Strategies used to defend pharmaceutical brands from generics

Abstract

Purpose: This research aims to provide an empirical comparison of the results of three brands’ marketing defence strategies used in advance of generic brands entering the market. By reviewing the effectiveness of these strategies, this research looks to extend the research on marketing defence strategies into the importance of anticipating competitor launches. Design/methodology/approach: A data set containing 243 weeks of scanned sales for 21 generic brands was used in a regression model aimed at measuring the effectiveness of each brand’s defence strategies in deterring entry and limiting the market share of these generic brands. Findings: The analysis shows that several marketing mix components were effective in limiting the impact of generic brands. What was critical to each component’s success was ensuring that they were implemented before the launch of the generic brands. Research limitations/implications: This research has the limitation of being confined to a category of pharmaceutical allergy brands, which limits generalisation of the findings. Practical implications: The managerial relevance of this research has two parts. First, it will encourage managers to move from implementing strategies in reaction to a competitor launch to implementing strategies in advance of their entry. Second, it provides insights into the effectiveness of several strategic options for brands facing the entry of generic brands. Originality/value: This study brings together literature regarding entry deterrence and market share loss prevention to help highlight the importance of proactive marketing defence strategies in reducing both the number of entrants and the amount of market share lost. It uses a data set to provide an empirical review of a range of marketing mix components used by pharmaceutical brands against low-price generic brands.