The application of new product development principles in the pharmaceutical industry : a comparative study of marketing practitioners' perceptions

Venter, Gertruida Helena Christina (2001-03)

Thesis (MComm)--Stellenbosch University, 2001.

Thesis

ENGLISH ABSTRACT: New products are indispensable to the growth of the modem business enterprise. Increased global and local competition, better informed consumers, rapidly changing technology and the short life span of products are typical of the reasons why it is necessary to develop new products. Traditionally new product development took place in accordance with a rigid new product development process where a next phase was dependent on the completion of preceding phases. The increased pressure to produce new products in shorter time spans has led to the development and application of less streamlined and rigid processes for the development of new products. The pharmaceutical industry has certain unique characteristics important for new product development. It spends more than five times than the average of all industries on research and development. New product development in the pharmaceutical industry largely depends on the discovery of new clinical entities and the development process is furthermore also highly regulated by governments. The focus of product evaluation in the pharmaceutical industry has also undergone a major shift. Traditionally the industry dealt with diseases which were defined broadly and as such the focus was on diseases and not individuals. The result was that consumer acceptance was virtually never evaluated. The shift is now to consumer acceptance because consumers become increasingly better informed and take part in decisions regarding their health and medical care. A further reason for the consumer focus lies in the genetic understanding of patients and this enable pharmaceutical companies to segment patients on the basis of pharmaco-genomic descriptions. The objectives of the study are twofold. In the first instance, the study assesses whether marketing practitioners in the South African pharmaceutical industry agree with the fundamental principles of new product development which are identified in academic literature. The responses from marketing personnel were obtained and analysed to establish their beliefs regarding new product development. The fundamental principles of new product development which form the focus of this study, were those that Calantone, Di Benedetto and Haggblom (1995) used in their research. The second objective of the study is to compare the findings in respect of the South African pharmaceutical industry with those of the study undertaken by Calantone, Di Benedetto and Haggblom in 1995. The purpose of the study is to establish whether the new product development principles taught in marketing management courses are relevant for the pharmaceutical industry. The method of investigation was divided into two sections, i.e. a literature overview and an empirical study. The literature study commenced with research on new product development in the South African Pharmaceutical Industry and other parts of the world. The Calantone, Di Benedetto and Haggblom (1995) questionnaire was also used in this study for data collection. The 91 pharmaceutical companies listed in Volume 34 of the 1999 MIMS Desk formed the population of the study. After contacting these companies a more accurate list was set up. After taking into account all the mergers that took place, 65 companies eventually constituted the population. Twenty nine of the questionnaires sent were returned and could be used. This represents a response rate of 44.6%. The organisations involved were responsible for 69.4% of the annual turnover of the total pharmaceutical industry in 1998 and their responses could therefore be regarded as representative of the pharmaceutical industry of South Africa. The questionnaire attended to the following principles of new product development: • Product innovation • New product development and launch tasks • Product diffusion • Interface between marketing, research and development • Organisational issues The information collected in respect of each pharmaceutical company was the following: • Annual turnover • Number of products manufactured and marketed • Number of employees • Number of new products launched during the past five years The findings of this study indicate that marketing staff in the South African pharmaceutical industry strongly agreed with those fundamental principles of new product development which were identified in academic literature. There was also a significant correlation between this study and the study undertaken by Calantone, Di Benedetto and Haggblom with respect to the percentage agreement on the various statements. It may thus be concluded that new product development principles taught in marketing managing courses are relevant for and are applied by marketing staff in the pharmaceutical industry in South Africa.

AFRIKAANSE OPSOMMING: Nuwe produkte is onontbeerlik vir die groei van die moderne sake-onderneming. 'n Toename in globale en lokale mededinging, beter ingeligte verbruikers, snel veranderende tegnologie en die kort lewensduur van produkte is tipies van die redes waarom dit belangrik is om nuwe produkte te ontwikkel. Tradisioneel het nuwe produk ontwikkeling volgens 'n rigiede nuwe produk ontwikkelingsproses plaasgevind waar 'n volgende fase afhanklik was van die voltooiing van voorafgaande fases. Die verhoogde druk om nuwe produkte in korter tye te vervaardig het tot die ontwikkeling en toepassing van minder stroombelynde en rigiede prosesse vir die ontwikkeling van nuwe produkte gelei. Die farmaseutiese bedryf het sekere unieke eienskappe wat belangrik is vir nuwe produk ontwikkeling. Die farmaseutiese bedryf bestee meer as vyfkeer die gemiddelde van alle bedrywe op navorsing en ontwikkeling. Nuwe produk ontwikkeling in die farmaseutiese bedryf is grootliks afhanklik van die ontdekking van nuwe kliniese entiteite en die ontwikkelingsproses word verder ook intensief gereguleer deur regerings. Die fokus van produkbeoordeling in die farmaseutiese bedryf het ook 'n verskuiwing ondergaan. Tradisioneel het die bedryf gehandel met siektes wat breed omskryf is en die fokus as sulks was op siektes en nie op individue nie. Die gevolg was dat verbruikersaanvaarding feitlik nooit beoordeel was nie. Die verskuiwing is nou na verbruikersaanvaarding omdat verbruikers toenemend beter ingelig word en deelneem aan besluite wat hulle gesondheid en mediese sorg raak. 'n Verdere rede vir die verbruikerfokus is daarin geleë dat pasiënte nou geneties verstaan kan word en dit maak vir farmaseutiese maatskappye moontlik om pasiënte op 'n farmakologies-genomiese basis te segmenteer. Die doelstellings van die studie is tweeledig. In die eerste instansie beoordeel die studie of bemarkingspersoneel werksaam in die die Suid-Afrikaanse farmaseutiese bedryf, saamstem met die fundamentele beginsels ten opsigte van nuwe produk ontwikkeling wat in die akademiese literatuur geïdentifiseer is. Die response van bemarkingpersoneel is verkry en ontleed om hulle oortuigings ten opsigte van nuwe produk ontwikkeling vas te stel. Die fundamentele beginsels van nuwe produk ontwikkeling wat die fokus van hierdie studie vorm, is dié wat Calantone, Di Benedetto en Haggblom (1995) in hulle navorsing gebruik het. Die tweede doelstelling van die studie is om die bevindings ten opsigte van die Suid-Afrikaanse farmaseutiese bedryf te vergelyk met dié van die studie onderneem deur Calantone, Di Benedetto en Haggblom in 1995. Die doel van die studie is om vas te stel of die nuwe produk ontwikkeling beginsels wat in bemarkingsbestuurkursusse onderrig word, relevant is vir die farmaseutiese bedryf. Die metode van ondersoek is onderverdeel in twee gedeeltes, naamlik 'n literatuuroorsig en 'n empiriese studie. Die literatuurstudie het begin met navorsing oor nuwe produk ontwikkeling in die Suid-Afrikaanse farmaseutiese bedryf en ander wêrelddele. Die Calantone, Di Benedetto en Haggblom (1995) vraelys is ook in hierdie studie vir die insameling van data gebruik. Die 91 farmaseutiese firmas wat in Volume 34 van die 1999 MIMS Desk gelys is, het die populasie van die studie gevorm. Na gesprekke met hierdie firmas en nadat alle samesmeltings in ag geneem is, is 'n meer akkurate lys opgestel en het die populasie uiteindelik uit 65 firmas bestaan. Nege en twintig van die vraelyste wat terugontvang is kon gebruik word. Hierdie verteenwoordig 'n responskoers van 44.6%. Die organisasies wat gereageer het was verantwoordelik vir 69.4% van die jaarlikse omset van die totale farmaseutiese bedryf in 1968 en die responses sou dus as verteenwoordigend van die farmaseutiese bedryf in Suid-Afrika beskou kon word. Die vraelys het aandag aan die volgende beginsels van nuweprodukontwikkeling gegee: • Nuweproduk ontwikkeling en loodstake • Produkdiffusie • Koppelvlakke tussen bemarking, navorsing en ontwikkeling • Organisatoriese kwessies Die inligting wat ten opsigte van elke farmaseutiese firma ingesamel is, is die volgende: • Jaarlikse omset • Aantal produkte vervaardig en bemark • Aantal werknemers • Aantal nuwe produkte wat gedurende die afgelope vyf jaar geloods is. Die bevindings van hierdie studie toon aan dat die bemarkingspersoneel in die Suid-Afrikaanse farmaseutiese bedryf sterk saamstem ten opsigte van die beginsels van nuwe produk ontwikkeling wat in die akademiese literatuur geïdentifiseer is. Daar bestaan ook 'n betekenisvolle korrelasie tussen hierdie studie en die Calantone, Di Benedetto en Haggblom studie ten opsigte van die persentasie wat saamgestem word oor die verskillende stellings. Die gevolgtrekking kan dus gemaak word dat die nuwe produk beginsels wat in bemarkingskursusse aangebied word, relevant is vir en toegepas word deur bemarkingspersoneel in die farmaseutiese bedryf in Suid- Afrika.

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