Product Launches: The Couch and the Airline Seat

In the old days, pills were products. Today, marketers need to treat them as time-sensitive opportunities. If you don't, you'll be left at the gate.
Feb 01, 2005

Imagine a couch. It's available in just about any department store, is always in stock, and has a long shelf life. If the couch is not sold today, it can be sold tomorrow. Management of this sort of product is mostly a matter of the product offering—just ensure the brand promise is strong and the product is available.

Now imagine an airline seat. The seat is available only on a specific flight, the number of seats available is limited by the size of the plane, and its shelf life is highly limited. If the seat is not sold by the time the departure gate closes, the revenue is permanently lost and cannot be recovered. Managing an airline seat is profoundly different from managing a couch: It's not a matter of product offering but of a comprehensive service offering—one that requires specialized resources (ticketing agents, baggage claim, etc.) and complex time-based optimization and pricing.

Pharmaceutical products today are more like airline seats than couches. The parallels may not be precise. But when one considers the challenges of the pharmaceutical market—the urgency and timing of the patient need, especially for progressively debilitating diseases, the increasing importance of information as part of the service bundle, the increasing competitiveness in therapeutic areas and the accompanying reduction in exclusivity times, and the separation of decision and acquisition points (doctor's office versus pharmacy)—the general similarity becomes clear.

Two areas seem particularly relevant:

(1) The pharmaceutical market is increasingly global and complex. Industry-wide we see growth in licensing, mergers/acquisitions, and co-promotion across national boundaries. While these deals make sense as ways of generating operational cost savings and achieving growth expectations, they have created new complexities in synchronizing product launches, managing global brands, and deploying and incentivizing global resources.

(2) The industry's "clock speed" is accelerating. Today, a new drug can replace an existing drug in just a few months, and a market leader can be toppled almost overnight. Time to peak sales has decreased: Eli Lilly's Prozac (fluoxetine), launched in 1988, reached peak sales about 10 years later. Aventis' Allegra (fexofenadine) peaked less than four years after its 1996 launch. It took Pfizer's Viagra (sildenafil), also launched in 1996, about two years to become a blockbuster, and Pfizer's Celebrex (celecoxib) less than one.

Product Manager Recommendations
Not surprisingly, the shift from a couch to an airplane-seat model of marketing throws new emphasis on the product launch phase. For many companies, a quicker, smoother launch is the key to enhancing lifecycle revenue. And launch is one of the most important areas where global coordination can pay off.

This article will look at how pharma can speed up the execution of pre-launch and launch activities and how companies can better manage the kinds of parallel processes typical of today's global market. These are crucial points for pharma—the choice today is get on board or get left at the gate.

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