Marketers and levels of leadership

pharmafile | November 7, 2005 | Feature | Sales and Marketing |   

Trends come and go in the pharma industry – just like in any other – but one which has stuck for some time, and looks likely to stay around, is the move towards global brand strategies. Although these strategies are interpreted at a local level by marketers in individual markets, the amount of flexibility and latitude allowed by the corporate strategy is often limited.

It seems like a pretty simple structure: corporate HQ determines the global brand strategy and subsidiaries in local markets implement it. So what is the possible justification for putting in another layer of regional marketers, to get in the way of this relationship?

The answer is that there is no one answer which fits every situation. While some companies are moving away from the regional team model, others are reinstituting it.

Pfizer, for example, is re-introducing a European regional structure, making individual countries operating units, with the marketing strategy coming from the European team. There are probably two reasons behind this: it ensures a consistent approach across the continent and could reduce costs. But is that justification for a regional team?

Common issues, different approaches

In Europe, we have a complicated trading structure – in theory a single trading block, but made up of 25 states, each of which is in a very different stage of development economically, technologically and in healthcare delivery.

Governments across Europe face the same cost containment issues, yet in each country we see significantly different approaches being employed.

In Germany, for example, there is a more directive style: GP prescribing budgets with punitive measures to ensure compliance, and the continuing moves towards the development of a Positive List. The UK approach is to drive responsibility and accountability for more and more of the healthcare provision budgets to the primary care providers. The French government has continued to concentrate on holding prices down through a stringent reimbursement policy.

All of this is creating different sets of needs at each level in each country. And the goalposts keep moving. This suggests that the differences in local markets are so great that a regional marketing presence has little value.  

And yet Europe is a unique region, because there is an inexorable move towards standardisation of approach. It will be a slow process but the 25 EU markets will over time become more and more receptive to a consistent market approach. But that European market will in itself be individual, and will be of a size and value which will mean it may well be resistant to inflexible global (usually US) led strategies.  

A marketing team with a truly European focus can take the global strategy and help make it fit the European model without losing the desired consistency and efficiency that such a strategy offers.

A regional voice

In Europe, as in most regions of the world, the difference in cultures between each market necessitates real and meaningful input at the planning stage of any global strategy. If an effective single, global proposition is to be developed, then a crucial element is input from every region. And few individual subsidiaries are going to have a loud enough voice to be heard and be convincing – so some form of regional response becomes vital.

For a single proposition to work, it has to be robust enough to withstand the impact of competition in each region, as well as flexible enough to embrace economic and competitive – plus regulatory and legal – differences in each market. Effective communication between the centre and local markets will ensure that each understands fully the implications, financial and strategic, of the global brand. And the regional team is in an ideal place to provide that conduit.

So a key role for a European marketing team can – and should – be to provide input into the development of the global brand proposition to ensure that it will fit most markets and withstand competitive pressures – understanding the financial and strategic implications globally and accelerating the market performance. Where local marketers do not have the skill sets or experience to drive strategy, a regional team is the logical way forward.

This input does not necessarily need to come directly from the regional marketing team, but it does need to be co-ordinated, which is often better achieved by a regional team.

Local insight: global strategy

The issue of diversity within one region, even one as superficially homogenous as Europe, creates serious questions for strategy development at a global level. What should the roles of local, regional and international marketing be in the development of this strategy?

When faced with significantly different local situations, each having apparently very individual target audiences with markedly different needs, it is obviously going to be very difficult to create a one-size fits all winning global strategy, even though some companies seem hell-bent on just that!

Increasingly obvious, if only from observing other industries, is that being close to the customer is the only long-term foundation on which to develop and sustain competitive advantage. Through that proximity, and consequent depth of understanding, it is possible to achieve the level of insight into customer needs on which truly effective strategies are based. The level of knowledge required to achieve this can only be developed at a local level.

Without that proximity to the customer, the danger is that strategies are purely product based, and brought to the lowest common denominator. This may well meet the therapeutic based entry-level requirements of the customer, but it is unlikely to address the more covert needs on which product choice is now being made.

Hence it is difficult, if not impossible, for international marketers to develop effective strategies in isolation. If the strategies are to work effectively in every country, the local organisation must have significant involvement in strategy development as well as execution.

If this is taken too far you end up with an inconsistent approach – in an environment of increasing cross-border EU markets this could have disastrous effects, as well as being costly and inefficient.  

It is perfectly reasonable for the centre to want to set the agenda when it comes to the central brand value equation and the core proposition. Local marketers should then be allowed to adapt to their local market situation through an agreed check and challenge process.

Size matters

Where the individual subsidiaries are still developing their marketing expertise, the regional team is in an ideal position to act as intermediary between the centre and local marketers, to ensure that the local insight inherent in on the ground subsidiaries is fed into the global strategy, but also to act as brand champion for the core proposition, and to ensure that it is embraced and implemented within the region.

This role for the regional team to provide a voice upwards to the centre becomes less vital as the experience of the individual subsidiaries grow, and they become better able to influence the centre directly.  

At this stage, a regional team can simply become a duplicating level, or even a barrier to better communication between local markets and global strategists.

The interface between global and local can then become direct, enabling the company to create and implement an effective global strategy which takes into account the flexibility required by local market needs, without the need for a regional team. This is the principal reason for the disbanding of many European teams, as individual subsidiaries become big, competent and confident enough to take back the strategy.

But what about all those less developed, emerging markets in central and eastern Europe which EU enlargement has brought to the fore? Even if there are one, two or more big markets within Europe which can truly bat on the global stage, where does that leave the up-and-coming smaller markets?

This is the rationale behind a model of allowing markets that are of a significant scale (not necessarily the big five) to report direct to the centre, but having a European team in place to support the other European markets. Another example of the need to be flexible in this issue – it's not simply a case of black or white.

The right person for the job

The success or otherwise of any regional team depends on the calibre of marketers in it. By definition, a regional marketer can't be as close to the customer as those in local markets, and yet the role requires customer focus and strategic ability – much more so than on a local level. Where are these international marketers going to come from?

The answer has to be from local markets within the region. But if, like Pfizer, you propose reducing local subsidiaries to operating units, where are these people going to learn their strategic thought processes in future?

Regional marketers have to be the best in the chain, combining the strategic brand thinking of the centre with the market knowledge and focus of the local, while batting for both sides simultaneously. This is especially true in smaller companies, where individual subsidiaries are unlikely to have the brand expertise and experience to be able to successfully interpret the global brand on a local level.

The objective link

Achieving the balance between driving an effective global proposition – with its inherent advantages in terms of economics, marketing consistency, quality control and regulatory issues – while guarding against the worst excesses of 'global parochialism' is one of the most intractable challenges facing companies operating globally.

The pharma industry has not yet found the answer to balancing global corporate goals with the ambitions and concerns of local marketers. But the effective use of regional marketing teams, coupled with a robust model to assess the relevance and effectiveness of a global proposition in a regional context, should be an important part of the solution – for some companies at certain stages of their development.

The regional team is in a unique position to add value, not just by working with local marketers to implement the global branding proposition, but also by acting as a conduit for input into corporate thinking, such as new product development needs.

If appropriate processes are in place at regional level, this can drive useful cross-fertilisation of ideas that can help accelerate performance both at a global and a local level. Globally, regional input can help ensure the brand is launched with the appropriate evidence and support for regional markets and decision-makers; regionally, it can help to address barriers such as capability, knowledge, process and resource, as well as coordinating pan-European initiatives.

The regional team can make judgements about the appropriateness of a global brand proposition, objectively and in an informed way. It is sufficiently distanced from local vested interests to look at the bigger picture, but at the same time it will have an empathy with the needs and concerns of local markets, especially adapting a global brand vision to suit different healthcare, economic and regulatory conditions.

So why the current trend towards downgrading, or removing altogether, European regional teams? Is it that pharma companies are failing to see the potential benefit of a conduit for better and more effective communication between the centre and local markets? Or is the decision being made on financial grounds – in which case the phrase 'false economy' might be apposite.

No one-size-fits-all

The decision about whether there is a role for a European marketing team to act as a buffer between corporate and local marketers, championing the proposition, while at the same time defending the worst excesses of global parochialism, ends up being a question of the scale, maturity and culture of the individual company.

If a company can achieve the ideal of better global marketers, who understand the need for local flexibility, combined with local marketers who have the expertise and capability to step up and both input into, and implement, the global brand locally, then the regional team becomes unnecessary. But that is a question of having the right calibre people and the right structures in place both at global and local level.

If this is not the situation, then there is a useful role for the regional team in Europe – but the calibre of its people is a key issue.

Once again there is no one-size-fits-all answer to this conundrum. But on balance, with Europe continuing its emergence as one of the worlds' biggest potential growth markets, ignoring the benefits of a well-structured, meaningful regional marketing presence is a mistake. The European regional marketing team is not dead yet.