The document discusses a new marketing model called Cluster Marketing that biotech companies can use when marketing budgets are reduced. It involves segmenting customers into smaller demographic and psychographic groups and targeting them with customized messages. This allows for more effective marketing with fewer resources compared to traditional mass marketing approaches, and helps protect brand equity and facilitate growth even in difficult economic times.

1. Marketing Biotech When
Funds Dry Up
During these hard economic times, it is common for companies to slash their marketing budgets
in order to improve their short-term bottom line and operate more efficiently. Australian small to
medium biotech companies are no different. To grow business when funds dry up, it is essential
biotech marketing departments change strategy rather than cut budgets. In this report, we
provide a brief overview of the short-term and long-term negative effects of cutting marketing
budgets and suggest a new marketing model for biotech companies to use in the current climate
and into the future.
INTRODUCTION
The model suggested further on in this report
outlines a new marketing framework for biotech
THE economy is in as worse a state than many life- companies to work from in hard times and best-
science executives can remember. The sentiment practice methods to carry over into the better times.
amongst management in the industry seems to be of But first, we must outline both the short-term and
dubious belief in the effectiveness of advertising and long-term negative effects of cutting advertising
marketing in the current climate. expenditure.
With no best-practice policies in place, management
is in limbo trying to preserve what they can whilst
trying to ensure that they stay afloat. Many THE MASS MARKETING CYCLE
executives are choosing to drastically slash their
marketing budgets or cut them completely. Further
organisational pressures to achieve more for less THE cycle begins with budgets being slashed due to
mean that buyers frequently end up in homogenous unsteady cash flow, as seen recently in response to
groups, forcing the marketing department to develop economic crises. With this, marketing departments
sophisticated and expensive ‘one size fits all’ begin cutting back on ad frequency and quality of
marketing messages. What often results is the marketing collateral.
marketing department wasting time (and funds)
Still trying to reach the whole target market and
trying to salvage campaigns rather than develop
pressured to get the same results with far fewer
new, more effective strategies.
resources, ad campaigns end up with inconsistent
messages. The sudden fall in company marketing
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 1

2. activity and quality begins to send alarming unique, individual messages at them. The marketing
messages to investors, customers and competition department can develop a ‘purple cow’ for each
and the years of building brand equity often begins cluster and develop warmer leads for the sales force.
to falter.
The new model has a range of benefits. Firstly, it is
With brand equity slipping, marketing activity less expensive than traditional mainstream mass
significantly slowing and revenue falling, the marketing. Secondly, it helps build brand equity
company begins hiring more and more salespeople more effectively in more markets. Thirdly, it creates
in the hope of lifting sales. To improve cash flow, the cohesion between the marketing and sales
sales force is pressured to look for short-term, high departments. And finally, it allows for greater control
profitability sales rather than cultivate long-term and measurement of ROI with real-time analysis.
relationships. Over time, with relationships dwindling,
sales prospects slowing, and brand equity falling
even further, revenue and investment funds begin to
CLUSTER MARKETING MODEL
dry up. Marketing budgets are slashed due to lack of
funds and the Mass Marketing Cycle continues on its
merry way. THE Cluster Marketing Model is straightforward but
requires careful execution. The following steps have
Does this sound familiar?
been developed to provide a guide to ‘going
The degree to which biotech companies experience clustering’:
the Cycle can differ substantially, but one thing
1. Advertise Smarter. As already outlined, instead
becomes clear: whilst building brand equity may take
of advertising your product range’s many benefits
many years, it can be quickly eroded with long-term
to a large audience, promote your brand to
negative impacts.
smaller, more alike audiences. As Seth Godin
Small to medium biotech companies need a model emphasises in his best selling book ‘The Purple
that can allow both effective and efficient marketing Cow’, “For big results, think small”.
on lower budgets.
This type of brand-focused marketing will fulfill a
number of objectives. Firstly, it will appear as a
new marketing campaign and make your
THE NEW MODEL OUTLINE company appear innovative and energised. And
secondly, it will position your company more
effectively within your most important markets.
THE marketing department’s role has always been to
communicate the company’s core messages to the 2. Marketing <-> Sales Collaboration. An
masses through what is known as mass marketing. important part of the Cluster Marketing Model is
Herein lies part of the problem. ensuring complete collaboration between the
marketing and sales departments. In order to first
In times of short cash flow and limited budgets, why
develop the clusters, it is a good idea to hold
scattergun homogenous, indirect messages through
meetings with sales people to create short lists of
traditional channels? Instead, we suggest a new
qualified target audiences. These meetings can
brand of marketing called Cluster Marketing.
help better outline the target audience’s
Cluster Marketing focuses on separating target psychographics, allowing for far more targeted
customers into more similar demographic and marketing messages.
psychographic groups (clusters) and focusing more
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 2

3. These meetings should be made common 5. Measure, Measure and Measure some more.
practice through the duration of the marketing As your target market has now been separated
campaign, allowing real-time feedback of into smaller more manageable clusters, measuring
marketing’s messages. Introducing sales activity your campaign’s success will be simpler.
between marketing ‘attacks’ can help refine
Sales tracking tools should be built into the sales
messages and improve the marketing campaign
cycle and coupled with regular feedback between
‘on the run’.
the marketing and sales departments. With each
Another benefit of these regular meetings, the piece of marketing collateral able to be measured
marketing department can develop a better through the Cluster Marketing Model, refining
understanding of the sales cycle and produce messages and improving communications for
inexpensive tools to help smooth the process. further campaigns becomes much easier.
These tools can include sales presentation
materials individually customised for the individual
clusters.
CONCLUSION
3. Develop Your Purple Cows. As Godin (The
Purple Cow, 2003) explains, “Being safe is risky.
THE Cluster Marketing Model provides a far more
Boring always leads to failure. Very good is an
efficient and effective framework than current mass
everyday occurrence and hardly worth
marketing models. With complete adoption of the
mentioning. To be a Purple Cow is to be
new model, small to medium biotech companies can
remarkable.”
avoid The Mass Marketing Cycle.
Now that you have done away with the limitations
Whilst providing a firm foundation for marketing
of mass marketing, you can significantly increase
departments to work from in tough economic times,
brand awareness and generate positive brand
the Model also provides a set of best practice
attitudes amongst each cluster by creating unique
methods for carryover into better times.
messages or purple cows for each. Using this
method, every piece of marketing collateral can With new cohesion between the marketing and sales
be personalised and customised and go a long departments, a better understanding of the
way in making the sales force’s job much easier. company’s target market and more trackable
campaigns, adherence to the model will allow
4. Improve Your PR Program. A solid PR program
protection of brand equity and business growth long
is a necessary part of any Cluster Marketing
into the future.
campaign. When correctly implemented it can
strengthen the overall marketing mix, generate ‘Marketing Biotech When Funds Dry Up’ is the first
warm leads for the sales force and make the edition of The Biobranding Report. The Biobranding
company appear active and energetic for a Report is a monthly investigation into important
fraction of the cost of mass marketing. Also, as issues facing the Australasian biotechnology
part of the Cluster Marketing campaign, your PR industry.
program can be customised to each individual
The next report, ‘Exploring Cluster Marketing for
cluster.
Biotechs’, will be available in July, 2009. To
Collaborating with an experienced PR Firm who subscribe to the reports, email
has existing relationships in the necessary media team@biobranding.com.au. For more information
channels will all but ensure success. see over.
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 3

4. About the Author:
David Ball is Managing Director of The Biobranding Group, a Brisbane-based brand strategy and identity
creation firm focused on the life-science industry. David has tertiary qualifications in biotechnology and
marketing experience through launching and running his own web businesses.
About the Company:
The Biobranding Group was founded to provide a unique offering to the Australasian biotechnology sector.
With real world science and high-tech expertise in-house, the company understands your needs because
they understand your technology.
The company is committed to improving scientific communications throughout the Australia-Pacific region
and help the biotechnology industry reach its potential. For more information please visit the company’s
website at www.biobranding.com.au or email team@biobranding.com.au.
About the Report:
The Biobranding Report is a monthly investigation into important matters affecting the life-science industry.
The content is based on research, literature and experience and is written from an independent perspective.
To subscribe to the report, please email team@biobranding.com.au.
© 2009 Zebras International Pty Ltd. All rights reserved. No part of this document may be reproduced or
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