Cost of Change State of the Pharmaceutical Marketing Department October 2015
"CHANGE IS HARD BECAUSE PEOPLE OVERESTIMATE THE VALUE OF WHAT THEY HAVE AND UNDERESTIMATE THE VALUE OF WHAT THEY MAY GAIN BY GIVING THAT UP." – JAMES BELASCO AND RALPH STAYER 2
COST OF CHANGE - BACKGROUND In 2014 we embarked on a journey to uncover the pulse of change and understand what marketers were holding onto and what they feared about for the future.
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COST OF CHANGE - BACKGROUND We conducted a survey of Marketing Directors and above, that worked within the Health Care / Pharmaceutical, Retail or Business Services industries. Respondents were asked to answer a series of questions on the following topics…
Challenges and key issues their marketing department are facing
Perceptions of their marketing department’s performance across a range of current and forward-looking metrics
Ability to and concern with handling change
Company performance and competitive perspective
Base: Total (n=103), Retail (n=36), Pharma (n=33), Business Services (n=34). 4
HERE’S WHAT WE LEARNED ABOUT CHANGE AND THE MARKETING DEPARTMENT 5
CHANGE IS HAPPENING MORE THAN EVER BEFORE AND PREDICTED TO HAPPEN WITH GREATER FREQUENCY IN THE FUTURE It is more important than ever to get in front of change and understand how other companies are innovating around change Perception of Future Change
Perception of Change
61%
73%
66%
73%
More The same amount 32% 24%
28%
7%
3%
6%
Total
Healthcare / Pharma
Total
Less
27% Healthcare / Pharma
0%
Base: Total (n=103), Pharma (n=33). Q20. Compared to 3 years ago, do you think change is happening more, less or the same amount?, Q21. And looking into the future, do you think change will happen more, less or the same amount 3 years from now?
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COMPANIES THAT FORESEE AND PROACTIVELY HANDLE CHANGE BETTER UTILIZE THEIR BUDGETS When is change typically handled in your Marketing department? Proactive Reactive
50%
51%
Total
55%
46%
We wait until change occurs and then evaluate a course of action
We proactively think about it and address it before it happens
Healthcare / Pharma
Confidence in handling change (T2B)
75%
45%
Prepared to handle change (T2B)
71%
41%
Wasted budget
14%
24%
Been using same partners/vendors past several years
44%
63%
Decisions need to get approval from several levels
12%
31%
Finance is enforcing cost-cutting metrics across the board
44%
47%
Initiative are often shelved due to changing priorities
33%
37%
Base: Total (n=103), Pharma (n=33). Q18. When is change typically handled in your Marketing department? 7
Company Comparison to Competitors (Top 2 Box – Better Than)
AND PHARMA IS LESS CONFIDENT THAN OTHER INDUSTRIES IN IT’S ABILITY TO CHANGE VS. THEIR COMPETITORS
ABILITY TO ADAPT QUICKLY
Total
34%
Business Services Healthcare / Pharma
Retail
20%
44%
18%
24%
24%
39%
14%
Base: Total (n=103), Retail (n=36), Pharma (n=33), Business Services (n=34). Q24. On the following statements, how does your company compare to your biggest competitors? 8
FOR ALL INDUSTIRES THE BIGGEST CHALLENGES FACED ARE COST & COMPETITION
Base: Total (n=103). Q7. What one word would you use to describe the biggest challenge facing marketing today?
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HOWEVER WHAT KEEPS THEM UP AT NIGHT ARE
CUSTOMERS
Base: Total (n=103). Q8. What are the key issues about your Marketing department that keep you up at night or that you worry about regularly?
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AND DESPITE THAT BEING THE TOP CONCERN ACROSS INDUSTRIES… 11
PHARMACEUTICAL COMPANIES ARE TRAILING OTHER INDUSTRIES IN 3 KEY AREAS IN THE UTILIZATION OF INSIGHTS
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Approaches
2
Embedding insights throughout the organization
3
Commercializing the insights in the business
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APPROACHES
WE ARE TIMID IN OUR APPROACH TO COLLECTING INSIGHTS
12% OF HEALTHCARE MARKETERS THINK THAT INSIGHT / MARKETING INTELLIGENCE IS USING BREAKTHROUGH TECHNIQUES TO DELIVER FRESH INSIGHTS Source: Clear, Cost of Change Survey, January 2014
27%
Total
12%
Healthcare Base: Total (n=103), Pharma (n=33), Q10. How well do the below statements describe your Marketing department? (Top 2 Box)
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APPROACHES
WE ARE HESTIANT TO LEVERAGE OTHER SOURCES TO MONITOR CHANGE
Total
Healthcare/ Pharma
Gut Instinct
Expert Reports News Headlines
Consumer Research
Customer Database Research
Q22. Please think about how your Marketing team identifies changes that may occur. How effective are the following methods? 14
APPROACHES
AND BUDGETS REFLECT THE LACK OF PRIORITZATION Marketing Budget Allocation 4% 5% 7% 7% 8%
4% 7% 5% 8% 7%
14%
10%
17%
20%
35%
30%
4%
8%
Total
Healthcare / Pharma
Insight After sales Social media PR Research & Development Brand development Sales / customer support Advertising / comms
Base: Total (n=103), Pharma (n=33). Q27. You noted that your overall Marketing budget is $_________ (INSERT AMOUNT FROM PREVIOUS. BOLD AND UNDERLINE). For the various elements below, approximately what percentage of your Marketing department budget is allocated to each? (RANGE 0-100; ANSWERS MUST SUM TO 100%) 15
EMBEDDING
WE DON’T DO A GOOD JOB OF CIRCULATING INSIGHTS AND INFUSING THEM INTO OUR CULTURE
ONLY 18% THINK INSIGHTS ARE BEING COMMUNICATED EFFECTIVELY THROUGHOUT THE ORGANIZATION Source: Clear, Cost of Change Survey, January 2014
25%
Total
18%
Healthcare Q10. How well do the below statements describe your Marketing department? (Top 2 Box)
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COMMERCIALIZING
INSIGHTS ARE NOT PERCEIVED AS RELEVANT
15% THINK THE
CIRCULATED INSIGHTS ARE RELEVANT TO THE BUSINESS Source: Clear, Cost of Change Survey, January 2014
26%
Total
15%
Healthcare Q10. How well do the below statements describe your Marketing department? (Top 2 Box)
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WHAT CAN WE DO ABOUT IT? 18
TO WIN WE NEED:
BRAVERY CLARITY EMPATHY AGILITY 19
BRAVERY FUTURE PERSPECTIVE Have a Brave Perspective on the Future
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CREATING A CATEGORY VISION TO ENCOURAGE BRAVE DECISIONS § Organizations encourage smart, brave decisions by developing forward-looking visions based on how the category will change over time § A clear vision of the category in 5 years enables a brand and business to align innovation efforts with sales/marketing under one platform § Hills (specialty pet nutrition) developed a category vision with 5 overarching growth platforms (upper left) which helped drive brave merchandising and innovation efforts 21
CLARITY PURPOSE & PLANNING Have a clear and enduring value proposition that matters in the hearts and minds of consumers
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MAINTAINING COHERENCE & CLARITY FROM DEVELOPMENT THROUGH LAUNCH § At Nissan, the product manager for a new vehicle is responsible for managing the core insight which (drove product inception) from idea through to launch, and beyond § This joined up process holds the entire team responsible for understanding and activating insights. § More importantly, the process ensures there is a clear purpose and coherent strategy behind each model that is not sacrificed or misinterpreted 23
EMPATHY CULTURE AT THE CORE Make the Culture Work to Activate the Purpose
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EMPATHY THROUGH INNOVATION: LEARNING AND SHARING §
At the Cleveland Clinic they made it their mission to ensure the patient experience was elevated not only through efficiency but also encoding empathy within the values of the culture.
§
To achieve this they hired a Chief Experience Officer and created an Office of Patient Experience. Through this office they established a series of internal and external programs to hone the skill of empathy. One program is a powerful video series to help their employees walk in the shoes of others.
§
The annual Empathy + Innovation Summit is an example where they invite healthcare professionals and executives to a “Boot camp on empathy, engagement and service behaviors” 25
AGILITY MAKING IT AN ENGINE OF VALUE Real-time Ability to Make Decisions & Adapt Ahead of Change
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DEVELOPING AN INSIGHTS ENGINE § In order to be more agile, organizations are heavily investing in infrastructure that enables insight to influence decisions faster § Particularly, brands like AT&T, GE and CVS are investing in ‘insight engines’ that connect all of their employees to the insights that matter § The mock up (left) demonstrates an example for how this comes to life. Employees signs up to the insight series, receiving critical learnings on a regular basis
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CLEAR IS A GLOBAL MARKETING STRATEGY CONSULTANCY WE ARE 70 STRONG BASED ACROSS 3 CONTINENTS
FOUNDED IN 2002
PART OF THE M&C SAATCHI GLOBAL NETWORK
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WE HAVE DEEP EXPERTISE HELPING BUSINESSES KEEP THE CONSUMER AT THE HEART OF WHAT THEY DO
THE NORTH FACE Brought the consumer to life in order to optimize day-to-day business decisions
WAGAMAMA Linked qual research, quant research and strategy, to inform expansion opportunities in the US
HELLMANN’S Provided deep understanding of target consumer across variants to drive communications and media planning
KASHI Conducted North American segmentation to identity their target and visualize in a clear, compelling way to engage the internal teams 29
WE CREATE VALUE. By deploying diverse teams of experts to challenge and collaborate across the strategic journey, bridging the transitions where value & clarity are usually lost.
Insight
Opportunity
Strategy
Realization
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We’d love to continue the conversation. Please let us know if you’d like to be a part of our upcoming events. Mike Weber mike@clear-ideas.com +1 212 361 0014 ext. 7006
Jennifer Strassburger jennifers@clear-ideas.com +1 212 361 0014 ext. 7003
CLEAR LONDON
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#05-10 Infinite Studios 21 Media Circle 138562 Singapore
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APPENDIX
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Biggest Challenges Facing the Marketing Department
IN HEALTHCARE COMPLEXITY OF CHANGE IS THE MOST PRESSING CONCERN
Total
Healthcare / Pharma
Differentiating our company versus major competitors
31%
30%
Managing complex multi-channel customer relationships
30%
42%
Aligning marketing activities and the sale’s organization’s priorities inside the business
30%
30%
Decisions are made with the short term in mind versus long term play
29%
27%
Understanding and optimizing the synergistic effects across activities
25%
24%
Dynamically managing customer interactions through customer service
21%
18%
Properly storing, unifying, and utilizing all available data
21%
30%
Using easy to use tools and services, particularly cloud-based, that can be integrated into marketing campaigns
19%
24%
An internal process that enables us to be agile and react quickly with new product and communications based on changes in market
18%
30%
Gaining meaningful market insight
17%
0%
Continuing diversity of channels and lack of integration across all activities
16%
24%
Base: Total (n=103), Pharma (n=33) Q9. What are the biggest challenges facing your Marketing department next year? Select up to 7. 33
LEGISLATIVE CHANGES ARE REGARDED AS THE BIGGEST DRIVERS OF CHANGE Biggest Drivers of Change Total
Healthcare / Pharma
Economic changes
56%
42%
Technological advancements
44%
46%
New competitive capabilities
36%
46%
Changing lifestyles and behaviors from current target consumers
32%
12%
Legislative changes
26%
52%
Changing demographics
17%
12%
New leadership
17%
21%
Changing internal culture
17%
15%
Changing social and cultural norms
15%
12%
Changes in supply chain
13%
3%
Changing relevance of corporate beliefs
9%
9%
Changing geo-political context
6%
12%
Environmental pressures or opportunities
5%
6%
Changing relevance of corporate resources
5%
6%
Increased pressure from investors / investment community
5%
6%
Base: Total (n=103), Pharma (n=33). Q23. Looking forward, what do you think the biggest drivers of change are for your Marketing department?
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