Innovation in the Pharma Industry: Market Research Tools, Technologies and Approaches to Improve Consumer Interactions

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Best Practices, LLC Strategic Benchmarking Research

Innovation in the Pharma Industry: Market Research Tools, Technologies and

Approaches to Improve Consumer Interactions

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Table of Contents

I. Executive Summary pp. 4-21

Research Overview pp. 4

Universe of Learning pp. 5

Innovation Widely Dispersed but Thinly Seeded pp. 6

Key Findings pp. 7-20

II. Universe of Learning: Key Demographics of Participating Companies pp. 21-23

III. Innovation in Marketing Research Approaches pp. 24-26

IV. Innovation in Marketing Research Tools pp. 27-72

Using Innovation to Update the Use of Analysis Tools for Key Market Research Activities

V. Marketing Research Trend Changes – Qualitative Trends pp. 71-76

VI. Marketing Research Trend Changes – Quantitative Trends pp. 77-82

VII. Emerging Market Research Tools in Pharma Sector pp. 83-94

VIII. Communicating with Consumers pp. 95-99

IX. Trends in Consumer Communication pp. 100-105

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Table of Contents

X. Evaluating Direct-to-Consumer Marketing pp. 106-108

XI. Lessons Learned and Pitfalls to Avoid pp. 109-113

XII. Appendix pp. 114-125

XIII. About Best Practices, LLC pp. 126

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Topics Included Study Overview

Innovativeness of MR Tools for:

Forecasting

Patient Flow Mapping

Positioning

Segmentation

Brand Research

Concept Testing

Brand Awareness

Customer Insights

Direct-to-Consumer

Tactic Testing

Target Product Profile Testing

Utilization of Emerging MR Tools

Effectiveness of Consumer Marketing Tools

Best Practices, Pitfalls & Lessons Learned

Research Objective: New technologies are

transforming how consumers educate themselves

and make critical purchasing decisions.

Correspondingly, across industry sectors the

consumer marketing playbook and marketing

research analysis approaches are evolving to better

identify winning tools and techniques.

This cross industry study addresses topical issues

that include new media for interacting with

consumers, new qualitative techniques for insight

mining and new quantitative techniques for research

data analysis.

Methodology: Best Practices, LLC engaged 59

Market Research leaders at 58 companies through a

benchmarking survey instrument. Eighteen

participants were from Pharma industry. In addition,

research analysts conducted executive interviews

with eight selected respondents to collect qualitative

data and insights.

Research Project Objectives, Methodology & Results

Best Practices, LLC conducted this cross-industry benchmarking study to identify current and

evolving approaches for consumer marketing and marketing research techniques and tools. This

study contains extensive qualitative data.

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59 Benchmark Participants Represent Nine Industries

Benchmark Class

Fifty-nine benchmark survey respondents from 58 companies participated in this study. More than 40

percent are directors, VPs, and C-level and a third are manager level. The rest fall under “other.” The

participants represent more than nine industries with pharma the largest segment at 30%. To add

qualitative depth to the study, eight interviews were conducted with market research leaders.

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Copyright © Best Practices, LLC

Pharmaceutical Benchmark Class Non-Pharmaceutical Benchmark Class

Sekisanchi LLlC

R2Business Solutions

(n=18) (n=41)

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Innovation Has Many Faces in Consumer Market Research

The “Innovation Insights Story” in Consumer Marketing Research reveals ongoing evolutionary change –

rather than revolutionary disruptive technology change. Innovation is broad reaching, incremental and

assumes various forms through tools, technology, process improvements and hybrid adaptations of

proven practices.

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Examining Innovation

Across Consumer

Marketing Research

Landscape

3. Innovation Is Widely Dispersed But Thinly Seeded: 80% Of

Venues Are Seed Beds With 5% to 12% of Companies Innovating

At Most Research Milestones 4. No Single Company Has Cornered the Market on M.R.

Innovation

5. Innovation Hot Spots Exist In Customer Flow Mapping,

Segmentation & Concept Testing. Innovation Has Many Faces:

Process, Tools, Hybridization, Deeper, Faster & Cheaper

2. Innovation Is Evolutionary / Incremental Across the Market

Research Process

6. Seed New Innovation Projects Where It Most

Benefits Your Existing Brands & New Products

1. Most Companies Rate Themselves Low on Market Research Effectiveness &

Innovation

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Qualitative Key Findings: Mobile Research and Online Tools

Improving Report Presentations Enhances Engagement: Finding innovative or fresh ways to

present reports/studies – such as formats like Prezi or the use of dynamic visuals – is an important

way to keep staff and internal stakeholders engaged.

Mobile Research Will Be a Key Tool for Market Research in the Future: Mobile research, with

its rapid delivery of point-of-care and point-of-sale data, will be an important tool for marketing

research in the future. Seventy percent of the Pharma Segment is using mobile research either

sometimes or frequently.

Online Communities Offer Bottomless Pool of Consumer Insights: Online communities are a

valuable qualitative source of consumer insights and yet the tool appears to be underutilized. In the

Pharma Segment, 50% said they were using online communities sometimes while the other half

said they don’t use them at all.

Social Media Listening Is Another Underutilized Tool: Social Media Listening is another

underutilized tool that can inform market researchers across many topics, including product

positioning, brand awareness and customer insights. In the Pharma Segment, 40% said they don’t

use it.

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The following key findings and insights emerged from interviews and qualitative survey responses in

this study.

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(n=59)

Q1. Please identify which industry sector your company represents

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Industry:

Pharma, 30%

Finance, 2%

Healthcare, 10%

Consumer Goods, 3% Marketing/Market Research Agencies,

15%

Electronics, 2%

Services, 15%

Telecommunications, 5%

Other, 17%

*Others:

Utilities

Education

Postal

More than 9 Industries Participated in Innovation Study

The benchmark study group was anchored by biopharma companies, which made up 30% of respondents. Healthcare (non-manufacturers), agencies, telecommunications, services, consumer goods, finance and electronics companies also participated in this marketing research innovation study.

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Q. If you do not feel you have a highly effective market research organization, rate what factors are impeding your

effectiveness?

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Effectiveness Obstacles (Pharma):

n =

14

14

13

14

14

14

14

8

Staff, Budget & Other Factors Impede Pharma

Pharma companies identify the same top obstacles – Insufficient staffing and budget plus “other” factors – to MR effectiveness. Insufficient staffing is clearly seen as the principal issue. Interestingly, the overall benchmark class sees over-reliance on quantitative data to be an issue – but pharma sees over-reliance on qualitative data as a larger obstacle. Again, Pharma sees lack of innovation as much less of an obstacle than the class at large.

% of Respondents

*Other Major

Obstacles Cited:

• "Company does not

place much

emphasis on

marketing"

• "Cultural barriers"

• "Inexperienced /

poorly training

people managers"

• "Not enough

standardized

practices/protocols

in place that would

enable capacity for

insight/ innovation"

• "Too many low

value requests

required by internal

customer base" *

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Innovation Topography Varies Widely across MR Landscape

Market research innovation is not only about new “tools.” This Innovation Topography Map shows that Methodologies and Tools innovation (illustrated in blue) often outpaces new tools. Some activities – such as customer flow mapping, segmentation and concept testing are fertile grounds. In contrast, tactic testing and target product profile testing are sterile from an innovation perspective.

Percentage of Respondents Rating Each Tool “Innovative” for Each Category:

0%

5%

10%

15%

20%

25%

Forecasting Patient FlowMapping

Positioning Segmentation BrandResearch

ConceptTesting

BrandAwarenessResearch

ConsumerInsights

DTC TacticTesting

TargetProductProfile

Testing forPipelineProducts

Methodologies and Tools Data Collection Analysis and Interpretation Reporting & Communicating

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Quant and Qual Working Together Create Synergy

Innovation in market research doesn’t have to be a new tool or methodology – it can come from finding ways to combine work streams to reduce job timelines. One participant thought having qual and quant teams work closer together would accomplish that goal.

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“We do see where qualitative is starting to inform quant where it didn’t before. I’ve been in

the offices of most major market research firms in the world and there’s usually a keypad

door separating the qualitative teams from the quantitative teams.

We’re seeing that change with online ‘qual’…we’ve got the technologies that allow us to

bring people out of a large segmentation study, a customer satisfaction survey, and bring

into a qualitative discussion for a deeper dive with them. That’s allowed the quant-qual

teams to co-mingle on these projects.

It is unbelievably common where you do a segmentation study and find some unexplained

thing and go through the keypad door and say, ‘Qual team here’s something to go

explore.’ Well that can take months…today we’re radically reducing those timelines by

giving them technology that the quants can run themselves or that makes the quant and

qual teams work together very closely.” – Chief Innovation Officer

Qualitative Component

Quantitative Component

Merging to

provide more

realistic Insights

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Q. Please Indicate how often you use these emerging marketing research tools when targeting patients/consumers:

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Emerging Market Research Tools (Pharma):

n=

10

10

10

10

10

10 100%

100%

50%

40%

30%

30%

50%

60%

50%

50%

20%

20%

Geotracking:

Gamification:

Online Patient/Consumer Communities:

Listening/Mining Social Media:

Web-Use Tracking:

Mobile Research:

Don't Use Use Sometimes Use Frequently

Pharma Segment: Utilization of Emerging Tools Uneven

The pharma segment appears to be building up its comfort level for some emerging market research tools like mobile research, web-use tracking, social media listening and online patient communities. At least half of the pharma participants said they use all these tools at least sometimes. Meanwhile, gamification and geotracking were not used at all.

% of Respondents

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Q. Please note all the factors that informed your rationale for not employing a DTC campaign for a new product:

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Reasons for NOT USING DTC:

59%

75%

38%

28%

35%

21%

22%

29%

13%

31%

39%

29%

32%

22%

12%

13%

31%

33%

35%

47%

56%

Condition doesn't support self-diagnosis

Other

Amount of fair balance required

Niche/small specialty market

DTC channels weren't targeted wellenough

Regulatory hurdles or restrictions

Too Costly

Not Important Consideration Important Considerationn =

18

19

17

18

16

8

17

Not surprisingly, the cost and regulatory hurdles that come with Direct-to-Consumer marketing were cited as the two principal reasons for not employing campaigns.

TBC Segment: Cost and Regulations Stop DTC Use

% of Respondents

*Other:

•"Don't do DTC"

•"Not my segment

of the market"

•"The company

does not currently

support this - it has

been suggested"

•"We don't really

market products

directly to

consumers"

*

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Pharma Segment Doesn’t Combine MR Techniques

The practice of combining market research tools or techniques appears to be even less prevalent in the pharma sector. Only 11 percent of participating pharma companies said they use that approach.

(n=9)

Q. Have you employed innovative combinations of existing market research tools or techniques that have produced

valuable insights (such as merging survey research with online behavioral tracking)?

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Innovative Hybrid Approach (Pharma):

Yes, 11%

No, 89%

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Best Practices, LLC 6350 Quadrangle Drive, Suite 200

Chapel Hill, NC 27517

www.best-in-class.com

About Best Practices, LLC

Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics, and winning strategies of world-class companies.

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Health & Medicine

Innovation in the Pharma Industry: Market Research Tools, Technologies and Approaches to Improve Consumer Interactions