Dr. Osler's famous phrase, "It is much more important to know what sort of patient has a disease than what sort of disease a person has," may be debatable medical advice, but its wisdom for pharma marketers is beyond doubt. These days, understanding patients and physicians is essential to pharma's health. The problem is: How do you sort them to know what sort they are?
This question underlies the practice of segmentation, the subdivision of markets. Until the '70s, the best method-still sufficient for many purposes-drew on social descriptors such as age, gender, education, income, region, and household size.
But it's no longer enough for marketers to classify customers by demographics alone. The Information Age is also the age of clutter and noise. The competition for mindshare-customers' time and attention-is ferocious. Merely locating them won't do. Message must match target and immediately connect. If content, tone, timing, and form are not attuned to customers' emotions and habits of mind, they are unlikely to notice, much less respond.
Many believe psychographics is destined to play a growing role in pharma. Before discussing its prospects, though, it is important to understand its present and past.
Divide and Conquer Packaged goods companies have been probing customers' psyches for at least 30 years. But pharma's use of psychographics is still "quite primitive," says Jaswinder Chadha, president and CEO of marketRx. He estimates it accounts for no more than 2–3 percent of the industry's marketing research spend. To be sure, some pharma marketers have skillfully sought and applied psychographic data for some time. But, according to Patricia Breman, a senior consultant with SRI Consulting, it "speaks volumes" that her company, developer of VALS (Values, Attitudes, and Lifestyles Survey)-the granddaddy of psychographic consumer segmentation models-has no pharma clients.
The psychographics saga began in the late '60s, when Arnold Mitchell realized that the times they were a-changin'. A social scientist, he declined to tune in, turn on, or drop out, but did set out to understand why the nation's social fabric was fraying. His efforts culminated in the original VALS model in 1978. Updated in the late '80s, VALS now consists of eight segments predicated on motivation, resources, and innovation. (See "VALS Segments," page 83.)
The rationale for segmentation in general is to attain marketing objectives at a reasonable cost by concentrating efforts for the greatest effect. It is, after all, impractical to deliver a customized message to each individual ("markets of one") and inefficient to address the entire market monolithically (as if it were completely composed of mythical average people). The solution is to break the market into meaningful pieces-internally homogeneous, as the textbooks say, but externally heterogeneous.
But how? Markets can be categorized by what people say, are, do, or think. The first category captures their preferences, the second applies social labels, the third describes consumption-related behavior, and the last (psychographics) elicits attitudes, values, and motivations. So why choose psychographics?
Grasping Intangibles The principle justification to use psychographics is that it works. Experience shows that "demographics alone don't do a very good job of predicting people's behavior," says Chris Jaworski, senior vice-president of brand research at RoperASW. Adding behavioral data, he says, "doesn't do enough." But RoperASW's research in non-pharma markets has shown that the inclusion of psychographic data more than tripled their ability to predict consumers' choices, from 20 percent without to between 60 and 80 percent with.
Many believe pharma marketing would benefit similarly. In fact, it already has. Johnson & Johnson has long deployed psychographics to position its OTC analgesics, Motrin (for aggressive medicators) and Tylenol (cautious ones).
Donohue believes that figure will grow as consumers are increasingly targeted. But DTC is not the only engine. Researchers are developing segmentation models to address a range of pharma's needs, from improving sales force effectiveness to deepening brand loyalties and increasing persistence. Some models focus on patients, some physicians, others both. Some use global consumer categories, others cross-therapeutic ones, while a number conduct pharma- or product-specific research. Some cultivate primary data while others teach old data to do new tricks.
Slicing and Dicing RoperASW and Market Measures/Cozint (MMC), divisions of NOP World, are remaking their consumer model, LifeMatrix, to create an all-purpose medical segmentation, HealthMatrix. (See "LifeMatrix.")
Preliminary results are encouraging. They've found interesting differences in healthcare orientation between related segments. Free Birds, for example, are more likely than Settled Elders to describe themselves as open to new medical treatments. They take charge of their health needs more frequently. And, though more accepting of limitations resulting from illness, they are more inclined to pay extra for medication that can improve their quality of life.
To the extent that HealthMatrix can be standardized across medical categories, NOP World will have an edge, Jaworski claims, since it has perhaps "the most comprehensive consumer trends database worldwide," Mediamark Research (MRI), a leading supplier of syndicated multimedia audience data. MRI can link segments to their actual media habits, allowing for precisely targeted media buys.
Consumer Health Sciences of Princeton, New Jersey, already offers a validated health-specific consumer segmentation model based on a survey of 36,000 Americans along 22 attitudinal measures, including:
The result is five cross-therapeutic "healthstyles," none determined by demographics, though age is somewhat correlated. What is relevant is a person's state of health. As Donohue says, "People can-and often do-change their healthstyle over time and in response to a serious diagnosis."
Donohue suggests that one of pharma's most elusive goals-improved treatment adherence-could be met by teaching physicians to distinguish patients by healthstyle to boost compliance. (See "Marketing Strategy for Increasing Adherence," page 79.)