Latent Class Models for Marketing Strategies

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.