Return on investment implications of pharmaceutical promotional expenditures and marketing mix interactions

¶ … Narayanan, S., Desiraju, R., & Chintagunta, P.K. (2004)

The principle problem that a United States pharmaceutical manufacturer who decides to advertise in Europe would face is the fact that advertising pharmaceuticals via direct to consumer advertising is not the most effective way of marketing these products. The most effective way of marketing such products is through detailing, in which sales representatives go and visit individual health care providers (such as physicians) and provide them with the details regarding the pharmaceuticals. Literature exists that indicates that there are greater return on investments for detailing than for direct to consumer advertising -- detailing itself is not considered advertising.

Therefore, the manufacturing company can either face a situation in which it budgets a certain amount of money for direct to consumer advertising and incurs less revenues than it would for detailing, or it could attempt to try the more lucrative potential of detailing. Doing so in Europe would require incurring a host of other expenses associated with detailing, such as sending representatives from the U.S. To the Continent, or possibly starting an overseas headquarters in Europe. Additional expenses would be associated with training sales people and having them travel around Europe as well finding and training people to communicate about these products in the many variations of European languages. Lastly, Europe's regulation agencies for pharmaceuticals is more stringent than those in the U.S., in which the "Food and Drug Administration….has been criticized for its weak enforcement of laws regulating such advertising" (Donohue et al., 2007, p. 673).

Still, it should be noted that English is spoken all over Europe which means that such a company could potentially hire sales people in various countries in which it would seek to provide detailing and simply train them. This process would be significantly exacerbated were the company attempting to detail in Asia, for the simple fact that the country would have to expand its "language capabilities" (Lerman, 2012) as researchers at Communispace found out when it attempted to market in Asia, since it is more difficult to find individuals who speak various dialects of the languages in this part of the world, and also be fluent in English and be well trained enough to properly detail a physician.

Another problem that a U.S. pharmaceutical company would face while employing direct to consumer marketing in Europe is related to reaching its target audience. Whereas a little bit of research ensures that a detailing campaign reaches the proper physicians and health care providers who could potentially market a product to their consumers -- thereby ensuring that 100% of the target audience is met -- there are no guarantees that direct to consumer advertising will reach all of its potential customers. Additionally, some physicians have implied that such advertising "encourages the use of expensive and sometimes unnecessary medications" (Rosenthal et al., 2002, p. 498). This fact is largely due to the reality that there are several means of employable media to use for this form of advertising, which may include television, newspapers, the internet, etc. Thus, it would be difficult for the aforementioned company to readily justify all of the expenditures for this form of advertising, especially as compared to a well-planned detailing campaign.