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Watch out

Be alert to the fact that launch success requires more than a great product and a sound marketing strategy

MeerkatWhile it's an exciting time to be a life sciences marketer in Europe, the pace of innovation is slowing, increasing the pressure to 'get it right' with new product launches. That means companies must ensure that they can launch new products effectively across the diverse markets of Europe.

Experience demonstrates that what companies do before the launch sets the stage for success afterwards. Figure 1 shows two products that reached the same level of peak sales in year three, but followed markedly different trajectories. Even though peak sales were the same, the cumulative difference just from the launch path was 70 per cent, which could equate to hundreds of millions of euros.

In addition, launches are often delayed. On the surface, delays appear to make a difference only for the first year, when sales are relatively small. However, in reality, the impact is significant, with the delay costing a year of peak sales. Thus, making a successful launch on time is absolutely critical.

Despite their importance, it is surprising how often launches go wrong. This is because it takes more than a great product or a sound marketing strategy to ensure success.

Following a specific framework can help increase the chances of a successful launch. Take the case of imaginary company, XYZ Pharma.

Framework for success
XYZ Pharma was launching several new products worldwide, but recent launches had gone poorly. Product A had mediocre sales and received minimal attention from local field organisations. In several countries, the launch of Product B had been delayed several times and eventually had very slow uptake.

How should XYZ proceed when it had failed repeatedly in the past?

1) Build a high-impact launch organisation
Global marketing managers responsible for developing launch strategy had run XYZ's previous launches. The local marketing team was not actively involved until close to the expected launch date or after the launch itself; the product was 'thrown over the wall' for each country to manage. As a result, some country teams had refused to support upcoming launches, claiming the product met no customer need and, even if it did, the local people had no time to promote it anyway. This haphazard approach yielded an 'us vs them' mentality in the organisation, with local marketing people often ignoring the strategy developed at the global level.

To overcome these challenges, XYZ built a launch excellence team responsible for driving global launches. This team consisted of dedicated global marketing and regional resources. Depending on timing, the regional representatives were either full- or part-time, but regardless, the launch was a recognised commitment that flowed through to their compensation plan and even global funded part of their pay.

Having a dedicated team accomplished several goals. First, it ensured the company devoted adequate resources to the launch. Second, the structure ensured local input was integrated throughout the launch phase. This local interaction became a 'must have' as opposed to just 'nice to have'. Positioning, segmentation and so on became much more customised and relevant, driving greater buy-in at the country level when products actually launched, especially from field sales.

Third, this structure ensured there was no question of ownership or accountability, since global and regional staff worked on the same team. Finally, all team members shared similar incentives aligned to overall launch objectives, including those beyond sales, such as the number of customers reached. Plus, incentives were applicable to non-commercial support staff, to ensure sufficient motivation for those in part-time roles.

While this structure worked well for XYZ, other companies have leveraged different approaches successfully. However, the fundamental tenets of allocating appropriate resources, ensuring global-local alignment, driving accountability and aligning incentives are necessary, whatever the company's scale or launch.

2) Create a vision-driven culture
One of the biggest drivers of launch success is to Think Big from the start. This involves quantifying total sales potential and developing an aggressive (but realistic) set of launch goals.

In the past, XYZ thought of opportunities in terms of organisational constraints. 'We have 10 sales representatives in France and get 10 per cent of their time, so how many sales do we get?' was a common line of thinking.

To drive change, first XYZ assessed the opportunity and the required investment regardless of existing capacity restraints. Only then did it start applying internal constraints to develop the product forecast by considering the product's market potential and the cost needed to achieve it.

Through targeted market research, XYZ gathered key metrics to support this analysis. When assessing opportunities further beyond launch, it leveraged high-level data such as epidemiology, incidence and procedure counts to develop a general market picture. To drive relevant decisions such as go/no-go, at this point the company realised it was more important to ascertain the exact magnitude of the opportunity for the product.

XYZ then integrated these market assessments into the overall business planning process to help global and regional management compare various product and country opportunities. This sort of planning is even more important today when resources are scarce. Only by understanding various opportunities using consistent methodologies did XYZ prioritise resource allocation across launches and opportunities in the existing business.

XYZ also had to address the issue of launch dates being viewed as moveable. To change attitudes, it focused on creating a sense of urgency about the launch from the top and mobilising the company towards this goal. In today's market, the window of opportunity for a new product is shrinking, as competitors enter the market quickly, or the market itself changes. Therefore, management stressed the fact that there was a finite time period  in order to really maximise the revenue potential offered. By holding the organisation to a targeted launch date, management could communicate the necessary sense of urgency to everyone. Conversely, rewards for an effective launch on time reinforced its importance.

However, companies should not sacrifice quality for speed. If a launch team runs into internal hurdles, such as securing sufficient training for local field sales organisations, companies should work with the team to find ways to overcome them.

 

Two products' paths to peak sales

Two products' paths to peak sales

 

Effective tools
For previous launches, XYZ global launch managers had used a spreadsheet-based project plan that they created from scratch. Often, this plan started robust, but it was rarely updated during the launch to reflect the inevitable changes that occurred, resulting in last-second emergencies. Usually, this involved a frantic request for help from a country marketer who had neither the context nor time to track down the data.

To prevent these emergences in future launches, XYZ developed a launch manual that included a comprehensive, easy-to-understand plan to guide launches. It included step-by-step organisational best practices, yet remained flexible enough for easy customisation. Every product, market and country is different, and this was reflected in the manual.

The standardised launch plan listed typical roles and responsibilities for team members, best-practice activities across geographies, common interdependencies among functions and between global and local, as well as identifying who was responsible and accountable for activities.

These materials gave launch teams a good starting point for local tailoring. The plan could be adapted if a new product had different local needs, such as different reimbursement authorisation or if it required a unique value proposition.

Knowing how teams needed to work was a start, but they also had to be able to develop customised strategies for their specific markets. Therefore, XYZ introduced frameworks to support effective launch strategy development. These covered critical topics relevant to the life sciences industry, such as how to understand stakeholder needs and develop reimbursement, regulatory and go-to-market strategies.

Codifying these frameworks was critical to success, so XYZ was not dependent solely on having the right people. After all, what if they left? The company evolved from individual global launch managers using their own frameworks to develop forecasts to using a standard consistent framework grounded in best practice.

Integration
To make it all work, XYZ took time to plan critical communications, initiating them early in the process and maintaining the level of communications over the long term.
If a country hired sales representatives to increase capacity in anticipation of a product launch, suitable communications enabled the salesforce to understand the change and how it would affect them.

In addition, careful attention to how key stakeholders communicated with one another was critical. XYZ ensured its local teams, that were closest to customers, were involved early and often in portfolio planning, but not to the extent that they were overburdened. Their ideas were incorporated into regional portfolio strategy, which helped build support for the eventual outcome. Such early input helped ensure that the launch product and supporting data would be developed with the customer in mind, met local needs, and built favour with key local stakeholders.

Finally, XYZ developed processes that effectively disseminated best practices from launch to launch and country to country.

Best practices are an acknowledgement of what does and does not work; embedding them in the wider corporate culture ensured that future teams would learn from others' experiences. XYZ also implemented 'pull' mechanisms, including online communities, wiki intranet sites and simple document repositories for the use of future launch teams.

In addition, a formal review was built into the launch plan that ensured team members would discuss and analyse it. Payment of final launch incentives was contingent on completion of this important last step.

XYZ also 'pushed' these lessons to ensure future launch teams would benefit. As with any knowledge-sharing exercise, new teams would have to know that this information existed and where to find it. Technology would facilitate the process, but a knowledge-sharing mentality had to be instituted throughout the organisation. This required behaviour modelling from the top and reinforcement through recognition and rewards.

After implementing this framework, XYZ successfully launched numerous products with greater efficiency than ever. This did not happen immediately, but over time and with careful change management.

The Authors
Matt Singer
is manager and global practice lead of product launch planning practice and Kurt Kessler is managing principal, marketing solutions, at ZS Associates

To comment on this article, email pme@pmlive.com

28th October 2010

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