Skip to NavigationSkip to content

Embracing marketing excellence

Published on 04/06/09 at 12:15pm

Since 2000, the top 15 pharmaceutical companies have lost around $800 billion in shareholder value, and looking forward, drug patent expiry across the industry will see sales cut by an estimated $200 billion over the next few years.

The reasons for this have been extensively discussed: new product discovery is becoming more expensive; R&D productivity has fallen; price pressure and regulatory requirements are increasing; the threat from generics is well documented; and prescribing decision-making is more diverse and complex than ever before. In this environment, pharmaceutical businesses and the managers that lead them have been looking for ways to stem the tide.

In his May 2008 Harvard Business Review article 'Rebuilding the R&D engine in big pharma', Jean-Pierre Garnier, Ex-CEO of GlaxoSmithKline (GSK), spoke out against "marketing wars" that have left companies with "oversize sales and marketing machines" costing twice as much as the amount spent each year on R&D. Although some companies have cut their sales and marketing functions, many are still too large relative to their product portfolio and are failing to deliver perceived value. In succeeding Garnier, Andrew Witty recently reflected that marketing in GSK will evolve, with more sophisticated marketing techniques replacing the traditional reliance on expanding sales forces. This transition reflects a move from large standing armies to smaller, more reactive, flexible and deployable forces.

With senior management questioning 'traditional' marketing models - and in some instances calling for a reinvention of pharma marketing - it is clear that old approaches ("the way we've always done it") are no longer sufficient. So, in this context marketing is seen as both a problem and a solution. In addressing this challenge, many companies are turning to 'marketing excellence programmes' as a means of fostering more sophisticated marketing capabilities and delivering sustainable competitive advantage.

The last five years have seen a wave of pharmaceutical companies embrace marketing excellence and capability-building programmes - programmes designed to embed the skills, approaches and processes necessary to define and execute effective strategy. Companies have spent millions of dollars defining marketing processes, creating training content and a cadre of trainers, and then immersing their marketing and sales staff in the theory of marketing excellence - but to what effect? Have they, or will they, deliver the hoped-for returns? In this article we will examine the key components of an effective marketing excellence programme and the questions it should equip a marketer to answer.

Marketing excellence and how to achieve

It has often been said that marketing is both a 'mindset' and a process. Marketing orientates the business to the customer (or market) - it enables a better understanding of customer needs, and positions the organisation to deliver against them. The marketing process is underpinned by market intelligence and this is the basis for long-term survival.

Unfortunately these capabilities can't be readily bought or automatically inculcated through a marketing course or programmes - they are complex bundles of skills, set within the knowledge base of the organisation and deployed through the organisation's (explicit and implicit) processes. Effective capabilities are a part of a successful organisation's DNA, and is difficult to replicate. That means an effective marketing excellence programme can't just be downloaded or unpacked from a box marked 'standard frameworks'.

To embed marketing capabilities and marketing excellence into the DNA of an organisation, the management team must focus on three equally important drivers. First, they must develop, or articulate, the internal marketing doctrine - ensuring that there exists within the organisation an environment which will foster the capabilities that the organisation is seeking to grow. Secondly, they must identify the broad skills areas that need to be developed within this environment - this breaks down into 8"10 components of the marketing process that can be found in any marketing text book, but also specifically identifies those few areas within the process where a deeper focus will lead to a disproportionate impact (for their business). Once this overarching framework has been identified, the team can then go on to develop the tools, approaches, frameworks, 'how-to' guides and training materials that will provide staff with the 'building blocks' that enable capabilities to grow over time. Finally, they must create a change management programme that puts an organisation on the road to marketing excellence. We will look at these activities in turn.

Develop the internal marketing doctrine

The foundation for successful marketing is a set of fundamental guiding principles (a 'marketing doctrine') - how the organisation thinks about marketing. These principles must be made explicit and shared within the organisation; reflect how the organisation will 'win' in its market; be articulated within a common language across the business; and be tailored to, and realistic for, the organisation both today and moving forward. These principles should lead to a common approach to marketing challenges - a common point of reference, framing how marketers within the organisation think about problems or deconstruct and address issues. These embedded principles ensure marketing continuity within the business, as invariably individual marketers move on.

A doctrine is tailored to the needs of an individual organisation, and provides a foundation for marketing excellence and not a prescriptive checklist. A fictitious PharmCo marketing doctrine might state:

* We will set clear marketing objectives in each of our therapeutic areas and for each of our brands.

* We will identify, quantify and prioritise customer (e.g. healthcare partner, purchasing group, patient) segments within our market.

* We will articulate key behaviour within target segments and identify the objectives for future behaviour, as well as the drivers and barriers to achieving it.

* We will create distinctive brand positions that are sustainable in the minds of customers and differentiated from our competitors.

* We will execute marketing activities, consistent with the brand positioning, that achieve the desired behavioural change.

* We will effectively monitor and track our marketing activities over the lifecycle of our brand to enable us to effectively refine both strategy and execution to maintain maximum impact.

While it is not earth shattering, the example above illustrates how an organisation expects its marketing teams to think about the issues they face. As the organisation moves on to identify the broad skills areas that it needs to develop, it must link each component of the programme back to fundamental marketing principles set out in the doctrine.

Identify skills areas to be developed

The marketing process is already well defined, and core skills, approaches and frameworks will be developed to address key business questions in a number of areas. These might include:

Defining the market: What business are you in? Where could and should you compete, now and in the future? How do you characterise the market (e.g. size, growth, drivers, barriers, unmet needs) in which you will compete? How will the market evolve and will it affect the way you (and competitors) define it? What business opportunity does this definition indicate and what threats may imperil the long-term prospects of your brand?

Articulate objectives and brand vision: What objectives have been set for your business? How will this be achieved? What business segments, therapeutic areas and geographies will you compete in? For the product or brand, what is the opportunity? What objectives have been set? How will the brand contribute to the corporate objective and the company as a whole? What new opportunities (e.g. indications, formulations) must be addressed to achieve the vision and objectives? Is there alignment with your market definition?

Understanding the competitive landscape: Understanding your competition is key throughout the marketing process. Who are your main competitors - now and in the future? What are your competitors' strategies likely to be " both corporate and brand? Which customer segments are they focusing on? How are they activating these segments and how can your organisation change the 'rules of competition' within the category to focus on your strengths rather than the competitors'?

Identify meaningful and actionable customer segments: Which specific physician, patient and payer segments are you targeting? In what priority and sequence? Do the customer segments display meaningful differences in behaviours, needs, and attitudes? Can the organisation identify and take marketing actions toward each segment? Are the segments large enough to be economically sustainable?

Identifying key purchasing behaviour or prescription decisions: What 'stages' exist within the prescription decision process? What choices do stakeholders (e.g. regulators, physicians, patients) have at each stage? Does the organisation understand the interactions between the relevant stakeholders and the choices they make? Which leverage points in the prescription decision process should be targeted?

Positioning: What is the organisation's core differentiated, meaningful, compelling and sustainable brand benefit? What is the target audience? What 'reasons to believe' support the brand benefit in our customers' minds? How are competitors positioned in the minds of these key customers? What indications do they have and what claims are they making?

Marketing execution: What major marketing levers will most effectively and efficiently deliver on the value proposition? Does the brand propose investing in levers that will both deliver on their core positioning and maximise their business opportunity? Is there alignment and consistency across marketing levers? Are you proposing to sequence levers to maximise impact and optimise cost-effectiveness? What specific marketing tactics will you employ to best connect with customers and/or outflank competition?

Metrics: What sensors need to be in place, and what leading indicators should we monitor to assess impact and track effectiveness against goals and objectives? How often will you measure progress against objectives? What are the specific targets/expectations for your key metrics? How will the results be disseminated or acted on by the organisation?

So many organisations are data rich, yet insight poor! Whatever steps your organisation includes within its marketing excellence approach, you also need to identify those few areas where a greater focus (and perhaps more investment) will lead to a disproportionate impact. While the connection of the various steps provides the basis for an effective marketing programme, some activities will deliver greater insight and have a disproportionate impact on business drivers. The organisation may feel that a greater emphasis on segmentation skills, brand positioning or tactical marketing execution will reap rewards considering its marketing doctrine and the corporate and brand objectives that it has set itself. These decisions will inevitably vary from organisation to organisation.

Create a change management programme

So, how does an organisation make its excellence programme 'stick', ensuring that over time it actually becomes a more sophisticated marketing organisation? Firstly, senior management 'demand' is crucial - planning submissions and evaluation of important initiatives must be rooted in the language of the marketing doctrine and marketing capabilities. This demand ensures that the capability-building process is seen as more critical than just another template-filling exercise. This clear link between marketing excellence and strategy submissions, planning processes and tactical marketing plans ensures marketing alignment between the organisation's goals, the spending of marketing budgets and the resulting customer behaviour. The organisation will reinforce demand with targeted incentives and rewards, recognising marketing excellence and mastery of critical marketing skill sets as well as identifying and celebrating success stories - examples of the practical impact the programme has had for specific brands or business units.

Successful organisations recognise that there may be explicit and implicit hurdles or roadblocks to deploying the marketing excellence programme: "This marketing excellence programme is fine, but that's just not how we do it in this team." A marketing excellence programme is an exercise in organisational change, and a change management team should ensure that barriers to adoption are identified and tackled to maintain momentum and uptake, as well as tracking progress and impact.

Do marketing excellence programmes really create excellent marketing organisations? Well, it depends on the scope of the marketing excellence programme and the time an organisation is prepared to invest. It doesn't happen overnight. Marketing capabilities are the integrative processes designed to collect and collate market insight and then apply the collective knowledge, skills and resources of the organisation to the market-related needs of the business. These capabilities can be taught and developed over time, but to be effective they must be set in the context of a meaningful marketing doctrine and reinforced through demand and application. As pharmaceutical businesses strive to move beyond a marketing and sales strategy that reflects the way it is always done, and to reshape their marketing and sales processes around smaller, more reactive, flexible and deployable forces, effective marketing excellence programmes provide the building blocks and learning processes that, when applied repeatedly to solve marketing problems, create a marketing leader.

Mission Statement
Pharmafile.com is a leading portal for the pharmaceutical industry, providing industry professionals with pharma news, pharma events, pharma service company listings and pharma jobs,
Site content is produced by our editorial team exclusively for Pharmafile.com and our industry newspaper Pharmafocus. Service company profiles and listings are taken from our pharmaceutical industry directory, Pharmafile, and presented in a unique Find and Compare format to ensure the most relevant matches