleading health information on the Internet.
13. Vanessa Khim (2009):- A study on “Pharmaceutical Direct-to-Consumer
Advertising and Print Media". This study examined which type of pharmaceutical direct-
to consumer (DTC) advertising would be the best marketing strategy for pharmaceutical
companies to use. The main argument was that one-to-one marketing in the forms of print
media and the Internet was the best strategy over mass media marketing in the forms of
television and radio. In this study the Results showed that the best method for DTC
advertisements is one-to-one marketing through magazines and websites. Through this
method consumers can be targeted by pharmaceutical companies. In addition these
advertisements offer clear information that a consumer and understand and retain. If
consumers can retain information about a DTC advertisement they have a better chance of
purchasing the medication.
14. Pantelic, D. (2009): A study report on “Internet as a Medium of Pharmaceutical
Companies Promotional Activities” concluded that Internet as liberal and hard to control
medium brings entirely new sets of solutions and/or problems to pharmaceuticals
marketers. The nature of the product, legal regulations and ethical principles create an
environment in which the marketers need above average creativity and care of the target
audience, message content and choice of appropriate communication channels for the
message to produce the desired effect.
15. Janet Hoek (2008):- Another study on " Ethical and practical implications of
pharmaceutical direct-to-consumer advertising". This paper examines healthcare
marketing and discusses the evolution, ethics and effects of advertising that promotes
prescription medicines directly to potential end-users. As a highly visible and
controversial element of healthcare marketing, DTC merits special attention since its use
is both restricted and under review, its regulation takes widely varying forms and its social
and medical consequences have generated ongoing disputes.
16. Paddison, A. and Olsen, K (2008):- A study report on "Painkiller purchasing in
the UK An exploratory study of information search and product evaluation", This paper
shows that interpersonal communication from family and friends is crucial in
purchase decision making due to its credibility and empathy. Interpersonal
communication can be instrumental as a substitute of pharmacists if it is deemed
trustworthy. It would be beneficial for companies to identify the structure and strength of

36
the influences of interpersonal/organizational exchange of information, which could gain
synergistic effect.
17. Davies, M. (2008): A study report on “Listening to Consumers in a Highly
Regulated Environment. Nielsen Online ".The study indicates the roles of consumers and
corporations have changed significantly since the rise of the Internet. YouTube give
consumers platform to voice opinions about products and brands. Consumers choose
social media sites including discussion boards, blogs and online groups. The anonymity of
the Internet affords a comfort level that encourages individuals to share details about their
symptoms, treatment history and experiences with their doctors, the efficacy and side
effects of medication, the impact of their condition on their own lives and more. At the
same time, the ubiquity of the internet can provide a connection between experienced
patients and someone newly diagnosed.
18. Vigilante,W.J., Jr. Mayhorn,C.B. and Wogalter,M.S. (2007): A study report on
"Direct-to consumer (DTC) drug advertising on television and online purchases of
medications”. The Result of this study indicated that participants frequently encounter
DTC ads and some report information seeking as a result. Participants reported
infrequently making online (Internet) purchases of prescription drugs possibly due to
safety and legal concerns. DTC ads influence interactions between doctors and their
patients. People appeared to be engaging in information seeking after they encountered
DTC advertisements. Another trend occurring with the proliferation of DTC ads is the
explosion in the use of the Internet. Internet provides opportunity to purchase drugs online
that might bypass physician’s restrictions.
19. Saurabh Kumar Saxena:- This article on "A review of marketing strategies work
by different pharmaceutical companies". His article presented the changing marketing
strategies when a pharma company shift acute base to chronic therapy base. This research
paper also gives an insight about shift in supply chain process and customer and end-
customer perception which is the base of formulation of different marketing strategies.
20. Manchanda, P. and Honka, E (2005): A study on “the effects and role of direct-to-
physician marketing”. These papers examine the physician attitudes toward detailing and
detailers and concluded that there is also strong evidence that detailing affects physician
(prescription) behavior in a positive and significant manner. While this relationship is
tolerated by physicians and promoted aggressively by detailers. The results also
demonstrate that while physicians claim to tolerate it as a necessary evil, it evidently has
an impact on prescription behavior via both a subjective and an objective path. They are
therefore heavily invested in this mode of promotion.

37
21. Donna U. Vogt (2005):- A study report on “Direct-to-Consumer Advertising of
Prescription Drugs”. This report examines legislative concerns and options on risk and
health information as they relate to advertising of drugs. It also discusses activities that
could be undertaken with current legislative authority to address concerns about DTC
advertising; and examines options for new statutory authority on DTC advertising.
22. AnantharamanRadhika, ParthanAnju and Mary Shepherd (2005):- A study report
on “A Brand’s Advertising and Promotion Allocation Strategy: The Role of the
Manufacturer’s Relationship with Distributors as Moderated by Relative Market Share ".
A comprehensive study found a weak relationship between DTCA and price for 20
heavily-advertised drugs, and concluded that DTCA costs ‘did not drive price increases. It
has also been argued that some new drugs are more expensive, as companies endeavor to
recover high R&D investments. However, newer drugs are more effective and help to
lower the costs of non-drug spending.
23. Kravitz, Richard L., Ronald M. Epstein, Mitchell D. Feldman, Carol E. Franz,
RahmanAzari, Michael S. Wilkes, L, Hinton. and P, Franks.(2005): A study on
"Influence of Patients' Requests for Direct-to-Consumer Advertised Antidepressants."
shows that DTC advertising leads to an increase in prescriptions for both patients with
conditions that are undertreated, and conditions for which drugs are at the margin of
therapeutic benefit. According to them, “the benefits of advertising will tend to dominate
when the target condition is serious and the treatment is very safe, effective, and
inexpensive. Harms are most likely to emerge when the target condition is trivial and the
treatment is relatively perilous, ineffective, or costly.”
24. Frank Windmeijer, Eric de Laat, Rudy Douven, and Esther Mot (2004):- A study
on" Pharmaceutical Promotion and GP Prescription Behavior". This study examined the
responses by general practitioners to promotional activities for pharmaceuticals by
pharmaceutical companies. Promotion can be beneficial for society as a means of
providing information, but it can also be harmful in the sense that it lowers price
sensitivity of doctors and it merely is a means of establishing market share, even when
cheaper, therapeutically equivalent drugs are available and concluded that conclude that,
on average, GP drug price sensitivity is small, but adversely affected by promotion.
25. Pioch, E.A. and Schmidt, R.A. (2004) :- A study report on " Community
pharmacies as good neighbours? A comparative study of Germany and the UK" .They
found that pharmacists have simultaneous roles; they have commercial interest in selling
and also providingimpartial advice. So, a conflict may exist between commercial roles and

38
professional duties. The majority of the consumers believed that pharmacists seldom have
the time to provide medication services.
26. Kaphingst, K.A., Dejong, W., Rudd, R.E., and Daltroy, L. H. (2004): A study
report on "A content analysis of direct-to consumer television prescription drug
advertisements" concluded that most DTCA gave consumers more time to absorb facts
about benefits than risks, which could have implications for the ‘‘fair balance’’
requirement. Some risk statements in the ads lacked important contextual information.
DTCA uses both medical and lay terms to convey medical ideas, suggesting that
consumer-friendly language is not used to communicate all information in the ads, as
urged by FDA (U.S. FDA, 1999). Complete references to additional product information
was given only in text, casting doubt on whether the advertisements were making
‘‘adequate provision’’ for dissemination of detailed product information. All
advertisements included at least one statement that directed consumers to seek more
information.
27. Weissman, J.S., Blumenthal, D., Silk, A.J., Newman, M., Zapert, K., Leitman, R.
and Feibelmann, S. (2004): A study report on “Physicians report on patient encounters
involving direct to-consumer advertising” in which surveys of physicians show a mixed
picture. Some physicians appreciate DTCA for increasing patients ‘awareness,
encouraging patients to seek medical advice for conditions that might otherwise go
untreated, and improving doctor-patient communication.
28. Bhattacharya J. and Vogt G. (2003):- A study on “A Simple Model of
Pharmaceutical Price Dynamics” present a model of price and promotion determination
over the drug life cycle. In this model the pharmaceutical company faces a multi-period
optimization decision and simultaneously manages price and promotion to influence
consumer and physician knowledge about their drugs. Bhattacharya and Vogt (2003) show
that the dynamic profit maximizing strategy for the firm is to initially employ a relatively
high level of promotion and to set a relatively low price. These levels will not only
increase current quantity demanded, but also raise future demand since high promotion
and low prices increase the physicians and the consumers stock of knowledge about the
drug. Since knowledge is costly to acquire, physicians’ prescribing patterns can be sticky,
and consumer use may also be sticky especially for chronic conditions, a high level of
current demand translates into high demand in future periods.
29. Murray, E., L, Bernard., Pollack, L., Donelan, K., Lee, K.,(2003):- A study on
“Direct-to-consumer advertising: physicians views on its effects on quality of care and the
doctor-patient relationship” found that found that 48% of patients believe DTCA promotes
unnecessary visits to doctors offices and 38% believe the ads cause patients to “take up
more of the doctors time.” It is difficult to determine whether this increase in time is
beneficial for the patient to convey new concerns to their physician, or whether physicians

39
are merely correcting the false expectations created by the emotional appeals in the
advertisements. Most likely, the increased time is beneficial for advertisements that
discuss widely under-diagnosed conditions, and harmful for conditions that are at the
margin of clinical benefit.
30. Mintzes, B., Barer, L., Morris, Richard L., Kravitz, K Bassett, Joel L., Arminee
K., Robert G. Evans, Richard P. and Stephen A. Marion., (2003) “How Does Direct-to-
Consumer Advertising (DTCA) Affect Prescribing?” Showed that physicians believed
patients who requested a drug were knowledgeable about the therapy. This perception of
knowledge may be translated to the perception of patient expectation for a prescription,
potentially leading to inappropriate prescribing: evidence shows that many patients who
request drugs based solely on DTC advertisements have not been informed about the true
efficacy of the drug, and may have misunderstood the side effects of the medication.
Therefore, physicians may be mistaken in their perception that the patient is well
informed, leading to questionable prescriptions as both the patient and physician believe
that the other is more informed.
31. Joel Lexchin and Barbara Mintzes (2002):- A study on “Direct-to-Consumer
Advertising of Prescription Drugs: The Evidence Says No”. This research examine that
there is little rationale for direct-to-consumer advertising of prescription drugs. Most new
drugs offer little if any therapeutic advantage over existing products. Direct-to-consumer
advertisements frequently downplay safety information. Physicians are highly ambivalent
about prescribing advertised drugs requested by patients. There is no evidence that direct
to consumer advertising results in any improvement in health outcomes.
32. Lyles, A. (2002):- A study on “direct marketing of pharmaceuticals to
consumers” shows that direct to consumer advertising of pharmaceuticals to consumers
follows changing social and economic trends which recognize patient autonomy in
healthcare management. DTCA is also a reaction of the pharmaceutical industry to more
restrictive prescription drug benefits and to the uncertain effectiveness of relying only on
traditional marketing activities such as medical journal advertisements and detailing
individual physicians
33.John E. Calfee (2002):- A study on “Public Policy Issues in Direct-to-consumer
Advertising of Prescription Drugs” .This study examines that DTC ads appear to provide
valuable information (including risk information), induce information seeking (mainly
from physicians), prompt patients to discuss conditions not previously discussed, and
generate significant positive externalities including the possibility of improved patient
compliance with drug therapy. The author suggests that a further relaxation of FDA rules
would accelerate the dissemination of valuable information, with favorable consequences
for drug development and consumer health.

40
33. Sengupta S. (2002):- The study report on "Prescription Drug Advertising: The
Effectiveness of Pitching Directly to Consumers" examined what demographic variables
were related to DTC ad exposure and recall rate. Female consumers showed significantly
higher exposure rates than males, and females were more likely to recall advertised drugs.
Another significant relationship was found between household income and ad exposure
and recall of the ads. Households with higher incomes were more likely to be exposed to
DTC ads and to recall brands of the advertised drugs. The relationship between age of the
respondent and ad exposure was not significant.
34. Merrill Matthews Jr (2001):- This policy report “who’s afraid of Pharmaceutical
advertising?” concluded that As the market for prescription drugs becomes more
competitive, consumers have more choices of high-quality drugs at reasonable prices. It is
competition and DTC advertising-not government regulation-that enables the choices and
will enhance the benefits. If legislators and health policy experts want to ensure that more
drugs are available at lower prices, they should consider policies that encourage
advertising and competition.
34. Merrill Matthews Jr (2001):- This policy report “who’s afraid of Pharmaceutical
advertising?” concluded that As the market for prescription drugs becomes more
competitive, consumers have more choices of high-quality drugs at reasonable prices. It is
competition and DTC advertising-not government regulation-that enables the choices and
will enhance the benefits. If legislators and health policy experts want to ensure that more
drugs are available at lower prices, they should consider policies that encourage
advertising and competition.
35. IrfanSharfoddinInamdar and Dr. MalharJayantKolhatkar (2001): This study on"
Doctor’s expectations from pharmaceutical products (medicine) which willinfluence their
prescription behavior". This study focuses on finding the need of customer and giving a
focused approach to the marketing team so that efforts will be directed at most important
factors and concluded that consumer looks for basic products like packaging, brand names
and other augmented product benefit however in case of medicinal product doctors have
given more importance to the core product benefit.
37. Eichner, R. and Maronick, T.J. (2001) A study report on "A review of direct-to-
consumer (DTC) advertising and sales of prescription drugs: does DTC advertising
increase sales and market share?” found that consumers are increasingly aware of DTCA,
and are often times requesting medications seen in advertisements. This kind of activity
has raised some concern amongst physicians who want to ensure that consumers are
provided with a fair-balance of benefit versus risk in formation.

IMPACT OF ADVERTISING ON CUSTOMER PURCHASE BEHAVIOUR IN PHARMACEUTICALS

IMPACT OF ADVERTISING ON CUSTOMER PURCHASE BEHAVIOUR IN PHARMACEUTICALS

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IMPACT OF ADVERTISING ON CUSTOMER PURCHASE BEHAVIOUR IN PHARMACEUTICALS