A complex business model for Bio-Pharma Industry

Customer focus, a core element of the marketing concept, is certainly a widely adopted buzzword today, one which is stressed in all introductory Bio-Tech marketing texts. While the marketing concept applies to all industries, it is particularly important in technologically driven industries that have been among the first to introduce quality techniques, many of which begin with capturing the "voice of the customer". Consequently, one would expect a customer focus to be integrated into new product development and marketing in technologically driven firms. Unfortunately, reviews have repeatedly concluded that the high tech product marketing concept often remains just that - a concept.

There are two issues relevant to the discussion of product launch in Bio-Tech markets. First, it is important to understand the difference between the customer's perspective and the manager's perspective that can exist in Bio-Tech markets. Second, there are specific features of Bio-Tech markets that are believed to distinguish them from other product categories. Examination of both of these sets of issues is necessary to understand the particular importance of the diffusion of innovation in the marketing of high tech products.

Perhaps there is something even more elementary which can explain the failure of high-tech companies to successfully adopt a customer focus (Amgen Inc. is no longer just a two-drug company, but that doesn't mean the biotechnology giant won't go to the mat to protect the market for Epogen, its first billion-dollar anemia-fighting blockbuster and still the core of its most profitable drug line.) The effectiveness of the Bio-Tech marketing strategy can be traced to how well the company focus with an understanding of the diffusion process. To put these specific examples in the right context, however, the nature of high tech markets must first be explored.

In addition, several Marketers have suggested that high tech markets, unlike low-tech markets, must focus on both demand-side marketing and supply-side marketing (e.g. Shanklin and Ryans 1984). Based upon the belief that supply can create its own demand, supply-side marketing is appealing to new product developers as it legitimizes a product orientation (e.g., Moore 1995). In practice, however, the supply-side can so dominate the demand-side that the needs of the consumers are ignored in strategy development. As a result product developers tend to be driven by their technology in determining the marketing mix.

The demise of several of Texas Instruments' product lines provides a glaring example of this phenomenon. For years, the firm has been known for its technical know-how. However, the fact that the linkage between technology and marketing was missing at Texas Instruments led to a failure to discern the need to change from a supply-side focus to a more market-driven orientation.

There is ample evidence pointing to specific ways in which Bio-Tech markets are different from consumer package goods markets. Because Bio-Tech companies exploit and create change rather than consolidate and defend existing conditions the interdependence between marketing and technology is of crucial importance. Companies regarded as low-tech may basically adjust their marketing strategies to reflect relatively unchanging technological conditions. Bio-Tech companies, however, must recognize that both technological and marketing conditions are rapidly changing. This dynamic environment necessitates stronger consideration for the marriage of marketing and technology. The Morden Marketing manger must know about Digital marketing mix not for sales purpose but interms of branding and CRM.

Research and practice indicate that Bio-Tech markets are characterized as dynamic and complex which results in a changing target market over the life cycle (THE PRODUCT LIFE CYCLE - Raymond Vernon, 1966) The complexity of the product also impacts market acceptance in different ways in high tech markets. As high tech products are more complicated, they require greater customer education and more product information. This necessity results in greater effort on the part of marketing to adequately convey the necessary information as well as greater effort on the part of the consumer to digest the information.

The requirement of greater customer education is not meant to imply an uneducated consumer. Consumers of high tech offerings, particularly those first to adopt a technology, are extremely sophisticated and product/technology savvy (twitting around daily business activity is already practicing by your potential customer, still you don't know what is twitter all about). The level of sophistication prevalent in high tech markets, however, demands developing an intimate knowledge of the consumer in order to ensure that the offering is captures what the customer considers to be desirable.

Target marketing is another critical factor for firms introducing Bio-Tech products. Complicating this factor is evidence that the customer base changes for each stage of the product life cycle as different segments of the market become interested in the product at different times.

Consequently, it is important to recognize the need to clearly identify and profile a target market as well as take into account that the profile of the target market will change over time. Social media marketing change the way to percive rquired inforamtion about high tech product and purchasing cycle. The buying decison is more dependant how you present your self virtually and how is yor testimonial speak loudly.

Bio-Tech markets may not be so different as to require different theories. However, there is ample evidence that their operating environments are more intense than consumer markets making attention to the nuances of product launch strategies particularly critical. Examination of the new product development process and the role of the diffusion of innovations followed by a review of several examples of recent high tech product launches will clarify why this is so.(ENBREL (etanercept) launch by Amgen and Wyeth for Reduction of signs and symptoms of active arthritis in patients with psoriatic arthritis)

Demand Driven Business Model for Pharma and Biotech Industry

The Demand-Driven Angle:

As Pharma and Life Sciences companies begin their transformation to a Demand-Driven Online Business Model, the first step is to create visibility in the channel and provide the intelligence to make smarter operational decisions.

This multi step value chain presents several opportunities in this regard. The greatest opportunity is its ability to quickly collect, analyzes, and acts on information. This continuous optimization process results in a predictable Demand profile if the Internet Marketing campaigns are designed from the start to deliver the marketing Message, collect a rich set of data for analysis, and use this data for decision making. This data/intelligence can then be amalgamated with sales, inventory, and movement data to provide demand insight information.

Who can help?

Many companies are looking to the traditional advertising agencies for guidance. However, the metrics-driven approach and technology requirement are often beyond the capability or service offerings of most agencies. The new age e-marketing expert those who have handy for High Tech Product and Services, Online Marketing with the sound knowledge of E-Commerce, who can handle the rapid change in technology.

Products from Google (Urchin Analytics) and Double-click (Dart) focus on how well the placement of advertisements generates visitor traffic, and if these visitors click on particular pages within a site. These tools cannot link to other data sets, however, making it impossible to develop models of audience behavior by segment. Competitive analytics tools like Hit wise provide insight into the traffic coming to an advertiser’s site, or its competitors’ sites, at an aggregate level. These tools will also uncover interesting data, such as keywords that lead visitors to a site. While useful, the data does not provide end-to-end insight.

What to do?

Many traditional marketing campaign management projects in pharma are disconnected from Internet marketing initiatives within the same company. In order to maximize response rates, traditional marketing campaigns should expand their scope to include Internet marketing functionality for use in data collection, understanding customer behavior, and relationship management.

It is imperative to develop a multidisciplinary approach, incorporating an analytics requirement into the design and development of Internet marketing awareness, as well as direct response and relationship marketing programs. Companies new to this space should start small, which often means integrating another brand’s opt-in database to cross-sell similar audiences (OTC Product sell).

The following are key questions to ask before implementing an Internet marketing value chain:

• Does my audience (physician or consumer) go online for health information in my category?
• For Internet direct-to-consumer (DTC) advertising, can consumers influence physician behavior in my category?
• How are my competitors using the Internet to reach the same audience?

Recommendations:

• Use corporate- and brand-sponsored initiatives to create a multifunctional team made up of brand (both DTC and physician), communications (PR), IT, and corporate analytics.
• Develop and share best practices for each stage and for end-to-end analytics. Use analytics in conjunction with offline marketing data and incorporate them into the overall campaign management strategy. These findings should be shared and not kept siloed.
• Commit to a single data repository. If this is external, ensure that the data is transferred into the corporate data warehouse frequently.
• Commit to a thorough review of tactical (weekly or biweekly) and strategic (monthly or quarterly) metrics that results in an appropriate response (e.g., a change in advertising, conversion, relationship marketing, and/or data development).
• Employ an Internet marketing infrastructure that provides end-to-end and tactical insight into how the brand’s Internet strategy is performing.

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Top 10 Forces Behind New Business Models

The following 10 issues represent the new issues behind business formation and creating hyper-competitive business models of the future.

• Aggregation: The tendency towards mainstreaming of "demand aggregation" where aggregation is no longer driven by supply. In new models, demand is first aggregated by giving things away and then demand is exploited.


• Knowledge Worker Productivity: The critical issue to being able to leverage your organisation's core competencies in real time. If you want to optimise your enterprise start here. Peel away everything and allow your knowledge workers to do what they do best, more of the time.


• Networks:The knee-bone is connected to the thigh bone is connected to the hip bone. Every form of network will become self-enabling to contact, communicate and share information with other networks, forming a vast complex global brain - nothing new here. However what will be, are the things that the networks will create, specifically intelligence (look out Gardner, the "9th" form of intelligence) or networking intelligence.


• Complexity: Incredibly simple. Layers and layers of technological complexity have created, yes, layers and layers of all forms of complexity. A simple gas pump talks to our car while we refuel and the data is downloaded to a database that triggers service, marketing and additional complex transactions--never before imagined.


• Connectivity: Everything we do will be recorded, catalogued and "served-up" from everything to our toaster, automobile, children's progress in school to real time appliances that work in the background to make decisions for us. We will be constantly in contact with anyone and everyone, even those we choose not to be in contact with.


• Value: Value will direct everything! People will jump brands, organisations and friends for higher value in their lives. Reducing risk will be a moniker of perceived value.


• Self-Leadership: We used to rely on organisations to provide leadership to the masses and since the organizational structure has now become fluid and ubiquitous through connectedness, self-leadership will pervade all growth and adaptability, in fact it will become living leadership.


• Learning: Kind of tongue-in-cheek here, but a learning competency will far exceed our ability to know, as one requires investment and the other requires ability.


• Light Speed: Not only because light offers increased bandwidth for data movement, but that things in the environment will literally change before your eyes, in real time.


• Personal Customisation: It follows with our ability to change the environment through all of those connectivity issues, it is clear that we literally will customise every experience for the person involved, right before their eyes. Customised marketing, service delivery and communications will all be controlled by ERM (Enterprise Relationship Management) Systems and inter-developmental databases.