Sunday, March 20, 2011


One of the most important approaches in business strategy is BENCHMARKING. In this strategic approach we constantly scour the environment to find out the best practices. After understanding this practice, it is incorporated in to the firm, to enhance competitiveness.

For eg., if many diclofenac brands are being launched, the companies benchmarking the market activities, start launching their own brands of diclofenac to get a slice of the market. Here the benchmarking effort has helped in new product launch. Benchmarking in a way is copying the best practices. Benchmarking is elaborated as the analysis & learning the best practices, and incorporating the same either directly or adapting the practice to ensure cultural fit in to the organization for improved outcomes.

Recently the ET reported on 3.3.2011 that major MNCs are launching a slew of me-too generics (ie., branded generics) to get a share of the booming pharma market. With new product pipelines not ensuring blockbuster successes (ie., atleast 500 million USD annual global sales), the idea is to launch new brands that are copycat brands of successful molecules and improve sales results.

This means MNCs are no longer relying on their personal marketing wisdom. It indicates a new openness in the pharma marketing approach. MNCs too are learning best practices from the market that ensure market success. One of the key approaches for success in India, is launching branded generics. MNCs are betting on this game with firm resolve!

What is the moral of the story?

If MNCs too are interested in launching me-too brands, to ensure better market penetration particularly in to rural pockets, this indicates that MNCs are now learning and incorporating new market practices for improved marketing outcomes. This indicates that the concept of benchmarking has got a boost. Today, pharma MNCs and nonMNCs are eager to learn of the best practices in the marketplace, and incorporate them for bettering marketing results.

BENCHMARKING is about understanding current business practices of one's firm, and understanding the business practices of other successful or above par companies. This learning is then incorporated for enhancing performance and reducing performance gaps.

One cannot operate as a silo. It is the dawn of a new era of benchmarking and co-operative competition, for survival and mutual growth. There was a time when pharma companies would not look outward for answers to their problems. Today, looking outwards and benchmarking has become the norm for survival and growth. Benchmark or suffer degrowth seems to be the guiding principle!


The final goal of benchmarking is improving performance outcomes. Thus, any practice that can potentially improve performance ought to be benchmarked! Learning anything that does good to the business is the norm. Benchmarking need not be from the pharmaceutical industry alone; it can also be, say, from the hospitality industry, that is, if the practice can potentially improve performance.

For eg., soft skills are vital in the hospitality industry. Hence, benchmarking soft skill training from hospitality industry for MRs and other front line personnel is certainly not a bad idea. Training of soft skill concepts like time-sense, courtesies, etiquette ... will certainly improve in-clinic performance to enhance sales outcomes.

Benchmarking is about learning and incorporating processes or practices that enhance performance, from other companies in the industry or other industries.

Benchmarking cultural attitudes like a learning culture and horizontal communication was attempted by DRL by benchmarking with software companies. It has certainly helped DRL in creating a learning culture. this is the website of a pharmaceutical benchmarking group, where success practices are shared among members and improved performance outcomes are sought.

The ultimate goal of 'managements of enterprises' is to constantly improve employee productivity. For knowing how to do this, knowledge sharing of practices is vital. Benchmarking helps with this. Since benchmarking is linked to employee productivity and can enhance the same, there is an appreciation on the concept of benchmarking. This helps incorporate best-in-class practices for better productivity.

Imagine the database of a pharmaceutical marketing company that has mapped the MR reports over three years. Based on this historical data, the infotech group can provide an e-mail to each MR, suggesting to the MR on the important calls that can be made in the next three days, including the timings of the calls, and the products to focus on. This concept can help reduce planning time, ensure better call outcomes, optimize time spent on doctor visits and if the MR is new, it will provide a great helping hand for efficient planning. This is the strength of a robust database department.

Above database based marketing practice is based on practices observed in FMCG companies, which helps them enhance sales.

There are many other types of benchmarking viz., strategic, operational, financial, functional, performance, metrics, best in class etc. With the dawn of a new era of benchmarking (even MNCs are into strategic benchmarking, as they are seen to launch me-too branded generics), benchmarking is on a take-off mode. It is important to institutionalize benchmarking formally to help improve employee productivity and organizational outcomes.

Thnks for reading this blogpost, please scroll down and click on older posts to read other blogposts, please recommend this blog to others.

1 comment:

Health Care Views said...

Nice post!

However, would like your views on the fact that in most parts of India, "Brand names become Commodity names", like Colgate and not Tooth paste.

My question to you is how far will they succeed in Benchmarking, with such mindset of masses? Wont the early bird catch all the worms?