Philip Stern

Marketing knowledge and the value of segmentation

This paper reports findings from a study into how marketing academics and MBA students view segmentation. The research indicates that both respondent groups view segmentation as being more valuable in helping to understand customers than improving business performance. For MBA students there appears to be no relationship between their reported marketing knowledge and the value attributed to using market segmentation. The findings for academics suggest inconsistencies in how they interpret the value of segmentation and appraise the usefulness of analytical and evaluation approaches.

It's a Dirichlet World: Modeling Individuals' Loyalties Reveals How Brands Compete, Grow, and Decline

ABSTRACT The Dirichlet is one of the most important theoretical achievements of marketing science. It provides insights into the distribution of consumer loyalties and is used widely in industry for benchmarking and interpreting brand performance. The Dirichlets implications run counter to some well-entrenched marketing pedagogy and so, unsurprisingly, it has attracted criticism arguing that it cannot adequately reflect the dynamic nature of consumer choice. The authors address these criticisms by discussing how consumer loyalties are manifested and examining whether changes in consumer loyalties do, in fact, disrupt Dirichlet buying patterns. To the best of our disciplines knowledge, based on extensive empirical and theoretical work, brands compete in a Dirichlet world.

Questioning the reliability of market segmentation techniques

Market segmentation techniques and analyses have received considerable attention in the academic literature. This paper compares and contrasts the results from conducting cluster analysis and factor analysis on two data sets, one which is genuine and the other which has been randomly generated. This analysis helps test claims about the validity and effectiveness of such techniques and looks at the reliability of the output. The findings suggest that researchers need to be careful to carry out valid preliminary work before presenting their results. Without such preliminary work it may be difficult to justify the segments which emerge.

Further Thoughts on the Marketing Trifid: The Case of Marketing Orientation

Marketing instructors are faced with an array of subject material from a wide variety of sources. These sources can be broadly grouped into three spheres of influence: the researcher, the teacher, and the practitioner. This article considers these three influences as elements along two dimensions, contribution and conduct. It explores the problems faced by instructors as they attempt to present a balanced view of a specific topic in class. This marketing trifid, asithas been termed, is illustrated using the concept of marketing orientation and is equally applicable to other theoretical concepts.

Can Branded Drugs Benefit from Generic Entry? Switching to Non-Bioequivalent Molecules and the Role of Physician Response to Detailing and Prices

Patent expiration represents a turning point for the brand losing patent protection as bioequivalent generic versions of the drug quickly enter the market at reduced prices. In this paper, we study how physician characteristics and their prescribing decisions impact the competition among molecules of a therapeutic class, once generic versions of one of these molecules enter the market. Our results suggest that to understand the diffusion of generics in the category marketers should (1) determine the size of physician segments sensitive to marketing activity and prices, and (2) assess the marketing activity of all pharmaceutical firms, whether bioequivalent or not. We further discuss the managerial implications of our results.

How health managers see prescribing

An understanding of the patterns of GP prescribing is important to those who play a role in the management of healthcare budgets. This paper analyses the contrasts and overlaps between the perceptions of healthcare managers and actual prescribing behaviour. While there are aspects of prescribing behaviour which are well understood, there are a number of areas where perceptions differ markedly from the patterns found in practice. The managerial implications of these differences are discussed.

Modeling the effects of promotional efforts on aggregate pharmaceutical demand: What we know and challenges for the future

Pharmaceutical marketing is becoming an important area of research in its own right, as evidenced by the steady increase in relevant papers published in the major marketing journals in recent years. These papers utilize different modeling techniques and types of data. In this chapter we focus on empirical research that studies the effect of marketing on aggregate pharmaceutical demand and we start with an overview of the most important published work. We then focus on two questions that are particularly relevant for the pharmaceutical market: (1) How do marketing variables affect the diffusion pattern of newly introduced pharmaceutical innovations? (2) How do dynamics influence pharmaceutical marketing effectiveness? We conclude with a look at some issues for the future along with an associated research agenda.

The Power of Before and After: How the Dirichlet Can Analyze The Sales Impact of a Promotional Activity

ABSTRACT The Dirichlet is a well-established theoretical model that describes and predicts patterns of purchasing behavior in stationary markets. This paper uses data from a highly nonstationary market to demonstrate that the Dirichlet norms also provide a baseline to interpret change in purchasing behavior—in particular, change wrought by sustained promotional activity. The empirical analysis of industrial purchasing data describes how one supplier more than doubled its share of the market. This share increase was achieved by, first, securing a higher share of the category purchases made by heavy buyers (increasing purchase frequency) before adopting a more typical growth strategy of attracting more buyers (increasing penetration).

Predictable Patterns of Prescribing Innovation

Who are the innovative customers for new products? Despite considerable research in this area, a striking characteristic of innovators was identified over 35 years ago. In work since often overlooked, Taylor found innovators tended to be heavy buyers of the parent category. This controversial result has major implications for both theory and practice yet has not, to our knowledge, been replicated. We therefore examine the extent to which heavy buyers dominate the innovator segment, adopting a research design that overcomes some of the limitations of Taylor’s original study, and we also extend Taylor’s work by examining heavy buyers in general rather than in a ‘category specific way’. Using a unique database, we examine the behaviour of British General Practitioners in prescribing radically new drugs and me-too later entrants over an 18-year period. We find regular replicable patterns of innovation among heavy category buyers.