Modeling the Effects of Promotional Efforts on Aggregate Pharmaceutical Demand: What We Know and Challenges for the Future - Innovation and Marketing in the Pharmaceutical Industry - page 604

corresponding coeffi cients. The meta-analysis of Sultan et al. ( 1990 ) suggests that
the coeffi cient of internal infl uence is sensitive to marketing variables for the 213
applications they examined. Only one study (Ruiz-Conde et al. 2011 ) does not make
a priori assumptions about how promotional instruments affect the diffusion process
of pharmaceuticals, and a family of diffusion models is analyzed to fi nd the appro-
priate specifi cation for the inclusion of marketing instruments in the adoption rate
(through the internal and/or external infl uence). The results indicate that the adop-
tion rate is affected by promotional variables via external infl uence for the majority
of the analyzed drugs.
Lilien et al. ( 1981 ) and Rao and Yamada ( 1988 ) investigate the infl uence of mar-
keting efforts on the repeat rate and fi nd a signifi cant effect. This result suggests
more research on the repeat rate is needed to better understand the complete diffu-
sion process of prescription drugs.
The lessons from the studies discussed here are that own (competitive) marketing
variables positively (negatively) affect the diffusion process of new drugs and hence
their incorporation into the macro-level diffusion models is recommended. However,
in a pharmaceutical setting, as in other contexts (Meade and Islam 2006 ), there is no
consensus regarding the most appropriate way of including marketing variables into
diffusion models.

20.4 Dynamics in Pharmaceutical Marketing Effectiveness

20.4.1 Introduction

In the previous section we provided an overview of studies on macro-level diffusion
models and concluded that pharmaceutical marketing efforts affect the diffusion
process of new drugs. This, however, leaves unanswered the question of how effec-
tive marketing efforts are for pioneering brands, as compared to early or late follow-
ers, i.e., does marketing work equally well in speeding up the diffusion process for
brands that enter at different stages of the category life cycle?
Other important questions relate to the timing of marketing efforts: given that a
brand is to enter a category, should the majority of the available marketing budget
be allocated to the months immediately following the launch, or should one save the
bulk of the budget for later periods when competition is possibly more intense?
How should the marketing budget be allocated around the moment of patent expira-
tion? And fi nally, do the recommendations differ for different marketing instru-
ments? For example, do we need to allocate physician-oriented marketing efforts in
the same way over time as advertising targeted at patients? To answer these ques-
tions it is essential to understand how marketing effectiveness varies over the
brand ' s life cycle.
Once a category matures, brands compete heavily for sales and/or market share
with the aim of optimizing profi ts. Of great interest to managers and policy makers
is the extent to which pharmaceutical marketing expenditures, aimed at increasing