Tuesday, January 23, 2018
Home > Pharmaceuticals > An Essence for Stability & Growth

An Essence for Stability & Growth

an_essence_for_stability_&_growth

90% of the pharmaceutical market is captured by heritage brands. Having stated that, managing and growing mature brands are the challenges faced by several organizations. Before addressing the challenges, it is important to answer one key question, ‘are all brands worth reviving?’ What are the brands that the organization should attempt to grow and what others should be allowed to die or divest?

Mature Brands

Mature brands, also termed as heritage brands, are very often considered as efficacious and a gold standard in a particular therapeutic area, with a bonus of a predictable safety profile. These brands are also cost-effective for the customers, profit generators for the organization and capture a market size that cannot be ignored by the organizations. Irrespective of the positive points, there are certain challenges faced by the mature brands. Most of the once-strong brands wither away into obscurity and revitalizing those brands can strengthen the bottom lines and bring stability to the organization. But, before reviving or revitalizing these brands, the organization needs to identify critical growth drivers and also quantify each driver as well.

The theory of evolution, as proposed by Darwin has changed the world paradigms and it has created a new perspective when applied to brands helping them survive and grow.

Brands too have a lifecycle and they either live or die. Certain brands suffer death from obsolescence or due to the changing technology, research, efficacy, etc. These brands can be then rejuvenated with new products and services. However, well managed brands which deliver good results can prosper for a long time. Research shows that leading brands in the market years ago are still in the same position. Research also shows that it has been proved difficult for a challenging brand to overtake these leading brands. This means that they have the ability to extend the life cycle or, possibly, the effective marketing of these brands has meant that the life cycle, in its purest form, does not exist (or applies to all the brands or some brands seem to be an exception to the rule. In my opinion, we should not make an absolute statement that product life cycle does not exist. It is a very strong concept and almost all companies use it as the base of strategy).

By applying well-conceived strategies, a brand can prove relevant to consumers, can provide long term consumer value and can last for almost time infinity. This concept can be well justified by the stories of Barbie, Colgate, Coca-Cola, Marlboro, Mercedes-Benz, Nescafe and Kodak, to name a few. In Pharmaceuticals, too, we have brands like Liv-52, Benadryl, Phenysydyl, Aten, Beplex Forte, Unizyme, Heptaglobin among others that are still living on. Time has shown that even either the change of therapies, mature brands remain evergreen withstanding the test of time.

Mature brands have a brand heritage associate with them. This brand heritage voices its status, character, social class and history. Brands that are still alive and have a strong brand recall in spite of all the odds are truly classified under heritage brands. These brands in turn leave a strong image in the minds of their consumers. These brands need not necessarily be a product, but can be anything- a University (IIM, Harvard), a movie (Sholay) or a person (Mr. Amitabh Bachchan). Thus, building a mature brand involves clear positioning, legal protection along with imaginative expressions of the brand’s identity. The brand’s heritage is the single most characteristic or attribute that provides the mature brand its sustainable competitive advantage.

Mature Brands Pose Challenges

Mature or heritage brands come with a string of challenges as well. As the brand ages with time, the number of competitors increases. The brand is likely to supersede therapeutically and either have a flat or declining sales trend. Immediate challenge would be the imminent or already available generic products. Also, the in-house product expertise is likely to decline with little or no sales force activity. Additionally, the Doctors are likely to be unresponsive to the brand since they would have ‘heard it all before’.

A once-strong brand becoming obscure is another challenge. This obscurity is due to the brand managers losing sight of the customer and attacking the competition instead. The mounting pressure for profit leads some organizations to shift their focus to competitors at the cost of the consumer. In this scenario, the organizations have the option of either fighting the competition or shoring up the consumer’s loyalty or identifying new uses for the brand and in turn generating new consumers.

Reasons for brand maturity:

Before getting down to strategic options, let us first examine why brands mature:

Competition

Competition in terms of new superior molecule in the same category or new research on diseases keep changing the guidelines for diagnosis and prescription. A classic example would be Asthma, where the treatment has undergone changes multiple times with respect to new research and molecules. In this environment, if the mature brands have to grow then there needs to be methods devised to ward off the threats due to the newer impending molecules.

In some cases, competition is not just from other drugs or molecules, but from physical interventions. For example, treatment for atherosclerosis have to compete with angioplasty or toothpastes for sensitive teeth have to compete with root canal treatments.

Stagnating Category Sales

If the entire category is declining, then a brand from several brands in the same category may use rejuvenation techniques. It makes absolute sense to build your brand at this time since this is the time when ambience is clutter-free and when the message gets communicated to the prospect clearly. 

Loss of Differentiation

A brand might need revitalization if it has lost its USP or if the earlier points of product differenciation have been diluted by copy-cats. The basic idea in this case would be to rebuild the brand from scratch so that it could still communicate advantages over the competition.

Aging Target Market

Another reason which calls for brand rejuvenation could be change in the age-profile of the target market of the brand. This, renews the position of the brand in the minds of the next generation consumers. For instance, enzymes used to be prescribed by doctors to a freely. , However, the trend nowadays, is to prescribe natural products which, threatens the older enzymes brands.

Changing consumer needs

Changing environment has led the consumer to demand for better, more efficacious products. The brand may thus, need revitalization if it no longer meets the prescribers’ or consumers’ needs. 

Are all old brands worth revitalizing?

Marketing mature brands is more often a case of managing the decline and delaying the inevitable. The challenge is to secure in-house resources in terms of promotional budget with sales force commitment often being out of the question. It is, therefore, vital to decide which brands are worth reviving.

The companies, which own these brands, have four options:  (1) Revitalize them (2) Milk them (3) Sell them (4) Prune them

It is extremely important to consider all the aspects before finally deciding on revitalizing mature brands. Some of these aspects include significance to the organization and heritage of the brand. Another deciding aspect would be whether the brand is at growth maturity, stable maturity or decline maturity. 

A Rainbow Approach for Mature Brand Revitalization

The organization needs to consider various strategic options once it decides to revive a brand. It goes without saying that the direction that a brand would take depends on  insights of the consumer a fact-based assessment of the brand’s identity and its legacy. Identification of critical growth drivers and quantification of each growth driver is the key. For this purpose, we have developed a rainbow approach for revitalizing mature brands.

 

Fig. a. Rainbow Approach for Mature Brand Revitalization

Source: Interlink Knowledge Cell

 

How can these brands move from classic old school to new school? There is no sure shot way; however, there are some key guidelines to help.

  1. Product Innovation

‘Discontinuation Innovation’ is the way through which marketers can reverse the decline of brands and markets. This is a development that fundamentally alters the state and perception of a sector.

For instance, tea bags revolutionized the way tea was perceived, thus, ending the ritual of pouring tea from a pot and turning it to a fast turnover convenience drink.

It is critical to connect with the consumers and also find new ways of connection by bringing about changes and innovation in ways they experience one’s brand. This further involves rethinking the product, customer service level along with channel strategies.

  1. Growth in Emerging Markets.

Emerging markets provide tremendous opportunities for mature brands and products.

The more technologically advanced the product, the shorter it’s period of rapid growth, and the longer its era of flat sales and eventual stagnation. There is little growth in sales of televisions, though innovation during the eighties kept the market buoyant. There is a replacement cycle, rather than growth in penetration, people generally buy the latest flat screen TVs when they are looking for a new set.

Most mature pharma brands have failed to penetrate the vast rural market. Reaching doctors and patients is a challenge that needs to be addressed as the brand pierces though the customer segments.

  1. Going back to the brand legacy.

The history associated with heritage brands is what differentiates it from the others. The trick lies in identifying that magic and working on it.

Nostalgia can act as a key pull factor to draw consumers back to the brand they once loved. However, this cannot be applied to all heritage brands. Thus, it is necessary to explore the equity of each heritage brand thoroughly. The key here is to capitalize on the existing brand strength and also to make sure that the good isn’t thrown out with the bad.

Lack of new scientific papers nationally and internationally is the challenge faced by many Pharmaceutical brands. There are constant queries from our client companies to generate medical data through meta-analysis or articles that would provide new material of interest to the Doctors.

In some of our consulting assignments for brand strategy, it has been the brand legacy that has come to the rescue of the brand – the case in point being Nitravet, where the legacy of the brand and the brand promise were highlighted leading to revival of the brand.

  1. Finding your audience again.

It is very important to find your niche with the younger, trendier segments of the society especially if you are in a more forward looking, research driven industry like Pharmaceuticals.

Each brand is different and how far to stretch the audience beyond the traditional consumer base will entirely depend on the industry, brand legacy and also how well the needs of the younger consumer segments can be met by the brand.

  1. Being relevant again.

Many of the heritage brands have fallen out of fashion. Reasons for this include products no longer used in modern times, emergence of new brands or solution alternatives and brand image not catching up with current times. This has led to many heritage brands losing their relevance with consumers today.

  1. Playing up the legend.

Every brand has a story and it is this story that helps us understand and identify with the brand with respect to what it is, where it comes from, what it means to buy from it and what it means to work from it. This story is, thus, a powerful way to revive mature brands.

However, many heritage brands either tell their story badly or dwell too much on past glories and alienate potential new customers. The story of the brand should be weaved and told in a way and context of how it helps deliver its promise. This in turn helps establish credibility and win more audiences.

  1. Out Source :

Managing mature brands can be quite a task at times especially when the organization has other priorities like establishing a range of new products or growing the portfolio of large brands. Our experience also shows that most brand managers tend to work on therapy areas that are current and futuristic due to which the older brands take a backseat. Also, mature brands tend to end us just as lame reminders to doctors since there is a crunch on the number of brands promoted to them. Thus, mature brands often languish with little time, money and attention, all from product management and field force. In this scenario, it is best to outsource the management of brand to an external agency for both sales and marketing.

Another option would be to get an external perspective like that of a consulting firm in order to develop and support the implementation of brand strategy. This will, in turn, offer a fresh look to the brand and also build commitment towards brand management leading to the success of the brand.

Conclusion

Mature brands are the heritage of any organization. Revitalizing these mature brands can improve the bottom lines of an organization.  Also, brands have the potential to live longer. While bad brands may fade away, good brands though, should never go.