Professional Documents
Culture Documents
Introduction
Expanding multinational Owing to the economic growth in the Pacific region and the squeeze on
business in the Pacific pharmaceutical profits in the US market resulting from changes in the health
Rim care system, namely HMOs (medical centres operated by major medical
insurance companies) and health care reforms, many multinational
pharmaceutical companies have been expanding their business into the
Pacific Rim countries. Pharmaceuticals in Hong Kong comprise a US$1.4
billion industry (IMSPacific, 1991) and have enjoyed an annual growth rate
of approximately 20-25% (Hong Kong Association of the Pharmaceutical
Industry, 1988). Investment in China by the pharmaceutical companies has
increased since 1980 (Miao, 1994). Today, there are nine pharmaceutical
joint ventures in China with investments of over US$10 million, half of
which are US-based companies. As China becomes more aware of the
protection of intellectual property (“Regulations on administrative protection
of pharmaceuticals and rules for the implementation of regulations on
administrative protection of pharmaceuticals” was legislated on January 1,
1994), more multinational pharmaceutical companies are joining in the arena
with Merck & Co., Inc. being a typical example. For the past decade during
the opening of the China market, Hong Kong has been regarded as the base
for exploring that market. A better understanding of the buying behavior of
the medical practitioners in these areas will allow multinational
pharmaceutical companies to formulate cost-effective promotional strategies
for the China market.
The marketing dichotomy Pharmaceutical companies, in general, segment their target users on the
of pharmaceutical firms basis of their behavior and decision-making process. This marketing
dichotomy of industrial/consumer goods in their formulation of marketing
strategies has long been discussed among marketing scholars. The Industrial
Marketing Committee Review Board (American Marketing Association,
1960) and some scholars differentiated consumer goods marketing from
industrial goods marketing according to main distinctions in the ultimate
user/buyer’s behavior. Sheth (1973) in his theory of family buying decisions
implicitly recognized the similarity between industrial and household buying
behavior. Later, Wind (1978) showed the similarity in the consumer and
organization segmentation concepts by demonstrating that the buying
centers have been moving from individuals to multipersons.
34 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING VOL. 10 NO. 1 1995 pp. 34-43 © MCB UNIVERSITY PRESS. 0885 8624
In the pharmaceutical industry, ethical products are considered to be
organizational buying, whereas over-the-counter (OTC) preparations are
categorized as consumer buying. Although the patient is generally the
ultimate end user, regardless of whether ethicals or OTCs are concerned,
medical practitioners have a rather unique and often multiple role in the
purchasing process of pharmaceutical products. They may be the deciders
who make the buying decision for their patients when prescribing ethicals,
or they may play the role of influencer and/or gatekeeper in the case of
OTCs or hospital dispensaries. In countries such as Hong Kong, where
medical practitioners are permitted to dispense ethicals in their clinics, their
buying motives can be even more complex and buying behavior becomes
consumer buying. It is therefore understandable that the bulk of marketing
efforts is directed toward medical practitioners.
Previous product Pitt and Nel (1988) studied the factors influencing the prescription behavior
experience is significant of 210 general practitioners in Australia. A distinction was made between
the interpersonal/organizational determinants of prescribing decisions and
the marketing tools utilized by pharmaceutical firms. They concluded that
the former are stronger influences than the latter on prescribing decisions.
The most significant influence on the medical practitioners’ prescribing
decisions is their previous product experience. Of the marketing tools
available to the pharmaceutical firm, personal selling is most powerful. A
factor mentioned most often by their respondents (32.4%) was scholarly
articles by specialists in scientific medical journals. Unfortunately, this
factor was not included in their questionnaire, and the authors admitted that
this was the major weakness and limitation of their study. But other missing
factors, frequently mentioned by their respondents, were the reputation of
the company and price of the product.
A majority of other studies tended to concentrate on marketing tools utilized
by pharmaceutical firms. Conlan (1991) reported that pharmaceutical
companies in the USA spent more than US$165 million on gifts, trips and
cash awards to physicians when promoting brand name drugs. For private
practitioners, Baker (1992) suggested that more selective office-practice
items, such as prescription pads and patient record forms, would be more
effective not only because they provided a service to physicians and their
staff, but also offered an added benefit of being perceived as less
promotional. Williams and Hensel (1991) reported that the source of
information about pharmaceuticals considered to be important by physicians
has changed in rank order from direct mail, journal advertising and detailing
to colleagues, conventions, meetings, and conferences.
The ethnic diversity of One of the major pitfalls in understanding the Chinese has been the tendency
China of Westerners and other outsiders to overlook the ethnic and subethnic
diversity among the enormous population of China (Swanson, 1989).
Swanson delineates 12 “nations” of China that transcend political/provincial
boundaries. The buying behavior of medical practitioners from Hong Kong
and Mainland China may differ as a result of their distinct socioeconomic
environment. In addition, Hong Kong has both dispensing and prescription
markets, whereas China is mostly a prescription market viewed by Western
medicine. Private practitioners in Hong Kong are allowed to dispense
pharmaceuticals in their clinics. Their government counterparts, on the other
hand, are the same as the majority of the Mainland medical practitioners
who practice in a formulary situation (purchase of pharmaceuticals is
decided by the members of the therapeutic team) similar to that of the USA.
However, since a number of operations in China have basically adopted the
Research methodology
Pitt and Nel’s mission The questionnaire was designed to investigate both interpersonal/
factors organizational influences and marketing/promotional tools as used in Pitt
and Nel’s study (1988). Some mission factors from their study were
included, notably scientific and clinical papers, reputation of the company,
and price of the product. Quality of the product was used to encompass the
positive connotation of the inert property of personal experience with the
product. Some commonly adopted sales promotional materials utilized in
Hong Kong were specified in the list.
In this study, samples of private practitioners in Hong Kong were drawn
from the IMS Directory of Private Practitioners. Only those who saw more
than 15 patients per week were included. The government counterparts were
randomly selected from the major government hospitals. All the selected
subjects were first contacted by telephone. Those giving consent were
personally interviewed using questionnaires printed in English. They were
asked to rate the factors influencing their buying decisions according to their
perception of importance from 1 (not important at all) to 6 (very important).
Difficulties in conducting A low response rate and questionable reliability of some responses tend to
surveys in China be major difficulties in conducting surveys in China (Steele, 1990). To
ensure the reliability of the responses, the samples of this study were
personal contacts in the teaching hospitals of the medical school of Zhong
Shan University. Two local medical practitioners, invited to be the study
coordinators (with prior training by the author), distributed and explained the
questionnaire to the medical practitioners who were willing to participate in
this study. In order to minimize subethnic diversities of language and
socioeconomic heterogeneity between Mainland China and Hong Kong
participants, the city of Guangzhou was selected to be the first trial of this
study because the people there share the same Cantonese dialect and TV
broadcast programs with Hong Kong residents. The English questionnaire
used in Hong Kong was translated by the author and verified by some
medical practitioners. Questionnaires in both English and Chinese were
distributed and the completed ones were mailed back through the local
representatives.
The association of the extent of perceived influence on prescribing behavior
was tested with the correlation analysis. ANOVA and Simultaneous
Dt = qa ( m , fe ) MSE / r
where
m = number of independent variable; fe = degree of freedom of random
error; and r = sample size
Hong Kong
Government Private China
Total 89 295 22
Specialty
GP 48 224 3
Obstetrician/gynecologist 11 19 2
Pediatrician 18 20 0
Neurologist 0 1 0
Psychiatrist 1 4 0
Rheumatologist 1 0 0
Cardiologist 0 4 4
Others 10 23 13
Years of experience (%)
0-7 70.8 15.5 13.6
8-12 15.7 25.4 50.0
13-20 11.3 35.1 18.2
21 and more 2.2 24.0 18.2
Median (years) 4 15 10
Table I. Demographics
Mean Standard
Rank Factors scorea deviation
Mean Standard
Rank Factors scorea deviation
1 Quality of the product 5.86 0.47
2 Reputation of the company 5.82b 0.39
3 Accuracy of promotional literature 5.18 0.96
4 Scientific and clinical papers 5.05 1.25
5 Samples 4.86 1.21
6 Seminar or lecture 4.59 1.40
7 Symposium or conference 4.55 1.34
8 Attractiveness of the promotional literature 4.41b 1.22
9 Medical journal advertising 4.09 1.23
10 Price of the product 3.91 1.57
11 Personal selling 3.86 1.64
12 Slides or video 3.73 1.32
13 Direct mail 3.68 1.73
14 Promotional items and gimmicks 3.55 1.50
15 Sales bonus 3.23 1.88
16 PC programming and support 2.68 1.39
Notes:
n = 22
a
Mean score is the average score on a 6-point scale, where 6 is very important, and 1 is not
important
b
Parameters are significantly different from the following ones based on Tukey-Nair Test at α
= 0.05
Company reputation
Accuracy of literature
Personal selling
Clinical reports
Seminar
Symposium/conference
Price of product
Samples
Slides or video
Promotional literature
Promotional gimmicks
PC programs/support
Direct mail
Sales bonus
0 1 2 3 4 5 6 7
Key :
Hong Kong government
Hong Kong private
China practitioner
Table VI. Major influencers for medical practitioners in Hong Kong and China
A major finding of this study which may deviate from the common belief of
the pharmaceutical industry is the relatively low importance of influence
accorded to sales representatives, particularly in China. Nevertheless, no
promotional tools other than personal selling can identify and exploit
directly the sources of influence. In addition, relationship is the most
important determinant in doing business in China (Redding and Ng, 1983;
Yau, 1987). It is important for pharmaceutical companies to place more
emphasis on quality of sales calls when salespeople can only have limited
direct interactions with medical practitioners. Since sales promotional
materials have lower influence ratings, planning and usage of them require a
more cautious evaluation of cost-effectiveness. When needed, proper
selection of them should provide exposure of the products, leads for the
salespeople and reinforce their selling effort.
Personal selling is less Specialties of medical practices were not restricted when selecting the
important sample for this study. The findings in principle are no different from those of
Pitt and Nel’s study which concentrated only on general practitioners.
However, owing to the distinct social system in China, the influence of
personal selling is much less important. This is an issue which requires
further study with a larger scale and continuing follow-up, particularly when
a trend of more frequent contacts between salespeople and medical
practitioners has started to be observed in China recently. A further
comparative study in other provinces is recommended for attaining a
comprehensive profile of the factors influencing the prescribing behavior of
the medical practitioners in China. The impact of years of experience in
medical practice and the gender of practitioners will also be interesting to
explore and to be compared with studies in other cultures.
Sandra S. Liu, having had several years’ experience in the pharmaceutical industry, is
currently a Lecturer in the Department of Marketing, Hong Kong Baptist University,
Kowloon, Hong Kong.