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Re-Branding or De-Branding

Article By Ari Buchwald November, 2002

The Pharmaceutical industry is in a fairly unique position among the general marketplace. While strict protection exists for pharmaceutical company patent infringement and drug development, there are also stringent limitations in place disallowing the organization from directly collecting specific sales information and easily marketing to their prescription base end users.

The true challenge to achieving customer loyalty and competitive differentiation is seen in how these organizations can collect and use customer data. Currently, most organizations simply are not properly collecting or using this information.

Exploring the Promotional Environment:

To move the business forward within the framework established by governing agencies, manufacturers will typically participate in several types of marketing efforts, B2B (business to business - marketing to medical practitioners), B2C or DTC (business to consumer or direct to consumer - marketing to end users) and B2B2C (business to business to consumer - a complex combination of the two methods).

B2B2C is typified by ride-along marketing materials attached or inserted into sample packets, or provided to medical practitioners at the same time as samples. These materials are often designed to stimulate the decision to fill prescriptions, provide knowledge about the competitive advantages of the product and provide the opportunity for the end user to provide contact information to the company in exchange for additional information or discount pricing concessions.

Such communication will provide additional insight into the customer and their behaviors. The challenge again lies in what is done with the data and exactly how that process can be leveraged to drive higher ROI and increased customer loyalty.

This has been the most effective way for the manufacturer to gain information on its end users and also happens to be the road to initiate relevant conversations with the customer. Some manufacturers have made their intent clear; it is worth a five dollar rebate per prescription refill to know exactly when and why consumers need and use their medications.

The reality is that the marketing machinations are common to all manufacturers. The same or similar efforts and channels are being used to communicate and educate consumers and medical practitioners alike. This environment creates a high level of competitive parity, often separated in the consumers mind only by price concessions in over the counter (OTC) products and by patent duration in prescriptive medicines. The reaction historically is an organization that is silo’d around products and product performance, and rather divorced from customer interaction and influence.

Creating Advantage:

Shifting from a product focus to a customer focus is a challenge in any organization or business vertical. It is especially difficult in the pharmaceutical industry, since the focus in is on the customer initially – in R&D. Post-launch, the manufacturer’s focus is turned toward product performance.

Creating this shift in efforts towards a customer focus is also exasperated by lack of a centralized data repository, and the current uses of customer data within the organization. A typical organization will hold customer level information in decentralized silos, with the company as a whole being unaware of the bigger picture and incremental gains that can be created with the combination of customer data resources.

The first step towards success involves the collection and standardization of existing customer data, centralization of storage, processing and definition of access. Beyond the barrier of breaking down organizational silos, this is a tremendous effort, and described at a very high level. This effort is also critical to moving the organization forward in subsequent steps, which involve the utilization of the collected information as well as the increasingly competitive future of the industry.

The processes that most effectively turn data into intelligence are twofold; creative analytics, and consistent usage of the available technology. Departmental functionality such as Sales Force Automation (SFA), marketing automation and analytic tools are reciprocally used to feed and derive intelligence from the centralized data repository.

Once technology is in place, efforts can be turned towards using data for development of strategic and marketing plans. Customer facing strategies should include accounting for complex product usage, varied channel and distribution avenues, and of course, the sheer amount of information that needs to be shared with distribution channels and end users.

Define Cross Product Synergies:

Major gaps in driving marketing and sales efforts are common across the pharmaceutical industry. A major contributing factor is hampered customer communication marketing efforts. This in turn is closely tied to a lack of alignment in customer and organizational goals and strategies.

To achieve a more cohesive plan that will increase loyalty and ROI, manufacturers must work to identify and map how their products fit within patient usage lifecycles in both a micro and macro view. This will aid in developing customer strategies that align with manufacturer goals.

This can be exceedingly difficult even when considered only from a product focus, as each pharmaceutical company has a different product mix, including controlled prescriptive and OTC drugs, as well as varied competitive sets and specific R&D direction.

Layer onto those product-focused considerations are additional consumer drivers such as; usage, tangible benefits and compliance drivers (pain management versus health maintenance), brand and category awareness, pricing issues, and as the accompanying illustration shows, complex multidimensional paths.

This is the environment in which all pharmaceutical companies live and work. Tremendous opportunity exists within this cube of parameters to define and align customer lifecycles, product paths and also to develop and collect valuable customer data.

Use broader measures to collect data and build intelligence:

OTC products can be used as a much less regulated and controlled entry point for data collection (as opposed to prescriptive products). This information can be turned into knowledge to support customer marketing efforts such as brand and manufacturer loyalty, look-alike acquisition, R&D and product research as well as competitive defense.

Collect Data Incrementally:

On a high level, products all have a similar two phase marketing lifecycle. Initially, manufacturers develop new products and need to conduct Ascendant Marketing; grassroots education for medical practitioners and DTC advertising designed to drive awareness of product uses and benefits. The second phase, Descendent Marketing, is comprised of competitive defense against replication, loss of market share and ultimate dissolution due to patent loss.

Customer lifecycles are infinitely more complex. Most consumers do not identify the pharmaceutical and OTC products in their cabinets by manufacturer, and thus brand loyalty is not mirrored by the parent corporation or across manufacturer brands.

Take for instance a manufacturer that offers a robust mix of prescription and OTC medications. By creating a bundle of several OTC products, the company can start to build awareness of their product lines at a level higher than the individual product. These bundles become an introduction point, linked by the manufacturer brand. Of course there should be some response vehicle included in the packaging to establish a customer level record in the central data repository.

This broader product-focused introduction can provide valuable base-customer information that can be used to transition the organization to a customer focus. Data can be collected and added over time, such as demographic information, marriage status, age range and sex. Additionally, survey information can be collected to determine exercise activity level, attitudes towards medications and supplements, and general health. More opportunities to collect, identify, and build customer-level information stem from adding the manufacturers’ customer-level prescriptive survey product insert information to this process.

Analysis Defines Direction and Lifecycles:

By accumulating this data, opportunities for complex analyses arises that can place end users into appropriate categories and also to establish their lifecycle trajectory through the manufacturers product families. Appropriate communications can be developed that will target messaging, lower advertising costs and increase ROI. Reciprocally, more incremental data can be collected and applied as the relationship develops.

By creating additional loyalty and awareness at the company level, satisfied patients will be more likely to purchase same company OTC brands, ask for name brand prescriptions, participate in surveys and provide additional information about their health, attitudes and life status.

This is the core, customer facing basis to developing relevant communications through analysis. Application of customer intelligence and effective measurements will quantify the investment in customer focused efforts. In addition, these efforts aid in overcoming challenges in the initiation and ongoing collection of information directly from the end user.

In the end, centralized customer data, analytics and the resulting customer intelligence can also be used to drive R&D and shape B2B, DTC and B2B2C communications by better targeting medical practitioners and their ultimate drivers (patient needs).

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