¶ … 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...
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