Accelerating Life Sciences Transformation

Accelerating Life Sciences Transformation

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Has the time come for Strategic Thinking in Pharmaceutical Brand Planning?

A strategic approach to a Brand new world…
 
Brand planning within pharmaceutical companies has traditionally focused on competitive positioning of the brand in the market place, the priorities over the next 12-18 months (including new indication launches), and optimizing resource allocation across promotional initiatives with “known” ROI. 
More recently, the planning efforts have included the identification of a few new, smaller innovative bets. The intention of these bets is to explore alternate ways of promoting the brands to key target audiences as the acceptance and effectiveness of traditional methods are declining. This trend indicates the need for a more long-term approach to promotional planning, exploring the potential for a radical change in the way that drugs are marketed in the future.
In addition, the shift of players in the decision-making process of choosing treatments requires earlier planning of life-cycle management considerations and a clear commercial direction. The world in which the industry now operates is no longer one dimensional and introspective. It requires a brand new approach for brands and companies to succeed. It takes courage, willingness and tolerance for trial and error and most of all, it requires a focus on the external environment, the customer and a long-term approach to meeting their needs with flexibility built into the business plans.
 
Moving from Brand centricity to Customer and Market reality…
 
The prevailing annual brand planning processes have an element of strategic direction in the up-front part of the process. This component is primarily driven by the concepts of who is the target, how to differentiate, core messages to be delivered and through which media? It is dictated by the labeled indications for the drug and tends to evolve significantly only when a new, approved indication is granted. Once approval for strategy is received from senior management, the planning process goes tactical very quickly and budget allocation and promotional plans drive decision-making. The decisions are often justified by primary market research to validate, rather than to explore.
Although sometimes used, methodologies such as business simulations (formerly known as war-gaming) are not consistently applied as a means to test the plans in a real-life simulation setting. Therefore, the current brand-planning efforts that span 12-18 months could be a more iterative process if the business simulation methodology were to be an integral part of the efforts and hence allow for better adapted and tested execution with a truly competitive lens applied.
 
Focusing on the forest, not the trees…
 
A narrow approach of strategy development and evolution tends to overlook the broader evaluation and consideration of macro-factors impacting the industry. These include changes in customer preferences, novel treatment practices and options and new competitive entrants to name a few. These factors would greatly impact the long-term view of the market evolution and the various futures the organization and its brands can come to face. Considering alternate future scenarios as part of ongoing strategic planning is paramount in today’s uncertain market conditions. Some, but not all of these strategic considerations and factors are consistently and systematically being investigated within organizations today, but they rarely drive down into the brand teams and therefore tend to be ignored, overlooked and down-played until it is too late to impact the direction of brand strategy and execution.
 
The value of cross-portfolio planning…
 
Since the planning efforts are most often brand-level driven, an opportunity exist for companies to overlay a traditional brand planning approach with a cross-portfolio, longer-ranging strategic exploration of the forces and market factors at a macro, industry, organizational and portfolio level. This would allow brand managers and corporate leaders the opportunity to ensure that:
  •  A long-term view of brand and portfolio opportunities and challenges is secured and acted upon,
  • Short-term actions are maximized, yet do not conflict with longer-term priorities and decisions and,
  • More realistic budgets and performance metrics are set.
 
Are Pharma executives ready to make the change?
 
Now, more than ever, the industry finds itself in an environment of great uncertainty, patent cliffs, less favorable public opinion, legal and regulatory scrutiny and global economic pressures. All of this points to the realization that the prevailing myopic view of the world in which they operate is inadequate in order to sustain performance, let-alone survive in the future. There is a need to adopt new processes and methodologies, such as the inclusion of active tests of brand plans and messaging. But most importantly, the addition and appreciation for a level of strategic thinking and planning will improve the chances of future business performance and create a more strategically challenging environment for brand managers at all levels in the organization. This would include embracing the opportunities and challenges of the future and driving over-arching strategies to the front-line of brand management and into the research organization.
 
This industry is ripe for change as the writing has been on the wall for more than a decade. The question is, are corporate leaders willing to take one eye off the next quarterly numbers just long enough in order to prepare their organizations to strategically stake out their own path to survive and thrive for the many quarters ahead?
 

About the author

Henrik Hedstrom
Henrik Hedstrom
Henrik Hedstrom is a Managing Consultant at Capgemini Consulting Life Sciences. His expertise is centered on helping life sciences organizations increase their impact in the ever-changing market and stakeholder landscape. Henrik has been assisting clients with organizational capability development, corporate, commercial, marketing and brand strategy formulation and execution. Specific capabilities include life cycle management planning, visioning, positioning and brand planning using methodologies such as scenario planning and business simulations to improve strategic decision making. You can reach Henrik at henrik.hedstrom@capgemini.com
2 Comments Leave a comment
I couldn't agree more. The need to be customer centric in our thinking and the need to evolve and innovate has never been greater. The biggest challenge I see to making this happen is changing the culture of our industry, our companies, and our leaders. If we don't tangibly show our recognition for people thinking longer term and trying new things it isn't fair to believe our teams will actually make it happen. It starts with me!
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