GOODS IN THE MARKETING SYSTEM.
ASSORTMENT POLICY OF PHARMACEUTICAL COMPANIES.
COMMODITY AND INNOVATION POLICY OF PHARMACEUTICAL COMPANIES
1. THE ESSENCE OF PHARMACEUTICAL PRODUCT STRATEGY
The process of selecting optimal market segments and finding the ideal way to “package” product benefits toward this segment is central to any pharmaceutical product strategy in any market. Thus, the strategic step of market segmentation is followed by three successive other steps, namely, targeting, positioning, and profiling. Targeting is defined as choosing the specific individuals to win over. Positioning is choosing the therapeutic segments in which to compete with a specific product. Profiling is choosing the promotional statements to compete for the target audience in the segments we have chosen. In other words, targeting refers to target customers, positioning refers to patients, indications, or situations, and profiling refers to promotional messages. Most marketing scholars agree that targeting, positioning, and profiling do not have priority over the other steps. However, the segmentation, targeting, and positioning (STP) model is a useful marketing mnemonic.
This pharmaceutical coding system divides drugs into different groups according to the organ or system on which they act and/or their therapeutic and chemical characteristics. Each bottom-level ATC code stands for a pharmaceutically used substance, or a combination of substances, in a single indication (or use). This means that one drug can have more than one code: acetylsalicylic acid (aspirin), for example, has A01AD05 as a drug for local oral treatment, B01AC06 as a platelet inhibitor, and N02BA01 as an analgesic and antipyretic. On the other hand, several different brands share the same code if they have the same active substance and indications.
In this system, drugs are classified into groups at 5 different levels:
First level
The first level of the code indicates the anatomical main group and consists of one letter. There are 14 main groups:[3]
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Code |
Contents |
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A |
Alimentary tract and metabolism |
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B |
Blood and blood forming organs |
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C |
Cardiovascular system |
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D |
Dermatologicals |
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G |
Genito-urinary system and sex hormones |
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H |
Systemic hormonal preparations, excluding sex hormones and insulins |
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J |
Antiinfectives for systemic use |
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L |
Antineoplastic and immunomodulating agents |
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M |
Musculo-skeletal system |
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N |
Nervous system |
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P |
Antiparasitic products, insecticides and repellents |
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R |
Respiratory system |
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S |
Sensory organs |
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V |
Various |
Second level
The second level of the code indicates the therapeutic main group and consists of two digits.
Example: C03 Diuretics
Third level
The third level of the code indicates the therapeutic/pharmacological subgroup and consists of one letter.
Example: C03C High-ceiling diuretics
Fourth level
The fourth level of the code indicates the chemical/therapeutic/pharmacological subgroup and consists of one letter.
Example: C03CA Sulfonamides
Fifth level
The fifth level of the code indicates the chemical substance and consists of two digits.
Example: C03CA01 Furosemide
TARGETING
Targeting is the process of selecting specific market segments on which to concentrate the marketing effort. This follows studying their needs and tailoring the product toward them. It is about establishing priorities among the different market segments. How then can an industry marketer decide on the optimal target selection? Four aspects present in every market segment need to be analyzed: the market, the customer, the competition, and the company itself . In other words, does the company want to pursue this segment (the company’s mission)? Does the company have the resources and capabilities to create a sustainable competitive advantage within this segment (the elements of internal analysis: resources, SWOT, and performance)? What about the segment itself (segment analysis)? Is it large and growing, with significant potential and in an early life cycle stage? Is it attractive? Who are the customers anyway (customer behavior analysis)? What are their characteristics needs, wants, attitudes, and beliefs? What do they think about our company? What about the segment competitors, existing and future (competitor analysis)? What are their capabilities, behaviors, performances, and motivations? How do we compare?
Following the analysis of these four critical aspects, a segment attractiveness study is performed. Different market segments are compared to each other, as shown in Figure below. Targeting should then focus on segments of high importance and high chances of company success.
The analyzed segments may be ranked according to superiority, equivalence, or inferiority—referring to a company’s standing against the competition. Obviously, attention should only be focused on the first two. Segments of inferiority should be avoided because they do not present the required conditions for a sustainable competitive advantage.
When introducing a new pharmaceutical product to the world, marketers have to present the product to customers across the whole healthcare spectrum, in market segments where they believe this product holds the highest competitive advantage or is able to best satisfy customer needs. It is necessary to evaluate both their product characteristics and the competitor’s, as well as select the product attributes (positioning) that matter to the customers.
Some definitions of positioning are: the act of designing the company’s offer so that it occupies a distinct and valued place in the target customer’s mind (Kotler, 1980); the process of adjusting and presenting a product in a way so that it is the most attractive option for the customer; making a product stand out from competition in the mind of the consumer; the sum of mental connections between the consumer and the (a) attributes and features, (b) feelings and emotions, (c) price and value, (d) problems products can solve, (e) use or application, and (f) competition promised with the offering.
Product positioning is obviously based on the inherent, core product attributes, as well the augmented attributes that the company has decided to package with the product. Furthermore, product positioning is influenced by the official approval of the relevant local regulatory authorities. In most cases, however, the approved product indication allows use of the product by various medical specialties or by patients suffering from a variety of similar pathological states.
Before we describe the process of defining a new product positioning, let us first examine the critical importance of this decision. A company with a fresh EMEA marketing authorization of a new antihistamine preparation is considering its European Union launch plan, including candidate launch countries, formulations to be introduced, and medical specialties to be targeted, as well as their respective promotional budgets. In walking around this marketing maze, the European headquarters team is focusing on the following questions:
• Which pathological states is this product licensed to treat, and what is their market size?
• Which medical specialty is involved in treating these states, and with what percentage?
• How many physicians are in each of these medical specialties?
• Does the company have the know-how in the respective therapeutic categories (prescribers, patients, competitors, markets)?
• Does the company have a wider product portfolio to offer these specialties?
• What are the unique product advantages for each disease?
• What products are the competition offering in these therapeutic categories?
• In which disease state will our product will have the highest competitive advantage?
• What amount of resources will be required in order to pursue this market segment?
Following the in-depth evaluation of all of these questions, the company’s marketers find out that their product will best be suited in the treatment of common allergies, which are more prevalent in certain countries than others. In these high-priority national markets, the primary medical specialists are GPs, and not the respiratory specialists. Physiciaumbers are gathered by contacting national medical associations, while an estimation of the required sales force sizes is also made. Later, a marketing research agency is contracted to approach selected target physicians and opinion leaders to ask them for their own, as well as their patients’, needs. The product characteristics are then matched to these customer needs, and three out of the nine potential products unique selling points are chosen as the most relevant. A comparison to the competitive products reveals that the product will indeed be able to keep its competitive advantage. A final decision is made to promote the new antihistamine among the selected medical specialty in some national markets with few of the available formulations, and at a competitive price range. In conclusion, the product is positioned in the selected market segments that offer the highest sales potential and opportunities to keep its competitive advantage. Product positioning, then, is defining promotional avenues and budgets, which eventually result in the new product commanding a 30 percent market share in its first year.
A brand is defined as any name, term, sign, symbol, or design, or a combination, intended to identify goods or services of one seller and to differentiate them from those of the competition (Kotler, 1980). Brand is characterized by a unique name, visual mark, trademark, and copyright that are combined to confer a distinguished appearance and personality to a product. Furthermore, through a consistent, painstaking, and expensive branding effort, the brand is made to “contain” a distinct informational content that clearly identifies the product attributes, benefits, values, and users. For instance, a specific whiskey brand may constantly remind its customers of the spirit’s unique taste, its ability to reduce stress and provide an easygoing party atmosphere, its exquisite “luxury” image, and young, healthy men and women enjoying life to the fullest. The competitive strength of a brand is measured by its brand equity, a term that refers to awareness, acceptability, loyalty, preference, price premium, and unit volume.
Most experts would agree that branding is key to the consumer goods’ positioning. But is it equally applicable to pharmaceutical products? And can it really provide added value to the consumer? A pharmaceutical branding policy can have direct benefits to the prescriber, patient, payer, and manufacturer of the product. It should be pursued after carefully weighing the advantages and disadvantages if market characteristics and manufacturer’s resources allow.
Cannibalization refers to sales loss of an existing product resulting from the introduction of a new item in a product line or brand family.
Profiling is the selection of positive promotional statements (features and benefits), as well as negative statements (adverse events, overdosage, contraindications, and drug interactions) that are used in support of the chosen targeting and positioning strategies. The process of profiling starts with studying the extensive product information available through its R&D phases. The results of the studies are gradually evaluated to determine the chosen market segments and the required product positioning. Only the required product attributes and benefits are presented to the consumer. A word of caution: profiling is not overboosting a products attributes or lying. To the contrary, it is the selection of the regulatory approved product characteristics that will be preferentially and repeatedly communicated to the consumers (prescribers and patients).
The Pharmaceutical Positioning, Targeting, and Profiling Statements Parameter
II. New product development
The continuous innovation of new products has been, is, and will continue to be the cornerstone of pharmaceutical industry’s success and long-term viability. Indeed, despite the recent industry moves toward cost-containment, globalization, integration, or merging, original product innovation continues to be the main element of the industry’s profitability. Various experts have expressed the opinion that a new pharmaceutical product helps to add shareholder value; boost the workforce morale; capitalize on distribution strengths; contribute to regional competitiveness and prosperity, defend market share; expand and create new markets; exploit technology iew ways; increase sales and profits of the existing product portfolio; increase the company’s integration; maintain an innovator’s image; maintain and increase sales and profits; gain a competitive advantage for the company; open customer’s doors; renew investor’s interest; renew the company’s vitality; replace other mature, less efficacious or safe products; take the company into new therapeutic fields; and use excess capacity.
This chapter is devoted to the detailed analysis of the new drug development process, the different drug discovery methods, and the role of innovation, as well as existing R&D strategies and R&D benchmarking.
Before studying the core drug development processes, this chapter compares the proposed classification schemes for either consumer or pharmaceutical products. New consumer products have been classified as follows: new to the world (introduction of the VCR, fax machine, or DVD devices), new to the country, new to the firm, new category entry (sliced bread), product line addition (new ice cream flavor), product improvement (lighter and faster), cost reduction, or repositioning. They can also be classified as core/base (dishwasher, chocolate), breakthrough (fax machine), and platform (computer chips). Other marketing scholars have categorized new products according to the degree of innovation. Thus, the innovation scale ranges from the breakthrough products (or new to the world), to the pioneering (thinner, most portable computer ever made), to the adaptive (a two-in- one hair shampoo combination), and finally to the imitative (or, as commonly called in the industry, another “me-too” product). A products newness for its company or launch market can be plotted in a two-dimensional model, as shown in Figure 9.1. The pharmaceutical industry’s Holy Grail is always a new to the company/new to the market segment molecular (or chemical) entity, abbreviated as NME or NCE, and often used as the most prominent indicator of a company’s drive for innovation.
Classification of new products
Chemical type
A new molecular entity or NME is an active ingredient that has never been marketed in this country. A new derivative is a chemical derived from an active ingredient already marketed (a “parent” drug). A new formulation is a new dosage form or new formulation of an active ingredient already on the market. A new combination is a drug that contains two or more compounds, the combination of which has not been marketed together in a product. An already marketed drug product, but a new manufacturer is a product that duplicates another firm’s already marketed drug product with the same active ingredient, formulation, or combination. An already marketed drug product, but a new use is a new use for a drug product already marketed by a different firm.
Treatment potential
Priority review drug (P) is a drug that appears to have therapeutic qualities that surpass available therapy, and Standard review drug (S) is a drug that appears to have therapeutic qualities similar to those of an already marketed drug. Other designations that may apply simultaneously include: SE1, a new indication, or significant modification of existing indication, including removal of a major use limitation, such as second line status; SE2, a new dosage regimen, including an increase or decrease in daily dosage or a change in frequency of administration; SE3, a new route of administration; SE4, a comparative efficacy claim naming another drug, including a comparative pharmacokinetic claim; SE5, a change in regulatory approval application sections other than the Indications and Usage section that would significantly alter the patient population to be treated, such as addition of pediatric use and/or dosing information or geriatric use and/or dosing information; SE6, an Rx-to-OTC switch; AIDS drug, a drug indicated for treating AIDS or other HIV-related disease; Subpart E drug (E), a drug developed or evaluated under special procedures for drugs to treat life-threatening or severely debilitating illnesses (the name refers to Title 21 of the Code of Federal Regulations, Part 312, Subpart E, which governs this classification); and Designated orphan drug (V), a drug for which the sponsor received orphan designation under the Orphan Drug Act (such a sponsor is eligible for tax credits and exclusive marketing rights for the drug).
Type classification
A is an important therapeutic gain. B is a modest therapeutic gain. C is little or no therapeutic gain. M is a drug already marketed in a foreign country. R is a drug that is subject to specific, unique conditions of approval. T is an important problem in toxicity. U is a drug likely to be used in children. D is a special situation. P indicates that a very important feature of application is the packaging. S indicates that application is sensitive due to wide-publicity, congressional interest, unusual request from firm, and so on.
These include the following.
Lead discovery and optimization: Naturally extracted or chemically synthesized substances are tested in experimental models (in vitro, ex-in vivo, and in vivo).
Structure modification of existing drugs: Chemical analogues of existing drugs are synthesized in the laboratory and tested for absorption, elimination, efficacy, safety, and interactions.
Rational drug design: Uses computer-aided molecular modeling to desigew entities that will bind a known receptor ligand like a “lock and a key.”
Combinatorial chemistry: Uses automated sequencers to synthesize thousands of new molecular combinations and then screens them in test systems.
Virtual drug design: Based on medicinal chemistry/biochemistry knowledge, hypothetical molecules are computer-designed and tested on virtual models for binding affinity and reversibility, chemical interaction, and the potential to influence intracellular processes.
Pharmaceutical R&D approaches can be directed toward the disease or a pharmaceutical product. Figure 9.3 shows the classification of drug discovery methods according to a disease or product focus.
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Disease- and product-oriented approaches of pharmaceutical R&D
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THE NEW DRUG DEVELOPMENT PROCESS
The new drug development process is an arduous, time- and resource-intensive procedure that takes several years from initial drug discovery to product commercialization. In general, the identification of unmet therapeutic needs leads to new drug design, a long clinical trial and marketing concept testing phase, a regulatory approval phase, and eventually the product launch and its life cycle management.
The development of a new therapeutic product (i.e., a new drug or biologic) is a long, complex and expensive process which typically takes 10 to 12 years (and sometimes more) from product identification to commercialization.1 This lifecycle usually involves the following stages:
1. Discovery and research: Identification of a target therapy for the diagnosis, cure, mitigation, treatment or prevention of a disease or condition.
2. Development: This includes the necessary non-clinical research, clinical studies and chemistry, manufacturing and controls (CMC) development to support clinical trials (e.g., IND, IDE, CTA, IDE) and licensing applications (e.g., NDA, NDS, MAA).*
3. Regulatory review and approval: Submission of data for regulatory review to demonstrate productsafety, efficacy and quality for its proposed indication.
4. Commercialization and marketing: Ongoing regulatory compliance through safety reports and other required submissions (e.g., product renewal).
New therapeutic product development
Development of a new therapeutic product normally begins with non-clinical testing followed by different phases of human clinical trials in support of the licensing application. Chemistry, Manufacturing and Controls (CMC) activities are conducted concurrently to support these studies. 1
Preclinical/non-clinical studies
Non-clinical testing (laboratory experimentation and animal investigation) assesses the potential therapeutic effects of a drug substance and demonstrates the reasonable safety of a substance before it can move to human studies. It may also include long-term studies (e.g., reproductive and carcinogenicity studies) that are conducted after the clinical trial is initiated. Non-clinical studies must be conducted following Good Laboratory Practices (GLP). This phase of testing may include in vitro and in vivo studies to research metabolism (pharmacodynamics [PD] and pharmacokinetics [PK]), safety, toxicity, dosage and efficacy. When designing these studies, ensure you review all related regulatory materials, such as guidance documents from your regulatory agency and safety topics from the International Conference on Harmonization [ICH].
Clinical trials
The objective of clinical trials is to evaluate the safety and efficacy of a product in humans. A clinical program involves four phases and must comply with regional requirements as well as Good Clinical Practices(GCP). Phases I to III are conducted to collect safety and efficacy information in support of the licensing application. Phase IV is conducted post-marketing (i.e., once the product reaches the market).2
Phase I – Human pharmacology
Phase I starts with the initial administration of an investigational product into humans (healthy volunteers, or in patients if for the use of cytotoxic drugs). These studies usually have non-therapeutic objectives. The study design can be open and baseline-controlled, or may use randomization and blinding to improve the validity of observations in the study. Phase I clinical trials may include:
· An estimation of the initial safety and tolerability, including both single- and multiple-dose administration
· A PK study
· PD studies, and studies relating drug blood levels to response (PK/PD studies)
· Early measures of product activity
Phase II – Therapeutic exploratory
Phase II explores the therapeutic efficacy in patients, with the designs including concurrent controls and comparisons with the baseline status. The patient population is normally selected with narrow criteria. A major objective is to determine the dose(s) and regimen to support Phase III trials. Other objectives may include potential study end point evaluations, therapeutic regimens and target populations (e.g., mild versus severe disease) via exploratory analyses, examining data subsets and using multiple end points in clinical trials.
Phase III – Therapeutic confirmatory
Phase III clinical trials are intended to confirm the therapeutic benefit―that is, the safety and efficacy of an intended indication in specific patient population. These are pivotal studies intended to provide an adequate basis for marketing approval.
Phase IV – Therapeutic use (post-marketing)
Phase IV begins after the product is approved. It may include a post-approval study that is designed to answer specific issue(s) identified during the regulatory review process. Commonly conducted studies include additional drug-drug interaction, dose-response or safety studies, and studies designed to support the use under the approved indication (e.g., mortality/morbidity studies, epidemiological studies).
Product quality: CMC activities
Extensive CMC activities must take place to establish the quality of the therapeutic substance (i.e., the drug substance) and product (i.e., the drug product in its final dosage form). Initial substance characterization allows a complete understanding of structure, stereochemistry, impurities, and chemical and physical characteristics. These products may be produced initially at a laboratory scale, but production should be scaled up in pilot and commercial scales during product development with corresponding validationactivities. Analytical methods and specifications must be established and validated to control the quality and purity of the drug substance, intermediates and the finished product. Data to demonstrate the substance and product stability must be collected. All activities should adhere to Good Manufacturing Practices(GMP) and must be carefully designed and planned to support the different studies that will take place in the non-clinical and clinical phases.4,5
*IND = Investigational New Drug
IDE = Investigational Device Exemption
CTA = Clinical trial application
NDS = New Drug Submission
MAA = Marketing Authorization Application
NDA = New Drug Application
BLA = Biologics License Application
In recent years the pharmaceutical industry has faced declining R&D productivity, a rapidly changing healthcare landscape and fierce competition from generics resulting in lower growth and profit margins. Historically, drug development focused on clinical trials management and outcomes. Now however, the industry is looking at more holistic approaches to improve processes of bring new products to market that can accelerate product development while lowering operational costs. This is challenging because of the complex value chain and business processes required in this highly regulated environment. Additionally, it has proven difficult for the industry to effectively adapt as many pharmaceutical companies are simply not optimized for
cross functional collaboration which is so desperately needed to support these changing market conditions.
One meaningful and holistic approach to today’s current challenges within the pharmaceutical industry is to focus on Product Lifecycle Management (PLM), which is a business transformation approach to manage products and related information across the enterprise. In recent years PLM has provided many pharmaceutical organizations with the ability to increase their ability to get products to market quicker, ensure greater regulatory compliance and efficiencies while reducing development costs.
Management of the Lab to Launch Process
The Pharmaceuticals Industry faces three key challenges today:
1. Complex Drug Development Process
2. Large Gaps Between R&D Operational Performance and Strategic Importance
3. Difficulty in managing Clinical Trial Inventories
Ideally, a successful new product development procedure is focused on three factors: achievement of internal R&D standards, the satisfaction of external regulatory standards, and customer satisfaction from a product designed to satisfy their needs and wants.
Idea Generation
The idea generation process for new pharmaceutical products is based on the identification of unmet therapeutic needs. This is based on the availability of large amounts of epidemiological and therapeutic area market data, currently commercially available online or through CD-based databases, as well as from primary customer data collected through syndicated market research or by sales, marketing, and medical affairs professionals. Armed with this knowledge, pharmaceutical marketers select a therapeutic area with an unmet therapeutic need, a significant potential for sales, and company knowledge. The process of unmet needs analysis, target profililing, and profile- based development is called label-driven development.
Idea Screening
Idea screening is the critical evaluation of numerous new product ideas based on a precise corporate strategy. New product ideas are exhaustively screened for their attractiveness based on various equations and models. The attractiveness index equation is expressed as:
I = T X C x P/D
where I = index of attractiveness, T = probability of technical success, C = probability of commercial success, P = profit if successful, and D = development cost.
New product feasibility study
One commonly used new idea screening tool is the product’s feasibility analysis.
Busines Analysis
Business analysis is the comparison of sales, costs, risks, and profit forecasts to corporate objectives. A variety of assessment criteria are used in the process, such as galenic form, tolerability, efficacy, interactions, economic dossier, or drugs of reference.
Development
This phase refers to the development of a new therapeutic idea into a pharmacological entity, and its preclinical and clinical efficacy and safety testing.
The clinical testing of experimental drugs is normally performed in three phases, with each successive phase involving a larger number of people. Once the FDA has approved an NDA, pharmaceutical companies conduct postmarketing or late Phase Ill/Phase IV studies. Overall, the new drug development process may last up to ten years and cost more than 300 million U.S. dollars to complete.
Almost all industry players are currently involved, in one way or another, in trying to make their R&D activities more efficient and focused. An important tool in monitoring the efficiency and productivity of R&D departments is R&D benchmarking, that is, the constant comparison of internal parameters to those of industry leaders. Experts and consultants in search of useful benchmarks have monitored several variables across the industry. Current R&D benchmarks are either qualitative or quantitative.
Qualitative benchmarks include regulatory agency commentary about protocols, nature of regulatory agency queries related to protocol flaws, and reasons for approval cycles. Quantitative benchmarks include protocol approval time, clinical development time, number of patents filed, number of INDs and NDAs filed, number of scientific publications and their bibliographic citation index, number of approval cycles, regulatory agency approval time, experts’ survey of the level of trial protocol quality, experts’ survey rating the efficiency and effectiveness of the approval process, pipeline size at various preclinical/clinical stages, project attrition rate, portfolio contents, and R&D spending as a percentage of company sales.
III. Product Life Cycle and Portfolio Management
Pharmaceutical products follow the same course as consumer products, that is, a rise, plateau, and eventually a fall of sales, in a phenomenon which has been described as the product life cycle or PLC. There are multiple reasons behind a product’s life cycle changes including the following: (a) different customers buy the product at different stages (diffusion of innovation); (b) evolving competitive structure of industry; (c) evolving internal product portfolio priorities; (d) evolving cost structure of the product; (e) evolving dosage strength and formulation of the product; and (f) evolving design and manufacturing of the product. Due to these and other reasons, every product needs a differentiated marketing strategy throughout its PLC stages. Industry marketers should master the art of life cycle management in order to maximize the product’s life cycle and profits.
Occasionally a consumer may find pharmaceutical products that were originally launched in the world marketplace several decades ago and now have seemed to reach immortality (aspirin, penicillin, cisplatin). There are two reasons behind the apparent immortality of these substances. Either the products were significant therapeutic breakthroughs at the time of their launch and are considered reference drugs, or there has not been any significant therapeutic innovations in their respective indications and they remain the valid therapeutic choices today. This by no means indicates the sustained profitability of the original manufacturer, who may have abandoned the therapeutic area all together, bowing to the competitive pressures of myriad me-too products. This chapter, then, discusses the PLC management of product brands—the valuable assets of industry marketers during their years of patent protection.
CONCEPTION AND PRODUCT DEVELOPMENT
As stated earlier, this phase begins with basic research, and then gradually moves through a series of preclinical and clinical research phases that lead to a new drug application (NDA). This is a long and risky period of resource-intensive activities and no product sales, thus a prolonged negative-profitability period.
One of the most important aspects of a product’s life cycle management is maximizing product revenue during the very limited period of remaining patent exclusivity at the time of launch. A typical product introductory period will take several months, or even years, to reach its growth levels, provided that the product’s promotional effort starts at launch. However, as Figure belows shows, pharmaceutical marketers can use a very significant business tool called premarketing to raise consumers’
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The need for premarketing
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awareness before the product becomes available. The introductory phase becomes shorter and revenue is maximized.
In general, premarketing should be initiated at least two years prelaunch, or at the beginning of Phase III of clinical research. The activities needed for premarketing require significant human and financial resources. Early commitment to the potential new pharmaceutical product from the company’s management is essential. Some organizations assign the design of premarketing strategy to the product managers who will eventually take responsibility of the marketed product. However, this often takes time and energy away from other product priorities. Alternatively, premarketing activities are directed by specialized marketing managers, often called new product development or new market development managers. These managers either transfer the responsibility of the product to the brand manager or continue with it as a full-time responsibility.
During the introductory phase, a pharmaceutical product’s sales revenues are small and exhibit a slow growth. The manufacturer is trying to gain product acceptance from the prescribers or patients. The overall marketing strategy behind this stage is to attract the therapeutic area opinion leaders, who are essential in communicating the product’s benefits to their colleagues through the pyramid of influence cascade. The product is offered only in a limited number of dosage strengths and formulations, while the prices are often high and stable (provided the product is an innovative one).
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Characteristics and Marketing Objectives of the Different PLC stages
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During this phase the industry marketers’ main informatioeed is market data that helps them define the product s optimal targeting, positioning, and profiling. In order to increase consumer awareness and willingness to buy, the following activities can be implemented: (1) offer clinical trial experience; (2) include physicians and patients in long-term treatment; (3) develop opinion leaders; (4) develop media spokespersons (such as successful patient testimonials); (5) sampling or couponing, (6) risk reduction; (7) adapt promotional mix; (8) broaden product offerings; and (9) modify marketing channels. Furthermore, the ability to prescribe and/or buy can be increased by the following activities: (a) penetration pricing; (b) adequate distribution; (c) liberal payment terms; (d) wholesaler consignment stocks; and (e) compatibility with existing medical supplies and equipment.
When a new product is introduced in a current therapeutic area, the company is said to be active in product development, as opposed to entering a new therapeutic segment with an existing product—a strategy called new market extension. Additionally, when a new product is introduced into a new therapeutic segment the company is pursuing a diversification approach.
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In the growth (or expansion) phase, a products sales revenues are moderate but rapidly growing and its profitability is increasing, while more competitors are entering the stage. The marketer’s main objectives are to expand the distribution breadth and product line by offering new product benefits and forms. Furthermore, the increasing competitive intensity is driving product prices down. As far as the product’s promotion is concerned, the messages are now persuasive and often comparative to competition’s (where comparative pharmaceutical advertising is allowed). The sales force is expanding, reaching more and more customers, often shifting its priority from the few medical specialists at the beginning to the large number of family physicians or general practitioners throughout the national markets.
At the peak of the growth phase, some marketing scholars have proposed the existence of a separate phase called the turbulence (or shake-out) phase. This period is when product sales plateau and signifies the imminent entrance into the maturity phase. Some of the characteristics of the turbulence phase are the slowing of the sales growth, fewer competitors than before, and a stabilizing distribution base.
At some point in a product’s life cycle every product reaches maturity, that is, a phase characterized by a stabilized sales performance, with low costs and high profits. At this stage, marketers are occupied with maintaining the product’s advantages, often fighting competitive new product launches with new features and benefits. A full product line is now available, offering a wide spectrum of product dosages, administration route possibilities, and formulations. Both price and distribution are now stable. The pharmaceutical manufacturer is conducting competitive advertising. An important feature of this phase is the shifting of the sales force focus from the “blanket coverage” of every active prescriber to the “key accounts,” or those physicians with the highest prescription potential and the highest profitability for the company.
Eventually, the product enters its decline phase, with decreasing sales, rising fixed costs, and an eroding profitability. Now, pharmaceutical marketers are faced with the dilemma of further “harvesting” the product, that is, prolonging its sales as long as posible or terminating the product and introducing a replacement. The product’s advertising becomes a reminder and sales force time and effort are reduced.
After a pharmaceutical product has reached its decline phase, the decreased profitability may necessitate the product’s withdrawal from the marketplace. Common reasons for a pharmaceutical product withdrawal include the following: low profitability, stagnant or declining sales volume or market share that would be too costly to build up, risk of technological obsolescence, entry into a mature or declining phase of the product life cycle, or product line conflicts. A variety of withdrawal strategies exist, which are characterized by the varying speeds of the product’s elimination from the market. Possible withdrawal strategies are (a) harvesting, (b) line simplification, and (c) total- line divestment.
THE DIFFUSION AND ADOPTION PROCESSES
A products diffusion process is based on its acceptance by the population. It depends on product characteristics such as relative advantage, complexity, compatibility, com- municability, trialability, risk, and so on. Diffusion increases with standardized technology, leads to lower manufacturing costs, and translates into lower prices. A product’s adoption is a customer’s internal process, involving awareness, interest, evaluation, trial, and adoption. It has been observed that people vary in their propensity to try new products. Rogers (1976) has differentiated types of consumers according to their speed of adoption of new products. These different population groups, including the innovators, early adopters, early and late majorities, and laggards, have been shown to play a role in the adoption of most consumer products and pharmaceuticals.
Some of the factors influencing the speed of new pharmaceutical product diffusion among prescribers and patients are the following: (a) relative product advantage (NCE); (b) type of advantage to be gained (antacid versus oncological product); (c) compatibility with one’s self (experiences, beliefs, values); (d) complexity (once monthly depot injection versus inpatient continuous infusion); (e) trialability (medicines often have to be included in a hospital formulary before an innovator physician may prescribe them); (f) observability (immediate pharmacodynamic effects or dissolution of disease symptoms will increase product adoption); and (g) past experience (a previously tried bitter tasting syrup formulation). Pharmaceutical development teams should take these factors into account early in the process, and test their product concepts with customer experimentation.
STRATEGIES FOR MODIFYING EXISTING PRODUCTS
Very often a successful product life cycle needs to be prolonged, either because the product can continue to be a significant revenue-making engine for the organization, or because the existing product pipeline does not guarantee a promising blockbuster in the near future. There exist a variety of possible product modification strategies. Once again, the customer needs, market and competition characteristics, and the company’s own resources and expertise will dictate the use of one or more of these strategies.
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The Prescription Decision Adoption Model
Product adoption steps
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A company’s product portfolio mix can be plotted in a two-dimensional model of the products’ relative competitive position versus their life cycle stage, indicating the product’s focus on innovation and present competitive position in the marketplace (see Figure 10.6).
A product’s life cycle management requires not only good marketing and sales strategy planning, or changes in its distribution or pricing. Additionally, there has to be a robust and proactive regulatory plan, spanning the product’s life cycle that allows new product modifications or indications to be introduced at the right phase.
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A typical regulatory life-cycle plan
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Packaging is the science, art, and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages. Packaging can be described as a coordinated system of preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects, preserves, transports, informs, and sells.[1] In many countries it is fully integrated into government, business, institutional, industrial, and personal use.
Package labeling (American English) or labelling (British English) is any written, electronic, or graphic communications on the package or on a separate but associated label.
The first packages used the natural materials available at the time: baskets of reeds, wineskins (bota bags), wooden boxes, pottery vases, ceramic amphorae, wooden barrels, woven bags, etc. Processed materials were used to form packages as they were developed: for example, early glass and bronze vessels. The study of old packages is an important aspect of archaeology.
The earliest recorded use of paper for packaging dates back to 1035, when a Persian traveler visiting markets in Cairo noted that vegetables, spices and hardware were wrapped in paper for the customers after they were sold.[2]
Iron and tin plated steel were used to make cans in the early 19th century. Paperboard cartons and corrugated fiberboard boxes were first introduced in the late 19th century.
In 1952, Michigan State University became the first university in the world to offer a degree in packaging engineering.[3]
Packaging advancements in the early 20th century included Bakelite closures on bottles, transparent cellophane overwraps and panels on cartons, increased processing efficiency and improvedfood safety. As additional materials such as aluminum and several types of plastic were developed, they were incorporated into packages to improve performance and functionality.[4] In-plant recycling has long been common for production of packaging materials. Post-consumer recycling of aluminum and paper based products has been economical for many years: since the 1980s, post-consumer recycling has increased due to curbside recycling, consumer awareness, and regulatory pressure.
The Chicago Tylenol murders of 1982 brought increased attention and regulation to tamper resistant packaging of pharmaceuticals.
Many of the most prominent innovations in the packaging industry were developed first for military uses. Some military supplies are packaged in the same commercial packaging used for general industry. Other military packaging must transport materiel, supplies, foods, etc. under the most severe distribution and storage conditions. Packaging problems encountered in World War II led toMilitary Standard or “mil spec” regulations being applied to packaging, designating it “military specification packaging”. As a prominent concept in the military, mil spec packaging officially came into being around 1941, due to operations in Iceland experiencing critical losses due to what the military eventually attributed to bad packaging solutions. In most cases, mil spec packaging solutions (such as barrier materials, field rations, antistatic bags, and various shipping crates) are similar to commercial grade packaging materials, but subject to more stringent performance and quality requirements.[5]
As of 2003, the packaging sector accounted for about two percent of the gross national product in developed countries. About half of this market was related to food packaging.
The purposes of packaging and package labels
Packaging and package labeling have several objectives
· Physical protection – The objects enclosed in the package may require protection from, among other things, mechanical shock, vibration, electrostatic discharge, compression, temperature etc.
· Barrier protection – A barrier from oxygen, water vapor, dust, etc., is often required. Permeation is a critical factor in design. Some packages containdesiccants or oxygen absorbers to help extend shelf life. Modified atmospheres or controlled atmospheres are also maintained in some food packages. Keeping the contents clean, fresh, sterile and safe for the intended shelf life is a primary function.
· Containment or agglomeration – Small objects are typically grouped together in one package for reasons of efficiency. For example, a single box of 1000 pencils requires less physical handling than 1000 single pencils. Liquids, powders, and granular materials need containment.
· Information transmission – Packages and labels communicate how to use, transport, recycle, or dispose of the package or product. Withpharmaceuticals, food, medical, and chemical products, some types of information are required by governments. Some packages and labels also are used for track and trace purposes.
· Marketing – The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package graphic design and physical design have been important and constantly evolving phenomenon for several decades. Marketing communications and graphic design are applied to the surface of the package and (in many cases) the point of sale display.
· Security – Packaging can play an important role in reducing the security risks of shipment. Packages can be made with improved tamper resistance to deter tampering and also can have tamper-evident[11] features to help indicate tampering.
· Anti-counterfeiting Packaging – Packages can be engineered to help reduce the risks of package pilferage or the theft and resale of products: Some package constructions are more resistant to pilferage and some have pilfer indicating seals. Counterfeit consumer goods, unauthorized sales (diversion), material substitution and tampering can all be prevented with these anti-counterfeiting technologies. Packages may include authentication seals and usesecurity printing to help indicate that the package and contents are not counterfeit. Packages also can include anti-theft devices, such as dye-packs, RFIDtags, or electronic article surveillance tags that can be activated or detected by devices at exit points and require specialized tools to deactivate. Using packaging in this way is a means of loss prevention.
· Convenience – Packages can have features that add convenience in distribution, handling, stacking, display, sale, opening, reclosing, use, dispensing, reuse, recycling, and ease of disposal
· Portion control – Single serving or single dosage packaging has a precise amount of contents to control usage. Bulk commodities (such as salt) can be divided into packages that are a more suitable size for individual households. It is also aids the control of inventory: selling sealed one-liter-bottles of milk, rather than having people bring their own bottles to fill themselves.
Packaging types
Packaging may be looked at as being of several different types. For example a transport package or distribution package can be the shipping containerused to ship, store, and handle the product or inner packages. Some identify a consumer package as one which is directed toward a consumer or household.
Packaging may be described in relation to the type of product being packaged: medical device packaging, bulk chemical packaging, over-the-counter drugpackaging, retail food packaging, military materiel packaging, pharmaceutical packaging, etc.
It is sometimes convenient to categorize packages by layer or function: “primary”, “secondary”, etc.
· Primary packaging is the material that first envelops the product and holds it. This usually is the smallest unit of distribution or use and is the package which is in direct contact with the contents.
· Secondary packaging is outside the primary packaging, perhaps used to group primary packages together.
· Tertiary packaging is used for bulk handling, warehouse storage and transport shipping. The most common form is a palletized unit load that packs tightly into containers.
These broad categories can be somewhat arbitrary. For example, depending on the use, a shrink wrap can be primary packaging when applied directly to the product, secondary packaging when combining smaller packages, and tertiary packaging on some distribution packs.
Symbols used on packages and labels
Many types of symbols for package labeling are nationally and internationally standardized. For consumer packaging, symbols exist for product certifications, trademarks, proof of purchase, etc. Some requirements and symbols exist to communicate aspects of consumer use and safety, for example the estimated sign that notes conformance to EU weights and measures accuracy regulations. Examples of environmental and recycling symbols include the recycling symbol, theresin identification code and the “Green Dot”.
Bar codes, Universal Product Codes, and RFID labels are common to allow automated information management in logisticsand retailing. Country of Origin Labeling is often used.
Shipping container labelin
Technologies related to shipping containers are identification codes, bar codes, and electronic data interchange (EDI). These three core technologies serve to enable the business functions in the process of shipping containers throughout the distribution channel. Each has an essential function: identification codes either relate product information or serve as keys to other data, bar codes allow for the automated input of identification codes and other data, and EDI moves data between trading partners within the distribution channel.
Elements of these core technologies include UPC and EAN item identification codes, the SCC-14 (UPC shipping container code), the SSCC-18 (Serial Shipping Container Codes), Interleaved 2-of-5 and UCC/EAN-128 (newly designated GS1-128) bar code symbologies, and ANSI ASC X12 and UN/EDIFACT EDI standards.
Small parcel carriers often have their own formats. For example, United Parcel Service has a MaxiCode 2-D code for parcel tracking.
RFID labels for shipping containers are also increasing in usage. A Wal-Mart division, Sam’s Club, has also moved in this direction and is putting pressure on its suppliers for compliance.[13]
Shipments of hazardous materials or dangerous goods have special information and symbols (labels, plackards, etc.) as required by UN, country, and specific carrier requirements. Two examples are below:
With transport packages, standardized symbols are also used to communicate handling needs. Some common ones are shown below while others are listed in ASTM D5445 “Standard Practice for Pictorial Markings for Handling of Goods” and ISO 780 “Pictorial marking for handling of goods”.
· 
Do not use hand hooks
· 
This way up
· 
Fragile material
style=’background-repeat:repeat;background-attachment:scroll;background-position-x: 100%;background-position-y:0%’>Keep away from water
· 
Keep away from sunlight
· 
· 
Clamp as indicated
· 
Do not clamp as indicated
· 
Food contact material
· 
Attention for this material
Package development considerations
Package design and development are often thought of as an integral part of the new product development process. Alternatively, development of a package (or component) can be a separate process, but must be linked closely with the product to be packaged. Package design starts with the identification of all the requirements: structural design, marketing, shelf life, quality assurance, logistics, legal, regulatory, graphic design, end-use, environmental, etc. The design criteria, performance (specified by package testing), completion time targets, resources, and cost constraints need to be established and agreed upon. Package design processes often employ rapid prototyping, computer-aided design, computer-aided manufacturing and document automation.
Transport packaging needs to be matched to its logisticssystem. Packages designed for controlled shipments of uniform pallet loads may not be suited to mixed shipments with express carriers.
An example of how package design is affected by other factors is the relationship to logistics. When the distribution system includes individual shipments by a small parcel carrier, the sortation, handling, and mixed stacking make severe demands on the strength and protective ability of the transport package. If the logistics system consists of uniform palletized unit loads, the structural design of the package can be designed to those specific needs: vertical stacking, perhaps for a longer time frame. A package designed for one mode of shipment may not be suited for another.
With some types of products, the design process involves detailed regulatory requirements for the package. For example with packagingfoods, any package components that may contact the food are food contact materials.[14] Toxicologists and food scientists need to verify that the packaging materials are allowed by applicable regulations. Packaging engineers need to verify that the completed package will keep the product safe for its intended shelf life with normal usage. Packaging processes, labeling, distribution, and sale need to bevalidated to comply with regulations and have the well being of the consumer in mind.
Sometimes the objectives of package development seem contradictory. For example, regulations for an over-the-counter drug might require the package to be tamper-evident and child resistant:[15] These intentionally make the package difficult to open.[16] The intended consumer, however, might be handicapped or elderly and be unable to readily open the package. Meeting all goals is a challenge.
Package design may take place within a company or with various degrees of external packaging engineering: independent contractors, consultants, vendor evaluations, independent laboratories, contract packagers, total outsourcing, etc. Some sort of formal Project planning and Project management methodology is required for all but the simplest package design and development programs. An effective quality management system and Verification and Validation protocols are mandatory for some types of packaging and recommended for all.
Environmental considerations
Package development involves considerations for sustainability, environmental responsibility, and applicable environmental and recyclingregulations. It may involve a life cycle assessment[17][18] which considers the material and energy inputs and outputs to the package, the packaged product (contents), the packaging process, the logistics system,[19] waste management, etc. It is necessary to know the relevant regulatory requirements for point of manufacture, sale, and use.
The traditional “three R’s” of reduce, reuse, and recycle are part of a waste hierarchy which may be considered in product and package development.
· Prevention – Waste prevention is a primary goal. Packaging should be used only where needed. Proper packaging can also help prevent waste. Packaging plays an important part in preventing loss or damage to the packaged-product (contents). Usually, the energy content and material usage of the product being packaged are much greater than that of the package. A vital function of the package is to protect the product for its intended use: if the product is damaged or degraded, its entire energy and material content may be lost.[20][21]
· Minimization – (also “source reduction”) The mass and volume of packaging (per unit of contents) can be measured and used as one of the criteria to minimize during the package design process. Usually “reduced” packaging also helps minimize costs. Packaging engineers continue to work toward reduced packaging.[22]
· Reuse – The reuse of a package or component for other purposes is encouraged. Returnable packaging has long been useful (and economically viable) for closed loop logistics systems. Inspection, cleaning, repair and recouperage are ofteeeded. Some manufacturers re-use the packaging of the incoming parts for a product, either as packaging for the outgoing product[23] or as part of the product itself.[24]
· Recycling – Recycling is the reprocessing of materials (pre- and post-consumer) into new products. Emphasis is focused on recycling the largest primary components of a package: steel, aluminum, papers, plastics, etc. Small components can be chosen which are not difficult to separate and do not contaminate recycling operations. Packages can sometimes be designed to separate components to better facilitate recycling.
· Energy recovery – Waste-to-energy and Refuse-derived fuel in approved facilities are able to make use of the heat available from the packaging components.
· Disposal – Incineration, and placement in a sanitary landfill are needed for some materials. Certain states within the US regulate packages for toxic contents, which have the potential to contaminate emissions and ash from incineration and leachate from landfill.[25] Packages should not be littered.
Development of sustainable packaging is an area of considerable interest by standards organizations, government, consumers, packagers, and retailers.
Packaging machines
A choice of packaging machinery includes: technical capabilities, labor requirements, worker safety, maintainability, serviceability, reliability, ability to integrate into the packaging line, capital cost, floorspace, flexibility (change-over, materials, etc.), energy usage, quality of outgoing packages, qualifications (for food, pharmaceuticals, etc.), throughput, efficiency, productivity, ergonomics, return on investment, etc.
Packaging machinery can be:
1. purchased as standard, off-the-shelf
2. purchased custom-made or custom-tailored to specific operations
3. manufactured or modified by in-house engineers and maintenance staff
Efforts at packaging line automation increasingly use programmable logic controllers and robotics.
Packaging machines may be of the following general types:
· Accumulating and Collating Machines
· Blister packs, skin packs and Vacuum Packaging Machines
· Bottle caps equipment, Over-Capping, Lidding, Closing, Seaming and Sealing Machines
· Box, Case and Tray Forming, Packing, Unpacking, Closing and Sealing Machines
· Cleaning, Sterilizing, Cooling and Drying Machines
· Coding, Printing, Marking, Stamping, and Imprinting Machines
· Converting Machines
· Conveyor belts, Accumulating and Related Machines
· Feeding, Orienting, Placing and Related Machines
· Filling Machines: Handling dry, powered, solid, liquid, gas, or viscous products
· Inspecting: visual, sound, metal detecting, etc.
· Orienting, Unscrambling Machines
· Package Filling and Closing Machines
· Palletizing, Depalletizing, Unit load assembly
· Product Identification: labeling, marking, etc.
· Sealing Machines: Heat sealer
· Weighing Machines: Check weigher, multihead weigher
· Wrapping machines: Stretch wrapping, Shrink wrap, Banding
· Form, Fill and Seal Machines
· Other specialty machinery: slitters, perforating, laser cutters, parts attachment, etc.
· Process Machinery (Product Preparation): Chopper, Crusher, Cutter, Molder, Peeler, etc.
· Process Machinery (Special Product): Coating, Enrobing, Seasoning
· Process Machinery (Product Cooking, Heating, and Cooling): Aseptic
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Drugs@FDA Instructions: Quick Search Instructions
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How Drugs@FDA is organized:
· The FDA applicatioumber (NDA or ANDA or BLA) is the key to finding information on a drug product. · The Overview Page gives you information to help you select a drug application to view. · The Drug Details page lists summary information about the drug and provides links to consumer and regulatory information, the application history, therapeutic equivalents, and labels. To find information on a drug product: · On the main Search page, enter the drug name or active ingredient in the search box. If you don’t know the whole name, type in as much as you know (at least three characters). You can also search by applicatioumber; however, do not enter both the number and the name. You may also click on the first letter of the drug name in the Browse Box. · On the Search Results page, click on your drug name. · On the Overview page, find your drug product by its dosage form/route and strength, or by company, and click on the drug name in the first column. This will take you to the Drug Details page. (If there is only one application that matches your search, you will not see the Search Results and Overview page.) · The Drug Details page lists the following information: o Drug Name o Application Number o Active Ingredient(s) o Chemical Type (for NDAs) o Review Classification o Original Approval Date · On the Drug Details page, you may find links to information such as: o Therapeutic Equivalents (if available for a prescription drug). Note: Please read definitions for Generic Drug and Therapeutic Equivalence. o Other OTC Drugs with the Same Active Ingredient (if available for an over-the-counter-drug). o Consumer Information Sheet (available for drugs approved since 1998) o Patient Information Sheets o Medication Guide (contains information for patients on how to safely use a drug product.) o Approval History and Related Documents (Reviews, Approval Letters, Approval Packages, Current and Archived Labels) o Other Important Information from FDA (may include FDA Alerts, Public Health Advisories, and questions and answers) Note: Not all information is available for all drug products. |
Trademark Branding Strategy
Distinctive design, graphics, logo, symbols, words, or any combination thereof that uniquely identifies a firm and/or its goods or services, guarantees the item’s genuineness, and gives it owner the legal rights to prevent the trademark’s unauthorized use. A trademark must be (1) distinctive instead of descriptive, (2) affixed to the item sold, and (3) registered with the appropriate authority to obtain legal ownershipand protection rights. Trademark rights are granted usually for 7 to 20 years and, unlike in case of patents, are renewable indefinitely. These rights are protected worldwide by international intellectual property treaties and may be assigned by their owner to other parties. Although a trademark has no limited term of existence, the rights to use it may be lost due to misuse or lack of use. Trademarks are divided into 42 international classes, each class representing similar goods or services. Whereas a trademark may be registered under multiple classes, it is protected only in the class(es) relevant to the business or trade area of the item. And, whereas the use of symbol ‘TM’ does not provide any legal benefit, it precludes the infringer’s defense of lack of knowledge of a trademark claim. Costs incurred in design and registrationof, and in defending, a trademark are usually amortized over the life the trademark or 40 years, whichever is shorter. In balance sheets, trademarks are identified as intangible assets and, in some cases such as Coca Cola Co., are far more valuable than the firm’s all other assets. The term trademark includes the associated term service mark (SM).
Trademarks and brands are synonymous for legal purposes. They describe a symbol, such as a logo, or name that expressly identifies a seller’s goods or services. Marketers commonly describe a brand as an intuitive construction rooted in trust. Consumers instinctively accept that a seller’s promise to deliver expected features and benefits is trustworthy, because that reliability is embodied in the brand. Trademark branding strategy incorporates both the legal and marketing definitions of brand.
Legal and Design
Legal and design issues are the two main components of a trademark branding strategy that deserve your attention. A competent trademark lawyer can inform you of the parameters required to legally qualify your mark for trademark registration. However, deliberately designing a trademark for “branding” purposes is a specialized discipline, and large corporations spend enormous sums to get it right. Decision makers at the highest levels of corporations usually get intimately involved in trademark decisions. You can only benefit as the chief decision maker in your business from having a working knowledge of the psychology behind trademark design.
Registering Your Trademark
The primary reason for registering your trademark is to prevent others from infringing on your mark. Trademark registration allows you to use the “®” symbol, which protects your mark from infringement by other parties. Moreover, your registered trademark is the visual symbol of trust that gives users confidence in your brand’s promise of distinctive user benefits. Registering your trademark is the logical thing to do. It is also integral to the branding process of establishing the emotional bond that links your brand to consumers. Visit the United States Patent and Trademark Office website for a primer on trademarks and the security they provide.
The Persuasion Process
An effective trademark branding strategy employs the same persuasion process used in branded advertising. Marketers commonly represent the process as one in which a credible source sends a message by way of a channel that delivers the message to a receiver. Trust is the foundation of branding. Your company is the credible source. The message is what you communicate across all of your communication channels. The ideal message is a promised user benefit that is specific to your brand. The message is trustworthy because the source is credible. The channel, in this instance, is your trademark, another consumer touch point communication platform along the persuasion continuum. The receiver is the intended recipient of your message. Your ideal trademark communicates that your brand is a credible source whose trustworthy message is intuitively self-evident from the trademark design, even to the most discerning cynic.
Logo Design
Your trademark starts by creating a logo based on the persuasion process. Each component of your logo should work in synergy to achieve the intended psychological effect. The combined components, called “trade dress” in the industry, include the shape and color of individual elements and the grouping arrangement. You’ll notice that the trade dress of prominent company logos obviate the need for words. Trade dress speaks volumes by itself. Be careful how you use color, though, as it triggers both physiological and psychological effects on observers. The ideal logo helps to bypass cognitive brand screening. When your logo resonates in the psyches of consumers, your brand is an automatic contender for consumer dollars.
Basics of trademarks and the trademark process.
Trademarks and service marks (Marks) are used to identify your ‘goods and services’ to consumers, and to differentiate your brand from others.
Obtaining a trademark registration, and maintaining your rights in a mark, are not as most people immediately assume. This page helps explain.
A trademark registration *is not* a license and never was, it’s more like a permit or notice.
· Trademark Notice of Opposition Common Questions
What is a trademark?
A trademark includes any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name.
What is a service mark?
A service mark is any word, name, symbol, device, or any combination, used, or intended to be used, in commerce, to identify and distinguish the services of one provider from services provided by others, and to indicate the source of the services.
What is a certification mark?
A certification mark is any word, name, symbol, device, or any combination, used, or intended to be used, in commerce with the owner’s permission by someone other than its owner, to certify regional or other geographic origin, material, mode of manufacture, quality, accuracy, or other characteristics of someone’s goods or services, or that the work or labor on the goods or services was performed by members of a union or other organization.
What is a collective mark?
A collective mark is a trademark or service mark used, or intended to be used, in commerce, by the members of a cooperative, an association, or other collective group or organization, including a mark which indicates membership in a union, an association, or other organization.
Most common reasons that marks are refused trademark registration:
1. the proposed mark consists of or comprises immoral, deceptive, or scandalous matter
2. the proposed mark may disparage or falsely suggest a connection with persons (living or dead), institutions, beliefs, or national symbols, or bring them into contempt or disrepute
3. the proposed mark consists of or comprises the flag or coat of arms, or other insignia of the United States, or of any State or municipality, or of any foreigation
4. the proposed mark consists of or comprises a name, portrait or signature identifying a particular living individual, except by that individual’s written consent; or the name, signature, or portrait of a deceased President of the United States during the life of his widow, if any, except by the written consent of the widow
5. the proposed mark so resembles a mark already registered in the Patent and Trademark Office (PTO) that use of the mark on applicant’s goods or services are likely to cause confusion, mistake, or deception
6. the proposed mark is merely descriptive or deceptively misdescriptive of applicant’s goods or services
7. the proposed mark is primarily geographically descriptive or deceptively geographically misdescriptive of applicant’s goods or services
8. the proposed mark is primarily merely a surname; and
9. matter that, as a whole, is functional.
Can one trademark a slogan, positioning statement, or tag line?
No, not as a rule, unless the slogan is the brand – or in very rare cases where, like ‘Just Do It’, the slogan has become (not becomes) so famous that most know it and the brand it relates to. Nike is one of the few with its ‘Just Do It’ slogan.
In most cases a slogan is not a brand or source identifier and therefore a slogan does not meet the requirements for a trademark.
Can one trademark a symbol?
Yes. An example is the Nike ‘swoosh’. However, the symbol must be made famous most often through extensive marketing, advertising and promotion.
Can one trademark a design?
Yes. For example, a certain bottle design can be protected as ‘trade dress’. The original coke bottle is a good example of trade dress. Other features can be as well.
The TM, SM, and the R in the circle ® .
You can and probably want to use the trademark symbol™ (TM), or service mark symbol (SM) to alert the public to your claim on the design and/or word mark.
After your trademark is registered, you can use the ® symbol, not before.
It is against the law to use the ® symbol unless you have received the official trademark registration certificate (which typically takes a few years).
A trademark application begins the process towards a trademark registration, however, an application is not a registration.
Why obtain a trademark registration?
Owning a federal trademark registration has several advantages, including:
· notice to the public of the registrant’s claim of ownership of the mark
· a legal presumption of ownership nationwide
· the exclusive right to use the mark on or in connection with the goods or services set forth in the registration
· the ability to bring an action concerning the mark in federal court
· the use of the U.S. registration as a basis to obtain registration in foreign countries
· the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.
Trademark law is likely one of the most confusing and fuzzy areas of law, since it is constantly evolving, and subject to change.
A Trademark application can be filed and processed at any time, before or even years after a Mark is used in interstate commerce.
A trademark application as ‘intent to use’ (or ITU) can be filed before a Mark is used in interstate commerce, however, an ITU must be followed up by a bona fide statement of use in interstate commerce in order for a trademark registration to be issued.
Trademark registration is not a guarantee of trademark protection.
The best way to protect a trademark, or pending Mark, is to use it (as long as it does not cause confusion in the marketplace with other registered trademarks).
The concern of the trademark office is twofold in application review:
1) To protect consumers from others fraudulently deceiving/misleading consumers with deceptively similar names
2) To protect the rights of trademark holders (registrants)
The United States Patent and Trademark office (USPTO) is a division of the Department of Commerce. The mission of the USPTO, like the Department of Commerce, is fair trade.
! Once a trademark is registered, the registration offers some protection, however, it is the registrant’s responsibility to do all that is required to maintain the trademark. This includes proper use of the trademark and proper enforcement to keep others from infringing on the rights of the trademark registrant.
The basic trademark process in the United States:
The first step:
To obtain a trademark (or service mark), you file an Application for your Mark with the United States Patent and Trademark office, and pay about $365 (application fee – per class) to the US Patent and Trademark Office (USPTO). This can be done online at uspto.gov.
! Before filing the trademark application, you should do a thorough trademark search and pay careful attention to the writing of your description of goods and services (G&S), as well as the class or classes your G&S will fall within.
Your Mark is your intended trademark. It can be a word or phrase, or a design, or both. Trademarks also can be for other aspects which are not covered here including ‘trade dress’ which involves the appearance of your packaging.
At uspto.gov you will be able to search for other existing trademarks that ‘may’ cause your trademark application to be refused.
! Searching for your exact same Mark and not finding your exact same Mark registered or applied for at uspto.gov is no guarantee that you will own a trademark, that the trademark office will accept your application, or that it will not later be challenged in a trademark opposition.
A trademark must not cause ‘likelihood of confusion’ in the marketplace. Therefore, you will not be allowed to take a ‘famous name’, change a letter or add a hyphen, or slightly alter its spelling, and expect to have your Application go through to registration. In fact, in some cases, if your Mark even seems to sound similar to a registered trademark, or have similar elements, if that other registered trademark has achieved ‘significant fame’, your Application may be refused – or opposed.
When you file your Application, you select a category or ‘class’ of goods and services provided by the USPTO. Within this ‘class’, you include a written description of the goods and services (G&S) that your mark is used in connection with. The ‘G&S’ is important in that it must be highly descriptive yet offer the broadest protection.
The initial review by the trademark examiner at the USPTO:
Within six months (sometimes sooner, sometimes longer), an Examining Attorney at the United States Patent and Trademark Office reviews your Application.
This Trademark Examiner (a Trademark Attorney of the USPTO) assesses your Application, and scrutinizes every detail.
While it may have been simple to apply online…
… the examiner (about 6 months after trademark application is filed) is now going to scrutinize your application as if filed by a trademark attorney.
The USPTO examiner must follow the laws, and treat every trademark applicant (trademark attorney, general attorney, non-attorney) as a trademark specialist.
The trademark examiner examines your trademark application in its entirety, reviewing and assessing every detail.
Though your trademark application may have taken you minutes to apply online, and you received a confirmation, everything you stated in the trademark application was stated under oath when you filed.
It is not easy to change dates and details afterwards, and ofteot possible at all.
The confirmation of application only means you paid, it does not indicate that you will get a trademark registration, or that your trademark application has been examined.
The examiner must make his/her judgment as to if your Application, if allowed to proceed to Registration, could cause ‘likelihood of confusion’ or damage to any existing registrant.
In addition, your trademark application must be acceptable in many ‘other ways’. Many of the ‘other ways’ are based on commerce principals.
By necessity, trademark prosecution involves many aspects more closely related to business, marketing, trade customs, and other business principles that extend well beyond civil law and/or civil law concepts. This can confuse even the most seasoned ‘general law’ attorneys – and often does.
At the highest level, seasoned Intellectual Property (IP) attorneys may fail without the business and marketing knowledge or experience needed to prevail.
References:
1. Mnushko Z.N., Sofronova I.V., Pestun I.V. Management and marketing in pharmacy. P.2. Marketing in pharmacy: Texts of lectures. – Kh.: PH of NUPh, 2008. – 148 p.
2. Vikram, Raja. “The Five Concepts of Marketing”. Saching.com. Retrieved 21 May 2013.
3. Kotler, Philip & Keller, L. Kevin (2012). Marketing Management 14e. Pearson Education Limited 2012
4. Framework for Marketing Management (4th ed.). Pearson Prentice Hall. 2009.
5. Adcock, Dennis; Al Halborg, Caroline Ross (2001). “Introduction”. Marketing: principles and practice
6. “Marketing Management: Strategies and Programs”, Guiltinan et al., McGraw Hill/Irwin, 1996
