A pharmaceutical business game
Areas: Strategic, Marketing and Sales Management of Pharmaceutical Companies.
Authors: Marcel Corstjens, Professor of Marketing, and Edouard Demeire, Managing Partner of PRISM
Minimum time required: 2 weeks to 2 months
STRATPHARM is a computer-based, industry-specific business simulation to help teach the application of strategy and marketing tools for the pharmaceutical industry. STRATPHARM focuses on marketing, but it also integrates important parts of other functions such as development and sales, thus allowing for cross-functional team building in an industry that is often dominated by individual R&D or sales cultures. The simulation exists in English and French and includes pedagogical materials.
Participants in the game are grouped within five teams representing as many firms which are either research-based or generic, over-the-counter (OTC) prescription or both. Each firm competes in four markets corresponding to different therapeutic areas: two existing prescription categories (e.g. anti-hypertensives, arthritis), one unmet therapeutic needs (e.g. AIDS vaccines), one OTC category (e.g. aspirin). Each of these markets is segmented according to diffusion of innovation and to patients and prescribers' benefits. The marketing mix allocation includes the use of sales representatives, advertising in medical journals, samples, mailings and product positioning.
The markets are regulated by the government in four different ways: patent protection, drug approval, price controls and reimbursement. The research process covers both traditional pharmaceutical research and R&D in biotechnology. The management teams focus on project formulation and development without however going into the details of molecular structure.
STRATPHARM is intended for use by managers in marketing and sales, but it will also prove valuable for those working in R&D and corporate staff and for medical doctors. It has been used in four executive development programmes at INSEAD. It has also helped to train nearly 1,000 executives in various internal company programmes.
The pedagogical objectives of STRATPHARM are twofold:
- to enhance participants' understanding of Strategy Development in terms of choosing a market (whether generic, research based, OTC or prescription), allocating resources among products, linking research and development with marketing and sales, using various types of market and competitor information systems, targeting segments and positioning products.
- to improve their Strategy Implementation Skills as far as product formulation to segment needs, marketing mix resource allocation based on response analysis, production and plant capacity decisions, co-marketing, joint promotion and licensing are concerned.