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THE BUSINESS MAGAZINE OF PHARMA
NOVEMBER 2010
VOLUME 30, NUMBER 11
Pharm Exec: There are many changes in the healthcare industry these days, leading to more pressure on sales and marketing budgets. How do you recommend phar-maceutical executives attack the evolving market? Jeffrey Spanbauer: First, healthcare re-form is bringing approximately 32 mil-lion previously uninsured consumers into the process. Government oversight will become even more of a factor, and cost containment will be even more critical. Second, focus on ROI is not just for the big picture, but for all marketing pro-grams—where should I spend my next dollar? Third, we’re facing other market factors, such as access to physicians, that change the way we do business in health-care. These factors lead to more scrutiny of budgets. We need a more in-depth view of the marketing mix, making sure we gain the most impact for the programs we fund. This evolving market makes us view healthcare in a whole new light.
PE: I am hearing “regional marketing” a lot these days—what is regional market-ing?
JS: We define regional marketing as tar-geted allocation of resources to markets for the greatest return on investment. It is an important part of the marketing mix and can help brands optimize their spend-ing to achieve the best returns. PE: What are the forces that are driving the need for regional marketing?
JS: The main drivers are the need for rap-id response to market conditions and the need for better ROI. Also, there’s a need to address the variability across markets, such as different demographics or man-aged care situations, making districts even within the same states very different. Back in the day, a blockbuster brand could af-ford to do “one-size-fits-all” marketing—they had lots of representatives and plenty of budget, so if the tactics didn’t work in
all markets, it was ok. But in today’s envi-ronment, brands have tighter budgets, so tailoring strategies and tactics to market drivers allows for increased ROI.
PE: When is regional marketing impor-tant? JS: Regional marketing is important when
a product has variability at a geographic level. We have analyzed and worked with brands in over 30 disease states and we typically see significant product variabil-ity in market share and volume per 1,000 people. The variability is usually 200 per-cent from the top-performing district to the lowest one, but can be as high as 400 percent.
PE: What drives this variability?
Regional Marketing, National GrowthPharm Exec sits down with an expert on regional marketing to ascertain what it takes to drive strong brand results
Growing a brand even faster is always a great idea. The opportunity is finding the markets where the brand can grow even more, and deploying the right resources to those markets
Jeffrey Spanbauer is a founding Principal at Healthcare Regional Marketing in Cincinnati. He can be reached at [email protected]
R e g i o n a l M a R k e t i n g:
Healthcare in a Whole new light
an essential Part of the Marketing Mix for Marketing and Sales executivesWith rapid changes in the market, healthcare reform, and a new emerging commercial model, driving brand performance is increasingly challenging. Tighter budgets and smaller sales forces make it more difficult than ever to get your message to healthcare professionals (HCPs).
However, rapid change creates opportunity. One aspect of this change is the fact that millions of previously-uninsured consumers will be entering the healthcare market, thus creating a significant opportunity for companies that are prepared. This preparation begins with understanding how healthcare reform, the new commercial model, and other market factors will impact the pharmaceutical industry and, ultimately, brand performance.
Regional marketing is now an essential element of the marketing mix, resulting in increased return on investment for many brands. In order to capitalize on so many market changes, marketing and sales executives need to view healthcare in a whole new light.
To read more of the white paper or find out more about Healthcare Regional Marketing, please visit hrmexperts.com.
Jeff Spanbauer is founding principal at Healthcare Regional Marketing. He can be reached at [email protected].
JS: We have identified six “drivers” of product variability. We call them the “Six P’s.” They are: “Population,” which deals with demographics; “Prescriber,” which focuses on physicians; “Provider,” focusing on entities administering the healthcare, such as managed care, hos-pitals, and clinics; “Payer,” which deals with who pays, such as the government or employers; “Product,” dealing with competition; and finally, “Place,” which covers Field Force dynamics and regional legislation.
PE: There is a perception that it’s all about managed care—if you are on second tier you are golden. What else is there to know about each market? JS: In today’s environment, it is never that easy. It really depends on the product and category, and we’ve found that it actually depends on all the Six P’s. We have seen many instances where brands have some markets with Tier 2 access and some with Tier 3. We’ve seen Tier 2 markets have the same or lower market share than Tier 3 markets. I know this drives brand man-
agers and managed market folks crazy … that is why we need to look at all Six P’s.
PE: When a growth brand is currently winning, why would it need regional mar-keting? JS: An incremental script is worth a lot of future revenue and profit … so grow-ing a brand even faster is always a great idea. The opportunity is finding the mar-kets where the brand can grow even more, and deploying the right resources to those markets.
Posted with permission from Pharmaceutical Executive. Copyright ©2010, an Advanstar publication. All rights reserved.www.pharmexec.com
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