Position, position, position
With each passing year, Pharmaceutical product positioning begins earlier in the development cycle, continues longer, and responds to more market variables than ever before. From the views of key opinion leaders (KOLs) in the early development stage, to the ad campaigns that mark an expired patent's over-the-counter debut, products must fit tightly defined niches in complex markets. Strategies in each new phase in the positioning process depend on factors like cost (really, the availability through HMOs and Medicare), similar drugs in a manufacturer's portfolio, and the self-image of patients, among others.
How target customers think and feel about a product, Ries and Trout maintained, will determine their behavior—what they buy and consume, and ultimately the kind of market share the brand wins. Because positioning drives strategy and helps determine what communications materials are created, it is central to the success of the brand. Positioning couples the understanding of the marketplace (including customers and customer segments) with the appreciation of the product (including its competitors) and guides the development of the marketing message.
Such an approach worked fairly well when pharmaceutical companies produced a constant stream of genuinely new chemical compounds. But these days, drugs with genuinely different chemical structures are extremely rare. Worse yet for marketers, the pharmaceutical promotional channels jangle with a confusing clamor of competing products, while third-party payers exert a growing influence on drug selection.
Cutting through this confusion starts with a return to basics, the orthodox Ries and Trout definition of product positioning: literally, where we want the product to be placed in the minds of our customers, after all is said and done. But circumstances may change substantially in the competitive environment, so where we want the product to be in the minds of our customer may not remain a constant.
Pharmaceutical marketers are beginning to focus on product positioning earlier in the clinical development stages. In cancer therapy and central nervous system treatments, for example, where compounds frequently have multiple indications, marketing research can determine which indications will lead to the most prescriptions based on current need.
Knowing where the positioning strategy is headed can help manufacturers prioritize their clinical trials. GlaxoSmithKline's Paxil (paroxetine), for example, started life as an antidepressant, but has sequentially added social anxiety disorder and panic disorder as indications. Pfizer's Geodon (ziprasidone) was launched as an antipsychotic, and more recently gained an indication for bipolar mania. When chemotherapeutic agents effectively treat different types of cancer, marketing research can help with tumor prioritization, which yields important information about the most profitable order in which to conduct clinical trials.
For a drug facing established competitors, early positioning research might suggest a non-intrinsic product enhancement as a competitive advantage. When Ciba-Geigy introduced Lotensin (benazepril), an angiotensin-converting enzyme (ACE) inhibitor, it had no clinical benefit to set it apart from the myriad other ACEs being introduced at about the same time. With some creative marketing, supported by appropriate marketing research, the manufacturer found a position for the product based on a unique lifetime price guarantee to the patient.
No Tabula Rosa
Just as family therapists say that each child in a household grows up in a different family, so too will each new product enter a different market than its predecessors. The launch of the first product in a market will be very different from the launch of the fourth or fifth, which emerges into a competitive world of older siblings. In the urinary incontinence/overactive bladder market (OAB), for example, several new products are joining the venerable Ditropan XL (oxybutynin) and Detrol LA (tolterodine) in that treatment area. Product managers will need to keep up-to-date on the positions of the previously introduced products and incorporate this awareness into the positioning messaging for the next product launched.
Positioning issues survive after a drug launches. The product's positioning does not change, but the story used to communicate the positioning does. Rather than starting anew—as repositioning often errantly attempts to do—each new story must build upon the foundation established by previous versions of the story. This is often called the "stair step" model.
At different stages in a product's life cycle, new marketing research builds upon previous research to support a product's positioning (see "Climbing Stories"). As the brand goes through early stages of development, for example, the perspective of KOLs shapes the product positioning process. Prior to launch, the input of physician stakeholders is most important. When a new indication is added, marketing research often focuses on doctors who are already prescribing the drug.
When a competitive brand launches, input from current prescribers again begins to reshape the positioning story of the incumbent product. Finally, if prescription drugs go over-the-counter at patent expiry, the feedback from patients and consumers typically steers research. At each stage of positioning research, the new story picks up where the old one left off. Once a product has been introduced into the marketplace, marketers can never again begin with a blank slate.
Cost: the New Strategy Shaper
A medication's cost plays an increasingly important role in a product's positioning story. In 2005, cost issues determine whether a pharmaceutical brand is included on formularies of managed care plans and, if it is, the tier on which the product finds itself. For many drugs, an otherwise elegant product positioning strategy fails when a pharmacist calls to inform the doctor that a prescribed product is not on the patient's managed care formular and that patient agrees to take a generic, or when a patient reports that the purchase of the product at the pharmacy required an out-of-pocket expenditure of $45—money the patient had previously earmarked for groceries—and simply does without treatment.
In the near future, many pharmaceutical marketers expect Medicare Part D, private drug plans (PDPs), "doughnut holes," and similar cost factors to move to the forefront of the product positioning process. Whether a drug is covered on the formulary of remodeled healthcare plans will soon outrank the importance of even the effects of tiered co-pays in positioning strategy.
Another key consideration in a pharmaceutical product's positioning strategy is its potential to create buzz in the marketplace. A well-known example of this phenomenon arose in the erectile dysfunction (ED) market, in which Lilly's Cialis (tadalafil) benefited from catchy terms like "weekender," a wonderful shorthand for patients to use in discussing what in drier, more clinical terms, would have been known as "duration of action." Conversely, Levitra (vardenafil) failed to develop a public relations shorthand for its own positioning and suffered in the marketplace as a consequence.
Positioning a Portfolio
Sometimes a pharmaceutical company markets two or more products for the same indication. If each product is positioned individually, without considering the market niche of the other(s), the total revenue value of the portfolio will suffer. To maintain an overall positioning strategy, senior managers must assume the responsibility for product positioning, which has traditionally been left up to product managers. Management may be tempted to allow each product management team to position its offering individually, so that stable mates have to duke it out. But managers generally find it best to position the portfolio of products as an integrated whole. Not only does this approach yield promotional efficiencies, it is also more responsive to the holistic viewpoint of physicians in a given treatment area.
Pfizer did an excellent job marketing Celebrex (ccelecoxib) and Bextra (valdecoxib) as a portfolio. The company presented Celebrex to treat chronic anti-inflammatory conditions, and positioned Bextra as the drug with more "punch" in acute pain. Not coincidentally, positioning Bextra this way put it in direct competition with Merck's Vioxx (rofecoxib). On the other hand, in a notorious portfolio-positioning failure, Bayer positioned Avelox (moxifloxacin) to compete with its own older stable mate, Cipro (ciprofloxacin). The overall positioning strategy confused physicians, and simply diverted business from Cipro to Avelox.
Positioning the Competition
Sometimes companies must actually position a competitor's product as a pre-emptive strike. Frequently, competitive intelligence can determine potential weaknesses in the competing product, even before it is launched. War Gaming, a dueling-details research methodology that pits two products against one another, helps marketers attack new products' soft spots. A classic example of such an approach was Lilly's pre-emptive strike against Pfizer's Geodon. Lilly successfully positioned the forthcoming competition as a drug with higher cardiovascular risk, which in turn blunted Geodon's initial marketing surge.
Companies must also remember to inoculate the market against negative perceptions of their own products that might be induced by competitive efforts. It isn't enough to persuade physicians about the benefits. If you don't address serious concerns about your product, your competitors certainly will.
Positioning a Condition
Some marketers find it effective to develop a position for the condition. Pharmacia, for example, developed OAB as a condition, because women found it hard to identify with urinary incontinence.
Understanding the attitudes, feelings, and behaviors of patients helps create white space, the redefined treatment areas that give marketers an opportunity to tell a new positioning story. Many become ethnographers, observing patients in their natural surroundings for extended periods of time. The makers of Detrol, for example, noted that some patients practiced "bathroom mapping"—in other words, they planned their daily activities in such a way as to ensure ready access to a restroom. This insight helped them develop a story for the new treatable condition known as OAB.
Pfizer succeeded in developing an ED condition where previously, there had been only impotence.
Facts vs. Feelings
For most pharma marketers, it is easiest to recount facts about efficacy, side effects, and dosage. But blending facts and feelings is one of the most challenging, creative, and rewarding aspects of product positioning.
In the ED market, a lifestyle category in which physicians and patients determine together whether to treat, Cialis' positioning needed to speak to both groups alike. In developing that dual message, the product's ability to work "up to 36 hours" was a statement of fact. That the product separated "the pill from the pillow" and helped patients feel less "rushed and medical" addressed complaints about Viagra, the incumbent ED product, which had to be carefully timed.
With pharmaceuticals, unlike shampoos, cars, cereals, and so on, feelings are not typically the primary driver of a product's positioning. In this highly regulated industry, facts form the backbone of a product's story. But feelings, as the Cialis and other cases show, often interpret and contextualize facts, and help shape a story for physicians, patients, and other stakeholders.
Richard B. Vanderveer is CEO of GfK V2, a global pharmaceutical marketing research and consulting firm. He can be reached at email@example.com
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