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Balancing act

The key to achieving success in Europe is creating a framework that embraces both local and global strategies

SurfMore than 40 years after the process of unification in Europe began, the region is still far from being a homogenous zone. The resounding `Non' from the French to the European constitution is the latest proof that there is a long way to go before we can talk about melting borders, closer cultural harmony and the economic benefits of a free-flowing single market.

With an estimated population of nearly 460 million people, 25 countries and 20 official languages, the European Union is, at first glance, still a hugely disparate and multi-cultural land mass.Yet in commercial terms this picture does not conform to the widely accepted sentiment that we are living in an increasingly global community.

Global consumer brands such as Coca-Cola, McDonalds and Nike predominate. The continued growth of the internet and 24-hour news feeds mean that we are never more than a click away from knowing what is happening on the other side of the world. However, while many FMCG companies have mastered the wealth of new technical tools available to effectively disseminate their key messages around the globe, some commentators say that pharma companies are still learning to do so.

Europe is one region where the industry is working hard to convey core messages, as it represents numerous opportunities for commercial success.

Regional European marketing teams have the onerous task of coordinating national campaigns with all their cultural and linguistic differences while at the same time remaining true to core global strategic messages.

How well they are managing to balance these considerations is up for debate, as is the question of whether European drug promotion in the 21st Century requires a strictly global impetus and focus or a more finely tuned specialist local approach.

Leonard Lerer, editor of the International Journal of Medical Marketing believes that companies will have to take a global approach to achieve European marketing success.

Our recent research for one of the major global pharmaceutical companies indicates that the similarities between the major European countries far outweigh the differences, he notes. In other words, distinct opportunities exist for substantial standardisation of all forms of pharmaceutical promotion, including market access, with all aspects of the approach to pricing and reimbursement, and the positioning and branding of products. In my view, the time is right for more rather than less standardisation but this requires competencies at European head office level which may not be apparent today.

He points to a number of ongoing trends that are currently reshaping the European pharmaceutical arena, such as a perceived convergence in issues around healthcare financing. On top of this, there has been a substantial diffusion of influence across Europe in terms of issues like parallel trade and the use of the internet, he adds. Consumers are basically becoming much more similar across the European region.

Yet, the fact remains that any push towards a more centralised approach to European marketing is going to meet with huge resistance from those out in the field. While different languages are the most noticeable stumbling block to the successful transfer of marketing strategies proven in the US across the pond, there are other disparities.


European countries have different cultural beliefs, different attitudes towards medicines, and different attitudes towards the pharma industry and its representatives, especially in terms of drug promotion.

It is for these reasons that in the past, companies have tended to use domestic healthcare communications
and PR agencies that insist they possess the specialist local knowledge needed to crack a particular European market.

However, there has been a recent trend (particularly on the part of larger pharma firms) to appoint a sole agency to oversee pan-European programmes. For instance, sanofi-aventis has taken on Publicis to do all its European work.

Such moves have led to accusations of short-sightedness based purely on cost-cutting, while big pharma simply argues that it's all part of catching up with the global thrust.

There is definitely a trend toward a global brand manager, a desire to launch within one year and get approval globally, and a push toward central approval of copy material, says Tom Kass, head of healthcare investment service at EFG Private Bank in Zurich.

The industry has always been exceedingly powerful at the local national level and people in head offices have not always found this useful and have wanted to transfer the power back to the centre. But I'm not yet sure that the bias toward global brand managers with global launch mandates is going to be terribly successful.

He argues that while centralisation would undoubtedly save a lot of effort and energy, the time is not yet ripe: I think you have to respect the need for centralised coordination while at the same time understanding that the regulators and the cultures in these societies and markets are different.

Matt Rowley, managing partner at the Central Group warns of the dangers of going too far down either the global or local path.

By definition, the moment a fully global approach is adopted, it compromises local campaigns by `knocking off all the edges' in order to fit the global messages into every market, he explains. At the end of the day, every product manager in every agency is measured by how well they do for their own particular national market not on how well the overall European campaign is going. A stringent global approach is effectively saying to product managers that they can't do the 100 per cent best for their market and this will usually lead to internal people pulling against the project, he adds.

However, problems also arise if companies decide to allow campaigns to become too localised. Rowley says that this scenario is at best a short-term approach with product managers being measured on how well their products do in a brief one- to two-year spell rather than five to 10 years, which would be a much more useful indicator for the company.

Of course, any further moves towards centralisation are going to meet with fierce resistance at the local level. As Kass puts it: I have no doubt that every king or prince who is running a country will want to keep it as local as possible. They will say they have the contacts with the regulators and the approval agencies, and can tap into their respective markets and be fairly obstructionist to save their own jobs.

Lerer agrees that local affiliates and agencies will put up a hideous fight but argues that ultimately the battle is lost before it's fought because the economics of pharmaceuticals today indicate that it simply isn't possible to maintain a huge local organisation. He points to the fiscal disparities between certain European countries where marketing spend does not always correlate to margins.

It tends to be in the countries where pharmaceutical companies make the most money that they put in the least marketing effort. For example, countries such as Italy have some messy issues but nevertheless remain highly profitable whereas Germany has a huge resource allocation but the profits are not so high anymore. What is required is a dispassionate readjustment rather than a radical change.


Getting the answers
The question rests on whether the most successful model for the future of European pharmaceutical marketing is indeed one based on a core global strategic campaign that delivers a consistency of key messages, product positioning and brand identity. Most agree that it is, but there is much debate about how much leeway local affiliates and agencies should be given in terms of catering for environments and needs in a particular market.

As David Barratt, managing director of Lowe Azure and Lowe Fusion points out, it can be a tricky task getting a local affiliate to play ball with a global campaign. He says that it's unusual for affiliates to comply with the `global brand book' with only minor tweaks for the local market and that more often than not, local product managers will request major changes to core visuals or even try to push through a 90 degree turn from the carefully researched central image or copy.

What most pharma companies fail to recognise is that all local advertising agencies need to fuel their `contribution to overheads' by the creation of new campaigns and major changes to visuals, irrespective of the validity of the researched core campaign, he says.

Barratt is of the opinion that local agencies servicing local affiliates will always try to come up with `better, more relevant' visuals rationalised by an `it's not right for this market' position when they see their livelihoods threatened by global campaigns.

However, this can lead to conflicting campaigns being rolled out. Having a drug brand with contrasting visuals and core propositions in different countries just confuses doctors. Key opinion leaders and lower level opinion leaders now travel around Europe and the US much more so core campaigns are paramount, he says.

But is pharma truly aware of the complexities that surround the issue of adapting European marketing to global strategies? Lerer believes that in general it has been slow to recognise the rapid changes that are occurring in Europe such as the substantial professionalisation of government and regulatory agencies.

In his view, the `competencies' that he spoke of earlier, which head offices will need, are much improved tools for measuring and predicting European trends, as well as a more rigorous approach to standardising branding messages.

In an ideal world
The picture of Europe as a homogenised region ripe for centralised marketing penetration is perhaps a little too idealistic at this stage.

I think there is a move towards globalisation, but in terms of Europe I don't think the pace of change is ever as quick as people think or want it to be, muses Rowley. Strong cultural and linguistic differences exist in Europe, that's just the way it is and it's going to take some big regulatory changes from Brussels to speed up the process. But at the moment it's still glacially slow.

Kass believes there is scope for restructuring the European markets: We don't really need it broken down into 25 nations, it could probably be broken down into half a dozen regional entities such as the Nordic nations. Maybe what we need is less heads of countries and instead one or two marketing sales types who can tweak things for each of the markets.

One thing is certain: as the world of pharma shifts more towards a global way of thinking, things are going to get even more interesting. For even though local managers will be happy to see their products imbued with specific universal brand elements, they will want to retain their individuality and responsibility for local campaigns. The war of attrition has only just begun.

2nd September 2008


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