Wednesday, October 21, 2009
Leaks in pharma marketing
THE ABOVE PICTURE IS RELATED TO JOHN KOPCHINSKI (former Pfizer sales rep) WHO WAS THE WHISTLE BLOWER (marketing leak!) THAT LANDED PFIZER IN TO PAYING 2.3 BILLION USD AS CRIMINAL FINE, AND JOHN MADE 51.5 MILLION USD IN THIS LEGAL ORDEAL. HE IS A BATTLE HARDENED GULF WAR VETERAN. I GOT THE ABOVE IMAGE FROM HERE.
Carry on doctor!
Pharma marketers lionize doctors. Prescription flow is the bread and butter of pharma marketers. To engage prospects and prescribing doctors, pharma marketers look at various formats of messaging. The MR too puts on his charms and persuasively feeds the doctor's senses - literally by sponsoring lunches and figuratively, by providing clinical data literatures. Small freebies, mega gifts and sponsorships - particularly to medical conferences is the icing on the promotional cake! Doctors like being lionized by pharma professionals.
The impasse: With market spends going northwards day-by-day (marketing budgets never come down do they?!) it is increasingly difficult to accurately judge which item of the marketing and promotional mix is providing the best bang for the marketing buck. Identifying the most powerful market-mix elements and investing most on the best options will certainly plug the leaks in pharma marketing.
MRs the biggest marketing investment
MRs (medical representatives) get a lot of the market spend. Their salaries, incentives, and expense reimbursements take a lot of the marketing moolah. Added to this are the doctor oriented spends through MRs. These include monies invested for samples, print inputs, gifts (small and big), and specific sponsorships. These items are provided by MRs to doctors based on company guidelines and business requirements. So essentially, the product per se takes the back seat. It is the marketing effort and resources that take up a lot of marketing monies. Without intelligent market spends, the product inevitably has a lack luster market performance. So the market spend through MRs to doctors and chemists is a necessary millstone round the company's neck!
Let us say, the company allots 25 units samples for a product/MR. Now is this less or more? If the samples are stopped will it increase or decrease the sales of the product? These type of nagging questions do not have clear cut answers. And hence, there are a lot of marketing leaks.
There is one more conundrum: typically, some MRs are heavy samplers and others get the business without much sampling. Yet each MR gets the same aliquot of samples. So how do you identify and judge the marketing leaks?
Certain areas of India are sample oriented, others - gift oriented, and still others require both. How to identify the right marketing cocktail to ensure that marketing leaks are minimal?
The penetration of products into the nook and corner of the target market is the key to product success. Products move from stockists (wholesellers) to retailers; however, products also move from the wholeseller to sub-stockists or even to unlicensed hawkers, and then on to retailers or dispensing doctors. Even these market forces (sub-stockists and hawkers) influence market penetration. So does one classify the sub-stockists and hawkers as leaks in the distribution process? Normally, they are valid marketing leaks!!
Schemes (bonus offers or free goods on purchase of a certain quantity of goods) on pharma products are a vibrant dimension of the commoditized pharma marketplace today. Schemes are an addiction. They can take product sales upwards, remove the schemes - the sales can drop like a stone in water. So where do you strike the balance? Should the corporate honcho summarily dismiss schemes as a massive leak in the distribution activity or should he identify it as a strategic investment for market penetration?
Leaks in messaging
Let us say the product manager (PM) creates a 10 sentence visual aid page for a product. During the briefing session to the MRs, the PM lays emphasis on 5 sentences. During the practice session, the MR focuses on 3 sentences, and finally on the first call with the new visual aid page, the MR in his very brief encounter with the doctor focuses on 1 sentence and tries to detail the second sentence. During his subsequent calls, the MR manages to only say the brand name and the pay off or tagline sentence. Finally, as the visual aid gets worn out, the MR stops detailing all the visual aid pages and randomly shows one visual aid page based on the time available and the target focus product. So do we conclude that the visual aid creation activity and all the investment to create the visual aid was a waste or a marketing leak?
When a MR gets a bunch of leave behind literatures, out of the 50 pieces, he uses only 28 and the rest are sort of discarded (he may even give some to his young niece). So should the firman be that leave behind literatures are an expensive fancy and to curb expenses - let us reduce the literatures and also the nos. given? This way it is hoped that the marketing leaks in messaging inputs are plugged. Now, is this a sagacious approach?
Where is the ROI?
During a lunch break, the finance genius cum finance departmental head sits across the table with the marketing head and asks him with bewilderment and justified consternation, "If each MR gets Rs. 150 worth of samples of a product, should he not get atleast Rs. 1500/- of business for the product?" And the finance head continues "There is that guy in place XXX who gets Rs. 15000/- worth of business for the product A with samples worth Rs. 150/-". "Why?" he thunders, chewing on a chicken kabab. Is the finance head right in identifying the tasty morsels of so- called marketing leaks (?) that can be plugged? After all the finance whiz has to ensure financial discipline. Nothing is free. There are no free lunches (or free kababs for that matter)!
WHITHER DO WE GO TO IDENTIFY AND PLUG THE MARKETING LEAKS? Hey, wait a minute, do we all agree, first of all that there are marketing leaks, or are they all necessary strategic investments?
The mind game begins
Baby, marketing is a game of PERCEPTIONS. The cup is half - full and/or half - empty. What goes up should come down. In life, the full circle phenomenon is the complete truth.
What is this full circle phenomenon?
An example of the full circle phenomenon is this: let us say a guy is a strict veggie, nonsmoker and teetotaler. Slowly, he starts breaking from this mould. He begins occassionally dabbling in nonveg foods, tobaccoism, and alcoholic beverages. Then the frequency increases and it starts peaking. At its peak, the guy starts thinking of altering his lifestyle and starts reducing intake. Finally, after some more time he tends to come back or atleast wants to come back to where he started from.
Let us say, a company starts upping the market spend slowly, then it peaks, the company then tries to curb and come back to a lower position.
It is all about balance.
When a company starts getting the general feeling that market spend is high, perceived marketing leaks are plugged to try and get a balance. Each stakeholder has his own agenda in creating a positive perception about the marketing strategies, inputs, and approaches. In marketing it is very difficult to get the right picture, because each element of the marketing mix does its bit in creating the business result. It is difficult to define a perfect marketing leak. Sponsorship of a stall in a medical conference is a marketing leak to some marketers, but to some it is an opportunity to prospect, convert doctors, and message powerfully.
Marketing is the only field of business activity where apparent leaks can be converted into opportunities that create customers, and increase sales revenues. True marketers do not visualize leaks they see opportunities, and work on how to create customers, retain customers and increase sales. through the marketing leaky hole!
If marketers start thinking of leaks, creativity gets bogged down, and it is the deathknell of marketing. There are no marketing leaks, only marketing opportunities. Oh yes, there should be budget and there has to be a framework to work on the marketing approaches, otherwise it creates imbalances.
The thumb rule is that marketing activities should be a mix of activities that provide short-term results, medium term results, and long term results. This will automatically ensure that alleged marketing leaks are not there.
WHEN THERE ARE SEVERE IMBALANCES AND EXCESSIVE FOCUS ON SHORT TERM RESULTS, CRIMINALIZATION OF PHARMA MARKETING TAKES PLACE. AFTER ALL IT IS NOT A SMALL EVENT THAT PFIZER HAD TO COUGH UP(in India they market an (in)famous cough syrup called Corex) 1.3 billion USD for misbranding and illegal kickbacks to doctors - this is a massive criminal fine. The total fine to be paid by Pfizer is as is now well known 2.3 billion USD (that is one third of the annual retail Indian pharma market in Indian rupees!). And mind you the massive criminal fine payment by Pfizer has happened because of a whistle blower Pfizer sales representative. The sales representative involved was John Kopchinski who fought legally for six years with Pfizer, and in the process has gotton himself 51.5 million USD through his victory. NOW THAT IS A MASSIVE MARKETING LEAK!!
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The bottomline: create a budget and work on the apparent leak (because it is actually an opportunity). Work with a sense of balance towards short term objectives, medium term goals, and strategic long term goals. There will be no sense of marketing leaks.