Abstract

http://ssrn.com/abstract=486244
 
 

Citations



 


 



Roi Implications for Pharmaceutical Promotional Expenditures: The Role of Marketing Mix Interactions


Sridhar Narayanan


Stanford Graduate School of Business

Ramarao Desiraju


University of Central Florida - College of Business Administration

Pradeep K. Chintagunta


University of Chicago

October 1, 2004

Journal of Marketing, Vol. 68, October 2004

Abstract:     
In recent years, pharmaceutical companies have increased their promotional expenditures, particularly on direct to consumer advertising (DTC) and detailing. Given the large dollar amounts involved, this study focuses on the likely effect of these expenditures on a firm's revenues. More specifically, using data from a category of pharmaceutical products, the study empirically explores the impact of interactions between pairs of marketing mix elements on ROI.

The findings of this study from the second-generation prescription antihistamines category include the following: (i) DTC affects category sales but detailing does not; (ii) Category sales are not influenced by interaction effects; (iii) Both detailing and DTC affect brand shares; (iv) Marketing mix interactions, e.g., between price and detailing, detailing and DTC, etc, significantly influence brand share. The study finds interesting variations on how these interactions affect revenues. (v) Detailing has a greater impact on revenues than DTC; and (vi) Detailing and DTC have long term effects on revenues that are about four to seven times the current-period effects. To assess the extent of category specificity of these results, the analysis is repeated for a very different pharmaceutical product category – antivirals to treat genital herpes, and several key results are supported.

Keywords: Marketing Communications, Interactions, Detailing, DTC, Discrete Choice Models, Generalized Method of Moments, Pharmaceutical Industry

JEL Classification: C35, I11, M31, M37

Accepted Paper Series





Not Available For Download

Date posted: June 5, 2011  

Suggested Citation

Narayanan, Sridhar and Desiraju, Ramarao and Chintagunta, Pradeep K., Roi Implications for Pharmaceutical Promotional Expenditures: The Role of Marketing Mix Interactions (October 1, 2004). Journal of Marketing, Vol. 68, October 2004. Available at SSRN: http://ssrn.com/abstract=486244

Contact Information

Sridhar Narayanan (Contact Author)
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
650-723-9675 (Phone)
HOME PAGE: http://https://gsbapps.stanford.edu/facultybios/bio.asp?ID=409

Ramarao Desiraju
University of Central Florida - College of Business Administration ( email )
Department of Marketing
4000 Central Florida Parkway
Orlando, FL 32816
United States
407-823-6251 (Phone)
407-823-5965 (Fax)
Pradeep K. Chintagunta
University of Chicago ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-8015 (Phone)
773-702-0458 (Fax)
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