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Emotional commitment

Brands are valuable assets and how they are perceived is critical to success

A cloud in the shape of a heartImagine that you were to acquire the Coca-Cola brand: the logo, the trademarks and the bottle shape, but none of the plant, equipment or property. How much might you have to pay?

The answer, according to Interbrand in their 2008 "Best Global Brands" report, is an incredible $66.6bn. And if you continue down the list of these top 100 brands, names such as Microsoft, Google, Nokia, Apple and Nescafé appear, each of which has a brand value of over $10bn.

For these companies, brands are often their biggest assets: their blockbusters. This is not in some soft or wishy-washy way, but in hard numbers on their balance sheets. When customers choose between competitive products in a marketplace, the brand contributes to earnings and profit, so it must be quantifiable and valuable to its owner. 

The only representative of the healthcare world in the survey was Johnson & Johnson, positioned 92nd out of 100, with a brand value of $3.5bn. Interbrand points out that no pharma brands have been included since 2007. Pfizer and Novartis – both included in the 2006 table – have been excluded following a review of their approach. 

Understandably, our industry is more cautious than most about intertwining brand and business because of the risks associated: if the brand suffers a setback, particularly an unexpected one such as an adverse event in trials, many aspects of the business may become vulnerable.

Maybe it is more to do with the fact that, historically, pharmaceuticals have not felt the need to embrace brand value.

Traditionally, brand value in pharma has been relatively simple. Blockbusters – driven out of innovation, marketed on a science platform, supported by evidence, communicated through large salesforces and priced at a level the company wanted – have driven significant growth for over a decade. But this model is dying, if not already dead.

We only have to look at pipelines to recognise that the industry is changing. All the big companies appear to be making the same headlong drive for innovation in the same therapeutic areas – oncology, immunology, HIV, CNS – where unmet clinical needs clearly exist. Gone are the days when innovation and brand building focused on therapy areas like cardiovascular, metabolic, anti-infectives or pain, as the clinical unmet need here is low and the rise of the generic both inevitable and rapid.

The challenge is how these new products are going to be created as value-driven brands.

It could be argued that value can only be driven from a clinical position, but even in complex secondary care markets, such as oncology or diabetes management, prescribing decisions are not made around the data alone, but upon the powerful combination of data plus perceptions. We have all seen the market research feedback that says "show me the clinical data and evidence and I will make my decisions on how good it is", yet the reality is perceptions play a vital role in adding value to brands, bringing intangible value to the tangible. 

As an example, consider Avastin. It has managed to penetrate segments of the oncology market where it is clinically inferior to some other therapy options because of oncologists' perceptions of the drug, personal experiences in other segments, and their inherent belief in the brand and the company that markets it.

This loyalty to a brand adds real financial value beyond the purely tangible, functional benefits. Perception and belief that drives an intangible connection between product and customer is the essential ingredient of brand value.

To achieve this, we must stop thinking of brand as an extension of marketing, like a halo around the business, which makes it emotionally appealing. Instead, we must define the essence of the differentiation and let it serve as the primary and integral driver of demand. Brands have as much to do with product, service, price, culture, channels and environments, as they have to do with marketing and communications.

In view of the widespread acceptance of brands as valuable strategic assets, it is strange that there is little evidence of this in the pharma industry. Pharma marketers often pay little attention to the soft, intangible parts of the brand. We need to reverse the whole concept of branding and, instead of looking at it in a visual and physical context, take an emotional viewpoint.

Managing a pharmaceutical brand is about driving demand throughout every aspect of the business. True brand management is probably better entitled 'brand value management'.

Brand value management is about understanding how value is generated and sustained. It is about creating, managing and measuring brand value across every aspect of the business – how it adds value to payer, physician, patient and the business/franchise.

To understand the creation of brand value, we need to understand what factors drive demand, what role the brand plays across each of those factors, and how strong the brand is versus its competitors.

In FMCG companies with powerful brands, the brand and the business are bound up together. There is a collective understanding that the franchise would simply not exist without the brand. It shapes the idea of what the business is, at its core, where it is going in the larger market, as well as the end goal – the realisation of the brand vision.

This carries important benefits, including engaged employees, profitable differentiation in the marketplace and significant competitive advantages as the more tightly bound the brand and the business are, the harder they are for rivals to copy or better. In addition, it brings high levels of customer interest and loyalty and consistency and coherence inside and out.

Understanding how your brand creates value for you is key to establishing and/or maintaining market leadership. Brand managers must see the world this way, ensuring that every marketing investment is driving demand and creating value. Now, more than ever, we need to know where we're likely to win and lose.

A brand that is managed for growth and value recognises that stakeholders and customers, and the environments they work in, never stop changing. As a consequence, marketing activities need to be flexible in order to build long-term value for a brand and to drive emotional connections towards differentiation when rational brand attributes are broadly similar.

Building and maintaining
First, you must know your customers. This involves breaking your market into segments based on robust, objective data to explain the triggers, goals and behaviours that identify the needs and attitudes of customers. Your segments need be distinct so that they can be managed to drive competitive advantage and enhance return on investment.

Brands need a focal point. Those that aim to be for everyone often struggle to be for anyone. Brands that understand their customers, meet their needs and address the attitudes of a specific segment, tend to be more successful and use this success to build perceptions and beliefs that are transferable to other segments.


Brand value pyramid

Brand value pyramid


Understanding brand choice
What is driving usage within your overall market? What drives loyalty? What creates customer satisfaction? Loyalty to brands is the key source of value. What is really making the difference between customers' selection of one brand versus another? The deeper your knowledge of what truly drives purchases, the stronger the foundations are for the brand value.

Pinpoint the value your brand plays in driving a customer to use it. Once the functional benefits are met, the customer's mind moves to other needs, which are intangible, emotional and often irrational. It is only at the pinnacle of the Brand Value Pyramid (Davis, 2000) that a brand achieves highest value. So pharmaceutical companies must relate to these needs by interacting with customers on a more emotional level.

In pharma, the obvious functional benefits are efficacy, safety, convenience and cost-effectiveness. But brands add value to these, driving differentiation from competition. Pharma brands often get trapped in the lowest level of the brand value pyramid, with the emotional and expressive benefits rarely promoted.

Customers will opt for lower-priced generic alternatives, unless they feel that a brand offers them some enhanced value. We have to realise that pharma brands have the potential to connect with customers at an emotional level.

Understand how your brand drives usage, from a market-driven, segmentation and competitive viewpoint. In other words, where and why do target customers think we succeed or fail and what are our strengths and weaknesses against those of our competitors in our brand's ability to meet needs, both functional and emotional?

Build a clear purpose for the brand. It doesn't matter which model you use to articulate your brand's purpose, so long as the purpose is clear and you understand it. Consider:
• Is the idea credible, based on an acknowledged truth that the organisation can deliver against?
• Is it relevant, based upon something that drives purchases, where the role of brand is strong and the brand can deliver?
• Is the purpose distinct? Will the brand be able to achieve territory it can own and which allows it to stand out from the crowd?
• Does the idea stretch the brand? Does it feel like it will work for the business into the future? The brand's purpose is fundamentally its idea and we need to lift this idea beyond strategic words so it communicates more fully.

In building brand value, we must consistently and continuously challenge ourselves. How is our brand delivering against customer drivers, adding value to customer experiences, connecting functionally and emotionally with customers?

The best brands are constantly looking for new ways to enhance their value. The key is to listen to customers, colleagues, competitors and markets. Listen and respond to changing needs, because every time you listen, you learn.

The Author
Chris Marks is client services director at the MSI Consultancy
To comment on this artilce, email

5th November 2009


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