The Right Marketing Mix for Pharma Success
The Indian Pharmaceutical Industry (IPI), is India’s one of the most dynamic industries for its prominence among the developing world. IPI is world’s largest producer and exporter of generic drugs. In addition, Indian Pharma has become more sophisticated in terms of the technology, reverse engineering and developing new techniques of manufacturing of drugs. Over a period of time, many companies in this sector have become more competitive and diverse with the emphasis on product differentiation. These changes in approach in manufacturing have led to increased efficiency in manufacturing in the last decade.
The positive side of these improvements is that manufacturing costs have leveled. However, these improvements in efficiency in manufacturing have not been matched with the improvements in efficiency in the marketing. That is why most companies started accumulating inventory since there was no efficient marketing strategy to sell the products.
Two research studies conducted by Institute for Social and Economic Change (ISEC), Bangalore and Indian Institute of Technology, Roorkee have pointed out this exact issue. The ISEC study incorporated the data of 2492 Indian firms for about 15 years. Their study found that companies with unmatched marketing efforts, either by allocating less than 10% of their annual budget or not having effective marketing strategy lagged behind in overall efficiency. In addition, this resulted in poor performance over the years and deteriorating the health of the balance sheet. The companies who did well spent at least 10% of their annual budget for marketing and had long-term marketing strategy coupled with a better presence in the market.
These studies are very crucial in this current era, where Indian Pharma sector is struggling from a multitude of problems. The Indian Pharma companies need to realize that, there needs to be a strategic marketing approach. In addition, Indian Pharma companies need to understand that even the marketplace is extremely dynamic and becoming highly volatile. Hence, there should be a strategic approach in order to succeed in these murky waters.
It would be wise to recite the basic marketing approach of 4Ps, if that is not already clear for our Marketing Professionals. Philip Kotler, the Marketing Guru has put these 4Ps in clear perspective for Pharma marketing. In addition, Kotler, also suggests that the foundation of entire marketing efforts should 4Ps on which the most efficient ‘Engagement Marketing’ approach should be built.
Pharma Marketing – Forging Relationships
Many studies including the study conducted by IIT, Roorkee, have suggested that large diaspora of Indian Pharma companies think that “Marketing is Selling”.
First of all, this misconception about marketing needs to be eliminated. Sooner we wash it down the drain, better it will be for our growth.
Marketing is neither selling nor it is advertising alone. Marketing goes well beyond these and thinks about making long-term relationships with all the stakeholders. Undoubtedly for Pharma companies, most important stakeholders have been the doctors, as only they can convert “marketing” budget to “Sales”. Traditional “sales” approach has been focused on ‘converting’ these doctors, so that sales increase. But in the current ecosystem, this approach will not go a long way as it takes huge efforts, both monetarily and manpower viz. to change one doctor’s behavior to prescribe the drug you make.
Once the basic 4Ps are clear in your mind, there is no limit on a number of marketing activities you can successfully and efficiently carry out. This current practice about marketing can be called the customer relationship-building and satisfaction view.
4Ps of Marketing Mix: The Change, The Constant
Many Pharma marketing professionals are already aware of 4Ps: Product, Price, Promotion and Place. In typical traditional marketing, it is your product that you sell, the price you demand for it, the activity you carry out to promote and the place where you sell it.
For Pharma companies, this is more complex.
The traditional view about the product has been limited to the drug, molecule or the medical device a company offers. The specifications, efficacy, USPs are considered as defining aspects of the product. However, in this competitive ecosystem, these parameters alone won’t be sufficient. The product needs to demonstrate the value to the end users and most importantly to the doctors, who use or prescribe your products. Understanding this value is the core of right marketing mix. If a product ‘A’ shows similar efficacy to product ‘B’, what sets them apart is the additional value such as its availability and extensive knowledge about them in the medical fraternity. Fail to deliver that value and the product remains another box on the pharmacists’ shelf. As most people are aware, sharing that value is much more efficient through new technological advances such as specific platforms aimed at delivering that value.
At Docplexus, we hear a lot of feedback from our doctor members, which not only focuses on the individual product but companies and overall product line. This feedback is very crucial for any Pharma organization willing to spread their footprint.
What your product sells for is the key factor for end-users. Similarly, it is the same for the doctors who prescribe it. The traditional efforts of ‘marketing’ have failed to gauge the insights about ‘acceptable price’. Whether your product justifies the price or it is considered as ‘too expensive’ cannot be easily gauged with views of a limited number of physicians. Only an efficient direct communication with a larger number of doctors will help you understanding correct price-point.
How the Pharma companies promote their product is also a key issue. The highly regulated marketplace does not allow direct marketing to end-users. That means their purchase choices driven by the doctors who prescribe or use these products.
A large number of marketing efforts are spent on advertising the product for a limited duration in the doctors’ community but various studies have shown that after all the money has been spent on advertising in the initial phases nothing makes doctor compel to prescribe a product. Generally, the relationship between Pharma companies last for a limited duration and there is no guarantee that the doctor will continue to prescribe the product. The lack of ongoing relationship has been the main hurdle. Mere monetary incentives do not entice doctors, neither it will maintain their interest in the product. Hence, taking your promotional activities where Pharma companies can understand the doctors’ behavior and build the relationship is imperative.
A digital platform like Docplexus offers exactly that. At Docplexus, understanding what doctors interests are, what they want to know and do and how they react to certain information is given special attention. Depending on this understanding, effective promotional campaigns in which more focus is given on relationship building than transactional approach. In this way, Pharma companies can benefit a lot as promotions are done more efficiently with measurable results.
Where a product is sold or marketed is very critical. Having wrong product at the wrong place is the basic law for failure. In contrast, right product at the right place can boost the profitability. In a traditional Pharma marketing approach, knowing the right place to market has been cumbersome. Indian Pharma companies now need to be aware of this new place called “digital platform”. In India, estimated 1,75,000 doctors (about 20%) are on this platform, Docplexus being the leader with over 62% of the total active users.
This ‘marketplace’ is incidentally portable and very responsive. However, the large numbers of Indian companies are slower to tap this marketplace. This marketplace is not only dynamic but highly segmented, the exact qualities Pharma companies would need for marketing their products. The right target audience not only reduces the costs of marketing but also guarantees increased awareness about your product in the segment of your interest. Perhaps, the time has arrived to choose ‘this’ place for maximizing your product’s reach.
The correct understanding of 4Ps of marketing mix would not only increase your sales but it will guarantee you the sustenance, as it makes you more responsive and agile towards your customers.