Marketing Module: FMCG Thinking In Pharmaceutical Advertising
Over 70 members of the PM Society and their guests attended a lively meeting at BMA House in Tavistock Square, London to find out what lessons Pharma advertising can learn from the world of FMCG and how can advertising support the sales force more effectively?
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| (l-r) Nick Bartlett (Medical Media Services), Mike Bohling (GEM Associates), Tim Lucas (White Lodge Media) |
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All marketing activities aim to impact on the process the individual goes through when deciding which product to purchase. The challenge for the pharmaceutical industry is to understand how their particular market works and the impact of advertising on that process. The world of fast moving consumer goods (FMCG) can provide valuable lessons.
The consumer buying system
The first stage in the consumer buying system is the stimulus - what makes us want to buy something. For a 14-year old, the stimulus for getting a mobile phone is peer recognition, not being able to ring Mum and Dad. These stimuli to purchase can be routine (newspapers, toothpaste, milk), others are impulsive. Women buy shoes impulsively, for men they are replacements. Stimuli can also be problem solvers (something for a headache) or opportunities (holidays).
Stimulated to buy, the consumer next considers the options. In a market we do not enter very often, say when buying a new car, we spend time gathering information (the 'search phase') so we can be more confident about making a choice. Only having collected enough information can consumers begin to choose between one product and another.
At the buying stage, distribution, price and supply come into play. As Tim Lucas of White Lodge Media points out: "If the logistics are not in place then the best advertising process will not sell an out-of-stock product - 98% of consumers are prepared to buy alternatives if the product they want is not in store." Finally, when the consumer takes the product home, their experience of using the product will either reinforce or challenge their perception of the brand and their likelihood of purchasing that brand again.
Rational, emotional, or sensual?
The most important factor affecting a market is frequency of purchase. For products purchased only infrequently consumers base their choice on three basic motivations: rational, emotional and sensual, or a blend of one or more of these.
Rational motivation applies in areas where a product simply has to work, whereas other products are more emotional (clothes), or sensual (music and food). Tim Lucas quotes Ronseal as an example: "When someone buys creosote for a fence the only important thing is that it will do the job. The Ronseal brand is positioned firmly on the main reason the consumer is entering the market place, i.e. it does exactly what it says on the tin. Ronseal's competitors are left with the choice of saying 'So do I' or to stand for something other than the main motivator in that market place."
The information stage
In an unfamiliar market, consumers will seek more information. While few people use the internet to find out the difference between Lurpak and Anchor butter, in complex markets like cars and IT more information is necessary because the perceived risk is high. Consumers obtain this information from private and public sources, drawing on their own experience of the brand or marketplace in question, the experience of their family, friends, and colleagues, independent expert advice, editorial in magazines, and visiting retailers. And they take notice of advertising.
Once the consumer feels able to make a decision, choice is based on two primary factors: the motivator (does the brand do the job?) and the discriminator (what makes one brand a better choice than another?). In making that final selection, price and promotion, the reassurance and recommendation of retailers, and after-sales service are all important. As Tim Lucas says: "Advertising can sell anything once, but the product and the service must ultimately deliver what is promised."
FMCG vs Pharma advertising
Consumer companies spend around £17 billion a year on advertising and this figure is still growing. One key characteristic of 'consumerland' is high advertising to sales ratios, i.e. money spent versus sales generated. For Mike Bohling (Planning Director at GEM Associates) this investment is driven by an inherent belief that advertising works, grows brands and generates sales. "If we assume that the NHS spends around £6 billion per year buying drugs, the £30 million the pharmaceutical industry spends on advertising represents an advertising to sales ratio of just 0.5%," says Mike. While not advocating that the industry should necessarily spend more, he makes the point that Pharma needs a better understanding of where advertising can play a role in order to approach the setting of ad budgets from a rational, accountable and objective-focused point of view.
Just as in 'consumerland' the stimulus for the healthcare professional to prescribe a particular drug may be routine (something they have always prescribed), on impulse (if an innovative product comes on stream), a replacement or a problem solver (distress purchases) when prescriber has to find an alternative if a drug has gone off patent or is withdrawn.
Most GPs are interested in the fact that the product 'does what it says on the tin'. In reality, however, a blend of motivations impacts on any decision. According to Mike Bohling, smoking cessation and obesity are classic examples: "The GP may well blame the patient for a self-inflicted condition and does not expect good compliance but wants to be seen to be doing his or her job. At the other end of the spectrum, the practice nurse may be more directly involved over a longer period of time. For her (or him) success is the key criteria."
If all products in the marketplace appear to work in much the same way, cost about the same and have similar qualities (e.g. PPIs, NSAIDs) the need for information is relatively low, but in a new and complex therapy area (e.g. diabetes in primary care) the need for information is significantly higher. The choice of information source depends on perceived risk, familiarity, other users' experience, and who the prescriber can trust. Only after going through this process does the healthcare professional choose what to prescribe. And even then it may not be available on the formulary.
The value of advertising
Studies show that the ROI from detailing is declining. IMS Health figures state that £6 billion is wasted on sales force activity across Europe: the number of sales reps is up by 85% with no corresponding increase in productivity. As Mike Bohling stresses: "Sales calls are getting harder to achieve, making it difficult to detail on a wide range of products. This has led to a focus on key products so that smaller brands are dropping off the radar. Clearly more effective support for lower priority and older products is needed. An answer is advertising."
For infrequently bought or one-off products, advertising can start the process by creating awareness and offering solutions. In complex, new or expensive markets advertising reassures the prescriber that they have made the right decision. Advertising can also strengthen rep activity and increase the perceived value of the product. Above all, advertising is about changing perceptions.
Large consumer companies like Procter & Gamble and Cadbury have identified how advertising works for them and, crucially, they set their advertising budgets on the basis of the task, not what the company can afford. For Nick Bartlett (Medical Media Services Ltd) understanding the effectiveness of advertising in the pharmaceutical industry begins with knowing what advertising can achieve. "The common sense approach to advertising states that you spend money to create awareness of your product, tell your customers how good it is, why they should buy it and how much it costs," says Nick.
The pharmaceutical industry spends very little assessing the effect of advertising and while ROI is often discussed it is very rarely measured. Evidence does exist, however, from initiatives like the Profit Impact of Marketing Strategy (PIMS) study. "PIMS shows that the more opportunities you give your target audience to see your advertising message, the better the chance of reinforcing your product's key benefits," says Nick Bartlett. "If your product's perceived reputation and offering are understood by your audience the greater value they attribute to it. Increased sales drive down costs, resulting in a more effective return on promotional investment."
Another study (ARPP, or Analysis of ROI for Pharmaceutical Promotion) showed that for smaller products advertising is significantly under-utilised, whatever the age of the brand. It also showed that too much is invested in sales forces selling smaller, older products. But effective advertising can enhance the return of an effective sales force by creating awareness of your product and your company prior to your rep walking through the door, and by continuing communication after they leave. It has to be consistent however: too many companies see marketing as an expense to be cut rather than an investment to be harnessed. It should also be remembered that the blunderbuss approach no longer works. You need to reach primary and secondary care, pharmacist, and the PCO board and no one approach is likely to reach them all.
The complexity of standardising all possible variables in the marketing mix means that there is no definitive 'off-the-shelf' model for measuring ROI. But it can be done. To this end, the PPA Pharma Advertising Forum has been established by a coalition of publishers and media buyers to highlight the ROI and overall value that advertising represents to the pharmaceutical industry in maximising the return from promotional budget. As Nick Bartlett says: "Evidence for the value of advertising does exist if you want to believe it. Understanding the effectiveness of advertising is vital to your business."
Conclusion
Summarising the meeting, Mike Bohling concluded; that we have seen how the consumer buys. FMCG companies are committed to spending and to understanding why and how to spend on advertising. As demonstrated they are almost universally media process driven and task orientated. Therefore, there should be no real difference in the way the healthcare professional buys, with of course the key exception of the role of the sales force. However, as has been widely discussed, sales force effectiveness is on the wane, meanwhile the apparent commitment to Pharma advertising is substantially lower.
From the presentations and the data presented, it has been shown that advertising with the sales force works, and as importantly with the sales force too. The question therefore is why are fewer, smaller products advertising when this could be the only affordable route to put them in front of their target audience?
The questions that were posed at the end of the meeting and which will go on to be debated were:
- Could this be a function of process?
- Could this be a function of lack of evidence that advertising works?
- Could this be a function of perceived entry cost?
To this end, the PPA Pharma Advertising Forum, established by a coalition of publishers and media buyers, aims to highlight the ROI and overall value that advertising represents to the pharmaceutical industry. The PPA are planning a series of events for the industry - including free half-day training modules on advertising effectiveness and free educational seminars. For more in formation on how the PPA Pharma Advertising Forum can help you maximise the return on your promotional budget contact Lucy Fairclough at www.ppa.co.uk.
Held on: 30/09/2004