Pharmaceutical Marketing Challenges
The 11 challenges that marketers face in the pharmaceutical and life science industry.
An industry with advanced techniques, patented products, generic/brand medications and medical devices is always going to bring with it challenges. For the pharmaceutical marketer, there are often more challenges than there are solutions arising alongside such manufacturing complexities.
Generally, and luckily, the pharmaceutical industry is one that is currently thriving, but as the industry evolves - biosimilars and new technologies come to mind - new challenges will be presented that will affect pharmaceutical marketing. Some of those challenges will form internally and some will form externally.
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MARKETING CHALLENGES IN THE PHARMACEUTICAL INDUSTRY
All marketing teams face common challenges, such as the challenge of generating leads, securing adequate budget for proposed marketing activities or proving the ROI for those marketing activities.
But in this post, we list the 11 challenges specific to B2B marketers in the science sectors that we are already aware of, and we'll also speculate on what lies ahead which may shape marketing initiatives in the near future.
1. SLOWER MARKET GROWTH
A QuintilesIMS report demonstrates a market growth drop to single digits, between 6% and 9%, through 2021, in the US, down from a 12% growth in 2015. Although growth has been common in the pharmaceutical industry which will keep growing, it is predicted to slow down due to pricing, market-access pressures, lower volume growth in emerging markets and further generic-drug incursion. The industry as a whole may experience some growth/sustainable challenges in the coming years.
2. THE INDUSTRY IS SLOW TO INNOVATE ITS MARKETING, CERTAINLY WITH DIGITAL
Deloitte has previously found that pharma’s digital advertising and marketing spend lags all other industries by quite a margin. This study, for example, states that digital advertising spend for 2014 was $6.2B in the financial services sector compared to $1.4B in healthcare and pharmaceuticals. A more recent study found that this spend had increased to $2.53B in 2017, but still dwarfs other industries by comparison who are mostly in the double digits by 2018.
The traditional nature of pharma is potentially holding back the potential of its marketing initiatives, with budgets sometimes allocated to more traditional methods and digital opportunities not exploited in the full. Of course, the pharma industry is adopting more and more digital initiatives, but at present, and as we have witnessed previously, it is always one step behind which creates a challenge for the marketers.
Source: Deloitte
3. MARKETERS ARE PUT INTO THE LIMELIGHT, MORE SO THAN SALESPEOPLE
B2B pharma has always relied on direct field sales to fuel its new business initiatives but this trend has shifted in recent years. The Marketing Journal suggests that the decline in B2B field sales makes way for more marketing-led initiatives, such as inbound marketing and effective SEO & web design, led solely by the marketing teams. Customer buying behaviours in general dictates that this self-service style of buying is a more preferred method of purchasing products.
This creates a challenge for marketers, as the weight of new business leans more on marketers than sales in an industry where it has always been the other way around. An article in PMLive suggests that marketers need to use digital to optimise B2B pharma sales, but with limited experience and/or no historical data from such initiatives, marketers are presented with a challenge. Where to start?
4. POLICY REFORMS
If you have worked in the pharma industry long enough, this won't be new. Policy reforms and new regulations happen often, and there is no sitting on the fence; most pharmaceutical organisations will need to comply. This impacts how products are manufactured and sold, and also how they are marketed. The pharma supply chain, in the B2B markets, is also affected where marketing efforts, initiatives and messages, such as content marketing, often require altering.
The legal and regulatory environment will always pose threats to pharmaceutical organisations and marketers will always be presented with challenges. The challenges for B2C marketers are far greater than those for B2B marketers, but this doesn’t mean that B2B marketers are immune to policy-based challenges.
5. DATA HANDLING, INTERPRETATION AND CONSENT
An Econsultancy healthcare marketing report highlighted that the majority of healthcare organisations are unprepared to deal with emerging data sources or to collect high volumes of data. The same report shows that 44% of large organisations are not prepared to use their CRM data in marketing campaigns. Albeit this report is from 2015, the challenges to data remain, and this will be the same for the pharmaceutical B2B sectors as well as many other sectors.
Marketing campaigns are often hampered by the inability to understand data – this is a challenge in a traditional space. As data collection, management and interpretation are sophisticated, even if the marketing initiatives that are being conducted are potentially not so.
Source: Econsultancy
6. CHANGES AND TRENDS AT THE TOP OF THE CHAIN: PATIENTS AND PEOPLE
This macro-level consideration generally will not affect the B2B marketer, certainly not on a day-to-day basis. But all that is required is one major change – population, income, education level, disease patterns or lifestyle change – and the whole outlook for an organisation or science sector can be affected. Meaning that the marketer is faced a challenge concerning what the message following a change in trend should and should be. Yes, the supply chain is long, but it is still a chain that is very much connected.
7. B2B2C: MARKET STRUCTURE AND SUPPLY CHAIN LAYERS
You do not see "business to business to consumer" (B2B2C) markets often, but the pharmaceutical industry is very much one of them. B2B2C is when an organisation sells to another organisation who then sells on to a customer of the product – the delivery channel is separate to the purchase decision channel. (The financial services industry, compared to earlier in this post, is another example.)
An article by Forbes Communications Council accurately captures the challenge within this sort of environment: “From a marketing perspective, it’s critical to determine the impact and interrelationships of marketing to the customer versus selling to the customer and marketing to the consumer and selling to the consumer by the customer.” This requires a complex balancing act from the part of the organisation, and the marketing team – most pharmaceutical organisations cannot avoid this.
8. DIFFERENTIATION AND THE COMPETITION
The B2B pharmaceutical marketplace is overwhelmingly crowded. McKinsey & Company demonstrate the advantage pharmaceutical organisations gain by being the first to market. Everyone else entering thereafter are usually left to fend for themselves in a competitive marketplace full of organisations with similar service offerings.
Differentiation is a challenge for all pharmaceutical organisations, and the challenges above make it even harder for the organisation to stand out, let alone survive. These differentiation issues are often related to price, message, brand perception as well as the product or service itself, and the demonstration of value and credibility over competitors is difficult.
9. BREXIT
Brexit poses a threat to all organisations operating from Britain. This is certainly the case for manufacturing organisations that import and export, and caught in the firing line are the pharmaceutical manufacturing and research organisations that are based in the UK. The Guardian quote Mike Thompson of the Association of the British Pharmaceutical Industry describing Brexit as "the biggest logistical challenge ever faced by the industry."
Costs are likely to increase, which affects future investment as well as the marketing budget allocated to marketing teams. Other challenges will arise, however, it's hard to predict exactly what at this stage. Below is a snapshot of how Brexit will impact GSK, Britain's largest drugmaker, as an example of the extent of this challenge.
Source: The Guardian
10. INTERNAL STRUCTURES AND COLLECTIVE APPROACHES TO DECISION MAKING
B2B marketers face a double-edged sword when it comes to decision making: Internal decisions usually require a number of individuals and departments to agree on a way forward to sell and market a product just like the customers of that same organisation will need to go through a collaborative procurement process to determine whether the product is appropriate. The average number of people within these decision-making teams are six.
When more people are involved in the decision-making process, it usually takes considerably longer to arrive at a decision than if one person was tasked with weighing up the options. For marketers, this creates a huge challenge as the time to take a product to market or the time to launch a marketing campaign can be delayed to a point where the optimal period for maximum impact can be missed. Crafting the message to these individuals, often from varying departments, also presents a challenge comprising multi-channel and multi-message considerations.
11. TIME AND TIME MANAGEMENT
Ask any marketing professional or department in any industry about the main challenge they face and you’ll see an overwhelming majority stating "time." As marketing has become more complex, with more options, more channels, more objectives and more measurement, time has become scarcer. The problem may sit with the marketing strategy, skills and capabilities, or even internal management processes. A more generic challenge, but still, one that impacts how we deal with all of the above challenges.
A SOLUTION TO PHARMA MARKETING CHALLENGES
The solutions to the pharmaceutical marketing challenges noted above (as ever, marketers are faced with considerably more than what we present in this post) are diverse. Each challenge in itself would create 11 separate blog posts with a multitude of methods of tackling the challenges. However, there is a solution for all...
Discussion. Participation in discussions with topics such as these adds interest to the topics, which in turn naturally leads to hashing out possible solutions to the challenges. We can seek to understand the environment and the variables present, but more so, how we can affect those variables. Creativity is usually existent within such environments, and once the discussions happen, we often find ourselves on the road to overcoming such challenges and finding opportunities in the process.
Want to test this? Pick a challenge from the list above most relevant to your organisation and set up a meeting with colleagues to discuss its effect on your organisation and marketing initiatives, as well as possible solutions. Alternatively, discuss these challenges with a member of the Orientation Marketing team by contacting us - there are a number of ways to get in touch.
