Marketing Excellence – Some of the Key Factors to Focus…

Even though pharmaceutical companies like to boast about their R&D costs as the biggest spend in business, marketing and promotions takes out much bigger chunk of cash every year from pharmaceutical companies. A report from PLOS medicine “The Cost of Pushing Pills” estimates the total annual pharmaceutical promotional spend in the United States as $57.5 bn against the total R&D spend of $29.6 bn in 2004.
In any business scenario, it is common sense to ensure excellence in areas of higher spends and business impact. Like many industries, sales & marketing (which majorly constitute the promotional spending) is one of the most critical functions in building up top line and bottom line in a business. We have heard lot of noise about sales force excellence in terms of effectiveness and efficiency. Most of the companies have many programs to increase sales force excellence and the current technological and analytical tools help these in many ways.
But have we heard enough on Marketing Excellence??? Don’t we think there are gaps for improvements in performing brand/therapy building exercises? Do we really believe that we are seeing through all aspects in getting a better bang for the buck?
I am trying to bring up some of the key factors that can reduce efficiency bleeding and financial leakages while performing brand/therapy promotion in a pharmaceutical company.
1) Communication Strategy: Needless to point that deciding and designing the communication strategy is one of the key functions in marketing a brand. Even though companies focus a lot on creating the target indication, positioning in terms of usage of the brand, place of the brand in the treatment algorithm, comparative analysis, treatment regimens etc., the focus on monthly or quarterly roll-out of communication and the impact analysis of the such rolled out communication warrants more attention. The communication planned should always attract the target customer, be simple to deliver and comprehend, address the key concerns in the minds of customers and in-line with the overall brand strategy. This also has its effect on the sales representative’s effectiveness in delivering the planned message and influence scripts. The data on impact should be recorded, as these historic data will further strengthen the analysis of the impact of communication types in the future. Competitive intelligence and market feedback are very critical in designing and planning the communication roll-outs for a brand. The brand manager should critically analyze the quality and effectiveness of the communication in terms of the competitor communications, physician response from the market, scripts volume (nRx and Trx) etc.
Another important aspect is internal communication to allied functions like sales, manufacturing, R&D, supply chain, finance etc. A brand manager should make it mandatory in his monthly plan to communicate key information and plans to the relevant allied functions in a timely manner. The major source of business information in a company is marketing and sales departments. So timely information and communication to all the concerned stake holders not only brings everyone up to speed but also brings in easy and early buy-ins for new initiatives and plans.
2) Business Analysis: Every move in marketing costs dollars and hence business analysis and validation in every step is very important. This involves both internal and external data analysis. Today a brand manager or a pharmaceutical company do not have dearth for market data. The challenges are in identifying the relevant data and analyze the data in terms of the key performance indicators (KPIs) so that the analysis throws up the right diagnosis of the situation and direction for the action. The KPIs would differ for different brands and therapies. For eg. One of the KPIs for a mature brand would be market share whereas for a new brand would be nRx (new scripts). If the KPIs for every brand and portfolio can be identified, the business analysis would mean a lot different and thus the investments made of promotion would be far more effective and efficient.
3) Multi-channel Promotion: Historically pharmaceutical promotion has been majorly through sales representatives. Today the scenario is changing – a sales rep costs about $200,000 per annum in the US, about 70% of the physicians cancel the sales rep appointments, 60-70% of the physicians do not consider sales reps as a reliable source of information, the average time spent by a sales rep in a physician’s office is 90 seconds to 2 minutes! In such an environment, it’s high time to pursue alternate channels, which can be for more cost effective, customer friendly and innovative in nature. There are various channels that have come up recently like e-detailing, blogs, KOL communication portals, virtual CMEs, call centers, direct mailers etc. Identifying and experimenting new channels is a great way to bring in innovation and create interest both at internal and external customer levels.
4) Resource Allocation: Resources are always limited when it comes to any kinds of investments. I am sure all of us agree that “endless resources do not mean any business sense”. S o the crux is how well the available resources (dollars, people, time, good will etc.) can be utilized so that the bang for the buck is the maximum possible. We talked about multi-channel promotion above. If the brand manager does not know the performance dynamics of every channel, she would not know which channels need what kind of investments. Every channel will have an optimal investment range that gives the maximum returns. This depends on various dynamics like customer acceptance, impact of the interactions, repeatability, penetration, cost etc. Similarly the brand manager should also know the optimal resource requirements for every brand and market segments. Hence the brand manager needs to be on top of all these to decide the annual promotional budget and the optimal allocation to the budget to get the best possible returns for every dollar.
5) Economies of Scale: We most often feel economies of scale is only for manufacturing and supply chain folks. Not at all. Economies of scale can be utilized in marketing in areas like purchase of branding services and goods (gifts, give-aways). Let us think a bit about the brand management services. Brand managers deal with a lot of vendors for various branding services like advertising agencies, medical writers, event managers, public relations agencies, literature designers etc. This aspect is not very transparent today in most of the global pharmaceutical houses, as the brand managers seldom discuss or share the information about their branding vendors to their peers. There is hardly any process to know which are the vendors available or short-listed in the company for different kinds of services, how are they evaluated by peers, how do they figure in terms of cost, quality, time-lines etc. in their earlier assignments in the company so on and so forth. This lack of transparency prevents utilizing the economies of scale in negotiating good prices, service level agreements, and quality commitments etc. from vendors.
These are some of the key points on top of my mind when thinking about pharmaceutical marketing excellence. I am sure there are much more concerns and challenges to discuss under all of these topics. However, if you feel I have grossly missed out mentioning any key issue here or if you have a different opinion on any of my views, please put across your valuable comments.
Cheers!!!