The global management guru Peter Drucker, in one of his management classics – “The Practice of Management”, published in 1954, that created the discipline of modern management practices, had underscored the following:
“As the core purpose of any business is to create a customer, a business has two, and only two functions, marketing and innovation. Only these two produce business results. All the rest are costs.”
The Harvard Business Review also had rated ‘The Practice of Management’ as Drucker’s best book on the managerial profession. Far more crisp than the larger compendium on Management, nicely balanced between precept and example, this book is eminently practical yet of genuine intellectual breadth. If Drucker’s work holds anything of immediate value for you, you will most likely find it here…”
Thus, Peter Drucker’s above concept is so fundamental that the pharmaceutical business can’t be any exception to it, in any way. That the old customers need to be retained, and the new customers are to be created on an ongoing basis, even in the modern times, still remain a basic requirement.
Nevertheless, the marketing process of doing so needs to change, according to the changing market dynamics. Continuation of playing the same notes from the grand old marketing playbook, with minor alterations here or there, would no longer suffice to keep pace with the changing market, and to effectively address the new stakeholders’ needs and wants.
Need to recompose notes of the playbook:
Both the current processes of pharma marketing and the patent claim for any type of drug innovation that the majority of the global pharma companies is currently following, have become highly contentious over a period of time, to say the least.
Even otherwise, in my view, both these processes have already hit the ceiling of the famous ‘law of diminishing returns’, where very simply put, the level of profits or benefits gained is less than the amount of money or energy invested.
Therefore, the question that comes up: Are the notes of the pharma marketing and innovation playbook fair, right, inclusive, and sustainable? However, in this article, I shall focus only on contemporary pharma marketing, and the opportunities that are coming up along with waves of changes in the business environment.
An example of ‘Change the logo’ saga:
Going by my personal experience, I have worked with many pharma marketing professionals, some of whom are still working in the industry. Post recruitment in the new company, having gone through a rigorous screening process, most of them would probably give a similar feedback that an anonymous quote captures as follows:
“The optimist says, ‘the glass is half full’; The pessimist says, ‘The glass is half empty.’ The marketing consultant says, ‘The glass needs resizing and a different logo.”
On a lighter vein, I am using below an example of one ‘change the logo’ approach. This is just one of many of my real life experiences. This may give you a panoramic view of how things generally are. The stretching of the same old marketing paradigm beyond its elastic limit is rather common, of course, with some sporadic digital tweaking. Nonetheless, the notes in the marketing playbook remain almost the same, producing the same tunes for some, and noise for many others.
This ‘logo change’ saga may sound quite familiar to many of my ex-colleagues of not so distant past. This approach exemplifies the limitations of a new recruit for a senior position to identify the core issues that would lead to the organization’s performance improvement.
It does not surprise me at all, when I find some top managements, who were an integral part of that selection process, promptly buying these shallow, and at the most peripheral ideas. It is quite evident that some of these top management members also suffer from similar analytical and management myopia. It is needless to mention that such things usually happen during the ‘honeymoon’ period’ of the new recruits.
Accordingly, the ‘logo change’ takes place in no time, paying a huge sum to the creative agency. Commensurate hype is simultaneously created around the new logo, backed by massive efforts to communicate its ‘ethereal design’ to as many targets as possible, often with no tangible outcome. Alongside, attempts are also made to change as many old things as possible, generating a multitude of seemingly high-voltage activities, though the performance on the ground remains unchanged, or rather deteriorates.
I fully understand, there is nothing wrong in changing anything, including a logo, that is not working or has outlived its time. However, when this assumes the top priority of a new and a top recruit, immediately after assuming office with a new responsibility, it somewhat doesn’t gel, and very often does not achieve the desired purpose.
Pharma marketing over-dependent on the likes of ‘Surrogate CMEs’?
Today, when there is a need to hear more from all the major stakeholders, one sided ‘telling my story’ mostly to the doctors continues to occupy a major part of pharma marketing, besides company sponsored or allegedly surrogate ‘Continuing Medical Education (CME)’ even for old branded generics.
The preparation of a canned brand communication in India is a routine pharma marketing process, with a plethora of avoidable and unproductive activities. This canned message is delivered to the doctors, usually through the Medical Representatives, conforming to a structured ‘tool-kit’, and heavily backed by free samples and gifts.
A large number of doctors too, continue to take this process, particularly in India, as an unavoidable routine, and also an integral part of their professional activities. It is widely believed, and frequently reported that the ‘magic wand’ for large scale prescription generation for pharma brands lies somewhere else.
Apparently, it is where the financial relationship between the doctors’ and pharma players is usually built and strengthened. One allegation is, in the garb of so called ‘CMEs’, even for old branded generic or as some folks call these as ‘classic’ brands, this financial relationship continues to thrive.
This gives rise to a suspicion in many, as to why pharma marketing is so over-dependent on the so called ‘CMEs’, even for old branded generics in India.
The vicious circle continues:
When the financial relationship of various hues, between the drug players and the doctors take the center stage, which pharma company has a deeper pocket counts. More expenses incurred in such relationship building process, may consequently drive the drug prices higher. In this situation, the patients get literally caught between the devil and the deep blue sea, where the Governments are compelled to intervene, as has started happening now in many countries.
In tandem, the pressure on performance keeps mounting on the marketers from the same top management, ultimately repeating the old vicious circle, where it may not be the ‘logo change’ that time, but another different sets of the same genre of hectic activities would commence, in pursuit of the illusive sweet smell of business success.
Recompose notes of the marketing playbook:
Even today, the marketing communication in the pharma industry remains primarily a monologue. Many training programs are currently sold to the industry to make this process a dialogue, as the Medical Representatives detail their products to the doctors.
However, on the ground, as I witnessed even in the last month while seating incognito in the clinics of some doctor friends, that the practice of monologue continues reflecting a great visible hurry in the product communicators’ end. Some from large pharma companies were using electronic gadgets, instead of a usual spirally bound product detailing folder, but their overall communication approaches were monologue too.
Thus, the modern age pharma marketers need to recompose the notes of their marketing playbook, soon. Some of the areas of active consideration may include the following:
A. Brand messages to be “pulled” by doctors, not “pushed” by marketers:
An interesting worldwide survey of 228 senior global marketing executives was conducted in February 2006 by the Economist Intelligence Unit, in co-operation with Google. The study highlights the need to transform the marketing communication platforms from a monologue to a more intense process of engagement, through effective dialogue with the stakeholders.
In this new environment, the relevance is more important than repetition, and marketing messages should be “pulled” by the consumer rather than “pushed” by the marketer. This calls for a transformation of the internal marketing organization. All the deliverables of pharma marketers’ must have a relevance to time, and measurable, with total accountability for top and bottom line growth in the areas of responsibility.
In the consumer products’ industry, the last decade has witnessed several innovative two-way marketing “conversations” between the customers and some of the world’s leading consumer brands. Driven by a confluence of innovation, competition and big shifts in consumer behavior, the dialogue between brands and their customers is replacing the traditional marketing monologue, the study observes.
Some recent developments:
In this regard, on Jun 2016, an IBM News Release announced that ‘The Weather Company’, an IBM Business has developed an industry-first capability in which consumers will be able to interact with IBM Watson through advertising, by being able to ask questions via voice or text and receive relevant information about the product or offering. It can create a one-to-one connection with the consumer, that can be personal, relevant and valuable; and can scale across millions of interactions and touch points. This digital tool can also help the marketers uncover consumer and product insights faster than ever before, revealing connections previously invisible to human data scientists, IBM claims.
For example, an anti-allergy brand could enable visitors to Weather.com to ask questions about whether the product is appropriate for children or what sort of side effects it might cause, as WSJ mentioned in its news item of the same date.
However, only the FMCG companies, such as, Unilever, Campbell Soup Co. and GSK Healthcare have, so far, reportedly signed on with Weather Co. to start running Watson-powered ads on both desktop and mobile devices this year.
According to another 2014 report of IMS Health on Social Media, among the top 50 pharmaceutical companies, more than half do not engage with consumers or patients through social media on healthcare-related topics. The top 3 pharma companies in this regard are: Johnson & Johnson, GlaxoSmithkline (GSK), and Novo Nordisk.
Thus, in the pharma industry, the old tradition, by and large, prevails. This scenario, I reckon, signals a pressing need to recompose the notes of the pharma marketing playbook, in general, and very soon.
B. Studying the future digital trends and customize:
To find out about what digital trends to expect in future, the February 2006 survey by the Economist Intelligence Unit had asked survey takers and executives about the online trends they learned during the previous 12 months from their children or other young people. The top three new trends came out as follows:
- Social networking,
- Multi-player video games
These are just examples, individual pharma marketers would need to take calls about the relevance of specific digital tools and trends relevant to their business and customize them accordingly.
C. Two important marketing tactics proposed:
It is becoming quite evident now, across the world, that with the stakeholders-mix and the traditional doctor-focused “push” messaging delivered mainly through a large sales force coverage, are not generating commensurate a return on investments.
While this approach still remains somewhat relevant for the doctors, one needs to find out what is happening to effectively engage the other important stakeholders. For example, what is happening to those patients who are seeking meaningful engagement through various digital platforms for healthcare?
Recently, the Wharton School, Google and McKinsey & Company teamed up to write a new e-book entitled ‘Pharma 3D’, which proposes the following two important marketing tactics:
- To reach patients, pharma companies need to leverage broader engagement models through alternative digital channels (including wearable, online, and social media).
- Pharma companies can no longer rely solely on their relationships with physicians; they also need to engage with other influencers, like online communities and social networks.
D. Pharma marketing organizations may consider doing 3 things for success:
The authors of ‘Pharma 3D’ suggested that the pharma marketing organizations may consider doing the following three things really well, for success:
- They Discover the behaviors, beliefs and needs of the people they are marketing to.
- They Design experiences relevant to the people they are marketing to.
- They Deliver those experiences consistently, superbly, and efficiently.
Though Peter Drucker had said long ago that marketing and innovation are two most critical functions of any business and only these two produce business results, in the overall pharma marketing activities a wide gap between the modern marketing realities and the current marketing practices still exist, rather glaringly.
It is true that digital tools are now being selectively used by some pharma companies, these largely fall in the area of digitizing the manual functions, with some add on gimmickry, and glamor quotient built into it.
In my view, pharma companies, especially in India, should no longer rely solely on building relationships with the physicians. Their top marketers also need to directly engage with all other crucial influencers, including the expert groups, online communities, and the social media, whenever required, leveraging the broader stakeholder engagement models.
The old pharma marketing playbook is slowly, but surely going out of sync with the stark market realities of date. So are the mindsets of a large section of the pharma marketers. It is now high time for the top management to create an appropriate marketing organization, and then encourage it composing the new notes for a contemporary, and a more relevant marketing playbook, jettisoning the old one, for good.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.