The future of pharma profitability lies in building corporate brands
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Prepared by Prophet THE FUTURE OF PHARMA PROFITABILITY LIES IN BUILDING CORPORATE BRANDS May 2013
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Transcript of The future of pharma profitability lies in building corporate brands
Prepared by Prophet
THE FUTURE OF PHARMA PROFITABILITY LIESIN BUILDING CORPORATE BRANDS
May 2013
Interested in learning more? Visit www.prophet.com/healthcare
Pharma corporate brands need to be the next big consumer brands
Product Marketing ROIis Declining
Blockbuster drugs are the lifeblood of current business models, but they are becoming less pervasive as many go generic in the major disease categories and across global geographies.
GENERATE A MEANINGFUL MARKETING ROI
Pharma Corporate Brands Have Poor Corporate Reputations
According to Prophet’s Corporate Reputation research, other corporations with strong reputations have been able to leverage their corporate brand to offset declining product brand efficacy. This opportunity has historically been closed to pharma given their poor corporate reputation.
RECLAIM YOUR CORPORATE REPUTATION
Pharma Can Corporate Own the Drivers of Strong Reputations
The drivers of corporate reputation are the same ones that drive product sales. They align well with pharma’s core capabilities and there is a significant opportunity to build a corporate brand around them.
OWN THE DRIVERS OF A STRONG REPUTATION
#1
Interested in learning more? Visit www.prophet.com/healthcare
The era of major blockbuster product brands efficiently driving portfolio growth is over
Given marketplace realities, regulatory pressures and global consumer demands, pharmaceutical companies must reimagine their growth drivers.
FDA new drug approvals have declined from previous highs
Generics now account for3 of 4 pills dispensed
Overall pharma and biotech R&D spending is declining as a percentage of global sales, and is projected to keep decreasing
R&D SPENDING AS A % OF WW BRANDED RX SALES
FDA APPROVALS GENERICS
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16 Emerging economies that speak 13 different languages will command 1/3 of global medicine sales by 2016
The era of major blockbuster product brands efficiently driving portfolio growth is over
Interested in learning more? Visit www.prophet.com/healthcare
LEADING CORPORATIONS HAVE UNCOVERED THE INEFFICIENT REALITIES OF PRODUCT BRANDING AND HAVE MOVED TO INVESTING IN THE MASTER BRAND TO DRIVE BROADER PORTFOLIO CONSIDERATION AND LOYALTY.
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Cisco spent a decade acquiring and marketing new product technologies, many of which had very strong brands, including Linksys, WebEx, IronPort, Jabber and Flip Video.
To drive greater marketing ROI, the company stopped investing in the product brands and instead began focusing attention on the corporate brand and using product family names, which has improved efficiencies of marketing investments.
Corporations in other categories have begun to shift focus from product brands to master brands
Interested in learning more? Visit www.prophet.com/healthcare
Corporations in other categories have begun to shift focus from product brands to master brands
P&G, most famous for its house of brands and for being a leader in consumer packaged goods recently began shifting investments to link their corporate brand to a higher purpose.
After sponsoring the 2010 Winter Olympic Games, P&G saw $100MM in incremental sales, achieved their highest aggregate U.S. market share, increased corporate brand awareness, increased product brand recall by 30%, and achieved greater long-term equity with the target, moms.
Interested in learning more? Visit www.prophet.com/healthcare
THE RESULTS OF PROPHET’S ANNUAL CORPORATE REPUTATION STUDY* RANKS PHARMACEUTICAL COMPANIES** AS BARELY AVERAGE IN THEIR OVERALL CORPORATE REPUTATION.
EVEN FAST FOOD COMPANIES OUT RANK PHARMACEUTICAL COMPANIES IN CORPORATE REPUTATION.
*Prophet’s corporate reputation study evaluated 150 companies among 5,300 consumers**Includes Abbott Laboratories, Sanofi-Aventis, Eli Lilly, Pfizer, and Merck
Interested in learning more? Visit www.prophet.com/healthcare
Historically, this approach has only been open to industries with strong corporate reputations
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72 7168 67 65 64
60 60 60 59 58 57 5753
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AverageStrong Poor Failing
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Ironically, the top drivers of reputation are ones that align well with pharma’s capabilities
The reputation drivers that drive both reputation and purchase are intuitively ones that pharmaceutical companies can and should perform well on, but at present do not.
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90Attribute weight Pfizer Abbott Laboratories Merck Sanofi-AventisEli Lilly
Pharmaceutical Industry Performance:
Top 3 Drivers of Reputation & Purchase
Attribute Weight
<60 – Poor/ failing performance
Is a company whose products and services make a difference in my life
Is a company that inspires me
Gives me peace of mind
>70 – strong reputation
Performance Scores
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Building a corporate brand and improving corporate reputation will drive product sale conversion and loyalty
Consumers are twice as likely to purchase, pay more for and recommend products and services from a company
with a leading reputation versus a failing one
Companies with leading reputations convert customers from considering a
product or service to purchasing products or services 90% of the time
40% of the key reputation drivers overlap with purchase drivers
All 100% of key reputation drivers overlap with recommendation
drivers
Companies with failing reputations convert customers from consideration to
purchase less than 60% of the time
Interested in learning more? Visit www.prophet.com/healthcare
We have developed a proven three-step approach to building a strong corporate brand and reputation
To build a strong corporate brand, you must begin with a rich understanding of all the stakeholders in the complex pharma environment and uncover beliefs, motivations and attitudes.
Using the new consumer insights as the foundation, you must next build a strategy that intersects with competitive landscape realities and your businesses assets, capabilities and strategy.
Finally, the corporate brand is brought to life across a series of signature activation touch points so that identity becomes real, differentiated and relevant in the eyes of key stakeholders.
BUILD THE CORPORATE BRAND STRATEGY
UNDERSTAND THE PHYSICIAN AND PATIENT
ACTIVATE THE CORPORATE BRAND
Interested in learning more? Visit www.prophet.com/healthcare
Interested in learning more? Please contact:
Michael PetromilliAchim WirtzSenior Partner
Partner(312) 878-4927+41 44 218 7819 [email protected]@prophet.com
Jeff GourdjiPaul Schrimpf
Associate PartnerAssociate Partner(312) 878-4929 (312) [email protected]@prophet.com
www.prophet.com/healthcare
