New product development: strategy & implementation mechanism based on primary & secondary data research in pharmaceutical industry

This study examines that marketing is, as in other industries is the driving force in pharmaceutical industry. There is a clear need for developing literature, which can take into account the needs of pharmaceutical marketing, and become a basic guide to business graduates majoring in marketing to understand how things will be when they pursue a career in pharmaceutical marketing. Although, there is good quality international literature available, but it carries the perspective of developed countries, where things are very different from a developing country like Pakistan. The actual product in pharmaceutical marketing suggests five characteristics that a product can have; a quality level, features, dosage form, a brand name, and packaging. A company has to decide on having a certain number of products in one product line. The aim is to have a product line, which offers enough choices for the doctors while keeping the length of product line manageable and profitable. A company may increase the product line length either by stretching it upwards and/or downwards, or through product line filling. New product development in pharmaceutical industry is a much more complex process as compared to other industries. The cost of development, the R&D capability, registration with the ministry of health, sourcing of raw material, all make this a daunting task for any marketing team. The new product development process in Pakistan's pharmaceutical industry can be outlined as molecule identification, molecule screening, sourcing of raw material, pilot batch manufacturing, marketing strategy development, test marketing/Clinical trial/user trial, commercialization. Price is one of the most interesting and controversial topics in pharmaceutical marketing. The responsibility of allowing a particular price lays with the regulatory bodies, as in case of Pakistan, The Ministry of Health. In view of the peculiar characteristics of pharmaceutical industry, the different approaches actually applicable and practiced in the industry as Cost-Plus Pricing, Break-Even Pricing, Value Based Pricing, Competition Based Pricing, & Economy Pricing. The distribution system in context of pharmaceutical marketing is a set of interdependent organizations involved in the process of handling the transportation of medicines from company's warehouse to the market, or to institutions’ pharmacies, where it will be sold to the end user. The model for marketing mix is made up of two streams of activities achieving the two objectives as “The Product Chain”, and “The Prescription Chain”. The product chain starts with the selection of the molecule(s). The selected molecules are then passed through the screening process applying the different criteria, then the source of raw material is identified, pilot batch is manufactured, if needed the company arranges for test marketing or clinical/user trial, and finally the product is sent into the market, or commercialized. The pricing strategy is worked out as a parallel process, and decided before commercialization. The product goes to the distribution house, then either directly to the retailers, or to wholesale from where the product eventually reaches the retailer. Parallel to that, the distributor also supplies the product to the hospitals’ pharmacies.