Latent Class Models for Marketing Strategies

Abstract

In this paper, an extension of the latent class (LC) approach is applied to analyse the Italian pharmaceutical market. This sector is characterised by a high level of competitiveness, more limited budgets than years ago and, at the same time, expensive sales and promotional activities; in this context, it is very important to understand which factors influence doctors in prescribing medicines, so as to design appropriate marketing strategies. A special adaptation of the multilevel LC model is estimated to identify market segments, that is, groups of doctors similar in their attitude towards the work of pharmaceutical representatives.