Choice Modeling: A Pharmaceutical Marketer’s “Crystal Ball” for Predicting Marketplace Behavior

In a perfect world, product managers would have a crystal ball they could turn to for answers to their most complex product issues. While there is no such magic fix in the real world, product managers do have a powerful tool – choice modeling – that can help them predict marketplace behavior and better manage the uncertainties they face when making decisions about their products.

For more than two decades, choice and conjoint modeling has been a cornerstone of all marketing research aimed at informing product development efforts. The choice modeling technique was developed in the field of transportation economics to predict people’s transportation choices under alternative assumptions of cost, time, etc. Since the early 1980s, the approach has been adopted in the marketing arena as the gold standard for predicting choice decisions given different product configurations and varying market conditions.

In the pharmaceutical arena, Target Profile Optimization provides the context for most choice modeling because of its ability to inform the optimal endpoints to be tested in subsequent clinical trials as well as to predict potential product uptake in the marketplace under alternative clinical outcomes. However, beyond this application, choice modeling is an extremely valuable marketing research tool that can be used to examine a wide variety of critical business issues for pharmaceutical product managers.

In an article authored for Product Management Today, Bart Weiner, President, and Shiv Raman, Chief Marketing Scientist, GfK V2, discuss how well-designed choice modeling can be used as a crystal ball of sorts to help predict a product’s future. In particular, the article shows how the key principles underlying choice modeling can be harnessed to answer the many questions that challenge product managers such as:

• What is the optimal launch sequence for multiple products (short vs. long acting) in a single therapeutic area?


• What is the impact of a line extension and to what extent will I cannibalize my other offering(s)?


• What is the optimal positioning platform for my brand?


• What is the optimal messaging platform for my brand?


• What is the share impact of market events such as changes in the competitive landscape or newly emergent clinical trial information for my own and competitive agents?


• What is the share impact of a change in status of my (or a competitor’s) brand from prescription to OTC?

In contrast to other marketing research methodologies, such as conjoint models, the article explains that choice modeling is a more ideal research application in terms of predicting a future behavior because of two main benefits. First, choice models directly measure the impact of marketing actions on prospective marketplace behavior. That is, alternative marketing actions may be evaluated in terms of their impact on product usage rather than some abstract metric such as an average score or rating. Second, by virtue of forcing respondents to make trade-offs in evaluating alternative product/market scenarios, choice modeling provides insight into the relative importance of the various factors that drive their decision making. From a marketer’s perspective, such insight can be invaluable in optimizing resource allocation across alternative options.

To download the article, Choice Modeling: A Pharmaceutical Marketer’s “Crystal Ball” for Predicting Marketplace Behavior, please click here. (Note: download may take approx. one minute)


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