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Uniting the unique

Marketing must overcome the physical and emotional barriers that divide Europe

There is no doubt that the pharma industry is global. The importance of geographically diverse markets to the overall success of a brand and the company is clear. With developing markets becoming more significant, this global perspective will be increasingly necessary and therefore standardised, globalised brand strategies are a fact of life that we need to learn to live with.

Marketing is a complex discipline, influenced by factors including culture and the local business environment

With the growing complexity that this brings it is very easy for a company to be tempted to try and centralise decision making, adopt a global marketing strategy and insist that all countries follow that approach. It can work, of that there is no doubt, but it is clearly not the optimal way to do things.

It can be very tempting to see Europe as one entity but, as we all know, just because we are part of an economic union does not mean we are all the same. The extension of the EU, and the consequent proliferation of countries under one banner, is also likely to lead to attempts to develop a pan-European strategy within the global context.

The first question to ask is what exactly do we mean by a European marketing approach? If we focus on marketing only, then we are talking about branding, overall strategy to include focus segments, positioning, messaging, pricing and implementation. If by a European approach we mean every country following exactly the same strategy and doing exactly the same thing then the answer is obvious - no.

How medical thinking develops and is then put into practice is not totally consistent across all markets, but there are common threads in most therapeutic areas. In many cases the clinical database for the active substance is fixed so we cannot significantly change the supporting evidence. So - even though marketing is a complex discipline, influenced by all sorts of factors including culture and the local business environment - sometimes a pan-European approach to strategy makes good sense.

This is not just about a 'top down' approach - it is about developing the best solution for as wide a geographic base as possible. The simplistic answer is to go for a rigid definition of strategy by a European regional team which is then implemented to the letter by the local markets. We all know that is not the right way to go. People need to be more than operators.

So what exactly is a pan-European brand? Is it just about the same name, logo and imagery? Not necessarily. The key is to define what the brand is going to stand for in the target customers' minds what is its value proposition and where is it to be positioned. It is also vital to be clear about what it will not stand for. Once we have defined that box then each market knows where it can operate and into which areas it must not stray.

Strategy may be consistent but local execution may be different because of local market forces and different competition

We must not confuse strategy with implementation. Strategy may be consistent but local execution may change because of different local market forces and competitive sets. One example is Pfizer's Celebrex which was launched in many markets with a 'power' positioning, taking advantage of its first-to-market status. However, it wasn't first to market in the UK - where Vioxx had already made this territory its own. Celebrex had to adopt a completely new message for the UK while remaining true to the core global brand.

Communicating the key global or pan-European brand values does not mean inflexibility when it comes to the execution of marketing communications in various markets. Pfizer's Lipitor used different visuals, and even changed its name between markets, yet the global brand strategy meant that the core message and values - more potent on LDL cholesterol, extended efficiency on triglycerides, simplicity of use - remained the same.

A significant challenge in the era of 'managed markets' is pricing. Countries take different approaches but all European markets have some form of constraint on prescribing and/or price.

With the increased use of reference pricing across Europe it is becoming even more important to maintain an effective price corridor. This may mean maintaining price in one market - at the expense of local sales - to ensure that the pan-European profit can be maintained. Pfizer have done that with Lipitor in Germany, where they have decided not to reduce the price to that of the reimbursement ceiling rate (Festbetrag).

Clearly there are implications for corporate and brand perception where price is maintained in a low cost market. If the value proposition is strong enough this should not have a negative impact elsewhere and a proportion of patients may still be willing to pay - in Pfizer's case 20 per cent of them, based on market share.

"Clearly there are implications for corporate and brand perception where price is maintained in a low cost market"

The impact on corporate perception is more challenging, raising questions about whether it is ethical to limit patients' access to a drug in order to maintain price.

A pan-European approach is a necessity and a reality. Doing it well requires significant skills from European marketers to prevent it becoming all about applying the lowest common denominator

The Author
Paul Stuart-Kregor

19th February 2008


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