Comparative Marketing Communication: The Case of Drug Detailing

Abstract

Comparative marketing communication has emerged as an important area of managerial and scholarly inquiry. In the pharmaceutical industry, it has been practiced in detailing, the personal selling to physicians. With physician-level panel data of detailing and prescriptions, we examine the effectiveness of comparative detailing versus noncomparative detailing. In particular, we investigate whether a brand’s comparative detailing directly damages competing brands or provides them free exposure to physicians. The Bayesian hierarchical probit model with reduced-form detailing policy functions allows us to examine comparative detailing at both aggregate level and individual physician level, while controlling for possible simultaneity issues in noncomparative detailing and comparative detailing. We find that (1) comparative detailing is less or equally effective than noncomparative detailing at the aggregate level, but there is strong heterogeneity across individual physicians; (2) some brands strategically focus their comparative detailing efforts on physicians who are less responsive to noncomparative detailing but more responsive to comparative detailing than others; (3) the market leader faces a denigrating loss if underdog brands compare against it in their detailing visits, but a generic brand enjoys a free-exposure benefit when other brands in the category compare against it in their detailing visits. Our estimates provide rich managerial implications by identifying physicians who are more profitable for comparative detailing. Finally, our policy simulation shows that a ban of comparative detailing can reduce the market share of generic drugs by 1.76% in statin market.