Are you exploiting
Blue Ocean Strategy opportunities for your brand?

We all know marketing and selling drugs is getting tougher: many therapy markets are saturating, market access hurdles make it increasingly difficult, generics erode the value of certain markets, etc. And in addition: classic marketing mixes increase competitiveness rather than decreasing it!

The solution? Make the competition irrelevant by creating a Blue Ocean market environment for your brand!

Creating a Blue Ocean market environment basically drills down to delivering value innovation. There is plenty of evidence in other industries that this works, and more and more pharma companies are exploring this strategy to avoid doing business in a highly competitive Red Ocean market environment. Value innovation must be understood in the broadest sense. It requires you to think creatively beyond the scope of your pharmaceutical product alone, and it is therefore a fantastic opportunity for pharma marketers to create stakeholder value by developing other than drug-specific value drivers to the whole spectrum of stakeholders with service components and non-drug specific product features.

Let’s explore this customer value concept into more depth. If customer value was expressed as a formula, it could be defined as the ratio of perceived customer benefits to perceived customer cost. For a particular group of stakeholders (e.g. patients), the value can be defined as:

Conjoint analysis can be used to quantify the importance of the value drivers. When examining benefits, as in the formula, it is useful to make a distinction between product and non-product benefits. Product benefits relate to the technical attributes of the drug and its functions, such as efficacy, side effects, and ease of use. Best is to express those in customer terms, e.g. pain relief, ability to perform daily activities, etc. Non-product benefits relate to features that are not part of the intrinsic product, such as training to reassure the patient, patient management support, etc. With the importance of new stakeholders and me-too products available in many therapeutic categories, non-product benefits are becoming proportionately more important for differentiating prescription drugs and creating value for the various target groups.

It is equally important to define the influence of costs, including subtle drawbacks such as the time required for a customer group to review the potential benefits of a new drug, or time to obtain funding for the patient. Again, companies must consider costs separately for each customer group.

The influence of total benefits and costs on value will vary between customer groups. Certain customer groups are becoming more cost sensitive—costs are gaining in relative importance over benefits. On the other hand, the trend is not uniform, and the influence of costs on value can vary markedly among various target groups.

Value analysis tools allow managers to integrate a large amount of data on benefits and costs in a systematic and efficient manner. By estimating the importance of various attributes and costs (and the way those attributes are perceived), managers can anticipate the market value of their products and services to multiple target groups. Often, customer added value has the perception of “gimmicks”, such as pencils for doctors. In reality, the emergence of personalized healthcare through biomarkers in oncology, the need for multistakeholder training in diabetes, etc. … all create unprecedented opportunities for value innovation. The estimates can come either from objective data gathered from the target audiences or from infield teams. In either case, the technique can also enable managers to evaluate ‘what -if’ scenarios. For example, what would be the effect of changing the perception of a particular attribute of a product, or reducing its price, or placing a new product on the market?

To help pharma companies with the process, our expert-trainer Edouard Demeire developed the Customer Value Analysis tool which in essence is an Importance-Performance analysis tool you should apply to your brand(s) for each of your stakeholders.

“ An interesting training, well structured and easy to follow with a good mix of people, good teacher, well organised.”

Martyna Lauritzen, Junior International Product Manager, LEO Pharma - Denmark