The New 4 P’s of Pharmaceutical Marketing
In marketing, the pharmaceutical industry is miles behind traditional consumer marketing industries, like consumer packaged goods and over-the-counter products. The industry must quickly learn to adapt marketing from a push-based distribution model to one that is now consumer-pulled. Pharmaceutical firms are adapting their focus and approach to accommodate this customer-led shift in their marketing mix. The customer is now at the center of the marketing universe for pharmaceuticals and no longer outside the marketing continuum.
The Old 4 P’s: Shifting Paradigm
Product – The What
The foundation of the marketing mix – indeed, the most important element in it – is the drug itself. All medications on the market are FDA indicated for a specific condition or disease, and pharmaceutical companies can only market a product for the approved indication(s). Due to the enormous cost and time required to bring a drug to market, companies must maximize product life-cycle management.
Price is uniquely set in the pharmaceutical industry. In most other categories, the producer or manufacturer is in control of price, subject to normal market constraints. This is not the case in the pharmaceutical industry, where companies have limited time to recoup development costs and, in most cases, the end user is not the ultimate payer. Pharmaceutical products are also constrained by managed care organizations and generic pressure.
Place and the Consumer
While the distribution system of getting a medication from point A (manufactured) to point B (pharmacy/end-user) has remained relatively the same over the years via the role of the wholesaler, community pharmacies and, more recently, mail order pharmacies, the flow of information to the ultimate end-user of prescription medications (i.e., the patient/consumer) has drastically changed.
Promotion – To Whom
Promotion of pharmaceuticals to professionals has experienced a major shift with the development of nonpersonal selling techniques. These include educational digital asset development, e-learning and direct marketing, including email and direct mail. Doctors are now utilizing more external sources for information about products and bypassing the traditional representative. Innovation has occurred in the marketing space, largely driven by technology.
Digital marketing has seen the emergence of search engines, social media, video distribution, blogging and device ubiquity. Data collection has progressed from being defined in terms of kilobytes to terabytes. Interaction devices have evolved from an unwieldy PC to a completely mobile smartphone. All of these innovative tools have accelerated overall marketing channels beyond the classic 4 P’s into a new marketing paradigm for pharmaceuticals: the new 4 P’s of marketing – predictive modeling, personalization, peer-to-peer and participation.
The New 4 P’s
The new 4 P’s revolve around the packaging, understanding and commoditization of information and have to be defined in terms of controllability from a pharmaceutical company’s perspective. The pharmaceutical marketer controlled the old 4 P’s, while the marketer and consumer share control of the new 4 P’s. Several pharmaceutical companies are making attempts at the new 4 P’s, boldly stepping into this new paradigm with great success. Here’s how pharmaceutical marketers are using them to benefit patients, physicians and profits.
Predictive modeling is the process of data mining using statistical techniques. These techniques allow data to be utilized for forecasting probabilities and trends. Predictive modeling allows marketers to utilize, or optimize, variables (predictors) that are likely to influence future behavior or results. This statistical method of predicting future behavior gives pharmaceutical marketers the insight they need to know when, how and with what message to “intercept” the patient, depending on where he or she is in the treatment cycle.
Personalized marketing communication uses specific imagery and messaging to enhance relevance. With this technique, a pharmaceutical company can provide vital information to each patient based on demographic profile and phase of treatment, using the most appropriate language and visuals. In addition to making the patient feel “recognized” by the brand, personalization helps facilitate patient-professional dialogue by prepping patients with relevant questions to ask their physicians. It helps extend post-visit care by reaching patients with relevant messages at appropriate times in the treatment cycle and managing their expectations. This, in turn, helps promote patient satisfaction.
Since a brand is defined by an intra-user network outside the control of the pharmaceutical company, peer-to-peer is the most disruptive force to brands as consumers and professionals now have amplified license to frame brands and critical information. Due to regulatory constraints and governance, pharmaceutical companies often must remain passive in this channel. From a positive perspective, peer-to-peer initiatives allow democratization of brands and products. For pharmaceuticals, this channel should focus on simple and clear objectives:
- Leverage key opinion leaders and influencers: Inspire
- Provide value: Inform
- Connect patients with one another: Facilitate
- Develop share-worthy content and assets: Create
The last of the new 4 P’s, participation, equates to consumers defining and driving what the brand means to them, often in public forums. Thanks to technological innovations, consumers are actively participating in most aspects of marketing including product use, promotion and advertising. Now an individual can discuss product attributes with a global audience instantly and inexpensively. While in many industries this has positive ramifications – such as new uses for a product – participation can create risk to pharmaceuticals in terms of product indications and adverse events. For pharmaceuticals, this channel should focus on simple and clear objectives:
- Give stakeholders what they want to make their situations better: Educate
- Monitor for new insights and opportunities: Listen
- Provide connection to what stakeholders believe in: Advocate
- Develop tools and assets that allow user control: Empower
Obviously, the traditional 4 P’s are still relevant. Yet pharmaceutical marketers must understand the opportunities offered by the new 4 P’s as well. They are not only effective, but also quick to deploy, cheap to implement and offer almost immediate results. It’s an exciting time in pharmaceutical marketing. Information has indeed changed the game. But willingness to play by the new rules is what will push progressive pharmaceutical companies to the next level of success.