Managing Multiple Products Summary
11
1 Copyright © Best Practices, LLC Best Practices, LLC Strategic Benchmarking Research Expanding a Product Portfolio Without Cannibalizing an Established Brand
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How to Launch New Products without Cannibalizing an Established Brand
Transcript of Managing Multiple Products Summary
1Copyright © Best Practices, LLC
Best Practices, LLC Strategic Benchmarking Research
Expanding a Product Portfolio Without Cannibalizing an Established Brand
Copyright © Best Practices, LLC2
Key Topics Covered
Research Objective & Key Topic Areas
Study Objective & Methodology
Objective:
This benchmarking study was designed to identify effective strategies and tactics for marketing multiple brands for the same indication or area of use.
Special attention was given to strategies for managing resources and for avoiding or controlling product cannibalization.
Methodology:
Best Practices, LLC used on online survey instrument to collect quantitative data. Research analysts also conducted in-depth interviews to collect executive insights and harvest best practices and lessons learned.
Effective methods of differentiating multiple brands
Positioning strategies that minimize product cannibalization
Operational changes that drive success when introducing a new brand into a product family
Positive & negative impacts of introducing a new brand
New product’s share of the combined marketing spend during first three years both are marketed
Marketing mix for new & legacy products
Marketing activities that drive continuing success for legacy brand
Best indicators of marketing effectiveness
Pitfalls, failure points and best practices
Best Practices, LLC conducted this research to identify successful strategies and practices that can be used by biopharmaceutical managers and executives to maximize the potential of multi-drug portfolios or franchises.
Copyright © Best Practices, LLC3
Universe of Learning: Companies Participating in Study Participants in this benchmarking research included 28 respondents at 22 leading pharmaceutical, biotech and medical device companies. Eighty-six percent of respondents are U.S.-based. Others are based in Mexico, India, South Africa and the Middle East.
Survey OnlyParticipants
Participating companies include: Abbott, Alcon, Amgen, Baxter, Boehringer Ingelheim, CardioDynamics, Centocor Ortho Biotech, Elixir, Genzyme, Lumenis, MEDRAD, Merck, Micro Labs, Monogram Biosciences, Novo Nordisk, Pfizer, Schering-Plough, Shire, Solvay, Teva Neuroscience, Wyeth and Xanodyne. Participants also referenced past experience at Eli Lilly, Roche, Bristol-Myers Squibb, Genentech & sanofi-aventis.
Copyright © Best Practices, LLC4
The following findings emerged from this benchmark study.
Selected Key Findings & Observations
1. Benefits of New Brand: In all, 96% of benchmark participants realized benefits from introducing a new brand where they already had a legacy product. Top among those benefits were market leadership, expanded market share and improved reputation with physicians and specialists.
2. Negative Impacts: Just over half the participants experienced negative impacts in introducing a new brand for the same indication or area of use as a legacy brand. The most common of those was creating product confusion among internal and external stakeholders.
3. Minimizing Cannibalization: Benchmark partners successfully use more than a dozen different strategies to control or minimize product cannibalization. Targeting different patient subtypes and aligning with thought leaders are viewed as the most effective of these.
4. Franchise Approach: More benchmark participants (73%) have successfully promoted their products together as a franchise than independently as separate brands (65%). Products that have complementary treatments lend themselves to franchise marketing, while those treating clearly different patient types are suited to marketing as independent brands.
5. Differentiators: Product efficacy is the attribute that benchmark partners most often find effective for differentiating multiple brands for the same indication or area of use. Nearly two-thirds of participants rated efficacy among their Top Three differentiators.
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Efficacy & Delivery Method Are Top Product Differentiators
(N=28)
Efficacy and delivery method head the “Top 3” list of most effective product differentiators for more than half the benchmark participants. Frequency of use is also among the top three for 36% of respondents.
Q. Which three of the following options are the most effective for differentiating two or more brands within one company for the same indication or area of use? (Check only three.)
Top Three Product Differentiators
Other Top 3: Segmentation (including audience type, customer type, identifying unique patient types for each brand (2), patient-specific needs, efficacy or safety in patient population); Service & Support (2); Positioning Statement.
14%
18%
18%
29%
32%
36%
50%
64%
4%
32%Other
Quality of life
Safety
Health outcomes
Compliance
Ease of use
Price
Frequency of use
Delivery method
Efficacy
% Respondents
Copyright © Best Practices, LLC6
Multiple-Brand Marketing Spurs Many Operational Changes
(N=28)
Additional Changes=
• Educational activities increased & shifted
• Structure changed to support portfolio objectives over individual brand
Q. What operational changes did your organization undergo in order to effectively manage more than one brand for a single indication or area of use when the new product was introduced? (Choose all that apply.)
Operational Changes Resulting New Product Introduction
Both the Sales and Marketing organizations undergo changes to accommodate introduction of a new brand in an area where the company already has an established brand. At a majority of companies, Sales adds training and revises incentives, while Marketing adds and shifts resources.
46%
64%
68%
68%
75%
79%
29%
29%
Expanded sales force size
Revised sales coverage plan to accommodatemore people and products
Realigned sales force/ Changed sales territories
Revised/ expanded sales training
Increased portfolio management activities
Added new marketing funds for new product
Revised sales force incentives
Shifted resources from older product tomarketing for newer product
% Respondents
Copyright © Best Practices, LLC7
Newer Brand Receives Larger Share of Marketing Spend
Q. What percentage of the combined marketing spend (for the new and existing brands) should be allocated for the newer product during the first three years that both are on the market?
Average Percentage of Combined Marketing Spend Allocated to Newer Product
The new brand typically receives just over two-thirds of the combined new and legacy product marketing budget during its first year on market. The proportion declines slightly, relative to the legacy product, over the course of the first three years both brands are marketed.
(N=28)
Average (Mean)
Low
High
85%90%
95%
20%25%
20%
61%64%67%
0%
20%
40%
60%
80%
100%
Year ONE Year TWO Year THREE
% M
arke
ting
Spen
d fo
r New
Bra
nd
Copyright © Best Practices, LLC8
Ten Steps to Excellence in Multiple-Brand Marketing
Best Practices, LLC research identified a series of 10 critical steps that lead to excellence in marketing multiple pharmaceutical products for the same indication or area of use.
1. Take a franchise-centric approach to managing the brands
2. Clearly differentiate
the products-- both from each
other & from the competition
7. Provide sufficient sales & marketing resources to new brand to enable
its growth
3. Align each brand with distinct customer & patient segments
4. Conduct situation analysis
to craft marketing plan that best reflects
brand & franchise opportunities
8. Align Sales to brand goals with appropriate incentives & clear positioning
9. Price products to
reflect values of individual customer segments
5. Set realistic goals & objectives for product sales & adoption rates
10. Plan for migration to
newer brand to retain patients
after patent expiration
6. Align marketing
mix to reflect market entry
position & strength of franchise
offering
Multiple Brand
Marketing Excellence
Copyright © Best Practices, LLC9
Pitfalls to Avoid
Key pitfalls identified by the benchmark class in surveys and interviews are:
Insufficient buy-in/ cooperation from the sales force
Inadequate customer/patient segmentation
Failure to clearly differentiate/position individual products and their values
Unrealistic product goals
Lack of effective pricing strategy
Internal competition for limited resources
Poor thought leader alignment
Insufficient investment in the new brand
Failure to align thought leaders
Insufficient sales force training
Copyright © Best Practices, LLC10
Best Practices – Fulltext Responses, 1
Provide clear product differentiation & unique positioning for each brand
Best PracticesPosition clearly on customer value measures (price and/or features) Identify key points of differentiating the new product and focus on just a few areas supporting those areas of differentiation with additional clinical workClearly articulate the positioning and key differentiation points of new, old and competitor productsUse case studies to develop patient types that paint a picture in the physician,s mind as to where to use each brand Some similarities in product branding, yet clear differentiation in product valuePilot newer product with thought leaders to validate value points to effectively distinguish vs, older product Make sure MDs understand where to use each product for maximum patient benefitMake the indications as different as possible Differentiate product features by market segment Ensure speakers/champions have precise messaging on how & when to use each brand. Use case studies.Optimize portfolio positioning Products must have a distinct point of differentiationDifferentiated marketing mixPositioning brands to be able to complement each other/clear differentiation Develop product differentiation strategy before late-stage clinical trials begin Clear differentiation between the two products
Key best practices identified by the benchmark class are:
Copyright © Best Practices, LLC11
Best Practices, LLC6350 Quadrangle Drive, Suite 200,
Chapel Hill, NC 27517www3.best-in-class.com
For more information contact:
Robert RatcliffeSenior Research Analyst
About Best Practices, LLCWe are 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.
