The Handbook of Marketing Strategy for Life Science Companies

Formulating the Roadmap You Need to Navigate the Market

Jean-Francois Denault

• Verlag: Productivity Press
• Jahr: 2018
• ISBN:
  9781351235280
• Auflage: 1
• Thema: Business
• Thema: Management

The proposed book is follows in the same steps as the first book in the series, The Handbook of Market Research for Life Sciences. While the first book focused on the techniques and methodologies to collect the market data you need to evaluate your market as well as presentation models for your data, the second volume will focus more on the commercialization elements of marketing. As such, this book will be covering a wide range of topics directly tied to marketing management such as marketing and commercialization strategies, consumers' behaviors, marketing metrics, pricing techniques and strategies as well as marketing communications (public relations, advertising, and more).

The objective of this book is to focus exclusively on the marketing aspects for life sciences, providing entrepreneurs with a toolkit of tools they can use throughout the marketing process, from market planning to commercialization. The overall objective is for them to gain an understanding on the marketing function, ask the right question, and be able to tackle simple to complex topics.

Chapter 1
Marketing Strategy Road Map

1.1 Planning toward Strategy

Many entrepreneurs want to develop a marketing strategy without first looking at their surroundings. More than once, I have been approached by a CEO of a start-up who wanted me to prepare a marketing strategy for his organization, but he was unable to answer some basic questions: What are your organizational objectives? What are your competitors doing? Who is your client? In some situations, even “What is your product?” was problematic to answer.

As such, I have found that there is a tendency to develop a marketing strategy without context, and then adapt, modify, and change the strategy as the company grows. But if you are changing your strategy each time new information becomes available, you are not necessarily being nimble and adaptive, but might be overly opportunistic and reactive. Your marketing strategic plan should be prepared around short- and long-term goals, containing tactics that are adapted after a careful examination of control values.

On the importance of marketing strategy

Marketing strategy is very important. It can be very complex, especially if you are going to sell a “low margin/high volume” product. If you have designed a “high margin/low volume” product (like a hospital software solution), then your go-to market plan might not be as complicated: you identify your 20 key potential clients, and then develop the relationships accordingly. But if you are looking at a mass market situation, the distribution strategy, the commercialization plan, and the product positioning are all going to be very important.

Katherine Parra Moreno, Vice President of Business Development, Epic Capital Management

1.2 Planning Your Marketing Strategy

In this book, we have simplified the preparation of the marketing strategy into four simple steps: complete your situation analysis (Chapter 3), develop your marketing strategy (Chapter 4), prepare implementation and control (Chapter 5), and set marketing metrics to evaluate the progress (Chapter 6). This is preceded by a short chapter on market research (Chapter 2) and is followed by a chapter discussing unique perspectives (marketing in life sciences, marketing health-care services, and marketing health-care digital products) (Chapter 7) (Figure 1.1).

1.2.1 Performing Market Research

Before preparing your marketing strategy, it is important to have the information you need to make the right decisions. Market research will be crucial, and it will be an ongoing process throughout your marketing strategy effort. As such, in Chapter 2, we will be going over the basics of market research, by exploring two aspects.

Figure 1.1 Basics of the market research process.

1.2.1.1 Planning Your Data Collection

Building your data collection tools correctly is crucial to ensure data is collected in a consistent manner, especially if multiple people are collecting the data independently. As such, I propose the use of four simple steps to building your data collection tool which are as follows: (1) define the information required, the target respondents, and the data collection tool you will use; (2) build your question bank; (3) triage and select questions; and (4) test the data collection tool prior to use at large.

1.2.1.2 Overview of Market Research Tools

There are many ways to collect your data. To cover the basics, we will be going over some of the more popular ones in life sciences which are in-depth interviews, online surveys, and focus groups. A brief discussion on secondary data collection techniques will conclude this chapter.

1.2.2 Situation Analysis

Your situation analysis is built using your information, which can be both internal and external to your organization. We will be going over the different types of information that you will need to collect and how to classify them so you can have a more accurate understanding of your company and its business environment. The main content of Chapter 3 splits into internal and external analyses.

1.2.2.1 Internal Analysis

Internal analysis is performed by examining the organization, so it can determine its own strengths and weaknesses. Some of the different things we will examine include processes, capabilities, and resources, as well as review the company’s mission and vision. Also, the business model is of explicit interest. Are you an integrated company or are you using a research model? Are you licensing your technology or are you going to market yourself?

1.2.2.2 External Analysis

External analysis is the analysis of factors that are outside the organization, but directly impact its functioning. While the company (as an individual organization) usually has very little control over these factors, it is very important to understand them. We will spend some time focusing on the key question, “Who is your customer?” so we can really expose the dynamics where the end user of the product can be different than the person who will be paying for it, and discuss the potential disconnect between the person who benefits from the product and service, and the payer. We will also go over the different actors’ interactions (and their specific interest) with life science products: the patient, the hospital, the primary caregiver, the private insurer, the group purchasing organization, and the government agency. Following this, we will take an in-depth look at competitive analysis, how to build a relevant market assessment and how to prepare a useful environmental assessment, which includes both the microenvironment (Porter’s Five Forces) and the macro-environment (the Social, Legal, Economic,Political, and Technology [SLEPT] model).

1.2.3 Developing a Marketing Strategy

Developing a marketing strategy is an extensive venture, so we will be dividing it in multiple sections. The first section will deal with the topics relevant to your marketing strategy vision, followed by a short discussion on traditional company marketing models, and identify which model is the most relevant for you. After these two sections, the next two sections will delve into the more practical applications of marketing strategy and describe the fundamentals such as the pricing strategy, distribution strategy, and promotional strategy. Finally, due to its importance, we conclude with a distinct section on digital marketing.

1.2.4 Implementation and Control Mechanisms

The implementation of your marketing strategy is the series of steps necessary to ensure you achieve your goals. It is a practical approach, the real-world application of your marketing plan. It is also a realistic assessment of how you will deal with roadblocks, as they emerge.

Meanwhile, control deals with the tools you need to measure the effectiveness of your strategies. As such, we will go over different control tools that you can plan to implement to ensure the resources invested in marketing and sale are properly generating revenues. This is split into two chapters. Chapter 5 deals with the more practical aspects of implementation and control mechanisms, whereas Chapter 6 focuses on the marketing metrics themselves for marketing decision making.

1.2.5 Final Notes

Chapter 7 addresses specific situations such as the marketing in life sciences, the marketing of health-care services, and the marketing of health-care digital products. For example, when discussing marketing strategy for services, we must acknowledge that there is a distinct approach for selling services versus products; hence, it is worth presenting the differences and similitude between traditional products (drugs, devices) and newer service technologies. The sale of apps and newer technologies also creates distinct challenges that should be accounted for.

Chapter 8 wraps up our journey toward marketing strategy while addressing the topics that will shape future marketing endeavors in life sciences, discussing the disruption of traditional health-care systems by patients.

Chapter 2
Overview of Market Research

The situation analysis is based on the information you have access to. The more precise the information, the better the decision making. When you start the process with some information on hand, it will most likely be necessary for you to engage into some market research activities to collect the missing data.

Market research is done for two audiences. First, it is done for the organization itself so it can make optimal decisions, e.g., when the lack of information could cost the organization more compared to the cost to acquire the information. Second, market research is done to convince potential partners and investors, by demonstrating the validity of an organization’s marketing strategy. This information will be necessary when making decisions and planning strategy.

In the text that follows, we will be reviewing some basic market research concepts, followed by the basics of the most popular market research techniques (both primary and secondary research). More information on how to plan and execute your market research, as well as analyze the data you gather, is available in the other book of this series, The Handbook of Market Research for Life Sciences [1].

2.1 Basic Market Research Concepts

Market research is full of dichotomies. To fully understand the market research process, we will be going over some of the most important concepts, which are primary versus secondary research, quantitative versus qualitative research, and inch-deep/miles-wide versus deep dive research projects.

2.1.1 Primary and Secondary Market Research

Primary market research is a market research activity in which the entrepreneur is actively engaged in doing research and creating data. Simply put, it is the collection of data that did not exist until the researcher completed the market research activity. Some of the most popular tools are web surveys, in-depth interviews, or focus groups. Although more costly than secondary data, it is tailored specifically to the researcher’s needs and will belong solely to him and his organization (meaning competitors will not have access to this specific information).

Secondary market research is the collation of data that already exists. For example, it could be collected through a web search or by aggregating news posts or blogs. The researcher collects and then transforms the data into something coherent and useful. Although less costly, it is not always tailored to the researcher’s needs.

2.1.2 Quantitative and Qualitative Data

Data can be quantitative or qualitative in nature. Quantitative data refers to data that can be measured and numbered. “Counting” the number of potential clients for a product, calculating the number of products or ...

Inhaltsverzeichnis

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Preface
• Introduction to Marketing Strategy
• Author
• 1  Marketing Strategy Road Map
• 1.1 Planning toward Strategy
• 1.2 Planning Your Marketing Strategy
• 1.2.1 Performing Market Research
• 1.2.1.1 Planning Your Data Collection
• 1.2.1.2 Overview of Market Research Tools
• 1.2.2 Situation Analysis
• 1.2.2.1 Internal Analysis
• 1.2.2.2 External Analysis
• 1.2.3 Developing a Marketing Strategy
• 1.2.4 Implementation and Control Mechanisms
• 1.2.5 Final Notes
• 2  Overview of Market Research
• 2.1 Basic Market Research Concepts
• 2.1.1 Primary and Secondary Market Research
• 2.1.2 Quantitative and Qualitative Data
• 2.1.3 Miles-Wide versus Deep Dive Research
• 2.2 Preparing Your Market Research Plan
• 2.3 Collecting Data—Primary Research
• 2.3.1 Data Collection Methods
• 2.3.1.1 In-Depth Interviews
• 2.3.1.2 Focus Groups
• 2.3.1.3 Online Surveys
• 2.4 Secondary Research
• 2.4.1 Active Secondary Research
• 2.4.1.1 Popular Sources of Data Online
• 2.4.1.2 Using Search Engines to Look for Information
• 2.4.2 Passive Secondary Research
• 2.4.3 Internal Secondary Data
• 2.5 A Few Words on Ethics and Market Research
• References
• 3  Situation Analysis
• 3.1 Internal Analysis
• 3.1.1 Assessing Your Corporate Vision and Mission Objectives
• 3.1.2 Assessing Your Current Capabilities
• 3.1.3 Assessing Your Company’s Business Model
• 3.1.4 Some Final Notes on Internal Situation Analysis
• 3.2 External Analysis
• 3.2.1 Customer Analysis
• 3.2.1.1 Understanding the Customer’s Decision-Making Process
• 3.2.1.2 The Client Ecosystem
• 3.2.1.3 What Does My Customer Want?—Using the Kano Model to Understand Your Customer
• 3.2.1.4 Identifying Customer Behavior
• 3.2.1.5 Building Customer Profiles
• 3.2.1.6 Some Final Notes on Customer Behavior
• 3.2.2 Competitor Analysis
• 3.2.2.1 Preparation
• 3.2.2.2 Identify Key Competitors
• 3.2.2.3 Evaluate Your Competitors
• 3.2.2.4 Getting Information on Competition
• 3.2.2.5 Final Notes on Competition
• 3.2.3 Market Analysis
• 3.2.3.1 Market Size Estimation—The TAM-SAM-SOM Model
• 3.2.3.2 Market Forecasting
• 3.2.3.3 Final Notes on Market Analysis
• 3.2.4 Environmental Analysis
• 3.2.4.1 Microenvironment—Porter’s Five Forces
• 3.2.4.2 Macro-Environment—The SLEPT Model
• 3.2.4.3 Building a SLEPT Model
• 3.3 Classifying Outputs: From SWOT to TOWS
• 3.3.1 The SWOT Model
• 3.3.1.1 The Four Elements of a SWOT Model
• 3.3.1.2 Developing Strategy Applications—From SWOT to TOWS
• 3.4 Concluding Remarks
• References
• 4  Developing a Marketing Strategy
• 4.1 Selecting Your Marketing Strategy Vision
• 4.1.1 Strategic Commitment
• 4.1.2 Strategic Opportunism
• 4.1.3 Strategic Adaptability
• 4.2 Choosing Your Marketing Model—What Type of Company Are You?
• 4.2.1 The Classical Company Models
• 4.2.1.1 The Production Model
• 4.2.1.2 The Product-Focused Model
• 4.2.1.3 The Selling Model
• 4.2.1.4 The Marketing Model
• 4.2.2 Modern Marketing Concepts
• 4.2.2.1 Relationship Marketing
• 4.2.2.2 Integrated Marketing
• 4.2.2.3 Internal Marketing
• 4.3 Creating, Adapting, and Implementing Strategy
• 4.3.1 Determining Your Target Market—Segmentation
• 4.3.2 Strategies Based on Products and Market
• 4.3.2.1 Market Penetration
• 4.3.2.2 Market Development
• 4.3.2.3 Product Development Strategies
• 4.3.2.4 Product Diversification
• 4.3.3 Marketing Strategies Based on Competitive Advantage
• 4.3.3.1 Cost Leadership
• 4.3.3.2 Differentiation
• 4.3.3.3 Cost and Differentiation Focus
• 4.4 Developing the Marketing Mix
• 4.4.1 Product
• 4.4.1.1 Key Product Decisions
• 4.4.1.2 Measuring Product-Market Fit
• 4.4.1.3 Making Key Product Decision—The ICE Score
• 4.4.1.4 Building a Better Product—The Hook Model
• 4.4.2 Pricing Strategy
• 4.4.2.1 Cost-Based Pricing
• 4.4.2.2 Competitive-Based Pricing
• 4.4.2.3 Customer Value-Based Pricing
• 4.4.2.4 Price Skimming
• 4.4.2.5 Freemium Pricing
• 4.4.2.6 Other Considerations for Your Pricing
• 4.4.3 Promotion Strategy
• 4.4.3.1 Objectives of Your Promotion Strategy
• 4.4.3.2 Promotional Tools
• 4.4.3.3 Choosing Your Promotional Message and Channel
• 4.4.3.4 Choosing Your Promotional Tools: The Bullseye Framework
• 4.4.4 Distribution Strategy
• 4.4.4.1 Factors to Choose Your Distribution Strategy
• 4.4.4.2 Different Types of Distributions
• 4.4.4.3 Specific Considerations for Distribution in Life Sciences
• 4.5 The Role of Digital Marketing
• 4.5.1 Driving Traffic
• 4.5.2 Selling Products Online
• 4.5.3 Digital Marketing in Action—The Pirate Metrics: “AARRR!”
• References
• 5  Marketing Strategy Implementation and Control
• 5.1 Implementation
• 5.1.1 Implementation versus Strategy
• 5.1.2 Implementation Plan
• 5.1.3 Barriers to Successful Implementation of Marketing Strategy
• 5.1.3.1 External Pressures of the Organization
• 5.1.3.2 Internal Pressures of the Marketing Function
• 5.2 Control Elements
• 5.2.1 Implementation of Control Processes
• 5.2.2 Barriers to the Successful Implementation of Control Procedures
• 5.2.2.1 Inadequate Monitoring
• 5.2.2.2 Inadequate Targets
• 5.2.2.3 Management by Exceptions
• 5.2.2.4 Cost and Complexity
• 5.2.3 A Word of Caution on Control Systems
• 6  Marketing Metrics
• 6.1 Why Use Metrics?
• 6.2 Some Pre-revenue Ratios
• 6.2.1 Sales Force Coverage
• 6.2.2 Break-Even Analysis
• 6.3 Ratios to Measure Sales Effectiveness
• 6.3.1 Return on Sales
• 6.3.2 Advertising-to-Sales Ratio
• 6.3.3 Customer Acquisition Cost
• 6.3.4 Marketing Percentage of CAC
• 6.3.5 Average Retention Cost
• 6.3.6 Lifetime Customer Value
• 6.4 Digital Marketing Metrics
• 6.4.1 Traffic Metrics
• 6.4.1.1 Overall Site Traffic
• 6.4.1.2 Monitoring the Source of Web Traffic
• 6.4.1.3 Monitoring the Paid Traffic
• 6.4.2 Conversion Metrics
• 6.4.3 Revenue Metrics
• 6.5 Final Notes
• 7  Discussion on Unique Perspectives
• 7.1 Marketing in Life Sciences
• 7.2 Marketing Health-Care Services
• 7.2.1 Difference between Services and Products
• 7.2.2 Developing Marketing Strategies for Health-Care Services
• 7.3 Marketing Health-Care Digital Products
• 7.3.1 Developing Marketing Strategies for Digital Products
• 7.3.2 Issues with Health-Care Digital Products
• 7.4 Final Notes
• Reference
• 8  Final Thoughts
• Bibliography and Further Reading
• Index