Our research team defines “immersive services” as those in which consumers are deeply embedded for a period of time, with their experiences largely constructed by the service. This includes industries like healthcare, education, hospitality, and eldercare. We identify four key characteristics of these services that can challenge consumer agency:

1. Encapsulation: Consumers are deeply immersed in the service, often separated from other parts of their lives.
2. Positionality: Hierarchies and power dynamics create stark differences between consumers and service providers.
3. Protocolization: Rigid routines and protocols dictate consumer behavior.
4. Multivocality: Multiple voices and perspectives within the service influence how consumers are expected to act.

These characteristics can make it difficult for consumers to act freely, thus affecting their well-being. For instance, consider healthcare settings where patients are required to follow strict protocols, or eldercare facilities where residents may feel constrained by rigid schedules. As polarization and AI-driven decision making become more common, these challenges are becoming even more pressing.

We discover, however, that consumers are not passive participants in immersive services. Instead, they actively work to regain their sense of agency through “improvisations”—creative strategies that allow them to navigate the constraints of the service. Specifically, consumers use five pathways to reclaim agency:

1. Expanding the figured world: Shaping their experience on their own terms by exerting control over time and space.
2. Voicing: Speaking out to challenge rules or advocate for changes in how they are treated.
3. Seeking task responsibility: Taking on meaningful tasks to assert independence and purpose.
4. Challenging protocols: Pushing back against rigid processes to co-create a service experience that better fits their needs.
5. Playing and imagining: Using creativity and imagination to reframe their experience and celebrate life.

For service managers, these findings offer clear strategies to empower consumers while maintaining necessary structure. Two key managerial approaches stand out:

1. Leverage technology to expand consumer freedom: Virtual tools and personalized digital platforms can help consumers navigate encapsulation and protocolization by providing more choices and flexibility.
2. Develop empathy-driven relationships: By fostering stronger interpersonal connections, service providers can address positionality and multivocality, helping consumers feel valued and heard.

We recommend a two-pronged approach to assess and address gaps in consumer agency. First, managers should analyze how the four structural characteristics—encapsulation, positionality, multivocality, and protocolization—impact consumers. Second, they should evaluate how effectively their services support the five pathways consumers use to regain agency.

Immersive services are critical to modern life, but they must evolve to meet the needs of consumers. By empowering consumers to reclaim their agency, service providers can enhance customer satisfaction, foster loyalty, and improve overall wellbeing.

Source: Laurel Anderson, Catharina Von Koshull, Martin Mende, and Johanna Gummerus, “,” Journal of Marketing.

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Over-the-counter (OTC) drugs are an important part of the U.S. healthcare system. According to the Consumer Healthcare Products Association, in 2023, OTC medicine was a $43 billion business, and an average American household on OTC products (based on 2022 statistics). OTC medicines have benefited consumers in many ways, including making it easy to treat minor or temporary conditions and avoiding missing work, school, or other activities. Clearly, OTC drugs play an important role in consumers’ everyday lives. However, it is also critical that OTC drugs are consumed in a safe and effective way, as overdosing may harm consumers and lead to emergency room visits and hospitalizations.

When taking medications that contain acetaminophen (e.g., Tylenol, Excedrin, Mucinex, NyQuil/DayQuil, Robitussin), many consumers do not follow the instructions on the product label, potentially leading to hepatoxicity, or liver damage. Using acetaminophen as a basis, researchers in a explore which consumers are likely to deviate from drug label instructions, why they do so, and what effective interventions can be implemented to help consumers better follow the directions. Benefiting from the unique diary data and advanced modeling techniques (including dynamic models of consumer choice, structural modeling, and Bayesian modeling), the authors model the consumption process of drugs and provide answers to these important questions.

This study provides valuable insights for various stakeholders, including consumers, pharmaceutical companies, and policymakers. As consumers, it is important to be aware of what makes us more likely to deviate from drug instructions (e.g., suffering from multiple symptoms, ongoing pain, mental health problems, overconfidence in self-medicating, etc.). It is recommended to be more cautious about the negative effects and risks associated with the drugs consumed for our own benefit. Pharmaceutical companies should deliver better drug instructions that consumers can more easily follow and should provide more consumer education to help develop more favorable drug consumption behaviors. For policymakers, such as the FDA and other organizations responsible for consumer well-being, it is crucial to explore ways to improve consumer awareness of drug ingredients.

Check out this interview with the authors for detailed insights:

Q: Your study identifies multiple label deviations by consumers using acetaminophen. What do you see as the most critical information missing from current labels that might prevent these deviations and how could practitioners incorporate these insights into future label designs?

A: Our paper suggests that, in addition to the current list, the label could emphasize the importance of matching the symptoms with the product. For example, if a consumer has symptoms other than pain, such as sinus issues, they should look for a combo-ingredient product that can treat sinus symptoms. If such a patient selects a single-ingredient acetaminophen product, the sinus symptoms will persist and continue to drive future pain and enhance the odds of label deviation.

Practitioners could incorporate these insights by emphasizing symptom-specific recommendations and designing labels to make acetaminophen ingredients more salient.

Q: What recommendations would you give to each of the stakeholders (including policymakers, e.g., the FDA, pharmaceutical companies, and consumers) on leveraging the insights about the profile of consumers (i.e., their demographics, health conditions, and behavioral markers) who are more likely to deviate from label instructions?

A: For policymakers like the FDA: In product labels:

• Emphasize the importance of matching the symptoms to the medication
• Clearly communicate acetaminophen as an ingredient. After years of policy interventions, this continues to be a struggle; 41% of consumers do not know that the medication they take contains acetaminophen

For pharmaceutical companies:

• Add symptom-match label instructions
• Make the information about acetaminophen as an ingredient clearer
• Educate consumers about the interplay between label deviations and their attitudes toward self-medication, health history (chronic pain, mental health problems), and demographics (women, smokers, heavy drinkers). Target messages to high-risk groups to emphasize the importance of taking the right product at the right time. Feasible platforms could include websites, display ads, and in-person hospital visit instructions

For consumers: As consumers we need:

• To understand that the “too soon” and “too much” label deviations are gateways to the >4g label deviations, the most critical clinical outcome. Therefore, self-managing the process (when and how much medicine to take) at a time when you are fragile because of illness is key
• To select symptom-matching medications and to be disciplined about this can mitigate acetaminophen overdose
• To pay greater attention to knowing the harmful effects of ingredients in the medicines we take; to read labels (vs. popping pills indiscriminately)

Q: The findings of this study are truly impactful and important, considering the consequences of deviating from the recommended drug dosage. The following drug instructions become even more critical when it comes to prescription drugs (in which case, patients’ conditions are more severe or side effects are more serious). Are you working on any projects that extend the findings to prescription drugs? Do you foresee any implications of your study for prescription drugs?

A: The collection of diary data on medicines is extremely difficult and expensive. I can’t emphasize the uniqueness of these data enough. Once you have it, the model and measures we developed can be straightforwardly applied to other contexts. For prescription drugs, these could include opioids, benzodiazepines, stimulants, sleep aids, antidepressants… As you can imagine, the hard thing here would be good quality data for the consumption of prescription drugs. Applications in the OTC space (e.g., ibuprofen, aspirin, dextromethorphan [for cough]), vitamins, nicotine (e.g., vaping), and Epsom salt (sore muscles) are easier to extend.

Q: It is wonderful to see that an increasing number of marketing researchers devote their attention to the healthcare industry, which is a very meaningful sector. Do you see any trends in terms of what topics researchers are working on to provide practical insights for policymakers and consumers/patients? What would be the promising areas to focus on in this field over the next 5 years?

A: The promising areas:

• Why haven’t the label changes worked over the years? Why is consumer knowledge of acetaminophen so poor (despite significant label changes and educational initiatives)? What are the hurdles and how best to overcome them?
• Many people buy branded versions of commoditized OTC drugs which are more expensive. Why is that, and are there nudges that could incentivize consumers to be more rational?
• Can healthcare apps mitigate label deviations? Any other tech-enabled (e.g., LLMs) solutions?
• DTC prescription drug marketing is much more regulated outside of the U.S. What are the implications for consumer welfare? This is a difficult but very important topic to study. 

Q: Did you face unique challenges while studying healthcare or drug-related topics compared to traditional marketing topics? If so, do you have any recommendations for your fellow researchers?

A: There is a good appetite for healthcare-related questions and consumer welfare implications. Therefore, there were no real hurdles in the topical area. The review process was challenging with almost all the questions centered on the methodology. The review process took some time.

Q: The study highlights consumer overconfidence in self-medication as a factor in label deviation. What strategies would you recommend for brands or retailers to balance consumer autonomy with effective guidance discouraging unsafe practices?

A: There is a series of experimental studies that could test a series of hypotheses (promoting overconfidence awareness, seeking second opinion, etc.). I hope that someone will take it on. At a more practical level, an easy intervention is for doctors or nurses to simply remind patients that overdosing comes with the possibility of long-term deleterious effects. Therefore, health care professionals could be very effective.

Q: Given that digital tools are increasingly part of consumer interaction, what specific technological approaches (such as apps, reminders, or digital labels) do you believe would most effectively support safe consumption? How should practitioners prioritize these approaches? What motivated you to pursue this fascinating and impactful research area?

A: Apps, reminders, digital labels, and websites such as are all great ideas. My thinking would be to pick those where it’s easy to take an A/B test to assess effectiveness. Here, it’s important to note that label deviations are “tail” behaviors, infrequent, and occur for a small percent of people. This presents a significant challenge in assessing what will move the needle on >4g outcomes.

Three of the four authors (Saul, David, and Neeraj) served on the steering committee for “the acetaminophen behavioral surveillance program” sponsored by McNeil Consumer Healthcare (which makes many OTC drugs, including Tylenol). On this committee, we got to work with researchers with deep medical and policy expertise, so we learned a lot in the process. While Saul and David (both subject matter experts on acetaminophen) wrote several papers in medical journals on the topic, we felt that audiences in marketing and the business world could benefit from what we learned from our work on behavioral surveillance of OTC drugs. We brought methodological rigor to this unique data, which included dynamic models of consumer choice, structural modeling, and Bayesian modeling. Therefore, the intersection of very relatable policy-relevant questions with broad societal impact, done rigorously, was the key motivation.

Source: Min Tian, David W. Kaufman, Saul Shiffman, and Neeraj Arora (2024), “,” Journal of Marketing Research, 61 (3), 430–50. doi:.

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A web companion that extends this research by providing detailed context and results is .

In countries without universal health insurance or developed health care systems, governments try to make drugs affordable and accessible. For instance, in India, where around 80% of healthcare expenses are borne privately with the majority paid out-of-pocket, the ostensible reason for price regulation is to increase the affordability of essential drugs. However, there is a general lack of empirical evidence assessing the impact of regulation on the availability, accessibility, and sales of prescription drugs in emerging economies such as India.

In a , we examine the unintended consequences of India’s Drug Price Control Order in 2013 (DPCO 2013) that was instituted to make essential medicines more affordable. Because of the lower prices intended to increase drug accessibility, we find that pharmaceutical firms curtailed marketing efforts for regulated drugs due to diminished profit margins and shifted their focus to unregulated (but related) drugs. This shift disproportionately affected prescriptions issued by less formally educated physicians—those who often serve the most economically disadvantaged populations, and the very groups DPCO 2013 aimed to benefit.

Pharmaceutical firms curtailed marketing efforts for regulated drugs due to diminished profit margins and shifted their focus to unregulated (but related) drugs.

The process began in September 2011 when the Indian government prepared a National List of Essential Medicines (NLEM). In May 2013, the government announced price regulations for these drugs, capping their prices. The price cap for each drug was computed using the weighted average (market shares used as weights) of the market prices of the drug as sold by different brands (minimum 1% market share). Brands priced above the cap were required to reduce their prices to at or below the price cap, while brands already priced below the cap were required to retain current prices.

The government implemented several measures to mitigate potential negative reactions from firms. The order required firms to maintain current production volumes of regulated drugs. While firms may apply to exit a category with a six-month notice, the order reserved the right to mandate production for up to 12 months. Furthermore, price increases for regulated drugs were limited to inflation levels. Additionally, it capped annual price hikes for unregulated drugs at 10% to prevent firms from offsetting lost margins on regulated drugs by raising prices on unregulated ones.

The Marketing Curveball

In this study, we identified 179 oral solid drugs (pills) included in DPCO 2013. By comparing data from India to the Philippines—a country without similar regulations—we find that, on average, the sales volumes of these regulated drugs declined in India.

We identify the strategic shift in marketing efforts of firms as a main contributing factor. In India, where direct-to-consumer advertising is prohibited for prescription drugs, the main vehicle for promotion is detailing; that is, providing information about drugs and their efficacy to physicians, usually by medical representatives from pharmaceutical firms. Using detailing data from a large pharmaceutical firm, we find that due to the lowered margins of regulated drugs, firms shifted their detailing focus to unregulated (but related) drugs. For example, a firm could have shifted its marketing focus from atorvastatin (a regulated drug for cholesterol issues) to rosuvastatin (an unregulated drug prescribed for similar issues).

We further examine this shift’s impact on prescriptions from physicians without formal medical degrees (termed as non-MBBS Physicians). Large parts of India lack access to highly qualified doctors, and physicians without formal medical degrees usually provide healthcare and actively prescribe allopathic medicines. Due to the shift in detailing focus, the percentage of prescriptions for regulated drugs from these non-MBBS physicians declined. Furthermore, our surveys show that compared to formally trained medical professionals, non-MBBS physicians relied heavily on pharmaceutical detailing to inform their prescribing practices.

We rule out other potential explanations for the declining sales volumes of regulated drugs. The prevalence of diseases like acute respiratory infections, circulatory system diseases, diabetes, HIV/AIDS, malaria, and pneumonia has increased, which does not explain the sales decline. Also, new drug approvals have dropped significantly since 2013 and AYUSH (traditional Indian medicine) has also declined. Thus, our findings strongly support a detailing-led explanation for the reduced sales volumes.

Lessons for Regulators, Marketing Officers, and Advocacy Groups

Our study serves as a reminder of the interconnectedness of policies and market dynamics.

• Regulators must understand the full spectrum of a policy’s impact before implementing it. This includes considering how pharmaceutical firms might react to price caps, including marketing strategies, and the downstream effects on healthcare providers and patients.
• Pharmaceutical companies need to maintain a balance between profitability and social responsibility, particularly in markets heavily reliant on out-of-pocket spending for healthcare.
• Patient advocacy groups must amplify their role in policy discussions, ensuring that the voices of the most vulnerable populations are heard and that their needs are prioritized in healthcare regulations.

extends this research by providing detailed context and results for broader dissemination.

From: Saravana Jaikumar, Pradeep K. Chintagunta, and Arvind Sahay, “,” Journal of Marketing.

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First Nations people “suffer from poorer health, are more likely to experience disability and reduced quality of life, and ultimately die younger than their non-indigenous counterparts,” according to the United Nations. Here, the term “First Nations” includes Indigenous, Aboriginal, Torres Strait Islander, Native, American Indian, First Alaskans, Native Hawaiians, Māori, Metis, and Inuit peoples.

Studies show that in Australia the life expectancy of First Nations males is 8.6 years less than the general population, and the corresponding number for females is 7.8 years. Similarly, the life expectancy of North American Indians and Alaskan Natives is 4.4 years less. The healthcare sectors in countries like Canada, the United States, and Australia have long overlooked the unique needs and perspectives of First Nations people, and this oversight has resulted in significant disparities in health outcomes for these communities as compared to the general population. What can be done to bridge this gap?

In a , we explore the role of marketing in decolonizing healthcare. We focus on the “Birthing on Country” policy, an initiative led by First Nations Australians that encourages women to give birth on their ancestral lands by adopting traditional birthing practices—in stark contrast to the western biomedical approaches that dominate the healthcare landscape.

At the heart of our investigation is the actor-network theory (ANT), a sociological framework through which we explore the intricate web of relationships and interactions that shape social phenomena. Through ANT, we discover how various stakeholders, both human and nonhuman, come together to form networks that can either support or hinder the decolonization of healthcare.

The Power of Marketing in Decolonizing Healthcare

One of the most striking revelations is the power of marketing techniques in this decolonization process. Traditional marketing campaigns, such as those promoting handwashing or smoking cessation, have had ambiguous results in changing behavior. However, when these techniques are tailored to respect and incorporate First Nations perspectives, they can become potent tools for change.

For instance, the “” policy did not gain traction simply because it was a good idea. Our research shows that creating a strong brand identity for the policy, leveraging influential opinion leaders, forging alliances with key public and private entities, and establishing formalized systems, including training, were crucial for the policy’s success. Additionally, it was not just about promoting the policy. It was about challenging the status quo, addressing resistance, and reshaping the healthcare landscape to be more inclusive of First Nations people.

Our findings underscore the importance of cultural sensitivity and inclusivity in healthcare. Western biomedical approaches, while effective in many ways, are not one-size-fits-all solutions. Different communities have different needs, and it is crucial to recognize and respect these differences. Moreover, our findings highlight the transformative power of marketing. Often dismissed as just a tool for selling products, marketing—when used ethically and creatively—can drive societal change. It can challenge entrenched beliefs, bridge cultural divides, and pave the way for more equitable healthcare systems.

A Roadmap for Rethinking Traditional Approaches to Healthcare

For healthcare professionals, policymakers, and marketers, our study offers a roadmap for rethinking traditional approaches, being more inclusive, and harnessing the power of marketing for the greater good. It is not just about improving health outcomes for First Nations people, it is about creating a healthcare system that respects and values the diversity of all its users.

This study has implications for First Nations people who wish to engage in decolonization. First Nations people can leverage marketing techniques and technologies to communicate the problem, promote the program, and design service delivery in a consistent fashion. Additionally, marketing practices might be used to advocate for developing infrastructure that supports such healthcare services. In the case of “Birthing on Country” initiatives, this included:

• birthing centers funded by the government and placed on First Nations land,
• culturally appropriate facilities, and
• community-led healthcare services.

Another critical lesson for First Nations people is that they need a network of allies. First Nations people must build relationships and partnerships with parties who share their goals of decolonizing healthcare. This includes engaging with researchers, policymakers, healthcare professionals, and community organizations to develop collaborative strategies, share knowledge, and advocate for change. Our study shows that universities and research institutes could present an argument with the same underlying rationale of “healing” but use the same scientific and healthcare discourses as the colonizer. These partnerships allow authentic representation and an ability to navigate a system designed to suppress, marginalize, and dehumanize. Without these alliances, there would only be pockets of decolonization scattered across the country.

The path to decolonizing healthcare is complex, but marketing can be a powerful ally on this journey. It is time for all stakeholders to come together and work toward a more inclusive and equitable healthcare future.

From: Reece George, Steven D’Alessandro, Mehmet Ibrahim Mehmet, Mona Nikidehaghani, Michelle Evans, Gaurangi Laud, and Deirdre Tedmanson, “,” Journal of Marketing.

This article appears in the Journal of Marketing special issue, “Marketing in the Health Care Sector.”

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Rural health care is in crisis.

Between 2010 and 2015, the death rate from coronary heart disease was significantly higher in rural areas (118.2 per million) than in urban areas (106.2 per million). The shortage of cardiologists is an especially serious issue facing over 60 million rural Americans who suffer from higher levels of heart disease, hypertension, and stroke. Reflecting concern over rising death rates for heart disease and stroke in rural areas, the American Heart Association (AHA) and American Stroke Association (ASA) issued a “Call to Action” in 2020 to address the rising inequities in cardiovascular health of rural Americans.

Since most rural communities are too small to support a full-time cardiologist, outreach clinics help increase access to cardiologists for underserved rural patients. Bringing cardiologists to the local community reduces the need for patients to travel inconvenient distances and can lead to more timely diagnoses and treatment, resulting in better patient outcomes. However, it is important for hospitals, policymakers, and insurance providers to understand outreach decisions and how they may be impacted by the coming cardiologist shortage.

Current Rural Health Care in Iowa

In a , we estimate financial costs of mitigating cardiologist shortages by studying outreach patterns over 30 years in the state of Iowa. While rural areas are underserved by cardiologists, urban areas seem to be in a state of oversupply. As per 2019 data for Iowa, the number of cardiologists per 100,000 people is 10.6 in urban counties compared to 1.5 in rural counties and 6.5 nationwide. The level of competition for patients in urban locations provides further motivation for engaging in rural outreach.

Iowa has fewer than 200 cardiologists, almost all of whom live in urban areas—and their number is expected to drop by 10% in the coming years. To make up for the lack of rural presence in Iowa, many practices have developed a strong network of visiting consultant clinics where physicians in many specialties, including cardiology, make periodic visits from urban to rural areas. The networks provide reasonable access and effective care to most rural communities.

An Australian Model

While the outreach clinic model has been the most successful in plugging holes in rural cardiology access, it still has weaknesses. Physicians who participate in the program are unable to see patients while they are driving to the outreach clinic. This “windshield time” can last as long as two to three hours in Iowa and includes not just lost opportunities to see patients, but also mileage and other vehicle expenses. The opportunity costs are significant enough that only about half of Iowa’s cardiologists participate in an outreach clinic.

In Australia, which has an even greater rural health care crisis than the U.S., the government’s Rural Health Outreach Fund subsidizes qualifying specialists to motivate them to practice in rural areas. Our study finds that if a payment program were adopted in Iowa to subsidize physicians for their windshield time, the payments would cost about $405,000 per year to maintain the current level of cardiology care in rural areas, even after the anticipated decline in numbers.

If a payment program were adopted in Iowa to subsidize physicians for their windshield time, the payments would cost about $405,000 per year to maintain the current level of cardiology care in rural areas.

We also explore other options.

• The suggestion to recruit foreign doctors to practice in rural areas has met with some success for primary care physicians, where the bulk of the funding is targeted. For such a program to be more cost effective than the public subsidy, it would have to attract five cardiologists who would work for $81,000 or less a year, a highly unlikely outcome. That would provide far less coverage than the network of outreach clinics for the same cost.

• Increased use of telehealth has also been proposed, but patients have been reluctant to use it for complicated health concerns. Furthermore, there are issues regarding reimbursement for cardiac telehealth consultations and lack of reliable, high-speed internet access in many rural areas.

Our study looks only at cardiology, but our findings suggest that similar public subsidies would be an effective way to at least maintain health care coverage in rural areas in other specialties. While we have generally been reluctant to suggest the government pay providers to practice in certain locations, we have few other feasible options to provide equitable access to necessary health care to some 60 million rural Americans.

Future research needs to move beyond the usual focus on merely improving provider outcomes to advancing our understanding of the implications for patients. Our novel way of viewing the problem of patient access shows how it is influenced by the competitive marketing decisions individual providers make. We expect that focusing on provider behavior and patient outcomes will enable marketing scholars to provide valuable insights into other important and complicated problems in health care.

From: J. Jason Bell, Sanghak Lee, and Thomas S. Gruca, “,” Journal of Marketing.

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Buying groups or purchasing cooperatives, a.k.a. group purchasing organizations (GPOs), work together to leverage their collective purchasing power to get discounts from suppliers. They are common across industries such as health care (e.g., Vizient), manufacturing (e.g., IBC), hospitality (e.g., Pandion), and retailing (e.g., Nationwide), representing a considerable number of members and sizeable spending. Buying groups play an important governance role in business-to-business (B2B) exchanges by managing suppliers on behalf of their member buyers. By doing so, buying groups can negotiate on behalf of their members, resulting in suppliers offering better pricing and services to businesses because they place larger orders or spend more money with them annually. But despite the prevalence of such groups across industries, questions persist about their effectiveness.

by Alok Kumar, Huanhuan Shi, Jenifer Skiba, Amit Saini, and Zhi Lu elucidates how buying groups impact buyer–supplier relationships and supplier performance for buyers. The authors propose a framework for analyzing the triadic nature of the relationships between buyers, suppliers, and buying groups. This framework enables practitioners and scholars to grasp the inherent intricacies and nuances within these relationships.

The findings show that buying groups can govern suppliers by monitoring their performance and community-building efforts to create harmonious ties between buyers and suppliers. Buying group monitoring enhances supplier performance, especially when coupled with buyer monitoring. However, community building is less effective when buyer–supplier ties are already strong.

Buying groups can govern suppliers by monitoring their performance and community-building efforts to create harmonious ties between buyers and suppliers. Buying group monitoring enhances supplier performance, especially when coupled with buyer monitoring.

The efficacy of buying group governance also depends on dependence: Buying group monitoring is more impactful when the supplier depends on the group and when the buyer depends on the supplier. However, buying group community building weakens as the buyer’s dependence on the supplier increases. The findings highlight the complex interplays between buying groups and buyer–supplier dyads, suggesting the need to incorporate groups into studies of B2B exchanges. This study provides novel insights into governance mechanisms and the boundary conditions of group–dyad interactions between buyers, suppliers, and buying groups.

Implications for Industry

Although monitoring efforts made by buying groups are beneficial, buyers should put their relational efforts into their interactions with suppliers. In addition, buyers and buying groups should strategically adapt their governance strategies in response to each other:

1. Buyers should emphasize supplier monitoring when buying groups monitor suppliers, and vice versa.
2. Buying groups should emphasize community building when buyer–supplier ties are weak and deemphasize it when the ties are strong.

However, the authors call for further scrutiny on the effects of buyer groups’ attributes, the impacts of community efforts aimed only at buyers (vs. buyers and suppliers jointly), and the distinctive role of contracts and incentives as monitoring practices. We interviewed the authors to gain deeper insight into this study:

Q: Could you please summarize the article for practitioners or undergraduates in a sentence or two? Please include (a) the main insights offered, (b) their impact on managerial decision making, and (c) the advantages for institutional policymakers resulting from your research when explaining it to them.

A: Many buyer–seller dyads engage with independent groups (e.g., buying groups/GPOs, research consortiums, industry associations), but the B2B literature has focused mainly on dyadic relationships, ignoring these groups. We aimed to address this gap by anchoring ourselves in the health care sector. Specifically, we examine how GPOs, GPO-affiliated suppliers, and buyer firms (hospitals) work together to enhance the value delivered to hospitals. We find that GPOs govern their affiliated suppliers through both formal (e.g., benchmarking) and informal (e.g., community building) mechanisms, which support the supplier’s performance as delivered to the hospital, contingent on the hospital’s governance of the supplier as well as the parties’ dependence on each other in complex ways.

Managerially, we suggest that hospitals and buying groups establish clear benchmarks for suppliers, particularly when the supplier is less replaceable, and groups undertake community-building efforts in fragmented markets.

Our work can be relevant to policymakers in the health care sector, where escalating patient care costs are a major concern.

Q: You touched on the primary motivations behind the current study. Could you provide further insight into how this research idea was envisioned? Also, what is the relevance of this topic to managers in the B2B sector that warrants close attention?

A: This paper was a result of a collaboration between a doctoral student (Jen Skiba) and a faculty team at the University of Nebraska. Jen’s industry experience indicated mixed thoughts on the utility of GPOs for hospitals. While Jen was developing her dissertation on the purchasing styles of GPOs, the team came up with a new perspective that focused on the intricate interactions among the multiple actors (GPOs, hospitals, suppliers) involved in the contemporary procurement system of hospitals. We envisioned that governance mechanisms in the procurement system are crucial for improving hospital performance outcomes and patient service quality. Our interfirm perspective offers insights for managers in B2B sectors, suggesting how they can leverage distinct governance mechanisms to coordinate transactions that involve heterogeneous actors (individual firms, groups) and span multiple exchange relationships.

Q: Given the paper’s reference to previous studies not efficiently comprehending triadic relationships between buyers, suppliers, and buying groups, could it be the case that managers and marketers similarly encounter challenges in effectively approaching and assessing these relationships? If so, what factors might contribute to this ineffectiveness in their approach and evaluation?

A: Managers often face the problem of assessing outcomes in their interfirm relationships. In fact, prior research has shown that a variety of organizational forms, including distribution networks, franchising systems, new product alliances, co-branding, co-marketing initiatives, joint ventures, and so on, face the problem of externalities, in which a third-party actor can impact outcomes in a focal buyer–seller relationship. Yet most of the B2B research that we see is dyadic in nature, ignoring the impact of these third parties (e.g., buying groups). The severity and frequency of this issue could depend on a host of factors, but some prominent ones include the resource endowments of the firms involved, their mutual dependence, and market uncertainty. The directional impact of these factors will need to be articulated considering the larger relationship context.

Q: Do you consider any potential influence of contextual factors, such as industry or market characteristics, to affect the relationships explored in this paper? In other words, are there specific contexts in which the proposed model of triadic relationships becomes particularly relevant?

A: While we did not explicitly test these other industry/market factors, we conjecture that there could be some contexts in which the triadic model proposed in our paper might be more salient. In particular, in industries where buyer firms are small or fragmented (and therefore lack the ability to command good terms from suppliers), we expect the emergence of focused third-party actors (such as the GPOs in the current study) to facilitate buyer–supplier exchange. Another condition could be the nature of the product, namely whether it is a commodity or is custom-made according to the needs of a particular buyer firm. GPOs must satisfy the preferences of many group members (buyers), which is hard to do when the products are custom-made for a specific need. Thus, we expect the third-party model will likely be less salient for highly specialized or customized products.

Q: Can you share more insights into the specific challenges and barriers you faced during your research? For instance, what challenges did you encounter in establishing partnerships with hospital managers, and what advice or pitfalls can you share with future researchers and practitioners seeking similar partnerships?

A: The biggest difficulty was getting hospital purchasing managers to respond to our questionnaire. To alleviate this issue, we had pre-contacted the hospitals and talked directly to the purchasing manager to get buy-in. Even when we had the buy-in, though, it was still difficult to obtain compliance. We offered some incentives to motivate the informants. As a part of this research, we also conducted approximately 25 in-depth interviews with industry participants. Locating these informants and getting them to respond to somewhat long interview sessions was also challenging. However, most agreed to help because the topic resonated with their industry experience.

Q: Could you share your thoughts on possible extensions of the current paper? For instance, how can the findings and methodology presented in your paper potentially serve as a foundation for future research or be applied to related areas within the field?

A: The interorganizational governance angle can be applied to other situations that require coordinated efforts across multiple organizations. For example, an increasing number of hospitals have adopted new programs to provide medical services at patients’ homes. Such programs require coordinated efforts from hospitals, pharmacies, community health services, and technology providers. Hospitals at the center of this network can leverage different governance mechanisms and their interplay to ensure the delivery of high-quality patient services. In addition, as a health care system may contract with multiple peripheral service providers for the hospitals under the system, they play similar roles as GPOs that aggregate hospital demand, monitor activities, and promote collaboration among them.

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Alok Kumar, Huanhuan Shi, Jenifer Skiba, Amit Saini, and Zhi Lu (2023), “Impact of Buying Groups on Buyer–Supplier Relationships: Group–Dyad Interactions in Business-to-Business Markets,”��Journal of Marketing Research, 60 (6), 1197–220. doi:

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Health care is vital to our interconnected world and, as demonstrated during the COVID-19 pandemic, societies are deeply affected by its successes and failings. Over the last decade, health care has been disrupted on both the demand and supply sides, and these changes have impacted the creation, provision, and consumption of health care in fundamental ways.

However, the role of marketing in this dynamic health care industry remains only partially understood and is often focused on conventional strategies such as business-to-business transactions (e.g., detailing or advertising to doctors) and business-to-consumer transactions (e.g., direct-to-consumer advertising). While important, this limited view ignores the new actors, roles, and exchanges that characterize disrupted health care markets. As a result, the health care sector is not acting on the full range of opportunities associated with these changes, including understanding their effects on consumer welfare.

In a Journal of Marketing special issue on “Marketing in the Health Care Sector,” we highlight more opportunities for marketing to contribute to the study and management of health care. We introduce a series of articles that offer novel contributions regarding marketing’s role, as well as a research agenda outlining more opportunities for marketing scholars to examine and understand whether and how these disrupted exchanges are improving health, empowering choice, and fostering competition.

At the heart of our view lies a set of disrupted exchanges involving conventional and new health care producers, health care providers, and health care consumers. Health care producers refer to those who develop health-related products, services, and information, even though they do not administer health care directly to patients. Health care producers come in two categories: i) conventional health care producers (i.e., pharmaceutical and medical device companies); and ii) new health care producers (i.e., technology and diagnostic companies).

Health care providers deliver information, products, and services to consumers. These providers also come in two categories—traditional providers that include doctors, nurses, hospitals, and health centers as well as new providers that include retail health care providers, complementary and alternative health care providers, and physician influencers who preach their health gospel to the marketplace.

Health care consumers receive and use information, products, and services created by producers and providers. Traditionally, they are exclusively on the receiving end of value. In today’s health care systems, however, consumers may also be peer creators of value when they participate in health care communities, provide reviews, and/or become influencers.

We focus on two types of disrupted exchanges in : i) the influence of new actors on their conventional counterparts and ii) the influence of these new actors on one another. We observe a merging of roles across producers, providers, and consumers manifesting in a “race to the provider role” that is disrupting many exchanges and changing consumer and firm behavior and the operation of these markets. We observe a merging of roles across producers, providers, and consumers manifesting in a “race to the provider role” that is disrupting many exchanges and changing consumer and firm behavior and the operation of these markets.

We identify initial potential impacts of these disrupted exchanges on three outcomes:

1. The health-enhancing impact refers to the degree to which mental and physical health outcomes might be improved.
2. The choice-empowering impact refers to the degree to which consumers have an actual or perceived improvement in their ability and motivation to understand and make health-related choices. One concern is that more information does not always equate to better choices.
3. The competition-inducing impact refers to the degree to which the change fosters competition that improves quality, increases access, and lowers prices. We find that these competitive effects are determined by whether consumers use new health care exchanges as substitutes or complements. If used as substitutes, disrupted exchanges may spur competition. If used as complements, the effects may be minimal or they may produce beneficial partnerships in the industry.

More research is needed to assess how the marketplace will be transformed and how marketing might contribute in positive or negative ways. Will health be improved, choice enabled, and competition fostered on quality care, access, and lower prices? Or will health be managed differently, but with no effects on morbidity and mortality, with more confusion than empowerment, and with more competition but no welfare gains?

We see an enormous opportunity for the marketing discipline to help understand and address the complexities arising from the unprecedented pace and level of change in health care exchanges. Asking questions about how the new actors and new roles are participating in these exchanges and to what end in terms of health, choice, and competition outcomes is a valuable role we can play. We invite contributions for creating a stronger role for marketing in the study and management of health care.

From: Christine Moorman, Harald J. van Heerde, C. Page Moreau, and Robert W. Palmatier, “,” Journal of Marketing.

This editorial is part of the special issue, “Marketing in the Health Care Sector.” More information about the issue is available here.

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Structural changes in the healthcare industry (e.g., the institution of the Affordable Care Act) over the past decade, as well as advancements in technology and care delivery, have resulted in an unprecedented shift toward patient-centric care. This means the marketing function now is a critical differentiating factor in the healthcare industry. While hospitals have tried a number of marketing strategies with varying degrees of success, one aspect largely ignored is a hospital’s organization of its service offerings, or its portfolio strategy.

In a , we assess the impact of a hospital’s portfolio strategy on patient demand. A growing trend in healthcare in recent years centers on hospital portfolio strategy—hospitals making key portfolio decisions such as expanding or contracting emphasis on care delivery within select departments. For example, , one of the largest rural health systems in the U.S., expanded its emphasis on cancer care services with an allocation of a new dedicated center with specialists, facility, and technology. These portfolio decisions call for significant resource investments, often running into millions of dollars.

But do these portfolio decisions pay off? This is a common dilemma that hospital CEOs face. Should they invest toward specializing in an area? Or diversify across other areas? If so, which areas should they invest or divest in? Through a series of empirical analyses involving secondary data on inpatient discharges, coupled with experiments, we shed light on these questions.

Effect of Portfolio Strategy on Demand

We define a hospital’s portfolio strategy across two dimensions:

1. focus, which is the depth of expertise within a category and
2. related focus, which is the breadth of expertise across related categories.

Hospitals with a high focus on a department may be regarded as “specialists” with a high depth of expertise in that category (e.g., for hernias). Hospitals with a high related focus in a department (e.g., cardiology) are selectively focused on multiple other categories (e.g., endocrinology, respiratory, and digestive systems) that are clinically relevant to that department (e.g., ).

We find that a hospital’s portfolio strategy can shape patient preference in important ways. There is value to specialization or focus. An increase in a hospital’s focus in a department leads to a significant increase in market share. However, some patients prefer hospitals that are able to signal breadth of expertise (i.e., focusing in related areas has a positive effect on market share). The results strongly suggest that patients do pay attention to hospital portfolios.

While the effects are significant and substantive, it is also important to know why they are so. We demonstrate that portfolio strategy can act as a strong signal of clinical quality, which patients care deeply about. Put differently, our results highlight the value of reputation/competence signaling by hospitals (through their service portfolios), in particular for patients with complex needs.

Lessons for Chief Marketing Officers

Our study offers guidance to healthcare executives, especially those in management roles at hospitals.

1. The revenue implications of portfolio strategy are sizeable. While the portfolio effects are indeed positive on average, we find the effect varies a lot across hospital departments. In other words, where you focus matters! For instance, while a 1% increase in focus on the kidney and urinary tract department translates to a 0.9% increase in market share (about $181,000 in annual revenue), a corresponding increase in focus on the ear, nose, and throat department is associated with a 0.8% increase in market share (about $84,835 in annual revenue). Thus, there may be larger benefits from focusing on some departments than others, rendering it suboptimal to follow a one-size-fits-all approach to portfolio growth.
2. Organize your portfolio based on its effects on demand. We find that for some departments (e.g., kidney and urinary tract), patient preference for both focus and related focus is high. These departments stand to gain the most by building depth of expertise in the focal category and breadth in related areas of care. In contrast, for departments such as cardiology and endocrinology, the benefits are higher for pursuing only one of the portfolio strategies, thus calling for a nuanced approach to portfolio strategy across departments.
3. Potential for targeted positioning. Our research indicates that patients’ preference for focus and related focus is higher when their care needs are more complex. Our results show that patients may find greater value in focus and related focus capabilities when faced with complex needs, indicative of an upside market potential of focus that perhaps remains untapped. In other words, while portfolio decisions have largely been a supply-side decision, our study points to the demand-side potential by highlighting its relevance among the complex patient population.

This means that hospitals have the opportunity to leverage portfolio strategy to target specific patient populations, further enhancing their patient-centric capabilities.

From: Sarang Sunder and Sriram Thirumalai, “,” Journal of Marketing.

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A notable trend in the pharmaceutical industry is the development of specialty drugs to treat complex, severe diseases, often with a limited number of patients. Of the 219 new drugs (or new active substances, NASs) that were launched in the U.S. between 2014 and 2018, 136 (62%) belonged to specialty classes. In 2017 alone, specialty drugs accounted for 32 of the 42 NASs.

Specialty drugs are produced using advanced biotechnology and often fill unmet patient needs. They treat complex, critical diseases, but they also come with high risks of adverse events and are extremely costly. For example, in 2018, specialty drugs accounted for 49.5% of total medicine net spending ($344 billion) in the U.S. even though they represented only 2.2% of the 5.8 billion prescriptions. Because of high costs, their prescription is subject to prior insurance authorization, which requires documentation on the appropriateness of the treatment for the patient.

Despite the proliferation of specialty drugs, little is known about the drivers of diffusion. What is the role of scientific evidence? And do marketing activities influence prescriptions by physicians, who are mainly specialists?

In a , we find that clinical studies affect the diffusion of new specialty drugs through a multistage scientific evidence production process.

We propose a framework of specialty drug diffusion, which is motivated by two principles:

1. The combination of novelty, complexity, and importance of specialty drugs necessitates that prescribing physicians must quickly develop an extensive knowledge base to make appropriate and timely evidence-based decisions.
2. Specialty drug prescribers are predominantly specialist physicians who have the motivation, opportunity, and ability to directly source and process scientific information to make evidence-based decisions. Thus, evidence emerging from clinical studies for a specialty drug should be critical for its diffusion.

The Importance of Scientific Evidence

As part of our framework, we note that scientific evidence production is a process consisting of three stages: (1) unpublished clinical studies, (2) evidence published in medical journals, and (3) clinical guidelines. Because of the high potential benefits of specialty drugs and the severity of the diseases they treat, we expect specialty drug prescribers to extensively source information from all scientific evidence production stages to evaluate a drug’s utility or net benefit for patients. Moreover, we expect direct-to-physician marketing (personal selling and journal advertising) to have a weaker or even negligible effect given the ability of prescribing physicians to source information directly from the scientific evidence production process.

Our findings support the idea that the influence of scientific evidence production on specialty drug diffusion is seen through all three stages of its production process. To our knowledge, our study is the first to register a significant effect of unpublished clinical studies (i.e., clinical studies whose results have not been published in medical journals) on specialty drug prescriptions. We also find that both journal advertising and personal selling have no significant effect on diffusion, confirming our expectations.

To further validate our findings, we study the diffusion of a non-specialty drug and find that in terms of scientific evidence production, only uncited publications (i.e., publications in medical journals not cited in clinical guidelines) and clinical guidelines influence prescriptions, but not unpublished clinical studies. Moreover, separate analyses by physician specialty status reveal that clinical guidelines influence only specialty physician prescribers and detailing has a significant influence only on general practitioner prescribers.

Our study offers a framework to help pharmaceutical firms evaluate returns on scientific evidence production. We underscore the need for changing the focus from published clinical results—as recommended by prior research on non-specialty drugs—to the consideration of all three stages of the scientific evidence production process. Our implications show that focusing only on publications will lead to an underestimation of the returns on scientific evidence.

Lessons for Chief Marketing Officers

Our findings suggest that scientific evidence is the dominant driving force for the diffusion of specialty drugs. This provides the following opportunities for CMOs:

• Engage physicians and patients in clinical study protocol design to produce customer-led innovation. Patient engagement may not only increase enrollment and reduce protocol amendment costs but also increase drug relevance to the target patient population.

• Install processes to systematically monitor patient and physician input and assess its impact on scientific evidence production. Shifting the focus to engage with patients and physicians has the potential to optimize marketing efforts given marketing’s capabilities to glean customer insights.

• Develop closer involvement in the production of innovation, which could lead to increased marketing influence within the firm.

Pharmaceutical firms could commit to innovation and quality at the prospect of a high scientific evidence ROI for specialty drugs. This in turn will improve the quality of life for patients, enhance productivity, and minimize the burden of the disease.

From: Demetrios Vakratsas and Wei-Lin Wang, “,” Journal of Marketing.

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At the height of the COVID-19 pandemic, Manuel Hermosilla received a call from a family friend in Chile who had been recently diagnosed with cancer. The friend needed help tracking down Hydroxychloroquine to treat her rheumatoid arthritis—a drug in short supply given its supposed therapeutic powers to combat COVID-19.

Hermosilla found two alternatives for Hydroxychloroquine: a generic version for about $15 a month and the branded version for a hefty $330. The family friend didn’t want the generic version, Hermosilla says. “Given her cancer diagnosis, she felt the generic wasn’t ‘safe’ enough—which got me to thinking: could medical-related insecurities impact patients’ brand/generic choices?”

Getting bad medical news can be alarming. It might influence us to embark on a healthier lifestyle, perhaps by exercising more or eating healthier food. Given that brand name drugs are perceived to be more effective and perhaps even safer than generics (despite many experts viewing generics as molecular replicas of brand name drugs), bad news might also affect how we choose between drugs.

A finds that some of the overspending on brand name drugs could be attributable to patients experiencing negative emotions when they receive bad medical news. The research points to estimates suggesting substantial savings for the U.S. healthcare system—about 10% of drug expenditures, or $36 billion a year—if patients always chose a generic option when available.^[1] The researchers suggest that a broader use of generics could significantly lower expenditures without sacrificing the quality of patient care.

Emotions and Risk-Taking

While much existing research has focused on the idea that consumers lack information reassuring them of the therapeutic equivalency between generic and brand name drugs, the authors focus on how “negative information shocks” might impact patient decision making. The work builds on literature showing that negative emotions reduce risk-taking.

Getting bad news is a common and often unavoidable part of interacting with the health care system. In this study, the authors first focus on the medical news that comes with blood testing results for low-density lipoprotein (LDL) cholesterol, looking at the “frontier” between 129 mg/dL and 130 mg/dL LDL results—the borderline between the “near optimal” and “borderline high” ranges. This is a common test with a clear cutoff defined in clinical guidelines. It is also a useful test because LDL levels are measured with significant error (e.g., depending on fasting), implying that the two types of individuals (129 vs. 130 mg/dL) have the same health condition.

The researchers examined 2,282 individuals who tested in the 129/130 mg/dL frontier, and the analysis includes all prescription drug choices by these patients (across six drug classes). They find that a “borderline high” LDL test result did in fact influence drug choice. Relative to control patients (129 mg/dL), those receiving the bad news (130 mg/dL) become 1.3% less likely to choose the generic option. Factoring in the average generic price discount relative to brand name drugs, this effect implies a roughly 3% increase in total drug expenditures for the average patient.

The study finds that the bad news effect is concentrated in the immediate aftermath of the test (90 days) and is particularly influential for patients purchasing a drug for the first time. It also finds stronger effects among healthier patients who might be “more surprised” by the bad news.

Aiming to extend the findings, the researchers turned to a different medical test: Hemoglobin A1c, a blood sugar test used for diagnosing and managing diabetes. They focused on the 6.9% to 7% threshold that patients with diabetes use to manage their condition. Here too, the results are generally consistent with the idea that bad medical news makes patients less willing to accept the higher perceived risk of generic drugs.

Bad News as a Factor in Drug Recommendations

While research on bad news in health care settings has traditionally focused on severe outcomes such as death or cancer diagnoses, examining routine tests could lead to a better understanding of healthcare spending decisions.

The findings have implications for several key stakeholders in the healthcare industry. Health policy makers, generic drug manufacturers, and insurers all share the common goal of encouraging patients to choose generics over brand name drugs. To achieve this goal, insurers currently rely on two primary toolkits. The first corresponds to a set of demographic and socioeconomic predictors of generic-averse attitudes. The second corresponds to possible intervention tools, which boils down to price-based promotions (e.g., discounts, coupons, free samples).

The researchers suggest that relying solely on demographic and socioeconomic predictors may neglect an important observable—the arrival of bad medical news. Accordingly, enriching the framework with variables for the recency of bad medical news could improve the campaigns’ efficiency. One simple approach might be to remind patients of the equivalency of generic drugs via a text message just after they receive their test results.

¹This figure follows the findings of and , who estimate that prescription drug expenditures in the U.S. could fall by 10% in the (partial equilibrium) scenario of full generic substitution.

From: Manuel Hermosilla and Andrew T. Ching, “” Journal of Marketing.

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