Global Marketing Q&A
Pharmaceutical markets can be divided into three broad segments:
1. 7 major mature markets – U.S., UK, Germany, France, Italy, Spain and Japan; these markets are big in terms of category value and are mature markets
a. Stable markets – Australia, New Zealand, Canada; they behave like mature markets with slow or stable growth
2. Growth markets – BRIC (Brazil, Russia, India, China) countries, Southeast Asian countries, key economies of South America, South Africa, and the rest of the Europe; they are showing either high growth or have the potential to grow fast
3. Developing markets – the rest of the world; these markets are still underdeveloped and will take some time to become profitable for pharmaceutical companies.
Mature markets have somewhat similar challenges for pharmaceuticals marketing and sales, despite the fact that there are differences in healthcare-related environments between the U.S. and European markets. Growth markets, on the other hand, are not only diversified in their healthcare-related environments but also on several other parameters, and can pose many challenges for marketing and selling pharmaceuticals. Developing markets are similar in terms of paucity of health infrastructure and hence have challenges more or less similar to each other. We will limit the scope of this discussion to the U.S . vs other major mature and growth markets.
Being part of pharmaceutical company’s sales force is a challenging career choice anywhere in the world – the United States, other major mature countries, or in growth markets. First of all, physicians are the key customers for sales force in pharmaceuticals and more often than not, they are technically the authoritarian figure in healthcare decisions. Therefore, it is always challenging to convince them on a proposition or argument that could possibly challenge current practices or beliefs or stem from lack of experience in new molecule/therapy. Secondly, physicians are an intermediary in further prescribing or recommending the brand to patients or healthcare consumers, and are therefore susceptible to get influenced by factors beyond the brand/molecule strengths. Apart from these common challenges in pharmaceutical selling across markets, there could be several challenges specific to a market’s conditions when compared to the US market. We can compare and contrast theses challenges through a simple ‘7 P’ framework:
1. Priorities in governance: In the United States and other major and mature markets, good healthcare availability for all its citizens is a key priority of governments and they encourage the development and availability of advanced drugs through research and development. The pharmaceutical sales force has to ensure that they have enough scientific evidence to prove that their brand is advanced in its therapy area to make it acceptable amongst physicians and other decision makers. In the growth markets, on the other hand, governments have to prioritize on several issues including healthcare. The government’s focus in such markets is to ensure basic and affordable healthcare is available for the greatest number of its citizens – and they could end up allocating a limited budget for advanced drugs. In such an environment, apart from scientific credentials, the pharma sales force is challenged to propose the right ‘value proposition’ of their brand in a cost vs. benefits scenario.
2. Public vs private platforms of healthcare delivery: The United States is different from the other major and mature markets on this parameter. In the United States, most of the leading medical institutions are privately owned. Although there are state-owned medical facilities, private healthcare is more widely available. In the other seven major and mature markets, the state has taken complete responsibility for healthcare. Growth markets have diversified platforms on state vs. private healthcare delivery. For example, in China the state plays a leading role in healthcare facilities, whereas in India, the private sector dominates in healthcare delivery.
Pharmaceutical sales forces have to focus on physicians and KOLs (key opinion leaders) in therapy relations in markets where the private sector dominates to ensure demand for the brand with the right pull. For markets where the state has bigger role in healthcare delivery, they need to focus on brand’s listing in the hospital pharmacies (being part of hospital’s formulary) plus development of relations with physicians and KOLs to ensure right push and pull for a brand’s demand.
3. Payer policies: Good healthcare is expensive. In the past t12 months, the United States and China, the world’s largest economies, have made healthcare reform a key public policy item. Medical insurance coverage for all its citizens is the main issue in these reforms. Though the United States has facilitated private insurance coverage, China is focusing on “cooperative” insurance coverage. Among the other countries in the seven major and mature markets, health costs are covered by social security provided by governments. And in most of the other growth markets, private medical insurance dominates the health cost coverage scene. In these different scenarios, pharmaceutical sales forces will face different challenges. In private insurance coverage scenarios, as in the United States and most of the growth markets, building relations with insurance companies providing medical coverage is important for pushing the brands. In the scenarios of cooperative insurance coverage and where medical costs are covered through social security, as prevalent among other countries in the seven major, mature markets and a few growth markets, building brand acceptance via health officials and KOLs is very important.
4. Patient demography and health needs: In the seven major, mature markets, populations are aging whereas in most growth markets populations are relatively much younger. The living conditions in the seven major, mature markets are also far superior compared to most growth markets. These two factors have a large impact on the health needs of markets. The seven major, mature markets have a greater prevalence and the burden associated with chronic diseases requiring long-term treatment, whereas in most growth markets acute therapy areas requiring short-term treatment still dominate. In chronic therapies, the main issue is to have evidence of long-term efficacy of the drug, and in acute therapies the main issue is to avoid drug resistance by disease-causing pathogens. Pharmaceutical sales forces have to focus in building brands on platforms such as “arresting the disease progression and complications” for chronic disease, whereas in acute diseases they have to focus on “fast-acting and latest-generation” drugs. Chronic therapy drugs don’t change rapidly, whereas change is the name of the game in acute area therapies.
5. Physicians’ work pressures: Physician-to-patient ratio is somewhat better balanced (not ideal) in the United States and the other countries in the seven major, mature markets. In growth markets however, the ratio is very unbalanced and physicians are over-burdened with patient load. Physicians in the United States and the other countries in the major, mature markets can plan out their time in a way where they can spend quality time in understanding a health brand and its strengths over other similar products and are also expected to spend quality time in continuing medical education programs/examinations. In growth markets, there is hardly any time available with physicians for understanding healthcare brands or updating themselves on scientific matters. Pharmaceuticals sales force in the United States and other major, mature markets can actually make a detailed presentation on the brand for an average of 15-20 minutes, whereas in growth markets they hardly have more than two minutes to detail their brand. The sales force challenge in such markets is to leave behind one key point for the physician to remember about the brand or the molecule or the company. In generics markets, this problem is heightened due to lack of competitive advantages.
6. Physical infrastructure: In the United States and other major, mature markets, the physical and technology infrastructure of modern times – including Internet connectivity, video conferencing, and 3G connectivity – are quite prevalent, allowing pharmaceutical sales forces to become empowered with a variety of techniques and support systems to communicate their point of view to physicians and other stakeholders. For example, a salesman can make a KOL answer a physician’s question on the spot using a 3G video facility on his phone. In most growth markets, the physical infrastructure of modern technology is spotty or in the development stage, greatly reducing the support tools available to pharmaceutical sales force. They have to completely depend on their own skills and knowledge to communicate points to a physician.
7. Professional and cultural issues vs. societal structure: The doctor and medical representative relationship is quite dependent on the country and its societal structure. In many growth markets, the medical rep is not treated very well for various reasons, primarily because of the lack of technical and educational qualifications to engage the doctors in a meaningful conversation. Local pharmaceutical companies are known to hire medical reps as “sales agents” rather than “science communicators” and that has led to a deterioration of the quality and perception of the profession. The role and responsibility of the medical rep needs to be carefully evaluated and strictly adhered to disseminate scientific knowledge and data to the medical profession. The profession needs a significant facelift or rather a face change in many big and small markets in the world.
Lastly, we need to find a simple framework for dealing with these pharmaceutical sales challenges. To operate more effectively in markets outside the United States, I suggest applying these key marketing and sales strategies:
• Investing in a thorough understanding of the market in terms of category acceptance and development needs of a therapy area and governance policies;
• Understanding the techniques available to sales people for maximizing their time with physicians in growth markets; these can be very culturally oriented and therefore might sound a bit odd compared to the selling techniques in the United States;
• Developing robust and live feedback mechanisms: To gain organizational understanding on market development stages, future resource requirements for developing a therapy area; and the impact/effect of the communication materials in daily detailing opportunities to doctors;
• Evolving a “customer segmentation” approach for targeted physicians, and developing means to keep the segmentation up-to-date;
• Applying test-and-learn models specially geared for growth markets to achieve ROI maximization;
• Using technological advances and developments to reach out more frequently, efficiently and in the most convenient way for the doctors; and
• Encouraging flexibility and adaptability to better understand local nuances in doctor-medical representative relationships, and helping to run local programs to enhance this rapport.
There are three key qualifiers in this question – “deep traditional roots,” “channels,” and “approaches to advertising.” Sketching a boundary around these qualifiers will make our discussion more meaningful. First, a couple of caveats: this discussion will include brand/product advertising and exclude “political” or “social” advertising; and second, we’re discussing an urban advertising audience and not a rural audience.
Unquestionably, Asia is a main economic engine for the world economy today. And as we have noted previously, this vast region is deeply rooted in its broad traditional roots of collectivism, family as social unit, and society above individual.
Irrespective of the economic cycles that every market goes through, each is also deeply rooted into its own broad marketing traditions. America prides itself on individualism and freedom, while Europe has its tradition of individualism and adventure, and Africa is known for tribal clan loyalties and living life for today.
Traditional roots of a market create its fundamental character, and healthcare advertising and communication leverage these roots to try to connect with the marketplace. Given this logic, no market or culture should be receptive to another’s advertising channels and approaches. Let us examine this logic further with the other two qualifiers embedded in this question.
Advertising’s main aim is to inform and change attitudes or behavior using a simple and one-dimensional message, or a layered and multi-dimensional communication. To achieve its aims, advertising has to ensure that it reaches the intended people and make the message relevant for them. For reaching people, advertising leverages different communications channels to put across an argument, thought, idea, or information. Interestingly, globalization has made advertising channels very similar across markets – Asia as well as Western – and marketers can plan their global campaigns by leveraging similar channels like TV, print, outdoor, and Internet in any market.
Asia, being a unique amalgam of developed and developing economies, throws open challenges to healthcare marketers because of its differences in technological advancements, population demographics, and political environment. These differences may make it difficult for marketers to use all the channels seamlessly across Asian markets. For example, while China offers the biggest opportunity to leverage disintermediation advantages between Internet and social network services, print and outdoor channels here are more innovative than in their Western counterparts. And ironically, it is not yet possible to use satellite TV in China at all.
Japan’s media channels scene, on the other hand, matches that of any developed Western country. India has complete democracy and freedom in media channels and therefore, offers wide and innovative print and TV reach in every language of the country, but struggles with Internet infrastructure (that is despite being the software capital of the world). Southeast Asia has a balance in terms of population distribution, media channel proliferation, and Internet infrastructure.
Secondly, approaches to advertising are strategies to make the message relevant and involving. Advertising leverages different emotional, functional, or relational approaches in communication to achieve this. Across cultures, both Asian and Western, leveraging basic human characteristics such as happiness, humor, love, fear, acceptance of endorsement, acceptance of rational argument, etc., are the basic approaches to advertising.
However, basic differences in traditions and culture between the Western world and Asia abound. Western society’s “enlightened” values of rational absolutism guide the pursuit of happiness rooted in individualism, whereas Asian’s morally relativistic values prepare them to appreciate the sense of collectivism for society’s growth. Such stark differences lead advertising to have very different hooks in these two different worlds. For instance, in most FMCG advertising, where the homemaker is the target audience and the protagonist in advertising messages, the Western way of portraying her vs. the Asian way of portraying her are often very different. In commercials that originate in the West, smartness or logic in the homemaker’s decision often is the relevant hook, whereas in an Asian context, her desire to be seen as the focal point of the entire family more often is the relevant hook. In both the cases, the approach of advertising could be based on love, care, or rational decision, but the tone and manner in which it is expressed is different.
Fundamentally, traditions and social milieu are strong features seen in cultures, countries and markets and can have varying degree of receptiveness to Western-oriented content channels and approaches to advertising. India, with its long history of foreign invasions and in its pre-economic liberalization era was more receptive, but is now changing rapidly and negotiating the balance between the West and Indian communication. Japan and China, with their own cultural practices dating back thousands of years, but with recent influences of the West on lifestyles, can indeed be more receptive to Western-oriented content in advertising – especially in certain categories such as automobiles and consumer durables that a show higher influence and acceptance of Western figures and content.
The core differentiation in communication content in Asia is best leveraged and uniquely optimized when local understanding/insight of demographic, cultural, and political influence are leveraged properly. Otherwise, broader approaches to advertising channels would remain similar across Asian and Western markets.