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STAKEHOLDERS IN PHARMACEUTICAL BUSINESS

  • January 2014
Authors:
Ganesh Pandit Pathak at Lotus Business School, Pune
Ganesh Pandit Pathak
  • Lotus Business School, Pune
Pathak
Pathak
Pathak
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Dr Sarang
Dr Sarang
Dr Sarang
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Sarang Bhola at Karmaveer Bhaurao Patil Institute of Management Studies and Research, Satara
Sarang Bhola
  • Karmaveer Bhaurao Patil Institute of Management Studies and Research, Satara
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Abstract

Pharmaceutical industry is struggling for developing and maintaining the relation with the customers for that, sales representatives are trying to develop relation with all the stakeholders viz. Doctor, Stockiest and Retailers i.e. Chemist. The ultimate consumer of pharmaceutical product is patient. Because actual business is comes from patients but most of the time medical practitioners, retailers are prescriber and decision makers and responsible for business. Present research paper deals with finding out the actual stakeholders in the pharmaceutical business. This paper will help to know the actual customer and consumers of pharmaceutical product which beneficial to marketers i.e. pharmaceutical representative and retailers for developing marketing strategy.
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ZENITH International Journal of Multidisciplinary Research _______________ISSN 2231-5780
Vol.4 (3), MARCH (2014)
Online available at zenithresearch.org.in
155
STAKEHOLDERS IN PHARMACEUTICAL BUSINESS
GANESH PANDIT PATHAK*; DR. SARANG SHANKAR BHOLA**
*ASSISTANT PROFESSOR,
RAJIV GANDHI BUSINESS SCHOOL,
TATHAWADE, PUNE, MAHARASHTRA.
**RESEARCH GUIDE
ASSOCIATE PROFESSOR,
KARMAVEER BHAURAO PATIL INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH,
SATARA, MAHARASHTRA.
ABSTRACT:
Pharmaceutical industry is struggling for developing and maintaining the relation with the
customers for that, sales representatives are trying to develop relation with all the stakeholders
viz. Doctor, Stockiest and Retailers i.e. Chemist. The ultimate consumer of pharmaceutical
product is patient. Because actual business is comes from patients but most of the time medical
practitioners, retailers are prescriber and decision makers and responsible for business. Present
research paper deals with finding out the actual stakeholders in the pharmaceutical business. This
paper will help to know the actual customer and consumers of pharmaceutical product which
beneficial to marketers i.e. pharmaceutical representative and retailers for developing marketing
strategy.
KEYWORDS: Medical Practitioners, Medical Representative, Patients, Pharmaceutical
Business, Retailers, Stakeholders.
INTRODUCTION:
In current market situation many pharmaceutical organizations are using electronic media to
develop and maintain the relationship with targeted customers. Sales representatives are
developing the relationship not only with doctors but also with retailers and stockiest. In
marketing, customer relationship management highlights the final customer of the product and in
pharmaceutical marketing patient may be the final customer. But sales representatives are
developing the more relation with Doctors, stockiest and retailers. Since, Doctors prescribes the
medicines of particular company, Stockiest and Retailers play important role in distribution
channels at the same time retailers can increase sale by communicating with nearest doctors
about scheme or by substitute the prescription. Then, where is the final customer i.e. Patient?
Sales representative never have a talk with patient but patients are purchasing the product and
consuming the same. For maintaining relations with customers companies are investing a crore
of rupees by offering valuable gifts, articles as well as tours. So, there is need to study the actual
stakeholders and customer in pharmaceutical business.
ZENITH International Journal of Multidisciplinary Research _______________ISSN 2231-5780
Vol.4 (3), MARCH (2014)
Online available at zenithresearch.org.in
156
REVIEW OF LITERATURE:
In marketing, the concept of Customer Relationship Management (CRM) highlights the final
customer of the product and as far as consider the pharmaceutical marketing patient may be the
final customer. But it is seen that sales representatives of this industry are developing the relation
with doctors, stockiest and retailers rather than patient. Doctors prescribes the medicines of
particular company while stockiest and retailers play important role in distribution channels and
can increase the sale by communicating with nearest doctors about scheme or by suggesting
substitute for some prescriptions. In this way sales representative never have any words with
their final customer i.e. patient but still patients are purchasing the product and consuming the
same. So it is essential to find out actual stakeholders in pharmaceutical industry.
Customer of a pharmaceutical company can be divided into prescribers and non prescribers. The
first group is mostly made up of general practitioners and specialists. The non prescriber group is
made up of all parties who do not write prescriptions themselves, but have a direct or indirect
impact on the prescribing process. Pharmacists may substitute the prescribed drug for the
corresponding generic under certain conditions. Patients, the largest non prescribing group of all,
who are gaining a similarly growing role in the prescription decision by consulting online
medical education and suggesting a brand name to the physician. This group is however outside
the scope of the proposed valuation approach as it will continue to require fundamentally
different targeting and promotional approaches (Meike et.al.,2002). The pharmaceutical market
is strongly separated from traditional to fast moving consumer goods markets as buyer, consumer
and decision maker are separated. In the case of a prescriptive drug the patient in fact is the
consumer. Health insurance funds as reimburses constitute the payer side. Physicians who are
prescribing the drug have the role of the decision maker. Therefore, the pharmaceutical industry
comprises a complex network of customers. The customer network consists of physicians, care
institutions and patients as customers in the proper sense. Further, stakeholder groups are
pharmacists, health insurance funds, health-care policy and pharmaceutical wholesalers. Owing
to their influence on prescription decisions, they should be considered as customers in a wider
sense (Christoph Burmann, 2011). Thus there are three main customer groups in pharmaceutical
industry which include patients, physicians and payers (Burmann, Christoph et.al., 2011). So
present sales efforts in many pharmaceutical companies are oriented towards three customer
segments first is physicians, second hospitals, wholesalers and pharmacies, and third one is end
customers, i.e. patients (Rainer Alt,2003) (Wadman, R. 2004).
The doctor-patient relationship is central to the healing art of medicine (Tanya et.al.,2010).
Physicians are pharmaceutical company stakeholders, sometimes as investors, but most often as
buyers/consumers, in that they use pharmaceutical products for the betterment of their patients.
Traditionally, pharmaceutical companies directed their marketing muscle at doctors who have
the authority to write prescriptions, by using their sales representatives who are also known as
detailers or drug representative (Lundstrom, R. F. 2004), since doctors are the only ones who
willing (perhaps they are assigned to do so) to speak with the representatives (Richard, 2002).
Physician is the primary target of most pharmaceutical companies relationship marketing efforts
since physician plays the primary decision-making role and serving as an intermediary between
the pharmaceutical firm and patient (Melissa Clark, D. V.2011). (Wright, W. J.,2005) also
highlights the importance of Physician Relationship Management (PRM).
ZENITH International Journal of Multidisciplinary Research _______________ISSN 2231-5780
Vol.4 (3), MARCH (2014)
Online available at zenithresearch.org.in
157
According to (Buttle, J. B.,2001) the CRM in the pharmaceutical industry by considering the role
of Patient Advocacy Group (PAG). They opines that establishing relations with third-party allies
has always been an important part of pharmaceutical company efforts, particularly in building
support for products among healthcare professional groups.
CONCLUSION:
On the basis of above review researcher found that, doctors, medical representative, retailers,
wholesalers, hospital staff and patients are the stakeholder in pharmaceutical business. Actually
in the concept of customer relationship management relations are developed with final customer
but in pharmaceutical industry though patient is final customer and/or consumer and any health
insurance company or care institution is payer, the industry is engaged in developing the relation
with physician as they are playing role of decision maker and prescriber.
REFERENCES:
Alt, R. (2003). Transformation in the Pharmaceutical Industry – Developing Customer
Orientation at Pharma Corp . 16th Bled eCommerce Conference eTransformation .
Burmann, C. (2011). Customer Centricity as a Key to Success for Pharma. Journal of Medical
Marketing , 49-59.
Buttle, J. B. (2001). Customer Relationship Management in the Pharmaceutical Insdustry: The
Role of the Patient Adovocacy group. International Journal of Medical Marketing , 1 (3), 203-
214.
Lundstrom, R. F. (2004). Physicians Perception of Pharmaceutical Sales Representative : A
Model fro Analysing the Customer Relationship. Journal of Medical Marketing: Device,
Diagnostic and Pharmacetical Marketing , 4-29.
Meike, M. (2002). A Consistent Approach for Assessing the Value of Prescribing and Non
Prescribing Customers. 309-315.
Melissa Clark, D. V. (2011). Relationship Quality in the Pharmaceutical Industry: An Empirical
Analysis. Journal of Medical Marketing:Device, Diagnostic and Pharmaceutical Marketing ,
144.
Richard, V. (2002). The New Micromarketing: Looking at the Practice as an Account to be
Managed, Rather Than the Doctor as a Target to be hit. 200-205.
Tanya, M. (2010). Is There an Elephant in the Room? Boundary Violations in the Doctor-Patient
Relationship in India. Indian Journal of Medical Ethics .
ZENITH International Journal of Multidisciplinary Research _______________ISSN 2231-5780
Vol.4 (3), MARCH (2014)
Online available at zenithresearch.org.in
158
Wadman, R. (2004). The need for a new go-to-market strategy in Europe: How to survive and
thrive in the new more complex healthcare marketplace. International Journal of Medical
Marketing , 154-162.
Wright, W. J. (2005). The CRM-Physician Interface Toward a Model of Physician Relationship
Building. Journal of Medical Marketing , 316-323.
ResearchGate has not been able to resolve any citations for this publication.
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