Saturday, August 7, 2010

Thoughts on branding


The concept of branding started with branding of cattle, horses and slaves to indicate ownership (in the 1800s). However. from the end of 19th century, the concept of branding extended to various products. Branding has become a very vital component of business practice. Particularly after Piramal Healthcare Solutions sold 350 brands and just one manufacturing location for a fancy Rs. 17000 crores (3. 2 billion USD), the importance of branding in pharmaceutical industry is felt stronger.

Brands help businesses STAND OUT from the crowd. A brand is not just about a logo, name and 'look and feel', it is also an emotional connect with the target audience. Thus, managements are spending more time looking at brand concepts, brand touchpoints and brand equity or brand value. This includes product brands, service brands and corporate brands.

How may branding develop in the future?

Businesses will strengthen focus on brand equity. Increasing perceived value of brands will gain momentum. Brand management will gain traction as brand assets are becoming more important than the physical aspects of a business. If Pfizer is a valuable company, it is not because it has 'n' number of manufacturing locations, or 'x' number of employees (including field force) - Pfizer is as valuable as its brands. Period! Corex is a Rs. 200 crore brand today. Corex is the no. 1 pharmaceutical brand in India. This and other brands from Pfizer make Pfizer valuable. This logic is applicable to any other company too. Businesses are valued mainly on brand equity.

This was not the case in the 1980s or earlier. Then, the physical assets of a company had greater value. The land and manufacturing plants were providing the main value to the pharmaceutical business. Today? It is the brand equities that are adding value to the enterprise.

This trend of increasing importance of brand equity or brand value will usher in a new approach of corporate working where the emphasis will be on increasing brand values or brand valuation.

Brands gain value or equity from:

1) brand sales
2) brand profits
3) brand scalability: is there scope for the brand to grow? Can the brand value increase exponentially with future time?
4) brand image: is it respectable?
5) brand penetration: is the brand more urban focused? Is the brand more focused towards specialists?

Brands versus threats of obsolescence

In pharma industry, brands have a unique threat, ie., of getting outdated. For instance, brands of astemizole, terfinadine, cimetidine, rofecoxib ... where are they now? With the generic molecule getting outdated or being withdrawn from the market, due to adverse drug reactions, the brands also have died a premature death. For a brand marketer, it is a tragedy. With great efforts the brand marketers have worked for ensuring good BRAND RECALL in the market. Finally, with controversy dogging the generic, the brand also has to suffer premature death. All the brand marketing investments have come to a nought!

Brands are separate assets

With brands becoming more valuable than even physical assets, brands need to be protected and brands need to live longer in the market in the best interests of the pharma company. With generics becoming outdated or withdrawn, how can a company preserve the brand name?


This was the marketing conundrum faced by the marketers at Reckitt. Sometime back quietly the marketers changed their DISPRIN from aspirin to paracetamol. The marketing thought was that Disprin was no longer being used for headaches widely, paracetamol was the faster selling generic in this space, hence, the quiet replacement of generic aspirin with paracetamol. However, when this happened, it stirred a hornet's nest. The regulators objected to this change as it was imprinted on the mind of prescribers that Disprin is aspirin. Disprin is used as a blood thinning agent too. So the company had to do a volte face.

The pragmatic marketers of Reckitt heeding to the public outcry and comments of the drug regulators, so they launched Disprin Paracetamol as a line extension. This has avoided the allegation of misbranding too.

Line extensions the way out

The above case study of Disprin (aspirin) and Disprin Paracetamol shows the way forward for pharma companies in brand management. With brand clutter being the order of the day, resorting to line extensions is becoming a necessity. Saving the brand name in the event of a generic becoming outdated or banned is an important challenge to brand marketers. Brands are built over time through costly investments. These efforts and resources spent, should ideally not come to a nought, just because a generic is no longer wanted. The brand name of the generic is still an important asset. The brand has generated a lot of pen habit among prescribers. Line extensions is a way out to save the brand name. This is especially because brands are today, very important assets, and it is not easy to establish brands. Disprin aspirin and Disprin Paracetamol is a very interesting and pragmatic approach.

The case of Althrocin

Ask any doctor what 'heritage brand' Althrocin is, pat will come the reply, Althrocin is erythromycin. At one time, in the 1990s, Althrocin was among the top 5 pharmaceutical brands of India. Today, with erythromycin prescriptions becoming lesser due to rise in prescriptions for cephalosporins and fluoroquinolones, the brand name Althrocin has become very weak. The brand equity is a pale shadow of its glorious past. What a brand tragedy?!


If brand Althrocin was redefined to include all similar generics like Azithromycin, Roxithromycin, and Clarithromycin (ie., macrolide antibiotics), through line extensions, would it have helped the marketing cause of increasing brand value of Althrocin?

Unless, brands evolve with times, ensuring relevance to the target audience, the brand values will inevitably become weak. Technology has to be harnessed to prop the brand higher. Brands should extend to various types of dosage formulations to ensure the brand is still exciting and relevant. In today's context, brand marketers should not easily bury brands, just because they have become old and mature. Brand marketers should help brands evolve and remain pertinent with changing times. That is the true call of brand marketing!

Brand marketing in pharmaceutical marketing is now a greater challenge since the brand is a master asset. In the above examples, brand marketers can take brand decline lightly and be party to the 'degrowth of a brand' because the brand is getting old OR like the interesting case of Disprin Paracetamol, brand marketers can make strategic moves (such as line extensions, there are other approaches too) to ensure brands evolve with time, and that brand equity enhances with time, so that there is a good future for all brands. NOW THAT IS SOME FOOD FOR THOUGHT!

Wishing all brand marketers all success in their professional life! Please do recommend this blog to your acquaintances, kindly read all other blogposts by scrolling down and clicking on older posts when required. Trumpet the benefits of the brand, do not make the voice feeble!

1 comment:


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