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Can pharma marketers cultivate both attitudes and data to ensure that they blossom in an ever-changing marketplace?
Beneath all the hype, fads and buzzwords, there are some fundamental truths in pharmaceutical marketing. Results are dependent upon differentiation, and pharmacological differentiation is becoming harder, costlier and shorter-lived.

As R&D excellence moves from being a differentiator to merely an entry ticket to the game, marketers have to ëstep up to the plateí and create differentiation through branding and other parts of the value proposition.

At the root of marketing excellence lies segmentation, a concept that emerged in the 1950s and is still a common thread in all great marketing strategies today. It is the central role that market segmentation plays in results that led us to ask: what is current industry practice?

Between 2001 and 2004, we interviewed and analysed almost all of the companies in the pharmaceutical industry, drawing out what worked and what didnít. The results provide endorsement for a few pharma marketers and an unsettling lesson for many more.

Traditional marketers

The idea and understanding of segmentation has been around longer than most pharmaceutical marketers have been alive. (For a quick reminder of how it can work and how it can fail, please refer to the box below).

Given this understanding of segmentation, we looked at how it works in practice compared to the theory. What we found can best be expressed by summarising the practice of three groups; traditional marketers, experienced reps and leading lights.

By far the majority of pharmaceutical marketers follow a predictable approach to market segmentation that might be called data-driven tactical segmentation. Although, naturally, the detail of practice varies between companies and therapy areas, the general principles are the same.

Hard data about measurable things like prescribing patterns, demographics etcÖ are usually used to segment prescribers but rarely patients.
Typical segments are ëhigh prescribers within a marketí or ëhigh prescribers of a productí. Such traditional practice, although aimed at achieving differentiation, involves using similar analytical approaches to similar data about the same customers.

Lack of definition

Given this homogeneity of practice, it is not surprising that the outputs vary little between the companies. A sort of industry culture is apparent, in which the incestuous recruitment in pharmaceutical companies seems to have homogenised segmentation practice, therefore making it less likely to lead to differentiation.

Such tacticle segmentation is useful in guiding operations and, when asked, most marketers said it is necessary to do but gives no real insight or advantage in the marketplace.

When pressed, some of the marketers we asked confessed that such hard data is at least as important as political protection in meetings as it is for guiding strategy.

One more time: what is segmentation

Segments are groups of customers with the same needs who therefore behave the same way towards value propositions. Good segments meet four classic tests. They are:

  • Homogeneous: everyone in the segment has the same needs and therefore motivations and behaviour
  • Distinct: customers in different segments have different needs, motivations and behaviours, and therefore consider themselves different to each other
  • Accessible: segments can be accessed by distribution and communications channels. If they canít, theyíre not good segments
  • Viable: segments are big enough, stable enough and profitable enough to be worth the cost of accessing them. If theyíre not, theyíre not a good segment.


The repís view of prescriber segments

In one of our cases, prescribers were categorised as one of four attitude-based segments:

  • The munch bunch: not really interested in the product, only appearing for the sandwiches at lunchtime meetings
  • The data demon: hungry for every new bit of clinical information
  • The nice guy: driven primarily by the need to have good working relationships
  • The cynical conservative: deeply driven by a scepticism about pharmaceutical companies and only interested in extracting funding or other benefits.

The experienced reps

Traditional marketing is carried out in the marketing department and inexperienced reps follow its guidance. However, when we interviewed experienced reps, either in the field or those who are now marketers, we found some pretty fundamental differences between the data-driven tactical segmentation and how these old hands think about their customers.

For these veterans, segmentation was about attitude and behaviour. As far as this group is concerned, the data-based segments of traditional marketers does not pass the tests of homogeneity and distinctiveness.

High prescribers can vary from academically-driven data fiends to harassed, give-me-a-easy-life, conservatives. A good example of such motivationally-based segmentation is shownin the box above.

Well rounded

While traditional segmentation has its home in the product managersí spreadsheets and the attitudinal view is held tacitly in the heads of experienced reps, leading lights seem to incorporate both into a more holistic approach.

Operations are guided by data, but the broader strategy is driven by a needs-based view of segmentation. However, this strategic approach is not left sitting in the heads of the more experienced reps, but is assimilated into the culture and structure of the company. Leading lights therefore segment in two stages:
Strategic segmentation: based on needs, motivation and attitudes and used to define the overall targeting and positioning of the company or brand (a good example of strategic segmentation is given in the box on page 34)

  • Tactical segmentation: based on prescribing and other data but used to operationalise and implement tactics such as selling, direct mail and advertising.
  • To give a mid-point summary: the leaders in our industry most commonly segment in two stages; firstly they look at strategic needs-based segmentation and secondly, tactical data-driven segmentation.

Many firms get these stages about face. Data drives the strategy and experienced reps use their knowledge of customers to adapt tactics. In essence, this means head office and the fieldforce work to two different agendas, with predictable results.

Of course, none of the marketers and people we interviewed were stupid or lazy. Quite the opposite. The question for us was why bright and hard-working marketers segment in a way that even they admit is not creating value or insight?

The answer to this lies in comparing what happens at different companies and probing deep beneath the surface of the first answers given about day-to-day practice.
The results revealed that leading lights differ from their followers on three levels; philosophical, cultural and operational.


Strategic segmentation in practice

One of the leading lights identified and targeted the following needs-based segment within the diabetes market:

  • Self-centred: only interested in their own gains from any interaction with the industry
  • Patient-centred: considers everything from the perspective of the patient, carefully considering the impact of decisions on them
  • Data-centred: decisions are driven by clinical information, and they are adept at processing clinical data
  • Pioneers: they are quick to adopt new ideas and are advanced with their diabetes management.

As the labels suggest, this insight into prescriber heterogeneity led to innovative tailoring of the value proposition, especially in salesforce activity and promotional materials.

Lessons in philosophy

The most fundamental characteristic of the companies we have dubbed leading lights is their attitude towards customer insight. Leaders see it as emerging from a sophisticated synthesis of customer information from multiple sources.

In particular, they recognise that transactional data (eg, reps calls, prescribing etcÖ) is capable only of revealing facts about met needs, whereas insight and strategic segmentation are usually a function of unmet customer needs.

By contrast, follower companies are wedded to data, believing that insight is just a matter of finding the right analytical method or algorithm. This represents a fundamental divide; the leaders have had an epiphany about the nature of segmentation and,until a similar paradigm shift occurs for traditionalists, they are unlikely to learn from them.

Lessons in culture

Differences in fundamental philosophy are reflected in the organisational culture of leaders and traditionalists. Leaders are willing to accept conclusions from qualitative research and repsí anecdotes more readily. They believe in ësoftí factors and work hard to incorporate them into their thinking. Importantly, leaders employ ëdouble loopí learning ideas to challenge their view of the market in the light of new knowledge.

By contrast, traditionalists said things like what gets measured gets done and facts are friendly, placing a higher value on hard data rather than on other forms of knowledge.

Critically, traditionalists are more likely to use information to confirm thinking, rather than to challenge it. As already mentioned, the use of data as a political tool is a noticeable characteristic of these traditional cultures.

Lessons in Operations

Given the differences in philosophy and culture between companies and among their figureheads, it is not surprising that they have filtered down to differences in operational practices. Obviously, these began with the two-step, strategic-then-tactical segmentation used by the leaders.

The traditionalists can be characterised by tactical segmentation in the office, which sometimes conflicts with the practice of the sales team. These differences are also mirrored in other areasof practice; target product profiles, agency briefing, campaign monitoring, sales team direction and measurement ñ all are fundamentally different when they have their origins in strategic segmentation.

On the surface, these differences are not always obvious but on investigation it becomes clear that the leaders build strategy and operations around needs-based segments, while traditionalists stick with data-based categories.

Change Management

Depending on your point of view, the findings of this research are either good news or bad news.

If youíre a leader, then itís good news. Thereís little doubt that this is the way to go, based both on our research and the four decades of prior research into segmentation that we read and built upon. The growing need for an epiphany and changes at philosophical, cultural and operational levels due to continuing changes in the marketplace means that it will be hard to catch you.

If youíre a follower, then itís bad news. The maturation of the market means that strategic segmentation will become more rather than less important, and the lack of a simple tick-box approach means that it wonít be easy to learn the tricks beingused by leaders. There is hope however. Companies can change; just donít assume it will be easy.

So, what if you fall between these two categories? Research suggests that the majority of pharmaceutical marketers will read this and say weíre not leaders but weíre doing a lot of this already. To use the jargon, most of this group are acting to reduce cognitive dissonance. To put it another way, they are traditionalists who are in denial and fear facing up to the difficult work of being a leader.

To those pharma marketers, the only comfort we can offer is that the past belonged to you, even if the future does not.

The Authors
Baba Awopetu is marketing manager of sales and account management at IMS ( and Dr Brian Smith is a visiting research fellow of both Cranfield and Birmingham University (

2nd September 2008


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