Please login to the form below

Not currently logged in
Email:
Password:

Survival tactics

Tips on how to adapt marketing strategies to suit the current harsh economic conditions

A tent against the backdrop of a mountain in the snowDespite the Bank of England claiming that the UK is nearing the end of the recession, we are not out of the water yet. There's no doubt that we are in difficult times, which could well get worse before they get better.

This is according to the head of research at the Chartered Institute of Marketing, Mark Stuart, who states a company's primary focus during a recession must be ensuring it avoids the fate of many familiar, as well as unfamiliar, names.

"There were 2,428 insolvencies in the last quarter of 2008, a rise of 220 per cent on the same period a year before," claims Stuart. "The common response, and one that is understandable, is to save costs where possible, cutting back on marketing and adopting a 'steady as she goes' principle, in order to weather the storm of the recession and wait patiently for the light on the horizon to appear. Yet a report from the Chartered Institute of Marketing, Keep Calm and Carry on Marketing, argues that such a policy is fatally flawed and more likely to fulfil the prophecy of failure that a strategy of keeping your head down attempts to avoid."

So just how can companies adapt their marketing to be well placed against competitors when the economy recovers?

"Ring-fencing marketing is a sound strategy to take, but this is not to say that last year's marketing plan should be embarked on regardless. Instead, adapt the plan to suit the new environment," Stuart suggests.

In Keep Calm and Carry on Marketing, the Chartered Institute of Marketing identifies seven key directives for marketing in a recession. These include: carrying on with communications; adapting the marketing message to suit the new environment; showing customers that you are on their side; differentiating; innovating; avoiding price wars; researching the marketing to see if changing behaviour patterns offer untapped opportunities; using technology and thinking creatively instead of defensively.

Sound principles, but is pharma embracing them? With the industry facing its own sector-specific challenges, as well as the global credit crisis, what strategies are companies adopting to ensure sustained success?

PM asked representatives from two pharmaceutical companies at opposite ends of the spectrum to provide their views on how to market effectively in a recession.

The first is an innovation-driven, science-centred global healthcare company, and the second an exciting new business model in pharmaceuticals. Their responses are documented below.


Back to basics

Quietly reassess your marketing plan in light of pressures on the NHS and environmental changes

You think the financial world is in recession? That's mild compared to the world of marketing where there is the potential for uncertainty and dilemma.

The concept of the 'recession proof' industry has passed in the UK. More than ever before, marketers are being tasked with driving growth in sales while managing costs. For many businesses, the national recession indicators manifest themselves in ways that often go unreported by the mass media.  With this, many consumers, business owners and managers are left bemused and bewildered as to what they could have done differently and have no plan whatsoever moving forwards.

The key question for us is how does it affect the National Health Service (NHS) and the healthcare industry as a result?

Recent months have seen changes at senior level within the Department of Health; Lord Darzi's resignation and the appointments of Andy Burnham, Mike O'Brien and Gillian Merron will, no doubt, add a new dynamic over the months ahead. Trillion pound debts will concentrate the mind of public finance directors at all levels, as political masters demand results before the June 2010 general election deadline and – like it or not – the drug budget is still an obvious target.

Alan Maynard, professor of health economics at York University, believes it is going to be "grim" for the health service and that a "sea change" in approach is required. "After seven years of plenty, the NHS faces seven years of want as gross distortions in the economy are corrected. As a consequence, the NHS is under intense pressure to recognise the problem and increase productivity by squeezing more out of available resources."

Dr Chris Spencer Jones, Birmingham's public health director and a former chairman of the British Medical Association's public health committee explains the impact of these financial challenges: "The concern is that politicians and managers look at what is discretionary in the NHS. They conclude we have to fund hospitals, A&Es and ambulances, but not softer things like mental health and community services. That puts the health and well-being agenda at risk and just stores up more problems for the future." Scary stuff.

Clearly, in an ideal world, the National Institute for Health and Clinical Excellence (NICE) would be given legislative powers, which take into account and model socio-economic benefits of individual drug spend. This would show benefit to tax revenue, industrial output and reduce the whole life burden to the NHS. In reality, however, don't hold your breath. Clearly industry needs to continue to work strategically at a political level, but – in the short term – we need to be smarter and more creative to excel in the current environment.

In the whirlwind environment that includes the standard demands of the day job, it is important to take time to pause for a moment and not to make knee-jerk tactical changes without consulting your original business plan. The plan you toiled over months ago is still relevant and should still be the cornerstone of what you are trying to achieve.

Marketing in a recession in not about genius; it can be as simple as adopting the mantra of the Green Cross Code, ie "Stop, look and listen".

Stop
The first thing to do is to acknowledge that the world around you is changing, so dig out your plan, dust it down and book some time in your diary to assess the situation quietly. With an open mind, start to read and, whatever you do, don't panic. This is a time when we need to return to the fundamentals of business, and part of that involves challenging your existing marketing plan: is it still right?

Start with critically evaluating your marketing activities. Are you doing what you need to do, or what you have always done? Ask how strong your internal customer groups are. Was your plan conceived and your forecast carefully crafted to deliver top- and bottom-line results? Can you ensure you have the clarity to convince your managers that you are worth continued investment? Next, you may have to build strong emotive bonds with customers and truly demonstrate value. Are you harnessing the power of integrated marketing? Is there consistency through all elements of the marketing mix? Are you using a multi-channel approach and, if so, have you utilised your resources most effectively? ie fieldforce, online activities, advertising, direct mail, medical education, to name a few. Have you picked the right activities and are you speaking to  the right customers at the right time?

Be smart with your budget, but maintain marketing spend. Ask yourself if the burdens of marketing programmes can be shared through joint-working projects? Are you making the best use of a multi-channel approach? Can you show return on investment for your key programmes?

Promotions/price offerings are not the right way to go in the majority of instances; they are simply price cuts, as they erode brand value in the long term. Be confident and stick to your brand essence and brand attributes; do not devalue them.

Look at your spend and make sure you cut the right costs (cutting spend will affect income and cause long-term damage). Have a plan to cut costs, however, so that – if necessary – you can manage any enforced cuts. Make sure you test your scenario plans. How accurate are your best, base and worst case scenarios now? Have you forecast accurately?

Look
If you get to this point and still think your plan is watertight and recession proof, think again. Remember, the NHS is the UK's biggest employer. It was founded in 1948 as a health service promising "cradle to grave healthcare, free at the point of delivery". It now deals with eight patients every second and if it is affected, there is no doubt you will be too.

On June 10, 2009, Kate Kelland commented for Reuters on an NHS Confederation report by NHS managers, which stated recession and rising costs will squeeze its budget by £15bn in the five years from 2011. She said that this would lead to "across the board" cuts in jobs and medical services and a possible cap on spending on new drugs. Resonating now?

If you are still unsure, the report also stated: "History suggests that failing to deal with the spending squeeze will lead to problems large enough to call the whole NHS into question", and added, "we cannot assume it will survive".

This may be the pessimistic view, but should make us all realise that we cannot keep doing things as we have always done them. The world around us is changing. Assess the situation and look for opportunities – they will be there, but they may be just a little harder to find.

Listen
Our customers are changing too. Are you taking the value offering of your product or service to the right people, in the right way, with the right messages?

If you don't know, find out where your customers are – segment, segment, segment. Which ones are you certain of winning? In an uncertain world, it makes sense to seek out certainty.

Truly differentiate on what the NHS, the Department of Health, and therefore NICE, want.

Who is your patient? What is the real value of your product to them? Do you have focused messages for each customer group? Are they integrated and consistent with the rest of your marketing effort?

 

Porter's Five forces of competitive position

Figure 1: Porter's five forces of competitive position

 

How will the recession affect your competition?
Ask yourself:
• What are they doing?
• How are they reacting?
• Are there new competitors expected to emerge? Utilise Porter's five forces (figure 1) to evaluate whether there are competitors you have not considered.
• Consider a full war games exercise to ensure you have scenario-planned every possibility.

The road should be clear. Take one final look in both directions, just to be safe, and set off with purpose knowing you have:

1. Clear objectives – a customer focused approach
2. Full cross-functional team buy-in and agreement to implement your realigned plan
3. Consistent measurement and monitoring in place versus key quantitative and qualitative measures at agreed time points to check progress/success
4. A contingency plan, just in case
5. Leadership behaviour – the world will be watching you!
6. A focus on "controlling the controllable".

Then you should be all set to step out into the market with confidence.

The Authors
Russell Abberley & Simon Turner are senior brand managers at Schering-Plough


Entrepreneurial attitude

Flexible marketing strategies can bring successful growth in a tough climate

This year, we have seen unprecedented pressures that have made it a difficult and increasingly competitive time for the pharmaceutical industry. The worldwide market for branded drugs is expected to grow by around just 2.5 per cent; the lowest expansion rate in 25 years, with the US market slowing even more dramatically.

Where traditional pharma players are retrenching and consolidating, medium-sized companies may have an edge in maintaining the ability to take an unashamedly entrepreneurial approach and employ strategies that play to this strength. Challenging the old ways of working can yield strong results.

Stay flexible
In tough times, it is tempting to retreat into the familiar territory of the way that things have always been done, but this only maintains a status quo and leaves not only individuals, but even whole companies, in danger of getting left behind. It's important to recognise that today's marketing environment is ever changing and that the most successful people and organisations will be the ones that are able to challenge their own habits and the way that things get done. From being brave enough to reassess product portfolios, radically overhauling marketing plans, losing activities that are nice to have and focusing on key strategic priorities, to making resourcing decisions based, not on capacity, but on the right mix of talent to deliver the best results, it's important to look up from the day job frequently and identify what needs to change to deliver success.

A culture of entrepreneurialism – flexible deal structures, rapid and direct access to the Board and a transparent and bureaucracy-free decision-making process – provide the commercial freedom to find the best solutions, wherever they may be. By networking with countries, companies and partners, a firm can source and provide the best in class, whether that be people, products or ideas.

Research and development
Taking an entrepreneurial approach to product portfolios will help identify the commercial opportunities that should be the driving force of any organisation and shape its behaviour at every stage. Naturally a premium on time-to-market is a critical strategy for success.

Mundipharma International (MINT) and its independent associated companies are perhaps more like an investor with go-to-market capabilities than a traditional pharmaceutical company. It has a strong history in strategic acquisitions, with a number of molecules currently in development as a result of such deals. This allows a strong cross-therapeutic area portfolio with manageable R&D investment.

Be proud to be a challenger brand
Every company – pharmaceutical or otherwise – should be looking for opportunities to grow the business and shouldn't be afraid to go up against established players in the field and show confidence in the product.

An example of prime challenger ethos is in asthma management. The respiratory and pulmonary market has experienced compound annual growth rates of over 9 per cent for most of this decade and is now worth, according to most estimates, over $4bn a year. This is clearly an area in which any pharma company would be interested. However, the traditional mindset of the pharmaceutical companies has been to focus almost exclusively on innovation in compounds and to pay little attention to the delivery device. MINT realised this and moved quickly to facilitate the acquisition by an associate of a small company that had developed a new kind of inhaler with the potential to revolutionise the market.

Look outside the industry
To develop, deliver and market game-changing products, a fresh approach can be to look outside the pharmaceutical industry for inspiration. Rather than focusing purely on past launches of similar pharma products, why not look to the FMCG market to identify approaches and strategies that can give you the edge in your marketing?

Audiences are changing, regardless of the financial environment. Maintaining a strong line in to key audiences via research and brand tracking is essential to ensure that precious budgets are spent in the most effective ways. Embracing new communications channels such as digital media, for example, may increase scope and reach to audiences, communicating to them in a way they appreciate and making smart use of limited budgets.

An excellent example of employing a completely new communications channel to educate healthcare professionals is the award-winning Cancer Tales – Communicating in Cancer Care project. A recent survey of almost 5,000 cancer patients revealed that more than half surveyed said they had proactively to raise the topic of pain with their doctor and one in three felt the pain was so intolerable they wanted to die. Ways to develop communication between doctors and patients is noticeable by its absence from medical curricula. A new approach was clearly needed to help the medical community more actively support patients and their families.

Having seen the profound effect the play Cancer Tales was having on audiences, MINT began to work with the play's author Nell Dunn, and director, Trevor Walker, and many other healthcare experts to develop a communications workbook as an educational tool for healthcare professionals. Performances of the play were organised during selected medical congresses to show the experiences of people with cancer and to highlight the communication issues faced by patients. The project has been so successful that elements of the workbook have now been translated into five languages and performed to clinicians in eight countries. Abstracts on the workbook have been presented at seven international congresses, over 18,000 copies of the workbook have been requested, and the campaign has been recognised for communications excellence with a total of three industry Communiqué awards.

Success built on exceptional talent
Of course, success would not be possible without the right talent. It's critical to recruit the right people and to provide them with the resources and opportunities to grow long-term careers with the company. Despite the downturn and cuts across the pharmaceutical industry, some companies are still expanding and are looking for your best people.

Recessions can stifle talent, as companies look to squeeze headcounts and increase workloads across remaining employees. This means that the skills you hired your best people for are potentially not being maximised – a demotivating experience for the person and a waste of potential for the company.

Consider carefully whether your company culture is helping your teams to achieve their full potential. Does your organisation or your team foster a culture where staff have the resources and latitude they need to achieve their goals? Do team members feel empowered for their own decisions and to effect change in marketing strategies for brands? We have chosen not to reflect a traditional pharma company structure or culture. Rather, we have taken inspiration from outside the pharmaceutical sector for the type of working environment we want to create. Our aspiration is to reflect the culture of a boutique law firm – a team of senior players working together to make important decisions and drive strategy.

To ensure this culture, we employ team members with very broad, commercial marketing roles so that talent is not stifled by focusing only on one element of the marketing mix.

An open, entrepreneurial culture, a sense of shared responsibility and the provision of freedom and responsibility for teams to develop their own strategies for success, helps attract the best talent and produce outstanding commercial results.

Don't forget agency partners
In times of lower headcounts, it's important to ensure you are getting the best from your agency partners. Demand access to senior team members who can provide valuable external strategic support when needed. Additionally, assembling a first-rate panel of external PR, marketing and advertising partners will not only support your brand, but will engage and motivate your key people. A word of caution however: it's critical to ensure your team is well equipped to lead top-tier agency partners, to ensure the best is made of the relationship.

In summary, at this time when the pharmaceutical industry is in retrenchment, it is an optimal time for flexible marketers and companies to invest, grow and seek out new opportunities. Those that hang around could be left behind.

The Author
Georg Toufar is director of European Marketing and Sales Services at Mundipharma International
To comment on this article, email pm@pmlive.com

24th November 2009

Share

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Synergy Vision

Synergy Vision believe in delivering medical communications that make a difference to healthcare professionals and patients. Our synergy of pharma...

Latest intelligence

Theresa Heggie
Alnylam’s big moment: bringing groundbreaking RNAi drugs to Europe
Theresa Heggie talks about the biotech’s 16-year path to market, and the promise of its ‘gene silencing’ medicines...
patients
Retaining reader value in plain language summaries of clinical studies
Balancing the risk of misinterpretation with the public’s ability to understand simplified plain-language summaries...
Can we talk about the ego-bias and chemicals influencing your target audience’s behaviour?
Over the Summer, the Page & Page team became fascinated by two books on this very subject. Two books from one author, Dean Burnett, an eminent neuroscientist, lecturing at Cardiff...

Infographics