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Best Practices in Expanding a Product Portfolio Without Cannibalizing an Established Pharmaceutical Brand
 

Best Practices in Expanding a Product Portfolio Without Cannibalizing an Established Pharmaceutical Brand

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Companies at bio-pharmaceutical industry today managing multiple products for the same indication is a complex balancing act —especially those that want to prevent one of their brands from gaining ...

Companies at bio-pharmaceutical industry today managing multiple products for the same indication is a complex balancing act —especially those that want to prevent one of their brands from gaining market share at the expense of another. Maximizing the potential of each product requires well-crafted marketing strategies and smart resource allocation plans. Marketers must effectively launch and market a new product or brand in a way that challenges external competition yet sustains the sales and value of a legacy brand that the company controls.

Best Practices, LLC conducted extensive research to identify successful strategies and tactics for marketing multiple brands for the same indication or area of use without cannibalizing an existing portfolio. Special attention was given to strategies for managing resources and for avoiding or controlling product cannibalization. Marketers can use the valuable insights and exhaustive data in this research study to carefully plan and implement their marketing strategies to create multiple, high-performing brands.

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    Best Practices in Expanding a Product Portfolio Without Cannibalizing an Established Pharmaceutical Brand Best Practices in Expanding a Product Portfolio Without Cannibalizing an Established Pharmaceutical Brand Presentation Transcript

    • BEST PRACTICES, ® LLC Best Practices, LLC Strategic Benchmarking Research Best Practices in Expanding a Product Portfolio Without Cannibalizing an Established Pharmaceutical Brand
    • BEST PRACTICES, ® LLC Table of Contents  Executive Summary  Research Overview: Objective & Key Topic Areas  Participating Companies  Critical Success Factors in Marketing Multiple Brands  Key Findings & Observations  New Product Differentiators, Strategies & Impacts  Marketing Spend & Budget Allocation  Marketing Activities & Product Goals  Qualitative Analysis  Pitfalls to Avoid  Best Practices  Appendix 2 Copyright © Best Practices, LLC
    • BEST PRACTICES, ® LLCCopyright © Best Practices, LLC 3 Key Topics Covered Research Overview: 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 an online survey instrument to collect quantitative data. Research analysts also conducted in-depth interviews to collect executive insights and to 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 Best Practices, LLC conducted this research to identify successful strategies and practices used by biopharmaceutical and medical device company managers and executives to avoid uncontrolled brand cannibalization and maximize the potential of multi-drug portfolios or franchises.
    • BEST PRACTICES, ® LLCCopyright © Best Practices, LLC 4 30 Companies Participated in the Benchmark Study Full Benchmark Class This study engaged 37 brand leaders from 30 leading pharmaceutical, biotechnology, and medical device companies. When appropriate, data in this report is presented separately for companies in the pharmaceutical/biotech and medical device/diagnostic industry segments. Logos on this slide represent participating companies, which are grouped by segment. Medical Device Segment:Pharmaceutical/Biotech Segment:
    • BEST PRACTICES, ® LLC The following findings emerged from this benchmark study. Key Findings & Observations 1. Benefits of New Brand: Most 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: There can be negative impacts in introducing a new brand for the same indication or area of use as a legacy brand. The most common of those include 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. 5 Copyright © Best Practices, LLC
    • BEST PRACTICES, ® LLC 11% 11% 78% 11% 22% 22% 67% 33% 44% 4% 11% 14% 21% 25% 29% 32% 39% 46% 82% Other (specify) Compliance Health outcomes Quality of life Delivery method/ device Ease of use Frequency of use/ dosing Price Safety Efficacy Q4. 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? (Select only three to indicate the top three most effective differentiators.) 6 Copyright © Best Practices, LLC Bio-Pharma Segment Medical Devices (n=28) (n=9) Efficacy Is Top Product Differentiator for Pharma Segment Efficacy is by far the most effective product differentiator for potentially competing brands within a pharmaceutical or biotech company. Within the medical device segment, health outcomes is the most effective option for differentiating among brands. Top 3 Differentiators: Pharma/Biotech Segment % Responses
    • BEST PRACTICES, ® LLC Q18. Please indicate whether your company's marketing strategy was successful in achieving goals, forecasts and objectives for its older and newer brands? (Choose one for each statement to indicate your level of agreement.) 7 Copyright © Best Practices, LLC Benchmark Class: Success Level New Brand Legacy Brand New Brands More Likely to Achieve Target Goals & Objectives Goals and objectives appear much more likely to be achieved among new brands than legacy brands as 96% of respondents believed that their new product sales goals were achieved, versus 93% for older products. Respondents were also more likely to believe their new products achieved important forecasts and objectives. Total Agree 96% 93% 93% 86% 89% 93% 43% 37% 43% 43% 36% 32% 54% 56% 50% 50% 54% 54% Newer product achieved sales goals Newer product achieved forecasts New product achieved objectives Older product achieved sales goals Older product achieved forecasts Older product achieved objectives Strongly Agree Partially Agree
    • BEST PRACTICES, ® LLC Ten Critical Success Factors in Marketing Multiple Brands Multiple Brand Marketing Excellence 1. Take a Franchise- Centric Approach 3. Align Each Brand with Distinct Customer & Patient Segments 7. Align Marketing Mix to Reflect Market Entry Position 9. Price to Reflect Values of Individual Customer Segments 10. Plan for Migration to Newer Brand 2. Clearly Differentiate Each Product on Attributes 4. Set Realistic Goals & Objectives 8. Plan Early to Execute Anti-Cannibalization Strategies 5. Align Sales to Brand Goals 6. Provide Sufficient Resources for Each Brand Best Practices, LLC research identified a series of 10 critical practices or steps that lead to excellence in marketing multiple pharmaceutical products for the same indication or area of use. 8 Copyright © Best Practices, LLC
    • BEST PRACTICES, ® LLC Q22. What are the key pitfalls, or failure points, that companies need to avoid when marketing more than one brand for the same indication or area of use? 9 Copyright © Best Practices, LLC Pitfalls to Avoid  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 Pitfalls to Avoid Key pitfalls identified by the benchmark class in surveys and interviews are:
    • BEST PRACTICES, ® LLC Q23. Please share three best practices for successfully marketing more than one brand for the same indication or area of use. 10 Copyright © Best Practices, LLC Best Practices  Provide clear product differentiation and unique positioning for each brand  Segment patient/ customer groups  Align sales force incentives with goals and train reps to deliver message  Focus on the whole franchise above individual brands  Measure performance  Align internal functions and objectives  Collect and leverage segment-specific data Best Practices for Managing Multiple Brands Key best practices identified by the benchmark class can be grouped into seven general categories.
    • BEST PRACTICES, ® LLC Best Practices, LLC 6350 Quadrangle Drive, Suite 200 Chapel Hill, NC 27517 USA 919-403-0251 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. 11 Copyright © Best Practices, LLC