The future of pharma profitability lies in building corporate brandsPresentation Transcript
Prepared by ProphetTHE FUTURE OF PHARMA PROFITABILITY LIESIN BUILDING CORPORATE BRANDSMay 2013
Interested in learning more? Visit www.prophet.com/healthcarePharma corporate brands needto be the next big consumer brandsProduct Marketing ROIis DecliningBlockbuster drugs are thelifeblood of current businessmodels, but they are becomingless pervasive as many gogeneric in the major diseasecategories and across globalgeographies.GENERATE A MEANINGFULMARKETING ROIPharma Corporate Brands HavePoor Corporate ReputationsAccording to Prophet’s CorporateReputation research, othercorporations with strongreputations have been able toleverage their corporate brand tooffset declining product brandefficacy. This opportunity hashistorically been closed to pharmagiven their poor corporatereputation.RECLAIM YOUR CORPORATEREPUTATIONPharma Can Corporate Own theDrivers of Strong ReputationsThe drivers of corporatereputation are the same onesthat drive product sales. Theyalign well with pharma’s corecapabilities and there is asignificant opportunity to build acorporate brand around them.OWN THE DRIVERS OF ASTRONG REPUTATION#1
Interested in learning more? Visit www.prophet.com/healthcareThe era of major blockbuster product brandsefficiently driving portfolio growth is overGiven marketplace realities, regulatory pressures and global consumer demands, pharmaceuticalcompanies must reimagine their growth drivers.FDA new drug approvals havedeclined from previous highsGenerics now account for3 of 4 pills dispensedOverall pharma and biotechR&D spending is declining asa percentage of global sales,and is projected to keepdecreasingR&D SPENDING AS A% OF WW BRANDEDRX SALESFDA APPROVALS GENERICS0%5%10%15%20%25%2008201020122014201620180102030402001200220032004200520062007200820092010020406080200520062007200820092010
Interested in learning more? Visit www.prophet.com/healthcare16 Emerging economies that speak 13 different languageswill command 1/3 of global medicine sales by 2016The era of major blockbuster product brandsefficiently driving portfolio growth is over
Interested in learning more? Visit www.prophet.com/healthcareLEADING CORPORATIONS HAVE UNCOVEREDTHE INEFFICIENT REALITIES OF PRODUCTBRANDING AND HAVE MOVED TO INVESTING INTHE MASTER BRAND TO DRIVE BROADERPORTFOLIO CONSIDERATION AND LOYALTY.
Interested in learning more? Visit www.prophet.com/healthcareCisco spent a decade acquiring andmarketing new producttechnologies, many of which had verystrong brands, includingLinksys, WebEx, IronPort, Jabber and FlipVideo.To drive greater marketing ROI, thecompany stopped investing in the productbrands and instead began focusingattention on the corporate brand andusing product family names, which hasimproved efficiencies of marketinginvestments.Corporations in other categories have begun to shiftfocus from product brands to master brands
Interested in learning more? Visit www.prophet.com/healthcareCorporations in other categories have begun to shiftfocus from product brands to master brandsP&G, most famous for its house of brandsand for being a leader in consumerpackaged goods recently began shiftinginvestments to link their corporate brandto a higher purpose.After sponsoring the 2010 Winter OlympicGames, P&G saw $100MM in incrementalsales, achieved their highest aggregateU.S. market share, increased corporatebrand awareness, increased productbrand recall by 30%, and achievedgreater long-term equity with thetarget, moms.
Interested in learning more? Visit www.prophet.com/healthcareTHE RESULTS OF PROPHET’S ANNUALCORPORATE REPUTATION STUDY* RANKSPHARMACEUTICAL COMPANIES** AS BARELYAVERAGE IN THEIR OVERALL CORPORATEREPUTATION.EVEN FAST FOOD COMPANIES OUT RANKPHARMACEUTICAL COMPANIES INCORPORATE REPUTATION.*Prophet’s corporate reputation study evaluated 150 companies among 5,300 consumers**Includes Abbott Laboratories, Sanofi-Aventis, Eli Lilly, Pfizer, and Merck
Interested in learning more? Visit www.prophet.com/healthcareHistorically, this approach has only been open toindustries with strong corporate reputations72 7168 67 65 6460 60 60 59 58 57 575348AverageStrong Poor Failing
Interested in learning more? Visit www.prophet.com/healthcareIronically, the top drivers of reputation are onesthat align well with pharma’s capabilitiesThe reputation drivers that drive both reputation and purchase are intuitively ones that pharmaceuticalcompanies can and should perform well on, but at present do not.304050607080907.87.97.98.08.08.18.18.184.108.40.206Attribute weight Pfizer Abbott LaboratoriesMerck Sanofi-Aventis Eli LillyPharmaceutical Industry Performance:Top 3 Drivers of Reputation & PurchaseAttribute Weight<60 – Poor/failingperformanceIs a company whoseproducts and services makea difference in my lifeIs a company thatinspires meGives me peace of mind>70 – strongreputationPerformance Scores
Interested in learning more? Visit www.prophet.com/healthcareBuilding a corporate brand and improving corporatereputation will drive product sale conversion and loyaltyConsumers are twice as likely topurchase, pay more for and recommendproducts and services from a companywith a leading reputation versus afailing oneCompanies with leading reputationsconvert customers from considering aproduct or service to purchasing productsor services 90% of the time40% of the key reputationdrivers overlap with purchase driversAll 100% of key reputationdrivers overlap with recommendationdriversCompanies with failing reputationsconvert customers from consideration topurchase less than 60% of the time
Interested in learning more? Visit www.prophet.com/healthcareWe have developed a proven three-step approach tobuilding a strong corporate brand and reputationTo build a strong corporatebrand, you must begin with arich understanding of all thestakeholders in the complexpharma environment anduncover beliefs, motivationsand attitudes.Using the new consumerinsights as the foundation, youmust next build a strategy thatintersects with competitivelandscape realities and yourbusinesses assets, capabilitiesand strategy.Finally, the corporate brand isbrought to life across a series ofsignature activation touchpoints so that identity becomesreal, differentiated and relevantin the eyes of key stakeholders.BUILD THECORPORATE BRANDSTRATEGYUNDERSTANDTHE PHYSICIANAND PATIENTACTIVATE THECORPORATEBRAND