This month, Pharm Exec sits down with marketing experts Sanjiv Sharma and Susan Schwartz McDonald to discuss the latest changes in the business model, and what these hold for the future of this important "c-suite" function. We also sift through a range of marketing experiences, at all stages of the product life cycle, to uncover five basic principles that can help managers use market research tools to make successful decisions in positioning medicines to meet the escalating expectations of customers.
—William Looney, Editor-in-ChiefPHARM EXEC: What are the key goals that market research is expected to accomplish in today's business organization?
SANJIV SHARMA: There are two. The first is to identify, prioritize, and quantify new business opportunities. The second is to wrest maximum value from the opportunities the organization decides to pursue. In this latter case, guidance and support for execution strategies is increasingly important. And it should be done with an eye to obtaining real value at all phases of the product's life cycle, not just at launch or during the early years, when market research helps to build take up by providers and patients.
PE: How would you describe the role of market research today compared to a decade ago?
SUSAN SCHWARTZ MCDONALD: Management expectations about what market research can do are much higher today. In the past, the predominant view was that market research was a subsidiary activity designed to backstop decisions and confirm the intuition and judgment of the marketing team, which would steer the ship based on close knowledge of the external environment. Today, market research is driven by quantitative approaches that focus on unmasking the will of the customer, and then implementing strategies to meet their expectations. Research has become an instrument of market democracy, where all decisions are filtered through the "customer plebiscite." Although the motivating factor is to manage risk by making the approach to the customer more predictable, this can work to limit the discretion that an internal marketing team has in driving specific actions to build the brand.
PE: Doesn't this pose a challenge to the credibility of the market research function, in trying to deliver against such expectations?
SHARMA: There is an inherent danger in requiring market research to conform to a rigid ROI calculus. That can actually drive research in the wrong direction, and limit options that can provide more insights. Strict reliance on the will of the customer can mean that marketers don't rely on their discernment skills, which have often produced the most insightful thinking. It can lead to a presumption that the customer always has the right answer, or that marketers are always posing the right question. Sometimes we don't.
PE: Are you saying that market research is best viewed as a decision support tool?
MCDONALD: Yes. The problem with the notion that market research should deliver a high ROI is that management will expect too much from the function and skew outcomes away from what really counts, which is creating a true value proposition among the customers most likely to buy your product. There is also the assumption that good decision support requires adherence to a "best practices" model, along with an overwrought reliance on customer insight. Unfortunately, this is a double-edged sword; it may foster discipline and consistency at the expense of creative thinking while actually driving costs higher.