Why a meaningful brand is a pharma’s greatest asset
SummaryWhy a meaningful brand is a pharma’s greatest asset
Pharmaceutical companies are under increasing pressure to deliver safe, efficacious and cost-effective drugs, while continuing to be innovative, compliant and profitable.
Sustaining competitive advantage has never been more difficult, and businesses are struggling to deliver revenue and growth: Pfizer’s revenues have decreased 28% since 2012, and AstraZeneca’s by 26%. One powerful way companies can safeguard against diminishing shareholder value and returns is to invest in building strong brand equity.
With physicians no longer the sole influencers in prescribing and drug purchase decisions; and patients having more access to information about conditions and treatment options than ever before, there is an expanding variety of forces shaping the dynamics of the industry. As a result, pharmaceutical companies now need to engage a wider range of stakeholders across multiple channels to improve their return on marketing investment.
The most valuable brands are seen as those that deliver superior shareholder returns over time, regardless of market disruptions. A measurement of the strongest brands in the BrandZ™ Top 100 as a ‘stock portfolio’ over the last 11 years shows their share price rose over five times more than the MSCI World Index and almost two thirds more than the S&P 500.
These most valuable brands have three characteristics in common, according to BrandZ research: they are meaningful, different and salient. Valuable pharmaceutical brands can be defined as those that possess these three attributes within different therapy areas and amongst different customer target groups. Consequently, these are the brands that are more likely to be prescribed and have greater potential for growth driving both equity and sales. A brand needs to occupy a specific place in the mind of the customer, whether that is a physician, a patient or any other stakeholder in the treatment journey. This can only be achieved if a brand is perceived to meet a need, to be differentiated, and to be top of mind.
So what does it take to be meaningful, different and salient? To be meaningful, stakeholders must feel affinity towards the brand, and perceive that it meet their needs. A ‘different’ brand is one that stakeholders feel provides them with something over and above the others, or which sets the trends for its category. Salient brands are those that come to mind quickly and readily when the customer is considering category purchase.
These three factors directly contribute to a brand’s ability to grow volume share, and justify a price premium, and also to its potential to grow value in future.
Increasing volume share is one of the top priorities for pharmaceutical companies as well as increasing market share. Meaning, difference and salience are all instrumental in the power that a brand has to grow volume, with different categories and markets requiring differing proportions of each to build and maintain stakeholders’ demand for a brand.
While being meaningful is the key to this power for most categories in the UK, including banking, insurance and cereals, brands in categories including airlines, hotels and biscuits rely on salience. It is less important in the UK to be seen as different from other brands in order to drive volume share, but it is key for brands to be not only be top of mind but also meet an essential need to grow affinity for the brand in consumers’ eyes and, therefore, keep demand high.
When we look at pharmaceutical brands in the context of GPs as the stakeholders and across various markets, it is meaningful brands that have most power to drive volume share, and are therefore most likely to be demanded; which can be translated into an increased likelihood to be prescribed within a primary care setting.
The more complex story comes when we consider the thoughts of a mix of GPs and specialists who are personally involved in prescribing or initiating treatment. Here, brands need a more equal split between being salient and meaningful to drive volume share. Just like consumer markets, it is more important for brands to display the salient & meaningful attributes than to be seen as different or setting the trends.
For example in Korea’s multiple sclerosis market, being meaningful contributes 42% to a brand’s power to increase volume share, while salience contributes 40%. In China’s diabetes market, stakeholders’ demand for a brand is driven by salience – so ensuring the brand is top of mind at the point of prescription is key in order to drive volume share. The same patterns can be seen in different geographical markets, although with slight variations.
Pharmaceutical brands that invest in becoming more meaningful and salient will build strong brand equity that leads to sustained customer demand and thus safeguard against diminishing shareholder value and returns due to factors such as genericisation and lack of a strong pipeline.
So how can pharmaceutical companies ensure their brands are meaningful and salient? They must focus on how to help their brand standout from the competition making sure that it meets the needs of customers in order to build brand loyalty and remain top of mind.
Firstly, this requires communications to be delivering a consistently meaningful message and secondly, ensure communication channels are utilised effectively to ensure key stakeholders are exposed to key sales messages and via the most relevant channel for that group of customers.
No company can afford to overlook the importance of growing their brand, and pharmaceutical companies are no exception. With a variety of forces continuing to put pressure on the pharmaceutical companies to deliver shareholder value in an increasingly regulated and competitive market, brands that rise above the rest in the physicians’ mind and meet the needs of all stakeholders, from physicians to payers and patients, will have a much better chance of sustained growth and profit.