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Unformatted text preview: Needs-based segmentation: principles and practice Kathryn Greengrove Glaxo Smith Kline, USA While the principles of needs or benefit-based market segmentation have been long established, its potential value as a route to a stronger market understanding and ultimately competitive advantage has been largely untapped in pharmaceutical marketing research, with internal process rather than market focus driving market understanding. Many of the tensions around the use of geodemographics for market segmentation in the consumer work are mirrored in the use of classification systems and diagnosis in the pharmaceutical environment. This paper presents the application of needs-based segmentation – market segmentation based on understanding how physicians use perceptions of patient needs to group patients and then use this understanding to make appropriate treatment decisions specific to each patient group. The need to include patient needs in market segmentation is taken into account by considering the consequences of not segmenting the market strategically. The approach is illustrated to show how valuable outputs are generated and how direction may be provided across the brand development process. The potential impact and application of this novel thinking within pharmaceutical companies is reviewed. This paper shows how a benefit-based or needs-based segmentation of the market provides a more potent view of the market, and argue that market segmentation should therefore be fashioned to reflect this. Facing new challenges? The global pharmaceutical market has historically enjoyed double-digit growth with sales in the leading 13 markets increasing by 11% in 2001 (10% in 2000 and 9% in 1999) (Darbourne 2002). Analysis of this impressive growth might suggest that current approaches to market understanding have been effective. However, in the past it has been the science that has driven the business. Growth has come from innovation in the treatment of disease, i.e. new treatments for currently untreatable disease or significant improvement in existing treatments. International Journal of Market Research Vol. 44 Quarter 4 © 2002 The Market Research Society 405 Innovation slowing down and new markets requiring a different process of definition? Science-driven innovation, however, appears to be slowing. New drug introductions have been slipping in recent years. Only 35 new active substances were launched in 2001 (Southgate 2002) with recent figures showing that this slowed even further to 28 in the past 12 months ( Financial Times ). We have seen a number of recent examples of the challenges facing the industry come to bear in high-profile unsuccessful launches (Shimmings 2002). Those drugs that succeed in the struggle to get through clinical trials are faced with tougher regulatory approval processes. The Food and Drug Administration (FDA) requested clarification on at least 21 products in 2001 (Shimmings 2002), many of these requests being for additional data in specific patient populations.these requests being for additional data in specific patient populations....
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This note was uploaded on 01/18/2012 for the course MKT 3370 taught by Professor Staff during the Spring '09 term at Texas State.
- Spring '09