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The Extra Mile

We know that marketing 'excellence' exists, so how are pharma companies expected to achieve it, and what are the differences between 'normal' and 'excellent' practices?

The jargon-heavy language of pharmaceutical marketing departments has been added to by a new term recently: the MX programme (short for marketing excellence).

Most of the first rank companies and those who aspire to join them now have some sort of training programme that aims to turn their marketers into market leaders, armed with new tools and skills; but what does excellence in marketing actually look like?

If we want to be better than our competitors at marketing, which direction should we go in and how will we know if we succeed? Without good answers to these questions, such programmes end up, as one brand manager called her company's MX programme, as a WOMBAT: a waste of money, brains and time.

The good news is that we know what pharmaceutical marketing excellence looks like. Fifty years of research, including my own PhD thesis, have compared what works with what fails. Although the details differ with context, the defining characteristics of great pharmaceutical marketing are clear.

The bad news is that too few training managers or practising marketers ever read this primary research. Hence, the frustrated brand manager and the article here, which, I hope, gives some research-based direction to your MX programme.

how many Ps in Marketing?

First things first: marketing is not the same as promotion. The practice of marketing includes Promotion, but also encompasses Pricing, Products and Place (or channel).

Others also talk about People, Process and Physical evidence too, giving a total of seven Ps. In any case, it's much more than advertising, sales aids and KOL development, as is neatly summed up in figure 1 (right), adapted from the work of Malcolm McDonald, Emeritus Professor at Cranfield School of Management.

This four-stage iterative picture of marketing helps us to see that marketing excellence requires much more than simply having a good eye for advertising and sales materials. True marketing excellence means mastering all four stages and, based on those decades of research, we can define what excellence means at each stage of the marketing process.

(1) Excellence is understanding the key issues:

The first characteristic of excellent marketing is a clear understanding of the key issues that marketing must address. This is much more than the supercharged data crunching that passes for understanding in many companies. It means defining the market, understanding the opportunities and threats from the 'near environment' of customers, channels and competitors, and the strengths and weaknesses that flow from our own competencies and constraints.

Truly excellent marketing also predicts how these will be changed in the future as they are driven by the 'far environment' of social, regulatory, technical and other factors. Table 1 (left) compares excellent and run-of-the-mill market understanding.

(2) Excellence is making strategic choices:

The second attribute of excellence is a set of clear choices about which customers to approach and how best to communicate risks and benefits. In many firms, these crucial decisions are fudged and so vague as to represent no clear choice, resulting in a strategy that fails to concentrate valuable resources.

By contrast, excellent strategic choices narrow their focus, tailor tightly and communicate in a way that is compelling to each member of the chosen audience, but not to others.

In the best companies, this choice of customer group and the offer made to it makes use of the firm's own distinctive strengths and is different from the strategic choices made by rivals. Table 2 (left) compares excellent and typical market understanding.

(3) Excellence is delivering value:

If steps 1 and 2 are undertaken in the rarefied atmosphere of the strategic planning department, then step 3 is more familiar to front line marketers. Delivering value involves translating the broad value proposition defined in step 2 into a tangible set of deliverables that customers see as more valuable than they could get from a competitor.

For excellent marketers, the key words are 'total customer experience' as they look closely at customers' entire value chain for ways to create value beyond the molecule. By contrast, the average pharma marketer focuses on selling the product. Table 3 (left) compares excellent and not-so-excellent value delivery.

(4) Excellence is monitoring the value:

Monitoring value is the stage which really separates the marketing sheep from the wolves, because the differences lie not only in whether firms do it at all, but also in how they monitor value.

In typical pharmaceutical marketing departments, the value delivered to the target customers is measured crudely, if at all, using mostly financial measures. In the few firms that demonstrate excellence in value monitoring, a dashboard of measures reveals the value delivered by different parts of the offer; and not just in absolute terms, but relative to the competition (table 4, left).

Furthermore, these firms pay special attention to monitoring areas where they had no planning data and had to make assumptions, because these areas are the sources of business risk.

It is easy to criticise what we see as 'standard', or typical, pharma marketing practices; however, the questions remain over how to become excellent in the field, and how to do so faster than the competition.

The Five Critical Success Factors
Comparing marketing excellent pharmacos with their followers reveals five critical success factors:

  • Leadership commitment: marketing excellence only happens when leaders allow the time and money for learning how to be excellent. It fails when leaders treat it as a secondary issue 
  • Import ideas: marketing excellence is aided by importing and adapting ideas, not just from competitors but especially from other industries. The enemy of excellence is a mindset of
    'we're different, so that doesn't apply to us' 
  • Be careful about benchmarking: benchmarking, an idea imported from manufacturing, can lead marketing excellence astray when it doesn't allow for differences in company culture and market context 
  • Honesty: marketing excellence needs an honest and authentic approach; it doesn't happen in a highly politicised environment. Excellent firms often use well-qualified external consultants to help them with this 
  • Theorise: cynicism about management theory, posing as pragmatism, hinders marketing excellence. Learning happens best when theory is neither scorned nor accepted uncritically. Instead, learning tests, adapts and selectively absorbs the lessons from management research.

These five critical success factors ought to help guide any MX programme, but the one other thing that emerged from the research was the issue of expectation levels.

Companies that achieve marketing excellence take a realistic attitude to how difficult it will be. Others may seek easy, cheap or fast ways to achieve it. As this article shows, marketing excellence is many things, but something it can never be is easy.

The author:
Dr Brian Smith is a Research Fellow at Cranfield and Birmingham business schools. His research into achieving marketing excellence in the pharmaceutical industry can be found at www.pragmedic.com, and he also welcomes comments on this article at brian.smith@pragmedic.com.

2nd September 2008

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