Dr. Bates’ Talkback: 3 ways to protect your brand against new market entrants
Dr. Andrée K. Bates outlines 3 value-based strategies to effectively defend against new market entrants
By on Jan 3, 2012Your market is changing and new competitors are entering the field. How can you defend your product’s market share and profitsand simultaneously work to ensure the continuing financial success of your company?
Defense against new marketentrants has come to the fore.Companies need a combination of reactive and proactive strategies and skills, but also a healthy dose of realism. Competition within pharma is fiercer than ever. Pipelines are emptying, making each drug more essential to the financial success of companies. Under this pressure, every pharma is amping up its marketing efforts and differentiation strategies.
Generics also are changing the game. Cheaper in price, similar in quality, they are just the answer for a populace craving drugs but crying ‘uncle’ at costs. (For more on generics, see How to mount an effective defense against generics and Branded generics: The emerging market opportunity.) And governments and insurance companies are capitalizing on the ability of generics to reduce healthcare costs. Increasingly, branded products are being pushed to the second tier.
Reality checks and resolve
What options do pharma companies have when it comes to defending against new market entrants? Effective defense begins with a reality check and resolve to find success within this new reality. Ultimately, it comes down to value.
Pharma companies believe their products provide superior value over competitors. But it’s harder and harder to convince others of this value.We define value as the inherent quality of the medication, the service that comes with it, and the long tradition of trust pharma commands. But to payers, government organizations and consumers, it’s a different story.
Faced with two products of similar makeup and efficacy, the drug with the lowest price will always be perceived as more valuable. And trust? It's just not a given any longer.To defend against new market entrants, we must effectively communicate irresistible differentiation and product value that will resonate in today’s environment. Here's how:
1. Research and intelligence
Think you know your market? Think again. The fantastic speed with which information and diversification occur today means the status quo is constantly being rewritten. This realization is the first step of the research and intelligence phase.
Next, companies must explore and understand the likely sources of competition, both the products and the companies behind them. Are you facing new market entrants from the competitors that have always been in your arena? Are there new companies encroaching on your hard-won territory? Are generics a threat?
No matter what the competition, marketers and developers must understand them well.Competition should be viewed from customers' perspectives. Does a new entrant have more advanced technology or flashy ease of use? Is the competitive difference entirely an issue of price? In comparison, you might have superior, time-tested safety profiles or an advanced knowledge of customer needs.
Use analytics to see exactly what the drivers are in your category, and whether you really have them nailed or could be doing things differently to strengthen yourself in preparation.
2. Create a strategy
The understanding that comes from the research phase directly informs your strategy.Comprehending the competition’s strengths against your own can help marketers creatively develop a plan. Rethink who you market to and how, taking advantage of the inevitable market share loss that will occur to retain the best customers in your base.
Competition is dynamic and ongoing, with market share erosion usually occurring over time. This allows you to manage how many customers, and which ones, are lost, maximizing the customer base and minimizing profit pain. For those customers that you depend on, whose loyalty ensures your success and who could potentially be swayed but must not be captured,retention can be secured by demonstrating how you match or beat the competitor’s perceived advantages. For those who will defect, the goal is to slow their change.
Leverage your strengths with product or service enhancements and emphasize the benefits that might be lost in a switch.Overall, the strategy must recognize and rework the brand, evaluating and revaluating all aspects in relation to the new competition. All product decisions and new strategies must be tested against the insight gained in the previous phaseand against additional research and simulations.
3. Plan execution
Implementation sounds easy, but it never is. It must be quick, comprehensive and flawless. Be ahead of the game, planning and preparing your defense strategy before the new competitor emerges into the market. And be prepared to change plans and reactwithcontinuity, consistency and complete buy-in as the market evolves.
3 tips for brand defense
Strategy is key in effectively defending against new market entrants. Some important things to remember when plotting brand defense:
Don’t assume the best.
It’s natural to assume, after all the planning and work that went into product development, that your offering will remain unique and unmatchable. The competition is quick, constantly evolving and increasingly singular-focused. Efficacy and safety are trumped by price for consumers and payers. The work you do to differentiate must be well-informed, comprehensive and compelling enough to push past this barrier.
Prepare for the worst.
It’s absolutely critical to consider, and even plan for, worst-case scenarios. What if formulary access ends up low? What if reimbursement turns out poor? The risk of less than optimal initial assignments is real. Plan for them by incorporating these possibilities into a greater business and commercialization strategy that includes methods to boost physician loyalty, create reimbursement support programs and other strategies.
Focus on price.
The best price is one that serves the company but takes into account the needs of consumers and payers. Look at pricing strategies that create the most access possible and minimize formulary and reimbursement restrictions.
Pharmas must acknowledge the realities and intricacies of today’s market, understand the competition and consumers, create strategies based on strengths and weaknesses, and implement plans quickly and thoroughly. Our job has always been to create and communicate value to consumers and customers. Effective defense against new market entrants relies upon these essential skills.
Dr. Andree K. Bates, a regular contributor to eyeforpharma, is CEO of Eularis, which applies analytics to determine the sales impact of marketing programs.
For more Dr. Bates’ Talkback, see How to get more value from existing products, Sales force effectiveness in the Japanese market, Building brands and boosting sales with Twitter and How corporate social responsibility boosts business.
For more on marketing, join the sector's other key players at KOL & Stakeholder Engagement Europe on Feb 21-Feb 22 in Berlin, SFE Europe and eMarketing Europe on March 27-29 in Barcelona, and SFE USA on May 30-31 in New Brunswick.
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