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INCREASING ROLE OF ONLINE PROMOTIONAL TECHNIQUES IN THE MARKET OF PHARMACEUTICALS Shiatolayemen AA. (Republic of Kazakhstan)
Shiatolayemen Anzhelika Akhmadovna - Bachelor of Economics and Business, Master Student,
SCHOOL OF MANAGEMENT ALMATYMANAGEMENT UNIVERSITY, ALMATY, REPUBLIC OF KAZAKHSTAN
Abstract: digitalization is the trend that shapes the entire economic development. Online ways of communication create new opportunities for the companies to promote their goods and services. COVID-19 pandemic accelerated the trend even more turning natural switch from old-fashioned offline methods to more convenient and less costly online ones to necessity. The same is true for the pharmaceutical industry.
At the same time industry of pharmaceutical production and selling has always been the tough one to accept innovative marketing approaches. The field is characterized by many promotional restrictions and highly controlled by the local and international regulatory bodies. This fact explains the attention to the question from the scholars and practitioners from different parts of the world.
This research paper is intended to examine the role online promotional techniques play in the market of pharmaceuticals.
Keywords: marketing, promotion, online tools, digital promotion strategies, pharmaceutical market, latest promotional techniques, digitalization, marketing trends.
ПОВЫШЕНИЕ РОЛИ ИНТЕРНЕТ-РЕКЛАМНЫХ ТЕХНИК НА РЫНКЕ ФАРМАЦЕВТИЧЕСКИХ ПРЕПАРАТОВ Шиатолаемен А.А. (Республика Казахстан)
Шиатолаемен Анжелика Ахмадовна - бакалавр экономики и бизнеса, магистрант,
Школа менеджмента Алматинский управленческий университет, г. Алматы, Республика Казахстан
Аннотация: цифровизация - это тенденция, определяющая все экономическое развитие. Онлайн-способы общения создают новые возможности для компаний по продвижению своих товаров и услуг. Пандемия COVID-19 еще больше усилила эту тенденцию, превратив естественный переход от устаревших офлайн-методов к более удобным и менее дорогостоящим онлайн-методам. То же самое и в фармацевтической промышленности. В то же время отрасль фармацевтического производства и продажи всегда была непростой для принятия инновационных маркетинговых подходов. Эта область характеризуется множеством рекламных ограничений и строго контролируется местными и международными регулирующими органами. Этим фактом объясняется внимание к вопросу со стороны ученых и практиков из разных уголков мира. Цель данного исследования - изучить роль методов онлайн-продвижения на фармацевтическом рынке.
Ключевые слова: маркетинг, продвижение, онлайн-инструменты, стратегии цифрового продвижения, фармацевтический рынок, новейшие методы продвижения, цифровизация, маркетинговые тренды.
Product promotion is the essential part of any marketing strategy as it helps to deliver key messages to the audience, catch their attention and make them get acquainted with and, eventually, buy the product. Promotion is also one of the components of so-called marketing 4Ps: price, place, promotion, and product. These 4 pillars shape overall marketing strategy and its implementation.
Promotional tools may vary based on the industry and market specifics but overall include the following: advertising, personal selling, sales promotion, public relations and direct marketing. Each of this promotion tools have been changing throughout the 21st century due to technological development and penetration of digital world to our lives.
More and more companies nowadays switch to digital promotion techniques and there are several reasons for that. First of all, marketers always follow the audience and the fact that audience spend most of the time chatting, reading e-mails, scrolling through the news channels or social media and watching online videos directly guides the specialists to use these channels. Secondly, digital promotion tools are often much less expensive than traditional ones (television, radio, printed materials and outdoor advertising).
Moreover, conditions dictate their own rules. Global pandemic that started in 2020 left no other choice for the communication than to go online - even conferences, contests, school and university classes, economic and political forums were turned into online format. Currently this new reality is becoming more and more habitual for people from different countries and continents.
If to talk about the industry of pharmaceuticals, it has its own specifics and areas for consideration. This market is highly regulated and subject to increased control from the governmental bodies. Not only products should go through several steps of evaluation to reach the market, but also promotion methods are bounded by the restrictions and numerous rules.
Another feature of the marketing of drugs is the target audience. There are five types of stakeholders in the process of delivering the product to the end consumer (wholesaler, pharmacy, pharmacists, physicians and consumers) and all these 5 stakeholders should be considered while promoting the medicine. Pharmaceutical companies have various tools at each level to communicate the product features and benefits and at each level different promotional techniques can be used.
This study is aimed to assess the role online promotional techniques play in the market of pharmaceuticals and present the conclusion - if the influence of digital tools actually important for the promotion in the industry. Research question is of argument nature and stated as: Are online promotional techniques gaining increased value in the market of pharmaceuticals?
Review of Literature
21st century is commonly characterized by the rising importance of digital means of communication and breakthrough technologies. These innovations cover almost all spheres of our lives including trade and marketing. Traditional marketing techniques are being gradually replaced by the newer ones. These trends of digitalization of promotion received particular attention from the standpoint of scientific academic research. Main reasons for this are the latest knowledge in the field and practical application of the results of studies. Scholars from different countries and regions tried to evaluate how the marketing changed due to digitalization and how these alterations influenced the market of drugs.
Bala and Verma (2018) claim that marketing has performed many roles because of various shocks, such as economic crises, unemployment, bankrupt and newly appearing companies, political pressures [1]. Therefore, it is vulnerable to change and has to adapt quickly to the altering conditions. Such adaptation can be observed through the online marketing. It is believed that digital marketing triggers two main improvements to the promotion. First of all, it helps to intensify monitoring of key performance indicators with the help of such tools as CRM systems, Artificial Intelligence (AI) and marketing automation. Second of all, interaction with the consumers is becoming more and more affordable and effective through social media marketing, content marketing and viral marketing [2].
Moreover, COVID-19 is the phenomenon that has influenced all spheres of human life including marketing promotion. Crisis as global pandemic influences consumer behavior and, therefore, marketing tools and approaches. When compared to the changes during economic crisis of the financial nature marketing adapts to the coronavirus realities in a similar way. Prominent changes can be seen in a way buyers behave; they change priorities and experience different values. In this regard, organizations that want to keep up with the tendencies can take advantage of online marketing promotion techniques. Thus, digitalization of marketing demonstrates rising significance as a mediator to maintain effective interaction between consumers and producer, especially in the long-term [3]. Thus, different literature sources try to evaluate the overall impact of modern digital marketing on the products' promotion.
Technologies have as well transformed the healthcare and medicines production industry, which includes transparent approaches, more effective communication and creation of new drugs. It also widely influences the strategies employed by the producers [4]. For instance, coronavirus pandemic once again prompted pharma production and other healthcare enterprises to use new technologies more intensively and try innovative business models. AI is widely used in the development of drugs and clinical trials, big data is crucially important for the research and implementation of innovations. Digital transformation is considered to be one of the strategic priorities for the pharmaceutical companies to achieve sustainable growth and drive better business performance [5]. However, industry of pharmaceuticals has not yet benefitted from the digital marketing, there are many problems facing the pharma business when it comes to marketing [6].
Pharmaceutical industry is itself very regulated and standardized field. Various judicial grounds are active all over the world to make the production of drugs safer and more effective. At the same type, it significantly limits the marketing opportunities for the companies. Gurala states that worldwide practices of advertising of medicines allow only over the counter (OTC) drugs to be promoted to the population, including through online channels [7]. Moreover, pharma producers have to realize that marketing of drugs is also the question of responsibility and correct delivery of key promotional messages, not to bring any harm to the consumer. Keeping that in mind regulatory authorities tend to develop and establish strict regulations in this sphere. If to talk about Kazakhstani market it seems to be even more rigorous in terms of such limitation, in comparison, for example, with Russian market.
Some argued that even the most breakthrough digital initiatives in pharma marketing are significantly bounded by the regulations (international and local), which often challenges the launch of new strategies and online advertising campaigns [8]. Balfour mentions that not only legislative regulations, but also the readiness of the market to accept new channels of communication plays a crucial role in the implementation of new online
promotional methods [9]. When the background experience of particular industry does not have precedents of a similar nature, process of diffusion of innovation can be slowed down or even disrupted. On the one hand specialists are less likely to be the innovators and, thus, the one to deal with the problems never seen before. On the other hand target audience (both healthcare specialists and patients) are more skeptical about advertising for pharmaceuticals than for any other product in the market.
One of the main features of online marketing of medicines is that "pharmaceutical firms are challenged to adopt an increasing digital presence, following social media major trends" [10, p. 123]. Sometimes firms are caught in the loop of traditional methods and do not see new opportunities that arise from the technological development. Still, industry tries to adopt latest strategies and take advantage of the digital promotional tools. Recent market overviews explain that companies are interested in the new and innovative ways to conquer the market of pharmaceuticals and remain stable market share [11].
Evidence suggests that online marketing gradually substitutes traditional marketing channels in the market for pharmaceuticals. There are also articles that confirm higher level of consumer and healthcare professionals' engagement and better cost-efficiency compared to standard face to face interaction [12]. The main reason for the cost-efficiency is the factor known as better targeting and, thus, less effort to attract the consumers. Moreover, online promotional tools are much easier to tailor to the specific product or company case and leverage the strategy for the long-term results.
According to Webb, social networks provide new approaches for medicine industry to get in touch with consumers and health care professionals and receive their feedback [10]. This is also confirmed by the research that revealed how sales force in Europe can much better take advantage of digital technologies and web-based presence [9]. In this case promotion was in terms of healthcare professional channel - physicians and pharmacists are the key opinion leaders in this regard. So, when it is impossible to deliver the information and marketing message face-to-face there is no better solution than to go online. Here the advertisement may be as well presented in more native way.
If to talk about the end consumers, special industry overview by PWC shows that approximately 2/3 of Americans use the Internet to look for their symptoms and the same trend is seen among 50% of European adults. It means that the companies may easily communicate with the consumers by simply targeting their advertising [11]. Digital tools here play the role of mean for personalization of advertisement and faster search for the target audience. Targeting due to behavior allows the professionals in the marketing of drugs to step-by-step monitor consumer paths online and even throughout various website pages. It allows receiving many details on one's preferences and lifestyles and later to offer tailored decision or sometimes set of medicines. Modern digital marketers widely use mobile applications as well - these applications do not only gather data but also provide valuable platform to set your advertising. Blogs and health websites are also quite popular and, unlike general daily use applications, they are created specifically to satisfy the target audience on their request [8]. In addition, it allows significant decreasing the costs for the marketers.
According to Bondal, pharmaceutical market in Kazakhstan turned out to be the fastest growing segment of online trade. For instance, research conducted by Data Insight and SAP reveal that sales of online pharmacies from 2017 to 2018 rose for more than 70 per cent compared to offline points of sale [13]. This may be explained by the "customer pain" of drugs being delivered directly to the consumer. Plus, Internet-stores can be characterized by the additional feature of offering the visitor opportunity to buy the complementary good they usually forget to purchase in traditional stores [13]. Such summaries once again confirm that the digital platforms are becoming more and more preferable for the population to search for both information and product. It opens unlimited resources for marketing specialists to promote their products.
Thus, it is clear that the sphere of marketing promotion in pharmaceutical industry is actual and developing. The question attracts attention of many scholars and researchers throughout different markets and regions. A lot of works have been written to assess the influence of technologies on the promotion techniques. It is clear that the role of online marketing tools for the promotion of drugs is gradually rising. Nevertheless, there are still not enough investigations that thoroughly analyze the opportunities digital promotion brings to the market of pharmaceuticals and challenges that may arise on the way. Research lacks latest studies on the question in Kazakhstan and market insights that may bring quality contribution to the field. The following research may serve as a good base for that.
Methodology
For the purpose of this study survey was chosen as a method of analysis. Due to the small sample this survey represents mixed quantitative-qualitative analysis and can give particularly useful information in revealing the perception of the different phenomena and changes by the people. As long as promotion primarily targets the audience of the product, survey with both end-consumers and the specialists in the field may bring very important insights and hidden views on the question. Also, survey gives an opportunity to receive first-hand data without any noise or misinterpretation.
As was mentioned above, research question was to understand if the online promotional techniques are gaining increased value in the market of pharmaceuticals. The aim of the survey was to receive honest responses
on the matter from the professionals in the field and consumers of the medicines and form conclusions on the basis of such answers. Chapter below gives description of the sample, data collection instruments, procedures and data analysis techniques used in this research.
Participants. Population for the study included representatives of the industry -medical representatives, doctors (general practitioners, ENTs, pediatricians, etc.), pharmacists - and end-consumers. All of them could share their understanding of the questions and view on the promotional effectiveness of online methods. Survey naturally narrowed down the population of participants from 128 people (based on the personal data base of the researcher gathered on the basis of work connections) to the sample of 34 people who actually gave the answers to the proposed survey.
Some survey participants were chosen from the working environment of the one of the biggest pharmaceutical production company in Kazakhstan which has representative offices all around the country. Other part of the participants was selected based on the following criteria: to fit the research purpose all participants had to be aged over 18 years old, be of a middle income tier and live in cities.
58,8% of ones who gave the answers to survey lived in Almaty, by 5,9% - in Kostanay, Ust-Kamenogosrsk, Karaganda and Shymkent, the rest lived in Aktau, Aktobe, Atyrau, Nur-Sultan, Zhezkazgan, Karaganda and others. Based on the age participants may be divided to te following groups: 22-27 years old - 38,2%, 27-35 years old - 32,4%, 35-45 years old - 17,6%, 45-60 years old - 8,8%, 18-21 years old - 3%.
Women population gave 76,5% of all survey answers which is a common situation in the industry. 58,8% of all people who gave their answers to survey questions represented the category of medical workers, while 41,2% were end-consumers of pharmaceutical products. Unlike the industry representatives target audience sees promotion from the other side and can provide very useful insights about the way they perceive digital promotion and how it affects their buying or prescription behavior.
Data collection instruments. Further to the above-mentioned, primary method of data collection was survey. Quantitative and qualitative results of the questionnaire allow studying people's opinions and real thoughts which is crucially important for the effective promotion. In terms of this research questionnaire was placed on the online platform Google forms, which was partially due to quarantine restrictions (still in place at the time of study) and partially due to distance considerations (to cover participants in different cities of Kazakhstan).
Questionnaire was anonymous and all participants were informed about the absence of collection of personal data in order not to violate personal data protection legislation. Thus, all answers were documented to be later analyzed through the platform functionality.
For the purpose of this research descriptive type of research was used. The choice of this type for conducting the research was justified by structured nature of this research method. On the one hand questions were standardized and did not allow the respondent to switch to another topic not related to the theme, which is very important to receive relevant results. On the other hand, they gave opportunity to expand the horizons of the research and reveal the information previously unavailable or considered unimportant (through the possibility to provide personal answer other than was mentioned in the list).
Each participant should have gone through the same set of questions about the industry trends, their thoughts regarding promotion of pharmaceuticals, digitalization of the industry and perception of online promotional tools as well as their effectiveness. The set of questions contained 10 questions with multiple-choice answers which were structured in the way topic could be discussed from wider perspective and was narrowed down to the specifics by the last question.
Procedure. First stage of the study included the research of the population and determination of the correct sample of survey respondents. All participants were chosen based on the characteristics required for the questionnaire. They were directly contacted by the researcher, informed about the aim of the study and format of the survey and asked to give their answers to the questions.
Questions were formulated and composed to fit the purpose of the study and reveal the research question in its fullest. Later, list of questions was set in the Google Forms platform. Timing to gather the answers was 1 week and average time it took for participants to complete the survey was 5 minutes for answering all 10 questions. The final stage of the study was review of the answers and thorough analysis of the result.
Data analysis. Analysis of the information started from the review of the survey results and finding the patterns and common features. Answers were structured in a logical way. With the functionality provided by Google Forms platform questionnaire outcome was prepared in the form of both ready analytical tables and Excel file.
All research findings were allocated to particular categories which included: participants' data, professional and consumers' attitude to the online methods of promotion, participant's projections on the further development of digital tools for marketing communication in the industry. On the basis of this structured analysis research results were developed.
Results
As a result of the survey research three main themes were assessed: overall perception of online promotion in the field, discussion on the effectiveness of such digital tools and future perspective on the matter. Due to participants were representatives of different target audience of the promotion communication - from the side of doctors and pharmacists and from the side of end-consumer - the outcome data were quite diversified.
Industry representatives' sample covered several specialties of doctors as represented in the Figure 1 below. They were given the option t choose the specialty from the list of pharmacology, gynecology, allergology and immunology, anesthesiology and resuscitation, gastroenterology, hematology, geriatrics, dermatology, surgery, infectious diseases, cardiology, cosmetology, neurology, neonatology, emergency medicine, otorhinolaryngology, ophthalmology, pediatrics, pulmonology, family medicine, medical representative and other.
Dermatology 5%
Pediatrics 5%
Gynecology 5%
Other 20%
35%
Medical representative 30%
Fig. 1. Participants' Specialization by Field
The first significant detail that was highlighted by almost participants is the effect of recent global changes on the communication - medical specialists believe that online promotional methods nowadays are more intense than before (60,0%). Participants also highlighted transition to online promotional tools - 36,9%, but the biggest share (47,4%) think that online promotional methods will only substitute traditional ones. That said, transition to online promotion was much accelerated by the environment of pandemic in which the industry currently operates.
As regards the tools they currently observe more often, the answers are presented in the following Figure 2. Based on the provided answers, two of the most popular tools to promote medicines online are webinars and online conferences (chosen by 9 people - 45%) and WhatsApp and Telegram broadcasts (chosen by 10 people -50%).
None
Webinars and online conferences
Remote visits (through special websites or application)
Calls E-mailing
WhatsApp / Telegram broadcasts 10
9
5
Fig. 2. Which Promotional Tools Are More Commonly Met among Medical Specialists
Among the features of the online promotional techniques workers of pharmaceutical and medical sphere highlighted the following positive features: take less time (47,4%), allow to study the information when it is convenient (52,6%), require less resources and give access to different resources outside the city or country (42,1% each). As regards negative perception of digital promotion tools difficulties in perception of information (42,1%) and frequent technical issues (26,3%) were chosen the most.
If to analyze the answers for survey given by the end-consumers (14 participants), 79% confirmed that they recently observed the advertising of pharmaceutical products, while only 21% gave negative answer on whether they faced such an advertising. For those who had experience of seeing the ads for drugs online promotion occupied 64% of all sources of information.
Still, only 36% of participants found the online advertisement of drugs helpful for them. Other part (64%, or 9 people) either did not find the information useful or find it hard to answer the question. This demonstrates that marketers should target the advertising more accurate and understand the behavior and perception patterns of their target audience, which is now weakly developed.
As the survey was designed to understand if nowadays online promotion plays an increased importance in the industry of pharmaceuticals, one of the questions for the ned-consumers was formulated as "If it is important for you to find all necessary information about the medicine on the Internet?". Participants should have chosen their answer based on the scale there 1 meant "Not important" and 5 meant "Very important". As a result, 93% of all participants confirmed that it is very important for them to find the relevant information about the drug in the online resources, while only 1 person (7%) considered such an opportunity of a medium importance.
Such finding clearly demonstrate that usage of online tools is the must tool for marketers in the industry of pharmaceuticals to connect to their target audience and promote their products. Moreover, 86% of end-consumers sample find online advertising of medicines (search ads, banners, articles, social media ads) more effective than the traditional one (TV, radio, point-of-sale advertising).
Given that, it can be seen that online promotional tools are gaining attention of both medical specialists and end-consumers, but have not yet conquered the full trust and engagement of the target audience. This, of course, may be explained by the relatively recent evolvement of such methods and conservative nature of the industry as well deeply laid in the communication patterns.
To sum up the results of the survey, most of the respondents agreed that the role of digital communication used to promote the medicines is definitely rising and unlikely to lose its influence in the market. At the same time, results demonstrate that marketers should adapt the communication to fit different channels and have more positive and effective send. Conclusion
To conclude, current study gave the opportunity to answer the question if online promotional techniques are gaining increased value in the market of pharmaceuticals. According to the received findings digital promotional tools, indeed, play significant role in the modern marketing of drugs. Moreover, the perspective of its development is even more promising, which is confirmed by many studies in the field.
However, practical survey made on the population of Kazakhstan demonstrated that local online promotional tools require adjustments and support to bring about the efficiency for the marketers. It may take time for the target audience to get used to the new methods of promotions. Important to note that such observations are true for both participants of communication.
This research also has its limitations: small sample number (34 participants) which does not allow building accurate and unbiased conclusion; socio-economic characteristics of survey participants were also bounded by the environment of the researcher; no expert took part in the research. Given that, this study cannot serve as indisputable evidence on the matter but may become a good basis for future research in the field.
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