Latent class models for marketing strategies: an application to the Italian pharmaceutical market

In this paper, an extension of the latent class (LC) approach is applied to analyse the Italian pharmaceutical market. This sector is 7 characterised by a high level of competitiveness, more limited budgets than years ago and, at the same time, expensive sales and promotional 8 activities; in this context, it is very important to understand which factors influence doctors in prescribing medicines, so as to design appropriate 9 marketing strategies. A special adaptation of the multilevel LC model is estimated to identify market segments, that is, groups of doctors similar 10 in their attitude towards the work of pharmaceutical representatives.