From house of brands to branded house: time for pharma to focus on the portfolio brand?

The time for change?

Historically, Pharma has adopted a house of brands approach. Where individual product brands take prominence over the company or portfolio brand.??

Companies build predominantly commercial teams around the products and marketing success is driven by boots on the ground, share of voice maximising, selling. They who shout loudest wins.?A slightly crude summary perhaps but few of us can deny the model?is product first, customer second.

The pandemic was the straw that broke the camel's back. It led us as an industry to finally re-evaluate the traditional approach, embrace digital technology and take pharma brands online.??

While prioritisation of omnichannel customer engagement can only be a good thing, it feels like a tactical knee-jerk reaction. One that is just papering over the cracks of a marketing playbook that needs to be re-written. ?

A good place to start will be to re-evaluate how we build pharma brands.??

A product-centric past??

The logic of the house of brands approach is that if a product has issues (safety, efficacy or otherwise), the integrity of other brands in the portfolio / company would be protected.?Although the importance of transparency in business these days would even call that argument into question. ?

The obvious drawback is?one of cold, hard resources – having to build a brand from the ground up time and time again. But it also has downsides when you consider the more intangible metric of brand equity.?

The groundwork for a successful launch starts years before licence. All the years of clinical trial development, stakeholder and community engagement, access and regulatory discussions and more, are building equity in the company brand. Only for it to then fall back into the shadows and be replaced by a brand whose name no one can pronounce let alone remember. ???

It’s a bit like Tesla launching a new car but giving it a completely new brand (let’s go with Xylectra)...that can only be promoted to car dealerships. ?

The scale of brand building inefficiency is highlighted when you consider the theory of creative commitment. Creative commitment is a composite measure of media spend, number of channels and duration. It has been shown to correlate with overall effectiveness, market penetration and market share growth in both B2C and B2B industries.

A surer path to marketing success is to produce larger, longer-term and more broadly targeted campaigns.

Forward to a future of people-focussed portfolio brands?

So instead of spending millions on product campaigns, featuring beach photoshoots (IYKYK) that live in unopened sales aids and illegible banner ads, pharma should invest in building portfolio brands. ?

By focusing on the full?‘around the product’ offering, brands?can stand for more than just their clinical data. Activity can address audience challenges and tap into societal or cultural context. In doing so, we can build longer-term emotional connections with audiences.?

This is healthcare, ‘emotion has nothing to do with it’,?I hear you say. But Doctors are people too and at a human level, we are more inclined to think of and engage with brands that we feel positively towards. There is also evidence showing that emotional ‘brand building’ advertising is more effective than rational advertising in driving long-term B2B brand growth.

Of course, products would still need their time in the spotlight. And sales activation strategies would target those ready to make prescribing decisions with more rational product features and benefits. ?

We should think of launches more like how Apple introduces new products. The products are unmistakably Apple. Even though they may offer only marginal feature improvements, people are more likely to choose them because they have an affinity with the brand. ?

Whether we want to admit it or not, the same goes for brand choice in healthcare.

A commercial safety net?

Looking at it from a purely commercial perspective: even good data isn’t enough to guarantee success. Analysis from ZS shows that 1 in 3 products launching with ‘superior efficacy’ didn’t meet first year targets. The problem is exacerbated for small biotech, where average peak sales are 50% less than big pharma.??

Portfolio plays make business sense – companies with more than 66% of their revenues in three therapeutic categories are more likely to launch successfully. Building a stronger portfolio brand on top of this business focus, provides a safety net for products to launch in to.?Think of it as an insurance policy against the unknowns of clinical trial development and launch market dynamics.?

This requires us as an industry to take a longer-term view and set therapeutic area strategy that goes beyond clinical development and product acquisition, to include disease and societal objectives. Take Novo Nordisk as an example – a company synonymous with diabetes that has focused not only its research and development but also its beyond-the-product commitments to ‘changing diabetes’. The company has sponsored the first ever professional cycling team consisting entirely of people with type 1 diabetes. It’s launched the Cities Changing Diabetes programme with the goal of addressing the systemic issues and health inequity underlying the rise in obesity and type 2 diabetes in cities around the world. Its latest financial results show a 31% value share of the global diabetes market, and growing year on year.

Moving forward?

Long-term plays aside, there are simple steps we can take to enhance the portfolio brand today: ?

• Cross-functional alignment: a brand is built based on a customer's perception of all its products and services. Aligning the entire brand team behind consistent, customer-oriented brand strategies will compound results.?
• Budget allocation: commit a portion of your annual marketing budget to brand building (i.e. longer-term emotional priming, intended to create mental brand equity to influence future sales). In B2B, data suggests approx. 45% is optimal. In pharma, anything more than we are doing now is worth exploring.?
• Measuring success: The ultimate metric is going to be sales. But shifting our attention from short-term performance metrics like impressions and clicks to customer-focused measures like satisfaction and brand health tracking will help re-focus what ‘good’ looks like. ??
• Embrace creativity: in a world where everyone has access to the same channels, creativity is the best opportunity brands have to stand out, and the biggest effectiveness multiplier available to marketers.

As Google’s year in search highlighted, 2022 has been a year where we looked for new possibilities. As pharma searches for answers to a more customer-centric future, it’s time we explored the possibilities of portfolio brand building. One things for sure, if we keep repeating the same patterns, we’ll never move forward.??

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Thanks for reading OUTSIGHT. We'll be back next month with more inspiration from outside pharma.

And if you're searching for the way forward for your brand, we'd love to talk: [email protected]