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Doctors' Perceptions towards Domestic and Multinational
Pharmaceutical Products:
An Investigation from Developing Country
Jashim Uddin Ahmed*, Md. Humayun Kabir Chowdhury**, Ishrat Jahan Synthia***, and Ishrat Sultana**** This exploratory study focuses on doctors' perception towards domestic and multinational phar- maceutical products. Doctors can heavily influence drug purchase decisions by performing the roles of users (sometimes), influencer, gatekeepers and deciders, while patients perform the role of buyers and users. The difference in perception was measured in terms of products, brand image and pricing. Data were collected from a sample of 15 doctors (n=15) using a questionnaire comprised of 12 ques- tions measured in Likert scales. The study reveals that brand image is the most influential factor for price of medicines and brand image is highly related to quality and the level of promotion for the un- derlying product. Furthermore, doctors perceive multinational products to be different and better than domestic products due to their stronger brand image. This study highlights that doctors' preferences are not fully unbiased and can be influenced by pharmaceutical companies. Due to its exploratory nature, findings might need to be validated in a further study with a larger sample.
Keywords: Bangladesh, pharmaceutical industry, brand, products, medicine, price
Studi yang bersifat eksplorasi ini fokus pada persepsi dokter terhadap produk farmasi domes- tik dan multinasional . Dokter dapat mempengaruhi keputusan pembelian obat dengan menjalankan peran sebagai pengguna ( user ), pemberi pengaruh (influencer) , penjaga arus informasi (gatekeeper) dan pembuat keputusan (deciders), sedangkan pasien melakukan peran sebagai pembeli (buyer) dan pengguna (user). Perbedaan persepsi diukur dalam hal produk, citra merek dan harga. Data dikumpul- kan dari sampel 15 dokter (n = 15) dengan menggunakan kuesioner yang terdiri dari 12 pertanyaan yang diukur dalam skala Likert . Penelitian ini mengungkapkan bahwa citra merek merupakan faktor yang paling mempengaruhi harga obat-obatan dan citra merek sangat berkaitan dengan kualitas dan tingkat promosi untuk produk yang mendasarinya. Selain itu, dokter menganggap produk multinasi- onal berbeda dan lebih baik dari produk dalam negeri karena citra merek yang lebih kuat . Penelitian ini juga memberikan kesimpulan bahwa preferensi dokter tidak sepenuhnya bebas bias dan dapat di- pengaruhi oleh perusahaan obat-obatan. Karena penelitian ini merupakan penelitian eksplorasi, maka temuan penelitian ini perlu divalidasi dalam studi lanjutan dengan sampel yang lebih besar.
Kata Kunci: Bangladesh, industri farmasi, merek, produk, obat-obatan, harga
"A generic drug is the same as a brand-name drug in dosage, safety, strength, quality, the way it works, * North South University, Bashundhara, Dhaka-1229, the way it is taken and the way it should be used. jashim@northsouth.edu, The FDA requires generic drugs have the same high ** Southeast University, Banani, Dhaka-1213, Bangla- quality, strength, purity and stability as brand-name desh. E-mail: mhkchowdhury@yahoo.com ***North South University, Bashundhara, Dha- ka-1229, Bangladesh. E-mail: ishratj@northsouth.edu, U.S. Food and Drug Administration (FDA) **** United International University, Dhanmondi, Dha- ka-1209, Bangladesh. E-mail: ishrat@bus.uiu.ac.bd ASEAN MARKETING JOURNAL Desember 2013 - Vol.V - No. 2 111 growth over the last 15-20 years and has be- come a worth of BDT 30 billion (US$ 385 mil- The pharmaceutical industry has recorded tre- lion) industry. The industry has low volatility in mendous achievements in the health sector and terms of growth, profit, raw material and cost contributed to the economic development of of finished goods. Almost all the life saving im- many countries (Al-Alak & Al-Ameri 2012). ported products and new innovative molecules In the last two decades, Bangladesh pharma- are channeled into and marketed in Bangla- ceutical industry has grown at a substantial rate desh through these companies. The Drug Act and has been one of the most profitable sectors of 1940 and its rules formed the basis of the with more than 245 pharmaceutical companies country's drug legislation. A minimum quality in Bangladesh (The Financial Express 2013). standard is set by the Directorate of Drug Ad- This sector has one of the highest growth rates ministration and companies generally follow (with a 15 percent rate) and as of 2011 it has a Good Manufacturing Practices (GMP) which total market size of US$1 billion. Bangladesh includes rigorous quality control (Chowdhury exports pharmaceutical products to 87 coun- & Kabir 2009). A positive impact of the Drug tries, including the US and a few European na- (Control) Ordinance of 1982 was the limited tions after meeting 97 percent of the domestic availability of foreign currency which was ex- demand and reducing the country's dependence clusively utilized for importing pharmaceutical on imported medicines, i.e. vaccines, insulin raw materials and finished drugs. Since Drug and anti-cancer products etc, which represent (Control) Ordinance of 1982, a rapid devel- three percent (Ahmed 2013; The Financial Ex- opment of domestic manufacturing capability helped contain the dependence on the import Although multinationals (representing 13 of pharmaceutical products (raw material and percent of the market) are increasingly shrink- finished product) around pre-1982 level. Un- ing the business of domestic companies in der the Drug (Control) Ordinance, government Bangladesh, domestic companies still capture fixes the maximum retail prices (MRP) of 117 around 87 percent of the market, producing ap- essential drug chemical substances and others proximately 6,000 brands of medicines. Ban- are priced through a system of indicative prices. gladesh is a developing country with a popula- This rule applies to domestic products only. In- tion of 150 million. Many of them are unable to terestingly, even with withdrawal of price con- purchase high-priced medicines (Ahmed 2012). trol from many products, prices have been set It is a matter of concern that same generic med- at affordable levels due to heavy competition icines are selling at different prices, having dif- in the market. The primary responsibility of ferent brand names. Domestic firms, producing drug quality control lies with the manufactur- at lower cost, have been the principal suppli- ers. Domestic companies were only taking part ers of drugs to the Bangladesh health care sys- in the distribution channel of MNCs. Millen- tem (Oxfam Report 2001). The varying price nium Development Goal 8 sets out the target of medicine is very irrational. For instance, for the international community in co-operation Gliclazide BP 80mg 100 tablets are selling at with pharmaceutical companies to provide ac- BDT 750 (US$ 9.6) under a brand name Gli- cess to affordable, essential drugs in developing clid by a company, whereas the same Gliclazide countries (The Millennium Development Goals BP 60mg 100 tablets are selling at BDT 1,800 Report 2008).
(US$ 23) under a brand name Diomicron by an- other company. Lots of such examples could be Literature Review
cited. Patients do not know the generic as well as the brand name of the drugs. They depend In the past decade, pharmaceutical compa- on the prescriptions by the doctors. Most of the nies have been involved in intense direct-to- doctors prescribe high-priced medicine while consumer advertising (DTCA) and promotion the very same medicines with lower prices are of prescription drugs. Spending on DTCA of available in the market (Hossain 2011). Phar-
prescription drugs has been increased (Dono- maceuticals sector has been enjoying a steady hue et al. 2007; Parker & Delene 1999). DTCA ASEAN MARKETING JOURNAL 112 Desember 2013 - Vol.V - No. 2 spending grew from US$2.5 billion in 2000 to $3.3 billion in 2003, $4.2 billion in 2005, and $4.5 billion in 2009. There was a 80 percent Price perception is the process by which increase in DTCA spending between 2000 and consumers translate price into meaningful cog- 2009. As a result, the average American televi- nitions and it has been the interest of research- sion viewer spent more than 15 hours annually ers for several years (Lichtenstein et al. 1988). watching prescription drug advertisements; that Price conveys information to the consumer re- was far more time than they spent with their garding the product quality (Erickson & Johans- family physicians (Brownfield et al. 2004). In son, 1985) and this issue has been extensively developing countries pharmaceutical industry studied more than any other factors in this do- invests heavily in promotion, and it has used a main (Dodds et al. 1991; Swan 1974; Zeithaml variety of promotional strategies to stimulate 1988). One of the most important findings in sales of pharmaceutical drugs (Al-Areefi 2013). the literature is that fair prices are related to ref- Since the rapid growth in pharmaceutical drugs erence prices (Kahneman et al. 1986). The pri- is a global phenomenon, it is essential for un- mary rule is that the actual price should be equal derstanding doctors' perception while prescrib- to the price that a consumer expects. Doctors' ing drugs and understanding patients' needs price sensitivity of medicine is an important is- and their preferences. The aim of this paper is sue and it is the centre of interest for fair pricing to examine doctors' preferences for source of (Rice 2009). Price increases would be fairer if information and understanding the context, as they benefit poor people rather than rich people. well as the reasons why they choose specific This type of fairness in price is very important branded medicine which they prescribe. Relat- for developing countries. According to Perez- ed constructs and literature are as follows: Casas et al. (2009: 960), "pricing policy of pharmaceutical companies is not set according Perceived Medicine Quality
to the purchasing power of the different coun- tries, but follows a general strategy of maximiz- Research reveals that perceived product quality has been the subject of considerable in- A worldwide increase in healthcare costs terest to practitioners and researchers, mainly poses a burden of affordability of medicines in services marketing. This is due to the ben- (Jamshed et al. 2012). The prospect of better eficial effects of marketing performance. The health and a higher quality of life has led to in- belief that high perceived quality leads to re- crease in both the number of prescriptions and peated purchases is at the heart of any business the price of new medicines (Feldstein 2005). (Kennedy et al. 2001). Thus, when developing Despite technical know-how and quality of marketing strategies, marketers have to take products, price plays an important role in deter- into consideration perceived quality and every mining the attitude towards purchase of medi- factor associated with it. cines. In terms of price versus volume, what In the context of quality of medicine, it is is not acceptable is a high-price: high-volume little more than doctor perceptions as to "how combination (Payers 2002). The cost of medi- well a particular drug from a particular phar- cines incorporates several added costs prior to maceutical firm will perform for a particular reaching patients (Perez-Casas et al. 2009). In patient's conditions" (Waheed et al. 2011). pharmaceutical sector, medicine prices are the Quality of medicine comes first which is aimed results of many different policy effects (Leop- at building brand image and increasing market old et al. 2012). According to Olcay & Laing share because its primary service is the patient's recovery or the exchange of trust. Domestic and multinational companies are competing with "Price of medicines is determined by a combination each other for their establishment and doctors of variables, including national and individual in- have different perceptions of each pharmaceu- come, government policy, degree of competition in tical product regarding quality (Borkowski & the public and private markets, health system capac- Gordon 2006).
ity, public policies, intellectual property protection, non-tariff barriers and import tariffs." ASEAN MARKETING JOURNAL Desember 2013 - Vol.V - No. 2 113 There are additional factors affecting phar- commonly related to the repeated behavior of maceutical products. For instance, price dis- purchasing a specific brand over time (Iglesias crimination by suppliers of patented products et al. 2011). Brand loyalty can be described as or the presence of a domestic pharmaceutical consumer's conscious or unconscious decision, industry with the capacity to produce generic expressed through intention or behavior, to re- substitutes. Perhaps this is why a group of cus- purchase a brand continually and proclaim to tomers could not afford to purchase medicines be the ultimate goal of marketing (Yee & Sidek beyond domestic pharmaceutical products. 2008). Moreover, brand loyalty exists when customers have a high relative attitude toward Brand Image, Perception and Loyalty
the brand, exhibited through repurchase behav- ior. This can be an asset to the firm, especially Brands create strategic positions and specif- when a customer is willing to pay higher pric- ic perceptual associations in the minds of con- es, and allows the firm to spend less money to sumers (Henderson et al. 1998). Brand prefer- serve and attract customers (Reichheld & Sass- ence is strongly effective in medical products. er 1990). Commitment and repeated purchase Moss (2007: 318) strongly believes, "that good behavior are considered as necessary conditions product brand work exists, for example, Novar- for brand loyalty followed by perceived value, tis UK established Lamisil for fungal nail infec- satisfaction and brand trust.
tion in the minds of the physician and patient via clever healthcare professional and disease awareness campaigns". Since consumers want to buy the product of a company they trust, Consumer perception is the factor that most- previous experience and the reliability of the ly influences the consumers buying process. brand name obviously affect the buying deci- When a consumer confronts with a new prod- sion. Rice (2009) states that brand-name drugs uct, s/he will consider salient attributes of the that are considered close substitutes for a given product and will form an opinion. In addition medical condition are marketed simultaneous- to this evaluation process, extrinsic cues might ly, but sold at considerably lower prices. As a influence consumers' perceptions of quality in a result, the physician's prescribing decision is more global manner by serving as an evaluative often the choice between two or more brand- context of liking or disliking the new product. name drugs rather than between a brand-name It is quite natural to surmise that a product that and a generic drug. maximizes perceived quality would certainly be Brand perception is consumers' ability to preferred to one that is perceived as low quality. identify the brand under different conditions, But the question becomes important when one as reflected by their brand recognition (Keller brand is preferred over another although they & Kotler 2006). Consumer-based brand eq- contain the same attributes. That's the reason uity was described for four dimensions; brand why the concept caused consumer behavior re- awareness, brand association, perceived qual- searchers to perceive the construct differently ity, and brand loyalty (Pappu et al. 2005). from those of the economists. In consumer be- Brand awareness was defined as consumers' havior literature, taken altogether, it is argued ability to identify the brand (Rossiter & Percy that the quality of a good is not only inherently 1987). It refers to the strength of a brand pres- related with the attributes in the good but also ence in consumer's minds. Brand awareness the psychological outcome a person or people has several levels starting from less recognition have for it.
of the brand to dominance (Aaker 1991). Consumers often perceive price as an extrin- Perceived quality is evaluated and decided sic quality cue. Several studies have searched by consumers and it is another valuation of consumer perception of price as an indicator of brand to push the customer. Brand is the image quality, and many of these have shown price to that consumers have in mind (Aaker 1991).
operate in this manner (Erickson & Johansson Brand loyalty is one of the most-cited con- 1985). Although there are so many arguments cepts in marketing literature and was most in favor and against this rationale, in this study ASEAN MARKETING JOURNAL 114 Desember 2013 - Vol.V - No. 2 the idea of positive relationship between price understanding of pharmaceuticals' products and perceived quality is adopted. The argu- prescribing context. A short pretest took place ments behind this assumption are: (a) produc- before conducting the field survey using the ing quality good needs sophisticated machinery questionnaire. In our research, we also initially that cost more and this increases the price, (b) did one focus group discussion (FGD), a fact manufacturers use high quality ingredients to that is often ignored by researchers (Hollander produce high quality products, and (c) it is un- likely that a product with low quality will be A sample of doctors' views was used in this charged more in this competitive world. study, a method widely used in pharmaceuti- It is assumed that when a consumer initially cal sector drug choices (Cockburn & Pit 1997; encounters a new product, important informa- Wulff et al. 2007). There are many arguments tion about the product is often missing. In this in favor and against the convenience samples. case, consumers may form inferences about Several authors have enumerated the dangers missing information by drawing a connection of using convenient samples in research (Bel- between available pieces of information, one of tramini 1983; Oakes 1972). These authors which is corporate image. Upon facing a brand, have generally cited threats to external validity consumers' cognitive responses will focus on as their primary concern, arguing that conve- question such as "Does the manufacturer have nient samples have the threat to be atypical of the necessary skills, expertise, and technology to the ‘general population', and that any findings produce quality drugs?" The positive responses based on convenient samples may therefore will develop into favorable evaluations toward not be generalizable to other populations (Cun- the brand. The opposite will be observed in case ningham et al. 1974). However, some scholars of a negative response. Thus, corporate image disagree on this issue. Oakes (1972) contends that is relevant to the company's ability to pro- that such arguments are unfounded because, re- duce output, is one likely source of consum- gardless of what population is sampled; gener- ers' quality perceptions. Both the domestic and alization can be made only with caution to other multinational pharmaceuticals are producing populations. In the same vein, Marshall (1996) medicines for different disease in accordance to argues that approach to ‘selection of a sample patient's recovery and our research seeks to find is usually justified'. Because the primary focus out whether there is any difference and if there of this study was to test theory and not effects is any difference, what are the factors behind generalization, considerations of internal valid- higher or lower sale of their products. ity were paramount and a convenient sample was appropriate (Calder et al. 1982; Cook & Campbell 1975; Tybout 1982). Concerns about external validity were secondary. A question- This study is based on exploratory research naire served as a data-gathering instrument.
with small sample size and non-representative. In this exploratory research, doctors were This type of research is used principally to gain asked 12 questions (a sample of 15 doctors a deeper understanding of something, which was chosen from three different hospitals), af- is carried out in the beginning of the research ter reading the cover page of the questionnaire process and initial activities carried out to refine that only mentioned the purpose of the study. the problem into a researchable one which need The second page contained the scale items, the not be precise (Robson 2002; Saunders et al. measures needed to test the hypothesis. The last 2009).
page contained the demographic question. In the questionnaire, the same question was asked Questionnaire Method and Data Collection
to mark the evaluation on a 5-point Likert scale for both domestic and multinational pharma- ceutical regarding each factor. Most subjects The questionnaires were designed and de- spent between 20 and 25 minutes filling out the veloped based on informal discussion with entire questionnaire. By comparing the answers some doctors and pharmacist to get insights and to the questions, we checked whether the factor ASEAN MARKETING JOURNAL Desember 2013 - Vol.V - No. 2 115 Table 1. Items of the Study Questionnaires Criteria: Option/Scale Do pharmaceutical companies spend more on marketing and promotion than they do on research and development? Quality, Production, Price, Do all brand name medicines have generic equivalents? and Brand evaluation Does local production leads to lower prices because of low quality? 1=strongly disagree, Technological advantage Do all the multinationals use more efficient and technologically advanced production method than domestic firms? Table 2. Independent Variables & Questions Independent Variables Bangladesh pharmaceutical growth "How would you rate the significance of each factor for the tremendous growth of the pharmaceutical sector in Bangladesh?" "How would you rate the significance of the following factors in determining the price of Perception of Brand Image "How would you rate significance of each option in how pharmaceutical companies promote "How would you rate significance of each option which influences the Brand Loyalty in the Bangladesh Pharmaceutical Market Factor "How would you rate the significance of each factor in advancing the performance of the Bangladesh pharmaceutical market?" Table 3. Descriptive Statistics List of variables Deviation Minimum Maximum Bangladesh Pharmaceutical growth Perception of Brand Image Bangladesh Pharmaceutical Market Factor Rate Multinational that was asked influences the customer percep- Survey Data Analysis
The data analysis involved planned compari- Design of the Study
sons of the relevant variables. The Descriptive Statistics (Table 3) is where SPSS has generated Each question in the questionnaire was de- descriptive and quartile statistics for the vari- signed in order to investigate the understand- ables. Due to small sample (n=15), instead of ing of the related study of the elements to get parametric test, non parametric statistical tool was used. Here, Wilcoxon signed rank test was The result was analyzed by descriptive na- used where two related samples were compared ture and generalizes the idea of different items to assess whether their populations mean ranks comparing domestic and multinational pharma- differ. By examining the final Test Statistics ta- ceutical companies. Questions were asked for ble, we can discover whether these changes are measuring all five independent variables.
significant. This is the p value for the test. We report the Wilcoxon signed-ranks test using the Z statistic (-0.608) which is based on positive ranking and Asymp. Sig. (2-tailed) is The statistical package used is the SPSS 17, 0.534. We have seen in the analysis domestic a most commonly used packages for quanti- pharmaceutical products' has negative ranks (7) tative research methods (Bryman & Cramer and sum of ranks (44.00), multinational com- 2011). After data were collected, the data from pany products' has positive ranks (5) and sum questionnaires were tested using Wilcoxon of ranks (16.00) and remaining 3 are ties. signed-rank test. ASEAN MARKETING JOURNAL 116 Desember 2013 - Vol.V - No. 2 Table 4a. Comparison of participants' score Multinational Users a. Domestic Users < Multinational Users, b. Domestic UserS > Multinational Users, c. Domestic Users = Multinational Users Table 4b: Test Statistics b Domestic Users – Multinational Users Asymp. Sig. (2-tailed) Based on Positive ranks, b. Wilcoxon Signed Ranks Test.
Summary of Survey Data
medicine would correlate with this, as doctors are likely to believe the two go hand in hand We undertook numerous tests of robust- with the patient's recovery.
ness including descriptive statistics, Wilcoxon signed-ranks test using the Z statistic. In this Q3. Do all brand name medicines have generic section, Q 1 to Q 7 presents the several issues equivalents? in this study, these being: (1) pharmaceutical Doctors have a different perception about companies' expenditure in more on marketing the brand images while prescribing any phar- activities than their research and development, maceutical products. Results show that 9 out (2) doctors influencing when prescribe a spe- of 15 respondents disagreed with the same im- cific medicine, (3) medicine brand issues, (4) ages of brand pharmaceutical products. They factor in enhancing the competitiveness of the perceive pharmaceutical products depending Bangladesh pharmaceutical market, (5) domes- on their branding. Interestingly, 3 respondents tic production lead to lower prices because of remained neutral and 3 respondents strongly low quality, (6) MNCs use more efficient and disagreed with the statement.
technologically advanced production methods than domestic firms, and (7) marketing directly Q4. What do you believe is the most important to doctors represent higher returns for Drug factor in enhancing the competitiveness of the Bangladesh pharmaceutical market? Government regulation is the biggest fac- Q1. Do you believe pharmaceutical companies tor affecting domestic competitiveness. This is spend more on marketing and promotion than likely to be true, especially in light of compre- they do on research and development (R&D)? hensive TRIPS legislation that is affecting the By far the strongest response received on pharmaceutical landscape at present (The Daily this survey is on this question which criticizes Kalerkantho 2012). Drug manufacturers and the companies. The lack of R&D infrastructure how they adapt to such legislation as well as seems evident from doctors' responses, under- increasing competition also play a role in the scoring the lack of investments in R&D. Mar- sector competition. Interestingly, only one re- keting and promotion, although important, do spondent believed that either doctors or patients not lead to the development of new and inno- had any substantial affect on competition.
vative drugs which are critical for the develop- ment of the sector in terms of global competi- Q5. Does domestic production lead to lower prices because of low quality? Doctors' perception of the product's value Q2. How would you rate the significance of the sets the price of the product. Their perception patient satisfaction factors in influencing doc- toward the domestic pharmaceutical company's tors to prescribe a specific medicine? product quality determines favorable impact on Patient satisfaction is very crucial factor in their mind although domestic pharmaceuticals the recommendation of a specific medicine. are not as competitive as multinational compa- Benefits of the drugs as well as the brand of the ASEAN MARKETING JOURNAL Desember 2013 - Vol.V - No. 2 117 Table 5. Factors for the growth of the pharmaceutical sector in Bangladesh a) Latest manufacturing techniques b) Government regulation c) Intense competition d) Marketing and promotional performance e) Market demand Table 6. Factors in determining the price of Medicines Table 7. How pharmaceutical companies promote their brand a) By introducing one new product b) Profit maximizing c) Exploitative practice d) Strong brand recognition nies in introducing latest technologically ad- are also unaffected by the cost of the medicines vanced production method. Surprisingly, none they prescribe. The lack of doctors' knowledge of the respondents strongly agreed with the on prescription medicines, as well as their lack lower pricing strategy of domestic pharmaceu- of a financial incentive to be concerned with the tical because of low quality. cost of drugs, combined with insurance to cover the patient's costs, have affected the structure of Q6. Do all the multinationals use more effi- this industry (see for example, Feldstein 2005). cient and technologically advanced production methods than domestic firms? Findings
The MNCs have advantages over domestic companies in technologically advanced meth- ods in production. Therefore, it is noteworthy to point out that MNCs hold 15 percent share of The findings of doctors' perception show the market despite this advantage, which may that introduction of latest manufacturing tech- suggest the significance of government legisla- niques of MNCs is greater than that of domes- tion and advantages in domestic production.
tic companies and the difference is significant. Similarly, doctors' perception show that Gov- Q7. Does marketing directly to doctors repre- ernment regulation is the most powerful fac- sent higher returns for Drug Companies? tor influencing tremendous growth of domestic There is a strong perception that marketing pharmaceutical companies compared to MNCs drugs directly to doctors means greater returns and the difference is quite significant.
for companies. A crucial factor that determines Doctors' perception shows that the domestic the demand for prescription drugs is the role companies face significantly more competition of the doctors as patient's agent in prescribing than multinational pharmaceutical companies. drugs. When treating a patient, doctors do not The survey findings indicate of doctors' per- have perfect information on the most appropri- ception reveals that, domestic pharmaceutical ate drug to prescribe, the possible substitute companies are more successful in their market- medicines that are available, their side effects, ing and promotional performance than the mul- and their relative costs. Therefore, pharmaceu- tinational companies and the difference is note- tical companies devote a great deal of effort in worthy. Doctors' perception of market demand marketing their medicines to doctors. Doctors for domestic pharmaceutical products is much ASEAN MARKETING JOURNAL 118 Desember 2013 - Vol.V - No. 2 Table 8. Factors influencing the Brand Loyalty c) Prescribed by doctors d) Unethical practice Table 9. Factors in advancing the performance of the Bangladesh pharmaceutical market a) Government regulation b) Drug manufacturers higher than that for multinational pharmaceuti- something to do with promoting the brand, but cal products.
promoting brand of a pharmaceutical product is not varied by strong brand recognition. Doctors' perception of multinational phar- maceutical product's quality is significantly The brand loyalty toward domestic and stronger than that of domestic pharmaceutical MNCs does not depend on price. Result shows product's quality. Moreover, promotional activ- that doctors do not perceive any significant dif- ity was tested to determine the price of domestic ference in pricing of these two pharmaceutical and multinational pharmaceuticals. This study sectors that influences brand loyalty. The qual- shows that doctors do not observe any differ- ity of MNCs is greater than that of domestic ence in the promotional activity of pharmaceu- pharmaceutical companies respective to brand tical sector in determining price of medicines. loyalty and the difference is significant.
Doctors' perception shows that brand image of MNC's is greater than that of domestic com- Bangladesh Pharmaceutical Market Factors
panies and the difference is noteworthy. Most interestingly, we have found that quality and Analysis of perceptions shows that domestic brand image for the MNC's product is higher sector's advantage in Government regulation than that of domestic products. Hence, doc- is much higher than that of MNCs. Result of tors feel that domestic pharmaceutical compa- this hypothesis shows that progression of the nies are competing more than the multinational performance of the Bangladesh pharmaceuti- cal market did not vary by drug manufacturers. More often than not, domestic pharmaceutical products are prescribed by the doctors. More- over, the patients demand more of the domestic The findings of doctors' perception show that pharmaceutical products than that of Multina- chance of introducing one new product by a do- tionals and the difference is noteworthy.
mestic company is greater than that of MNCs. Similarly, doctors' perception of profit maximi- Discussions
zation of domestic pharmaceutical product is much higher than that of multinational pharma- In our research findings, we have seen that ceutical products.
doctors perceive domestic and multinational The analysis reveals that doctors' perception pharmaceutical products differently. In relation about promoting a brand does not deal with ex- to this, all the factors considered in this study ploitative practice or unethical practice. Inter- are different for domestic and multinational estingly, both domestic and multinational com- pharmaceutical products. Therefore, the market panies believe that reinforcing brand image has demand for drugs seems to be the single most ASEAN MARKETING JOURNAL Desember 2013 - Vol.V - No. 2 119 significant factor creating growth in the phar- ferent pharmaceutical companies. Most of the maceutical sector at present. It is not surprising respondents agreed that marketing products di- due to the growing number of elderly and the in- rectly to them represents higher return for drug troduction of more and better drugs to the pop- companies. This might happen because several ulation. Interestingly, government regulation is medical representatives from different compa- not considered to be highly effective relative to nies try to attract the doctors through gifts and other factors, which tends to diverge from re- other facilities. Therefore, doctors prescribe the sults indicating its impact. Therefore, it is clear medicine of that company which attracts them that market demand for domestic pharmaceuti- the most. However, doctors should do what is cal company products is very high, leading to best for the patient and consider the financial tremendous growth of domestic companies.
capability of the patient. Doctors should not Brand image seems to be the single biggest suggest expensive medicine to a poor patient. factor affecting the price of medicines. Brand So, it can be said that doctor's ethics is the pri- image of medicine, however, can be affected by mary factor while referring a medicine.
quality and promotion. As brand image comes down to the effectiveness of the medication, it is not surprising that this is the single biggest factor affecting price. From the research findings, we have seen A brand promotion in pharmaceutical indus- that instead of proper R&D, marketing of phar- try can be successful if it can bring one new maceutical products are given more emphasis. product in the market followed by the reinforc- An investigation should be conducted on the is- ing of brand recognition. According to Moss sue since healthy growth is likely to encourage (2007:317) "brand image needs to be tracked the pharmaceutical companies to introduce new and monitored against the chosen identity and drugs and maintain a healthy competitiveness continually adjusted to maintain an ideal posi- with respect to essential drugs. tioning within the marketplace". Perhaps that Due to lack of government's monitoring pol- is because pharmaceutical companies are not icy and practice, pharmaceutical products man- inclined to admit exploitative practices. Inter- ufactured locally cannot be ensured uniformly. estingly, both domestic and multinational com- Some of the leading pharmaceutical (domestic) panies believe that reinforcing brand image has manufacturers and the pharmaceutical export- something to do with helping to promote the ers of Bangladesh have started to export to for- brand. The test of hypothesis shows that doc- eign countries which are strategically important tors' perception toward domestic pharmaceuti- for global expansion. Here, government should cal companies differs mostly by its introduction encourage setting up of more domestic compa- of a new product.
nies and provide them with financial assistance.
The test result shows that quality of medi- In order to increase the LDCs export, phar- cine associated with a brand plays a significant maceutical companies need to ensure compli- role affecting brand loyalty which highlights ance of the policies and principles. Formation why infrastructure and production are key de- of alliance and contract for exchanging views, terminants that must be enhanced in order to information as well as technical know-how ensure standards of quality. It can be concluded with developed countries like India, Pakistan, that customers perceive multinational phar- Brazil and Argentina should enrich this sector.
maceutical company's medicine quality more Many doctors are doing exploitative practice positively, which influences the brand loyalty. at present. An investigation is needed to empha- Despite doctors play the critical role in pre- size the doctors' suggestions in order to fulfill scribing medications and in brand awareness their expectations from the company. Finally, with customers, they are looked at as the least we can quote from statements of Moss (2007: important factor influencing the performance of the pharmaceutical market. Doctors' preferences for a medicine are al- The [pharmaceutical] industry needs to move from most fully depended on the influences of dif- tactical to strategic brand management, from a lim- ASEAN MARKETING JOURNAL 120 Desember 2013 - Vol.V - No. 2 ited focus to a broad portfolio perspective, from a activities of a traveler without a set of itiner- largely sales-driven approach to one that also takes ary in the sense that during the process traveler into account brand identity and other sophisticated can adapt the new changes in his/her way. Dur- marketing concepts. At present, the pharmaceuti- ing the research process especially when it is cal industry is not ready for the major changes that exploratory research, a researcher should be have already occurred within the consumer world but cost containment, diminishing pipelines and in- ready to accommodate new changes and adjust creasing governmental pressure on prices may well according to new findings in the course of ac- force its hand in the future.
tion (Robson 2002). This study is exploratory research in order to get the deeper understand- After analyzing all the data, facts and figures ing of doctors' perceptions towards domestic from the survey of fifteen doctors, a theory can and multinational pharmaceutical products. be developed that domestic and multinational This study is limited with fifteen respondents pharmaceutical companies in Bangladesh have from a particular city of Bangladesh, which has differences in their performance. The role phar- been selected for the survey. In Bangladesh, al- maceutical companies in a global economy is though the current population is huge, the ratio to carry-out research, develop and produce in- of experienced and skilled doctors to popula- novative medicines that improve quality of life tion is very low, which keeps the doctors busy and it is their duty to do so in a profitable way treating the patients (Uzzal 2013). It was a dif- (Leisinger et al. 2012). The prevailing drug or- ficult job to get the doctors to participate in the dinance needs to be amended again to impose study from their busy schedule and it was time mandatory price approvals for all drugs from consuming as well. Therefore, there was not drug administration. To ensure quality medi- enough data for getting valid and reliable con- cine, the capacity of the drug testing laboratory clusion and hence the effect of the perception needs to be enhanced as well (Hossain 2011).
of doctors needs to be investigated further with Finally, doctors should be fair while prescrib- large sample size. The nature of this research ing medicine to patients. Better treatment from justifies the smaller sample size (n=15) and non doctors should be expected based on ethical be- parametric equivalent of t-test has been used havior and morality. as data analysis (Saunders et al. 2009), as the focus is on in-depth interview of few doctors Limitations and Future Research
instead of collecting large sample data. Moreo- ver, this research should have included doctors This study is based on exploratory research. from all over Bangladesh. This is a shortcom- Exploratory research is used principally to gain ing of the research. Finally, the research find- a deeper understanding of something, which is ings based on developing countries may or may carried out in the initial stages of the research not be applicable to developed and underdevel- process and initial activities carried out to re- oped economies. Despite all these limitations, fine the problem into a researchable one which the research study indicates a promising direc- need not be precise. Saunders et al. (2009) ar- tion for comprehending doctors' perceptions of gue that exploratory research is just like the Aaker, David A. (1991), Managing Brand Equity, New York: The Free Press.
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