The Emerald Research Register for this journal is available at www.emeraldinsight.

com/researchregister

The current issue and full text archive of this journal is available at www.emeraldinsight.com/0955-534X.htm

A new product launch strategy (NPLS) model for pharmaceutical companies

Peter Trim
Department of Management, Birkbeck College, University of London, London, UK, and

NPLS for pharmaceutical companies 325

Hao Pan
Orion Pharma, Newbury, UK
Abstract
Purpose The purpose of this paper is to make explicit how marketers employed in the pharmaceutical sector can ensure that the company is positioned in the industry as a result of a sustainable competitive advantage being achieved. Various factors are highlighted, including high research and development costs, stringent government regulations and cultural factors such as religion. Design/methodology/approach The new product launch strategy model outlined in this paper was developed from both secondary and primary sources. A literature review was undertaken, a number of in-depth personal interviews and a focus group session were conducted, which involved managers within a pharmaceutical company. The research strategy encompassed the case study method and the NPLS model was validated and can be viewed as generalisable. Findings It is clear from the research undertaken that some marketing models are viewed as being too complex; however, it is generally appreciated that marketing models can be used to interpret complex relationships that are evident in a marketing system. Research limitations/implications Two weaknesses associated with the model were identied. First, the assumption that there was a one-way relationship between the strategic launch decisions and the tactical launch decisions and, second, a feedback mechanism was absent that would provide users of the model with a means for evaluating their decisions and identifying alternative strategies and tactics. The model was amended and a feedback mechanism was introduced. Practical implications The NPLS model can be used by marketing practitioners to enhance communication between corporate level staff and subsidiary level staff, and can be used to implement and/or facilitate the strategic marketing concept within a pharmaceutical company. The model can also be used to focus attention on risk reduction/elimination associated with market entry. Originality/value The NPLS model is an addition to marketing knowledge and can assist marketing academics and researchers to understand better how marketing models can be constructed and implemented. The model can also be used by marketing practitioners employed by pharmaceutical companies to make tactical and strategic decisions; to evaluate a new product launch strategy; and to devise international marketing entry plans and strategies. Keywords Product launch, Marketing models, Pharmaceuticals industry, Decision making Paper type Research paper

Introduction The pressure to develop new products has increased (Cooper and Kleinschmidt, 1987), and this has resulted in senior management thinking in terms of continuous (re)alignment, whereby there is a focus on internal and external factors (Fisscher and

European Business Review Vol. 17 No. 4, 2005 pp. 325-339 q Emerald Group Publishing Limited 0955-534X DOI 10.1108/09555340510607370

EBR 17,4

326

de Weerd-Nederhof, 2001, p. 7). Yeoh (1994) has noted that companies in the global pharmaceutical industry need to develop a sustainable competitive advantage through a reorientation of the new product development strategy, which results in a ow of successful new drugs. The marketing models that have been developed to date are useful with respect to explaining marketing phenomena, but marketers working for global pharmaceutical companies need to develop more focused marketing models that allow them to understand, interpret and predict events and issues relating to market performance. It can be argued that more research is required in order to establish how a new product launch strategy model can be developed. Emphasis needs to be placed on predicting product performance via a relevant global marketing intelligence process. Hence, marketers working in the pharmaceutical industry need concepts, models and decision-making frameworks that allow them to implement effective new drug launch strategies. The new product launch strategy (NPLS) model for pharmaceutical companies that has been proposed in this paper will help marketing managers to formulate appropriate launch decisions (Pan, 1999), as it raises many issues relating to the decision-making process and how decisions can be formulated and implemented. The key point being: that marketers can eliminate risk or reduce specic types of risk associated with a successful new pharmaceutical product strategy, and then develop a foundation on which to build a brand positioning strategy or strategies, that result in successful positioning within the industry. The NPLS model outlined in this paper was constructed using both secondary data and primary data (Pan, 1999). Having undertaken a literature review; a number of in-depth personal interviews and a focus group session were conducted which involved managers within a pharmaceutical company. The case study approach was used and proved benecial as it allowed the NPLS model to be validated by managers within a pharmaceutical company. It is also hoped that the ndings will stimulate further research in the area, which may take into account the various complexities relating to the public sector referred to by authors such as Laing and Hogg (2002), for example. Launch strategy and new product performance Crawford (1987) has indicated that the risk associated with new product development failure is high, and Cooper and Kleinschmidt (1993) have studied various new product success factors (competitive advantage, synergies, project familiarity, market attractiveness, and competitive situation). Montoya-Weiss and Calantone (1994) have identied a number of determinants associated with new products (strategic factors, market environment factors, development process factors, and organisational factors), and this can be considered a useful extension of Cooper and Kleinschmidt (1993) work relating to launch strategy in the context of the success of a new product. There is a link here with the work undertaken by Fisscher and de Weerd-Nederhof (2001) who have placed the new product development concept within an organisational setting. Fisscher and de Weerd-Nederhof (2001) have made reference to the actions of individuals and the social-dynamical processes that prove inuential with respect to new product development. Hyland et al. (2001) have taken this a step further by linking product innovation with continuous improvement and have broadened the topic by allowing important questions relating to organisational culture to surface.

One can also argue that the work of Craig and Hart (1992) into launch strategy(ies) is valuable because it focuses on new product performance. Urban and Hauser (1993) have highlighted the fact that the product launch itself normally requires the largest commitment of resources (time, money, and managerial input), and this has been conrmed by Montoya-Weiss and Calantone (1994). Dundas and Krentler (1982) have dened launch strategies as tools to guide new product launches. The impact of a launch strategy on new product performance has been investigated by Biggadike (1979), and Hultink and Schoormans (1995). Biggadike (1979) has looked in detail at launch decisions and it is important to bear in mind that launch decisions involve marketing mix decisions. Crawford (1994) has introduced a product innovation charter that ensures that new product development is placed within a logical framework and receives the continual support of top management. The various approaches taken to study aspects of new product development has produced an in-depth body of knowledge that is of relevance to researchers from various branches of management thought. It can also be stated that those involved in new product launch strategies are required to make both strategic and tactical decisions, and this has been taken into account when developing the NPLS model outlined in this paper. Pharmaceutical industry factors The regulations governing the pharmaceutical industry have been rened through time and are intended to ensure the availability of safe and effective drugs on the market (LaFrancis Popper and Nason, 1994). Marketers in the pharmaceutical industry need to take into account regulatory constraints, if that is they wish to implement an ethical marketing strategy. LaFrancis Popper and Nason (1994), have identied a number of categories of regulations affecting the introduction of drugs, and have shown that the type of regulation did have an affect on the timing of a new product introduction. Marketers working for a global pharmaceutical company need to bear in mind the fact that the long lead time involved in bringing a new drug to the market means that income generation needs to take into account the investment in future research and development projects (Sapienza, 1993). Hence, marketers working for a pharmaceutical company need to fully understand the strategic and tactical planning implications associated with quantiable potential risks, and need to develop contingency plans in order to counteract the actions of competitors. Porter (1985) has made it clear that innovative products create opportunities for erecting competitive barriers and pharmaceutical companies can, through strategic positioning, establish entry barriers that keep substitute products out of the market. The pharmaceutical industry generally classies individual drugs according to product groups called therapeutic categories. These categories may be viewed as a set of drugs that have similarities in the diseases treated and in the character of treatment. Yeoh (1994) provides two reasons as to why pharmaceutical companies specialise in specic areas of drug therapy. First, the chemical properties of drugs in one therapeutic category differ from the chemical properties of drugs in another category. Second, marketers in pharmaceutical companies can ensure that research competence in particular therapeutic categories are developed and exploited and this is easier to achieve than the company incurring high learning costs and additional costs associated with failure as a result of entering unfamiliar therapeutic categories.

NPLS for pharmaceutical companies 327

EBR 17,4

328

Thomas (1988) has paid attention to the costs associated with pharmaceutical marketing activities and has concluded that most companies concentrate their sales efforts on specic therapeutic categories. Competitive advantage (Porter, 1980, 1985) can be associated with a company developing and exploiting internal technology (Grant, 1995). Licensing represents an option that enables a company to extend its geographic reach, as well as ll gaps in a product line for example. Sapienza (1993) has made reference to internal development and the erection of entry barriers, and Yeoh (1994) has suggested that a commitment to internal research and development is necessary in order to develop successful new pharmaceutical products for the global market. Senior managers in pharmaceutical companies are paying attention to such issues as increasing research and development costs; and the increasing levels of competition (Little, 1989). It is because of the constant threat of competition, that senior marketing staff in pharmaceutical companies have adopted a global perspective to the market. Strategic marketing-planning models Aaker and Weinberg (1975) have suggested that a model is designed for investigating the behaviour of a real system. Boulden and Buffa (1970) have suggested that modelling is a process that involves taking tangible organisational inter-relationships and translating them symbolically into a logic; and this suggests that marketing models are tools that aid the decision-making process (Montgomery and Weinberg, 1973; McIntyre, 1982). Some marketing models have been classied as too complex and this is possibly because they have been perceived as too mathematical (Trim, 1994). McIntyre (1982) has pointed out that when a problem has been adequately structured and the necessary data has been readily available, marketing models have been widely implemented and have proved satisfactory. Owing to the fact that marketing systems are highly complex, models can be used to interpret the set of complex relationships that are evident within a marketing system. There are a number of marketing related/strategic planning models in the marketing literature that can be deployed in order to facilitate the marketing decision-making process. The growth-share matrix (Boston Consulting Group, 1972; Lilien et al., 1992); Porters (1980) competitive industry structure model; and Porters (1985) value chain concept; have made a useful contribution to the body of knowledge and have established themselves as planning models (Lilien et al., 1992). Porters (1980) competitive industry structure model has been used by marketing strategists to analyse the level and type of competition within an industry; and Porters (1985) value chain concept has been used by marketing strategists to identify a companys capabilities from two perspectives: primary activities and support activities. Aaker (1995) too has contributed to the subject of strategy formulation and implementation via the strategic market management framework that takes into account both the external environment and the internal capabilities of the company. Aakers (1995) approach has proved valuable in the sense that the framework provided represents a system that facilities the integration of management practices in order to make strategic decisions, as well as create a culture in which the strategic vision of senior management can be communicated. With respect to new product development and introduction, Lilien et al. (1992) have identied two groups of marketing models:

(1) the new product adoption process model; and (2) the new product repeat-purchase model. However, it can be pointed out that there is a scarcity of pharmaceutical industry specic new product development and introduction models. Yeoh (1994) has done much to correct this imbalance by suggesting that as regards a pharmaceutical products global success, there are ve key variables that need to be taken into account by marketers: technological familiarity; product differentiation; competitive intensity; source of technology; and national origin of the company. Yeoh (1994) has suggested that these ve variables together determine the overall global success of a new drug, however, more attention needs to be paid to addressing the launch strategies themselves. The reason for this is because a new product launch strategy will affect such issues as positioning within the industry; and stimulate retaliatory action from competitors. The constructs of the NPLS model and their inter-relationships Figure 1 is a summary of the NPLS model for pharmaceutical companies that was developed with the intention of facilitating new product performance (Pan, 1999, p. 45). Pan (1999, p. 41) suggests that new product performance is determined by a combination of a set of strategic launch decisions and a set of tactical launch decisions. This takes into account the work of Rothwell (1972), Cooper (1979 and 1980), Hopkins (1980), Craig and Hart (1992); Cooper and Kleinschmidt (1993), and Montoya-Weiss and Calantone (1994); the key point to note being that a launch strategy can determine the performance of a new product on the market. Owing to the fact that the strategic launch decisions are made early in the new product development process and do affect the tactical launch decisions made at a later date, it is important that marketers take a holistic view and think in terms of how the decision-making process itself can be rened through time. Pan (1999, p. 41) has categorised the strategic launch decisions into three types of strategies: product strategy, market strategy and rm strategy. These launch strategies were identied using the Aaker (1995) framework that was applied to the pharmaceutical industry in order to identify the industry specic factors. The tactical launch decisions were in fact the marketing-mix elements (product, price, promotion and place (distribution)), and it was acknowledged that the schools of classical marketing and strategic marketing were integrated for the purpose. The simplied strategic marketing framework and pharmaceutical industry factors Pan (1999, p. 42) modied and simplied the Aaker (1995) framework in three ways. First, the framework was given a new product development emphasis while maintaining the dynamics of strategic marketing. Second, it was simplied in order to incorporate the application of new product launches. Third, it was redesigned to identify the strategic launch decisions relevant to a new product. The simplied framework encompassed two main elements: an external analysis (customers, competitors, the market and the environment in which the new product would compete); and an internal/self-analysis of the company (the companys overall performance and strategic options). The opportunities and potential threats for a new product were dened. As regards the internal/self-analysis, the companys resources,

NPLS for pharmaceutical companies 329

EBR 17,4

330

Figure 1. The new product launch strategy model for pharmaceutical companies

reasons for past successes and failures, and the companys culture and the morale of the staff were studied. The strengths and weaknesses of the company relating to new product success were determined and this provided depth to the subject matter. The simplied framework was made industry specic and this meant that the pharmaceutical industry factors formed the other input construct of the NPLS model. These industry specic factors were categorised into four groups of issues: product issues, regulatory issues, technology issues, and geographic issues (Pan, 1999, p. 43). The product issues highlighted the importance of product innovativeness and technology familiarity. Product innovativeness can be dened in terms of the uniqueness of the new drug and thus this is what the sales force needed to concentrate ` on; its ability to perform was viewed as the key element vis-a-vis success in the market. Technology familiarity is important as it provides valuable research, marketing ` knowledge and intelligence (feedback from the sales force vis-a-vis their experience with previous product development policies and practices). The regulatory issues can be considered highly specic and relevant in terms of sensitivity. Different regulations in various countries can cause marketing related problems that need to be overcome. They can also determine whether a new drug is successful or not or needs to be heavily promoted for example. The issue of promotion ` has been addressed by Sheffet and Kopp (1990), and is an important element vis-a-vis the marketing mix and budget allocations. Changes in the way in which the National Health Service has been managed in the UK has forced some UK pharmaceutical companies to evaluate their strategic direction and implement various tactics, and this has to some degree been an ongoing situation. Recent developments such as the change from the General Practitioner (GP) fund holding arrangement to the new primary care group arrangement has effected the marketing operations of pharmaceutical companies. Indeed, a number of these issues have been raised by Laing and Hogg (2002). It is possible to conclude, therefore, that a pharmaceutical industry specic new product launch strategy model can only be valid if it takes adequately into account all the relevant regulatory issues that govern the industry (Pan, 1999, p. 44). The technology issues need to be thought of more in terms of the resource issues needed during the product launch decision-making process. For example, one cannot expect a GP sales force to have the necessary expertise of account management that is deemed crucial to the success of a specialist product in the treatment centres of excellence (Pan, 1999, p. 44). Underpinning a successful new product launch may well be different approaches to internal development of technology and the utilisation of resources; and international licensing arrangements. The geographic issues take into account cross-national comparisons regarding factors affecting new product success. When viewing the global marketplace, it is important for marketers to appreciate fully cultural value systems and the inuence of religion for example (Pan, 1999, p. 44). Personal norms and beliefs can and do effect the outcome of a launch strategy and these need to be taken into account when developing a marketing model. Issues such as the potential impact of the acceptability of a certain treatment/therapy needs to be carefully thought through. Individual country markets differ in terms of regulations, socio-economic factors, economic development and political maturity, as well as the degree of competition that exists for example. These factors need to be thought through by marketers because they will determine the

NPLS for pharmaceutical companies 331

EBR 17,4

332

` choice of strategies to be implemented and will determine the tactics to be used vis-a-vis a new product launch strategy. A large number of issues have been identied in the application of the simplied Aaker (1995) framework. Pan (1999, p. 46) has suggested that although the Aaker (1995) framework is comprehensive, it does not give adequate importance to various elements. As a result, vital pharmaceutical industry specic factors would be overlooked by marketing managers who simply use the Aaker (1995) framework on its own. By ensuring that the relevant pharmaceutical industry factors are viewed as a separate input construct, a more in-depth understanding and appreciation will result and this will lead to a holistic approach being adopted. Pan (1999, p. 46) proposes that relevant pharmaceutical industry factors have a direct impact on the identication of tactical launch decisions and do therefore, need to be taken into consideration when formulating launch decisions. Strategic and tactical launch decisions The strategic launch decisions make up a construct that is both an output of the combination impacts from the simplied Aaker (1995) framework and pharmaceutical industry factors, and an input source for deriving tactical launch decisions and the nal model output construct new product performance. Pan (1999, p. 46) has classied the strategic launch decisions into three groups: product strategy, market strategy and the pharmaceutical companys strategy. This ensures a holistic view is taken of the company and how it interacts with the environment. The product strategy encompasses a products image and branding, and the market strategy is the group of strategic launch decisions. The latter determines market targeting and competitor related functions (and retaliation); and the companys strategy reects the companys culture and mission, and the new product launch process. Tactical launch decisions are inuenced by both strategic launch decisions and pharmaceutical industry factors. Pan (1999, p. 47) has grouped these in terms of the marketing-mix and the product decisions can be dened as tactics relating to the branding and assortment of the new product. New product performance is the nal output construct of the overall NPLS model for the pharmaceutical company, and is normally measured in terms of protability, generated within a specic time period. Methodology Pan (1999, p. 49) dened the research objective as:
To construct a valid and user-friendly new product launch strategy (NPLS) model for pharmaceutical companies.

The methodological approach outlined by Trim (1994) with respect to developing a marketing model was followed and amended by (Pan, 1999, pp. 49-51) as necessary. Seven major steps were used to construct and validate the NPLS model: (1) Step 1: Literature search. The identication of the reference sources (secondary data) to be used. (2) Step 2: Literature survey. The utilisation of the reference sources and the extraction of the desired information.

(3) Step 3: Model construction. Construction of the NPLS model applicable to pharmaceutical companies. (4) Step 4: Primary data collection. Case study research encompassing in-depth personal interviews with two product managers within the same pharmaceutical company. This was to validate part of the NPLS model: using the simplied Aaker (1995) framework as a tool for identifying product strategies, market strategies, and the companys strategies relating to new product launch. Two products were selected due to their newness. Product A was a pre-launch product that appeared ideal for the purpose of the study. Product B was a product that was launched within the past 12 months. The product managers interviewed were able to apply the Aaker (1995) framework. The product manager for product B was asked to repeat the exercise under the scenario of treating product B as a pre-launch product. Any resulting strategic differences were recorded and possible explanations discussed. The two product managers views on how valid and useful the simplied Aaker (1995) framework was as a tool for identifying new product launch strategies were tape recorded and documented. (5) Stage 5: Validation of the NPLS model. A focus group consisting of seven managers (four product managers, two regional sales managers, and one divisional sales and marketing manager) from the same pharmaceutical company was formed to discuss the validity of the NPLS model. The focus group members were asked to comment and criticise the model after a presentation of the model by the researcher (Pan, 1999, p. 50). The discussion centred around the practicality and implications of the NPLS model. (6) Stage 6: Renement of the NPLS model. Modication of the model after the focus group discussion and recommendation. (7) Stage 7: A repeat of stages 5-6. This was to ensure that the focus group members were satised with the validity and the usability of the NPLS model. The case study method Yin (1994) has indicated that the case study method is an empirical inquiry that investigates a contemporary phenomenon within a real-life context. Patton (1980) has argued that the case study method can be used to allow managers to make better decisions owing to the fact that they understand the uniqueness of the phenomenon being studied. Pan (1999) used the case study method in order to ensure that the product managers provided a holistic view of how useful the simplied Aaker (1995) framework was as a tool for identifying new product launch strategies. Each product manager was able to input his/her unique knowledge and experience, and use the Aaker (1995) framework as a blue print to produce unique product specic launch strategies. Patton (1980) has suggested that the case study method allows a particular problem (identifying launch strategies for a new pharmaceutical product in this case) to be studied in depth and this has the benet of increasing the chance of a discovery being made. It is important to bear in mind that the case study method has been criticised. Yin (1994) has questioned the universality of the research output and Hammersley (1995) has suggested that the results of the case study method can achieve universality if, for

NPLS for pharmaceutical companies 333

EBR 17,4

334

example, a number of independent case studies are conducted with the same conditions prevailing. Being aware of this issue, Pan (1999) conducted two different case studies using the same tool (the simplied Aaker (1995) framework) for two different products with two different product managers. The manager for product B was also asked to repeat her case study exercise treating her product as a pre-launch product (as indicated in the above). This was to increase the universality of the results (the managers views on how valid and useful the simplied Aaker (1995) framework was as a tool for identifying launch strategies). The personal interview method The personal interview method can be used to obtain data to answer a specic question(s), and to probe where necessary, thus achieving a better insight into the subject matter (Patton, 1980; Trim, 1998). The researcher selected the unstructured, in-depth interview method, in order that the respondents could express their opinions in a spontaneous manner (Cohen and Manion, 1995). The product managers were encouraged to express their views on the usefulness of the simplied Aaker (1995) framework when applied to the products they were responsible for. The product manager who carried out the exercise twice was asked to discuss the differences in strategic choices if the Aaker (1995) framework had been deployed during the time of her products launch. The validity of the simplied Aaker (1995) framework as a tool for identifying new product launch strategies was discussed by the managers. Pan (1999, p. 53) was aware that it was not possible for the product managers to possess a complete knowledge of the subject matter and that it was time consuming for the product managers to gain a holistic interpretation of the Aaker (1995) framework. An e-mail was sent to each manager explaining the concept of the Aaker (1995) framework prior to the tape-recorded, in-depth personal interviews being conducted. A telephone conversation conrming the managers understanding and completion of their case study (applying the simplied Aaker (1995) framework to their product(s)) was also carried out prior to the interview. Focus group method The focus group method represents a form of group interview and usually involves a limited number of people (four to 12), the idea being that the members of the group will discuss a specic topic under the guidance of a researcher (Hakim, 1987). The focus group method is known to be a vehicle for providing unique perspectives on a research topic (Denzin and Lincoln, 1994); and Blumer (1969) has indicated that the focus group method can be used to provide valuable insights into various subject-matter. Pan (1999 p. 54) organised a one-and-a-half hour focus group session involving seven managers of a pharmaceutical company. The managers included three product managers who had been previously involved in validating the use of the simplied Aaker (1995) framework; one product manager who was familiar with another product of the company; two regional sales managers; and one divisional sales and marketing manager. The focus group session started with a presentation of the new product launch strategy model for pharmaceutical companies (see Figure 1) and the group members were then directed to comment on the validity and practicality of the overall model.

Although the focus group method can be classied as inexpensive and exible, it has been noted that an emerging group culture may emerge that interferes with an individuals views and opinions, and as a result group-think emerges (Denzin and Lincoln, 1994). Being aware of issues such as hierarchy, the researcher asked the group members to express his/her views on the model, starting with the junior managers and ending with the senior managers (Pan, 1999, p. 55). This approach allowed the junior managers to think through the subject matter and to express their views before the views of the senior managers were expressed. This was useful as it reinforced the concept of transparency. Findings: case study narrative Strengths of the NPLS model The NPLS model takes into account the factors necessary for a successful launch and in the case where a company is a subsidiary of a multinational pharmaceutical, the marketing emphasis of the NPLS model can be viewed as relevant. Four main strengths of the NPLS model were identied: the identication of strategic and tactical launch decisions; the inclusion of the simplied Aaker (1995) framework as a tool for identifying strategic launch decisions; the inclusion of pharmaceutical industry ` specic issues that were judged to be inuencing factors vis-a-vis the strategic and tactical decision-making process; and the applicability of the model at both a corporate level and subsidiary level. The identication of strategic and tactical decisions The identication of strategic and tactical decisions were perceived as most valuable and the model functions were viewed as an acceptable analytical framework that could be used to guide managers through the sequence of problem-solving and decision-making. The emphasis on the balance between strategic launch decisions ` and tactical launch decisions vis-a-vis accuracy and credibility of the prediction of overall new product performance were judged to be relevant. It was also judged to be instrumental with respect to the planning of launch decisions. In particular, the classication of product, market and company strategies enabled managers to have a ` holistic view of the company vis-a-vis new product development. The advantages of incorporating the simplied Aaker (1995) framework The simplied Aaker (1995) framework was described as comprehensive and the framework was viewed as straightforward, and it yielded useful results. The rationale for using the simplied Aaker (1995) framework as a tool for reaching strategic launch agreements was made explicit. Consideration of pharmaceutical industry-specic factors The necessity to list the pharmaceutical industry specic factors prior to the determination of launch strategies is evident. Regulatory and geographic issues can be listed under market analysis while product issues can be listed under performance analysis. Technology issues can be listed under the determinants of strategic options. The inclusion of pharmaceutical industry factors as a separate determinant for both strategic and tactical decision-making is necessary. Furthermore, pharmaceutical industry factors or industry specic issues would stimulate managers in-depth

NPLS for pharmaceutical companies 335

EBR 17,4

thinking of specialised subject matter. Pharmaceutical industry factors were considered to be a strength of the model and would remain a separate construct of the model rather than being incorporated into the simplied Aaker (1995) framework. The applicability at both corporate level and subsidiary level The applicability of the NPLS model at both a corporate level and subsidiary level are recognised as important. The model is useful with respect to initiating new product development projects (the planning phase) and the utility of the NPLS model on the subject of country market entry selection is more appropriate at the corporate level. Corporate level decisions usually encompass decisions relating to what product, which country, when to start the planning process and why launch the product in country A as opposed to country B, for example. The NPLS model provided managers with a comprehensive analysis and information that would feed into the corporate level decision-making process. The NPLS model is versatile and could be applied at both the corporate level and the subsidiary level. The relationship of strategic decisions and tactical decisions The NPLS model indicates the importance of the combined contribution of both strategic launch decisions and tactical launch decisions. Tactical decisions can also inuence or affect the choice of strategic decisions on some occasions. Tactical decisions can also create reverse inuences. Weaknesses of the NPLS model Two weaknesses of the NPLS model were identied: the NPLS models assumption that there was a one-way relationship between the strategic launch decisions and tactical launch decisions; and a feedback mechanism was absent that would provide the users of the NPLS model with a means for evaluating their decisions and identifying alternative strategies and tactics. A feedback mechanism needed to be introduced that took into account the output of new product performances so that the NPLS model would aid users to evaluate the accuracy and effectiveness of their decision-making. It would also provide users of the model with another opportunity to analyse relevant information and identify alternative strategies and tactics. As a result, it was necessary to amend the NPLS model (see Figure 2, Pan, 1999, p. 84). Conclusion The methodological approach adopted allowed a simplied Aaker (1995) framework to be produced that allowed marketing managers in a pharmaceutical company to identify new product launch strategies. The incorporation of the pharmaceutical industry factors and the identication of strategic and tactical decisions are strengths of the NPLS model. The model is also practical in orientation at both the corporate level and the subsidiary level. The NPLS model can facilitate buyer-supplier relations as it provides a mechanism for enhanced marketing communications. The NPLS model can also be used to evaluate marketing situations such as improving an existing products performance, and has the benet of being holistic in orientation. The model allows decision-makers to link aspects of general management and strategic marketing, and makes a contribution to theory building.

336

NPLS for pharmaceutical companies 337

Figure 2. The new product launch strategy model for pharmaceutical companies

EBR 17,4

References Aaker, D.A. (1995), Strategic Market Management, John Wiley & Sons, Chichester. Aaker, D.A. and Weinberg, C.B. (1975), Interactive marketing models, Journal of Marketing, Vol. 39 No. 43, pp. 16-23.

338

Biggadike, E.R. (1979), Corporate Diversication: Entry, Strategy and Performance, Harvard University Press, Cambridge, MA. Blumer, H. (1969), Symbolic Interactionism: Perspective and Method, Prentice-Hall, Englewood Cliffs, NJ. Boston Consulting Group (1972), Perspectives on Experience, Boston Consulting Group Inc., Boston, MA. Boulden, J.B. and Buffa, E.S. (1970), Corporate models: online, real-time systems, Harvard Business Review, Vol. 48 No. 4, pp. 65-83. Cohen, L. and Manion, L. (1995), Research Methods in Education, Routledge, London. Cooper, R.G. (1979), The dimensions of industrial new product success and failure, Journal of Marketing, Vol. 43 No. 1, pp. 93-103. Cooper, R.G. (1980), Project NewPro: factors in new product success, European Journal of Marketing, Vol. 14 No. 3, pp. 277-92. Cooper, R.G. and Kleinschmidt, E.J. (1987), New products: what separates winners from losers?, Journal of Product Innovation Management, Vol. 4 No. 2, pp. 169-84. Cooper, R.G. and Kleinschmidt, E.J. (1993), Major new products: what distinguishes the winners in the chemical industry?, Journal of Product Innovation Management, Vol. 10 No. 2, pp. 90-111. Craig, A. and Hart, S. (1992), Where to now in new product development research?, European Journal of Marketing, Vol. 26 No. 11, pp. 1-49. Crawford, C.M. (1987), New product failure rate: a reprise, Research Management, July-August, pp. 10-24. Crawford, C.M. (1994), New Product Management, Richard D. Irwin, Homewood, IL. Denzin, H.K. and Lincoln, Y.S. (1994), Handbook of Qualitative Research, Sage Publications, London. Dundas, G.R. and Krentler, K.A. (1982), Critical path method for introducing an industrial product, Industrial Marketing Management, Vol. 11 No. 3, pp. 125-31. Fisscher, O.A.M. and de Weerd-Nederhof, P.C. (2001), Towards eccentric organisations a case study of new product development, Journal of Workplace Learning, Vol. 13 No. 1, pp. 5-13. Grant, R. (1995), Contemporary Strategy Analysis: Concepts, Techniques, Applications, Blackwell Publisher Inc., Oxford. Hakim, C. (1987), Research Design: Strategies and Choices in the Design of Social Research, Allen & Unwin, London. Hammersley, M. (1995), Whats Wrong with Ethnography?, Routledge, London. Hopkins, D.S. (1980), New product winners and losers, Conference Board Report No. 773, The Conference Board, New York, NY. Hultink, E.J. and Schoormans, J.P.L. (1995), How to launch a high tech product successfully: an analysis of marketing managers strategy choices, Journal of High Technology Management Research, Vol. 6 No. 4, pp. 229-42.

Hyland, P.W., Gieskes, J.F.B. and Sloan, T.R. (2001), Occupational clusters as determinants of organisational learning in the product innovation process, Journal of Workplace Learning, Vol. 13 No. 5, pp. 198-208. LaFrancis Popper, K.M. and Nason, R.W. (1994), The drug lag: a 20-year analysis of six country markets, Journal of Public Policy and Marketing, Vol. 13 No. 2, pp. 290-9. Laing, A. and Hogg, G. (2002), Political exhortation, patient expectation and professional execution: perspectives on the consumerization of health care, British Journal of Management, Vol. 13 No. 2, pp. 173-88. Lilien, G.L., Kotler, P. and Sridhar Moorthy, K. (1992), Marketing Models, Prentice-Hall International Inc., Englewood Cliffs, NJ. Little, A.D. (1989), Forces driving change in the US pharmaceutical industry, Spectrum, pp. 47-55. McIntyre, S.H. (1982), An experimental study of the impact of judgement-based marketing models, Management Science, Vol. 28 No. 1, pp. 17-32. Montgomery, D.B. and Weinberg, C.B. (1973), Modelling marketing phenomena: a managerial perspective, Journal of Contemporary Business, Vol. 2 No. 4, pp. 17-43. Montoya-Weiss, M.M. and Calantone, R.G. (1994), Determinants of new product performance: a review and a meta-analysis, Journal of Product Innovation Management, Vol. 11 No. 3, pp. 397-417. Pan, H. (1999), A new product launch strategy (NPLS) model for pharmaceutical companies, unpublished MSc dissertation, Department of Management, Birkbeck College, University of London, London. Patton, M.Q. (1980), Qualitative Evaluation Methods, Sage Publications, Newbury Park, CA. Porter, M.E. (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press, New York, NY. Porter, M.E. (1985), Competitive Advantage: Creating and Sustaining Superior Performance, Free Press, New York, NY. Rothwell, R. (1972), Factors for success in industrial innovations, Project SAPPHO A Comparative Study of Success and Failure in Industrial Innovation, SPRU, University of Sussex, Brighton. Sapienza, A. (1993), Assessing the R&D capability of the Japanese pharmaceutical industry, R&D Management, Vol. 23 No. 1, pp. 3-16. Sheffet, M.J. and Kopp, S. (1990), Advertising prescription drugs to the public: headache or relief?, Journal of Public Policy and Marketing, Vol. 9 No. 1, pp. 42-61. Thomas, L.G. (1988), Multirm strategies in the US pharmaceutical industry, in Mowery, D.C. (Ed.), International Collaborative Ventures in US Manufacturing, Ballinger Press, Cambridge, MA. Trim, P.R.J. (1994), Strategic marketing models and competitive advantage, Working Paper, No. 25, Canterbury Business School, University of Kent, Canterbury. Trim, P.R.J. (1998), A methodological approach and discussion relating to an ethnographic study of a partnership arrangement, Working Paper, No. 98/06, Department of Management, Birkbeck College, University of London, London. Urban, G.L. and Hauser, J.R. (1993), Design and Marketing of New Products, Prentice-Hall, Englewood Cliffs, NJ. Yeoh, P.L. (1994), Speed to global markets: an empirical prediction of new product success in the ethical pharmaceutical industry, European Journal of Marketing, Vol. 28 No. 11, pp. 29-49.

NPLS for pharmaceutical companies 339