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Segmentation Based on Physician Behavior: Implications for Sales Forecasting and Marketing-Mix Strategy

We calibrate a segmented diffusion model by incorporating the knowledge of physicians’ prescription behavior using a sample of four product histories from the pharmaceutical industry. The results show that when compared to the standard diffusion with retention model, the segmented diffusion model based on the knowledge of physicians’ prescription behavior has a better fit than models that are not based on physicians’ prescription behavior. Our comparison also reveals a significantly different influence of marketing activity on potential innovator and imitator physicians across models.