Lecture # 3

Pharmaceutical
STP

Compiled By: Syed Tahir Ali

Segmenting Market:
Customer Segmentation, Customer Targeting
The Essence of Pharmaceutical Product Strategy
The STP Model
The Essence of Pharmaceutical Product Strategy
The STP Model
The Essence of Pharmaceutical Product Strategy
The STP Model
 Market Definition
We can think of all potential customers sharing a particular
need or want.

In the consumer goods world, we can think of

• Sports car markets

• Home Appliances Market
• Cola drinking markets

Pharmaceutical Marketers may define

their market using various criteria:
Pharmaceutical Market
Definition Methods
 Segmentation based on
end customer profile
•A retired elderly patient may be looking for an efficacious,
but mainly safe medication that will not interact with other co-
medications or disease states and at a cheap price.

•A working professional may need an efficacious product

that will not cause drowsiness or other severe adverse
events.

•A young mother may ask her daughter’s pediatrician to give

her a prescription for a cough syrup she has been told by her
neighbour that works well.

•Cancer or AIDS patients may be open to experimental and

powerful medication that may extend their hopes for survival.
 Identifying markets
and sub-markets
Based on these observations of

• Prescriber profile
• Patient profile
• Market research data
• Prescription audit data
• Sales force suggestions
and countless other sources...

... marketers are trying to identify markets and sub-markets for

their products, allowing them to optimally target their campaigns
and resources toward these different groups of customers.
 Market Segments

Each distinct group of customers

constitutes a market segment.

The process of identifying each

segment and its characteristics
is called market segmentation.
The Concept of Market

Segmentation
Because a single product is not likely to appeal to all customers, an
effort is made to identify groups of customers that find different
product variations to be attractive.

Segmentation is the process of analyzing and breaking down the

whole market into specific sub-markets, each with their own
characteristics and needs.

The Important Benefits of Market Segmentation

• Designing optimal product/market matches

• Proper promotion strategies
• Effective promotional spend allocation
• Identifying the most appropriate distribution channels and
• Exploiting neglected segments
 Different criteria may apply to
multiple stake holders in the
Pharma Industry

Demographic, socio-economic or consumption

pattern criteria may be especially suitable towards
patient segments

While psychographic and behavioural criteria may be

equally important in segmenting prescriber groups.

For Institutional business where purchase decisions

are made by stakeholders other than the prescribing
doctors, the segmentation criteria may be different.
 Characteristics of Market Segments
for Pharma Products

Differentiable : Ob/Gynae DRs. wanting to Rx NSAIDS for PMS or patients

•
with PMS
• Measurable : Hospital oncologists treating inpatients
• Accessible : Distribution reach, Dr. presence
•
Substantial : Mass diseases vs rare diseases
• Actionable : Purchasing power, authority
• Defendable : Size of competition and intensity of competition
The Market Segmentation Steps
Targeting
 Targeting
Targeting in very simple
terms is defined as
choosing the specific
individuals to win over.
 Target Market

 A set of buyers sharing common needs

characteristics that the company decides to
and
serve

 A group of people or organizations for which

an organization designs, implements, and
maintains a marketing mix intended to meet the
needs of that group, resulting in mutually
satisfying exchanges
Perceptual Mapping, Brand Positioning
 Perceptual Mapping

 Perceptual mapping is a diagrammatic technique used by

marketers in an attempt to visually display the perceptions of
customers or potential customers.

 Typically the position of a product, product line, brand, or

company is displayed relative to their competition. Some
perceptual maps use different size circles to indicate the sales
volume or market share of the various competing products.
Perceptual Map Of Competing Products

Perceptual maps commonly have two

dimensions even though they are capable
of having several.
You can see consumer perceptions of
various automobiles on the two dimensions
of sportiness/conservative and
classy/affordable.
Perceptual Map Of Competing Products
 Perception Mapping
It investigates the attitudes and
perception of
• Prescribers
• Patients
• Pharmacists
• Nurses and others

In relation to selected
product attributes
• Efficacy
• Safety
• Tolerability
• Onset of action
• Ease of use
• Taste
Comparison of Multiple products in relation to
• Price etc.
2 attributes mapped on a 2 dimensional scale
 Perceptual Mapping

 For a Pharma product Perceptual Mapping

can be done on

 Efficacy vs Safety
 Efficacy vs Price
 Dosage convenience vs Price
 Compliance vs Price
 Pharma Product Attribute Analysis*
*Investigation of the relative competitive advantage of each of the product’s
attributes in relation to its competitors’. This assists in product positioning
in the area where it presents the highest competitive advantage.

Physicians’ ranks are collected on each of the attributes

Attribute Level
Price Rs. 10, Rs. 20, Rs. 30 per day
Dosing OD, BID, TID, QID
Side Effect High, Medium, Low
Efficacy High, Medium, Low
Administering IV, IM, Oral
 Positioning
A Kotler definition

The act of designing the company’s offer so that it occupies

a distinct and valued place in the target customer’s
mind.

The process of adjusting and presenting the product in a way

so that it is the most attractive option for the customer.

The sum of mental connections between the consumer and

the
1. Attributes and Features
2. Feelings and emotions
3. Price and value
4. Problems products can solve
5. Use or application and
6. Competition offered with the offering
The
Mahagurus of
Positioning

Al Ries & Jack Trout

1.Positioning : The Battle for
Your Mind
2. Marketing Warfare
3. Bottom Up Marketing
4. Horse Sense
5. The 22 Immutable Laws
of Marketing
Advertising Age : 1972 onwards
A series of 3 articles entitled
“The Positioning Era”
• Since then 500+ speeches
• 120,000 orange booklets distributed
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 A Good Brand Positioning

• Helps guide marketing strategy by clarifying the

brand’s essence

• What goals it helps the consumer achieve and

• How it does so in a Unique way?

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 The Result of Positioning
• Is the successful creation of a
consumer-focused value proposition

• A cogent reason why the target market

should buy the product?

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 Requirements of Positioning
• Similarities and differences between brands be
defined and communicated

• Defining the frame of reference by identifying the

target market and the competition

• Identifying the ideal points of parity and points of

difference brand associations (eg. Dettol vs Savlon)

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 Points-of-difference
• Points-of-difference are attributes or benefits
consumers strongly associate with a brand and

• Believe they could not find to the same extent

with a competitive brand
eg. Apple : design
Nike : performance
Lexus : quality

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 Positioning for Competitive
Advantage
• Product’s Position –
• the way the product is defined by consumers
• the place the product occupies in customers’ minds, relative to
competing products ( based on perceptions )
• Important: Consumers live in an over-communicated world –
• want to simplify – positioning occurs with or without the help of
marketers
• Marketers must:
• Plan positions to give their products the greatest competitive advantage in
selected target markets
• Design marketing mixes to create these planned positions (not empty
promises)
• Implant the brand’s unique benefits and differentiation in customers’
minds

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 Positioning for
Competitive Advantage

Important

Profitable Distinctive
Criteria
for determining
which differences
to promote Superior
Affordable

Pre-emptive Communicable
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 Positioning Statement

Panadol is the best analgesic for Mild and Moderate

Pain and Fever.
• Panadol is stomach friendly.
• Panadol have attractive packaging and differentiative
effects
• People want rapid and safe action.