JSM 2005 - Toronto

Abstract #302484

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Legend: = Applied Session, = Theme Session, = Presenter
Activity Number: 175
Type: Invited
Date/Time: Monday, August 8, 2005 : 2:00 PM to 3:50 PM
Sponsor: Section on Statistics and Marketing
Abstract - #302484
Title: A Multicategory View of Customer Relationships
Author(s): Pradeep Chintagunta and Xiaojing Dong and Puneet Manchanda*+
Companies: The University of Chicago and Northwestern University and The University of Chicago
Address: 1101 East 58th Street, Chicago, IL, 60637,
Keywords: customer relationships ; multi-category models ; count data models ; hierarchical bayesian methods
Abstract:

A major focus of marketing activity in the pharmaceutical industry is on the largest segment of physicians---the nonspecialists. This is because they prescribe across a wide variety of product categories and account for a significant proportion of all prescriptions in large therapeutic categories. An important question for firms is to manage resource allocation across categories in terms of marketing to the same physician, i.e., it is important to understand the differences across physicians and categories that lead to differing levels of prescriptions. As the number of prescriptions written by a physician in a given time period is a nonnegative integer, we use a correlated count data model (in a hierarchical Bayesian framework) in this paper to model multicategory prescription behavior. The model allows for physician response to be correlated across therapeutic categories via both observed and unobserved factors. We estimate our model on a new physician-level dataset and discuss the implications of our findings for resource allocation and physician targeting.

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Revised March 2005