Show Branding in the Pharmaceutical Industry By Tom Blackett (co-editor of Brand Medicine the Role of Branding in the Pharmaceutical

l Industry)

1. Introduction The global pharmaceutical industry is undergoing profound change, and pharmaceutical companies traditionally science and sales-driven businesses - must embrace marketing and branding strategies to a much greater extent than in the past. Brand building during the period a new drug remains under patent can help prolong the commercial life of the product once its monopoly status lapses; strongly branded prescription drugs can more easily make the transition into the over-the-counter (OTC) arena. The role and the value of branding in the pharmaceutical industry is changing, and this is the subject of Interbrands latest book, "Brand Medicine."

2. Branding Branding has barely existed in the pharmaceutical industry, yet the word brand is used indiscriminately and largely inaccurately. So far, branding appears to be the act of finding a trademark for a new product, launching it into the marketplace, throwing some advertising at it and then giving up all support when the patent lapses. In the world of consumer goods and services, companies have for decades used branding techniques to achieve competitive advantage. Such techniques involve the development of a set of distinguishing characteristics in the product (or service), which are capable of creating a strong and distinctive impression with the customer. If this impression is positive and other factors - typically price and availability - are in place, then a purchase decision that favours the brand will generally arise. How are these impressions created? First, through the product itself: it must be of acceptable quality and fully capable of performing its functional role - whatever that may be. Next, through the packaging which must both protect the contents and allow the product to be accessed easily and in the required quantities. And finally through the brand image, and this is influenced through the brand name and identity, the pack graphics and the advertising. For the majority of consumer goods and services, product differentiation is very difficult to achieve. The ubiquity of technology, skilled workforces, raw materials and capital means that sooner or later the competitive playing field will be well and truly level. In such circumstances the role that the brand plays becomes pivotal.

The classic example of course is Coca-Cola and Pepsi Cola. Neither company will applaud me for saying so but there is no significant difference between the taste of Coke and the taste of Pepsi. Yet the world divides between "Coke people" and "Pepsi people." Why is this? Both brands are in universal distribution, both are priced at around the same level; these are conditions of perfect competition. What separates these brands are their distinctively different images - the unique appeals that their owners have carefully cultivated over the years.

3. Branding in the Pharmaceutical Industry And this is where the pharmaceutical industry differs so much from other consumer goods industries. Building a cola brand takes decades of investment in advertising, promotion and distribution. By contrast, the economics of the big pharmaceuticals companies are locked into product lifecycles of limited duration. The critical factor in the economic equation is the patent and the amount of time that is available to the company to maximize the return on its investment, the majority of which will have been ploughed into the research and development required to create the new drug. Advertising and promotion is therefore of critical importance in the early stages of a new pharmaceutical brands life, to maximize awareness and, hopefully, trial of the new product. It is then required again at the mid-point of the brands life, to reinforce and remind buyers of the products efficacy - now proven through several years performance. And then it is needed over the latter stages, in the final scramble to extract every last cent of revenue before the patent lapses, generic imitations appear on the scene and the price plunges. But all this can and must change: Successful research and development is proving increasingly difficult; the "blockbusters" of recent years -- Prozac, Zantac, even Viagra -- are nowadays a rarity; -Pharmaceutical companies are seeking to mitigate this potentially damaging influence on their profitability through mergers, and through alliances with specialist research laboratories. And, critically, other industry dynamics are changing too: In order to ease the burden on the public purse, governments everywhere are trying to reduce the number of "reimbursable" products that are prescribed. Amongst other measures they are reviewing the regulations regarding those drugs available only through a doctors prescription, and are encouraging the pharmaceutical companies to make more drugs available over the counter; In the US, where private health insurance is a major factor, similar cutbacks in what payors will and will not reimburse are forcing more products over the counter; And the Internet and direct-to-consumer advertising is feeding voracious public interest in health care. We now live in the age of patient power, and this threatens to change forever the traditional drug

company/doctor/patient paradigm. The doctor no longer mediates the relationship to the extent he or she once did, and this has implications too for the role of the pharmaceutical industry sales representative. 4. Building Brand Strategy So how should pharmaceutical companies address the process of branding? The answers are to be found through reference to the "fast moving consumer goods" industry which, duly adapted, is as follows. The classic approach to developing brand strategy involves a series of stages in which the following are defined: brand positioning brand personality brand values unique qualities of the brand that support these values how the brand appears to its audience Brand Positioning To be competitive, brands must be distinctive. They must possess defining characteristics that are perceived by customers to be unique, attractive and relevant to their needs. These characteristics may be functional - based on product attributes and performance, or emotional - based on perceived benefits or pleasure which flow from the brand experience. Positioning is the analytical process that helps to define the competitive space available to the brand and then states, as the foundation of all subsequent branding activity, how this will be filled. The most successful brands occupy positions in the minds of their customers that are unique and defensible; the positioning process is to do with putting the brands in place and keeping them there. Developing a powerful and distinctive brand positioning involves a series of activities: understanding the product and its area of competence (effectiveness) understanding the needs of the different segments of the market identifying the most attractive segment developing the brand so that it can, with justification, claim to own a benefit that is relevant to the needs of the target audience evaluating the uniqueness and value of the benefit(s) to the target market

depending on the fit between the intended and perceived positioning (blend of benefits), refining the brand according to customer response. The majority of the worlds most successful brands started life with a functional point of difference that was valued by customers and prompted their choice. But as competitors crowded in, the trailblazers were driven to seek additional ways of maintaining their appeal. Coca-Cola, as ever, is a great example. When it first appeared in Dr Pembertons drug store, back in the 1880s, its formula was unique. Then, as competition arrived in the shape of other cola drinks, it was driven to seek, and annex, areas of competitive advantage that other brands did not occupy; hence "refreshment" and the slogan "Coke refreshes you best." Refreshment as a rational claim out-positions all competitors. Over the years the refreshment platform has led to "enjoyment," "sociability," "togetherness" and "universality," the core of Cokes emotional appeal. So it is with pharmaceutical brands: their positioning must perforce be based on effectiveness or they would not be credible. The promise, and delivery, of effectiveness engenders trust, perhaps the most powerful of all emotions. Beliefs about pharmaceutical brands and their effectiveness occupy a different corner of the brain than that of cola drinks. Relief from illness, pain or discomfort is a far higher needs state than the recreational alleviation of thirst. Trust in pharmaceutical brands, therefore, is a more vital and hard-won commodity. But once gained it can be leveraged most successfully in the brand-building process. Personality Brand personality builds on the emotional appeals of brands and is the medium through which these, in advertising and through visual brand identity, are expressed. Therefore brand personality is an important differentiating factor in positioning brands. Brands can be positioned as masculine or feminine, young or old, authoritative or light-hearted, radical or conservative, according to how advertising and visual identity are used. Brands can reflect human personality traits and can align themselves closely with the aspirations of their target audience. Advertising in medical magazines is replete with beaming geriatrics exemplifying the virtues of the latest treatment for incontinence, or amorous fifty-somethings whose marital bliss has been restored by a stiff dose of the latest male impotence corrective. Such crass stereotyping may be effective in capturing the attention of hard-pressed doctors, but the industry must appreciate that only a subtler touch is likely to succeed with modern consumers, sophisticated and sceptical as they are. Brand Values Brand values are the glue that binds the customer to the brand. They must be linked to the brands attributes - the reality of the offer - or they will have absolutely no credibility. Moments of truth are critical to the brand customer relationship. (Some cynics, however, have commented that, in pharmaceuticals, placebo is often the most powerful brand.)

So much of pharmaceutical brand advertising, because it is aimed at GPs, focuses on product attributes, and very little focuses on patients emotional needs. That this should be so is perfectly understandable, as it is a function of the supply chain of medicines. But what it highlights is that while the functional needs of doctors and their patients are very much the same, there is a whole layer of additional support - reassurance - that the patient needs. Information about, and access to, pharmaceutical products will soon be only a click away: this is when brands will really come into their own. Unique Qualities of the Brand that Support the Values What are the functional and emotional qualities of the brand that can support the brands core values? Where is the proof? With prescription products there should be abundant scientific evidence that the claims made for the product are true: this is mandatory. A number of official and quasi-official bodies exist in countries such as the UK to ensure that no bogus products slip through the net. With OTC products much the same applies; and as many OTC products have been on the market for decades, longevity and the trust built up over the years can also provide powerful emotional justification. How the Brand appears to its Audience This is the visual manifestation of the brands role and purpose. It comprises brand name, packaging design and advertising. Not only should these represent the brands identity and positioning, they should help to express the brands personality. The extent to which they can do this depends on whether the brand is available as a prescription-only product or OTC. Far fewer restrictions of course apply to the design and advertising of OTC brands; but the prescription sector, for the time being, remains tightly regulated. Of all the elements in the brand "mix," the name remains the most important. It is just about the only component of the mix through which the brand owner is permitted to convey brand positioning to all audiences. The choice of the brand name therefore is absolutely critical - particularly if the brand is earmarked for the OTC market. Finally, a word or two should be said about internal commitment. Creating a culture where the importance of branding is understood is critical. No amount of careful market analysis, brand building and testing will succeed unless it is accepted within the organisation that branding is of genuine commercial value and can help to optimise scientific success. Achieving this recognition is the greatest task that confronts brand "evangelists."

5. The Future So with the gradual decline in the power of the patent to secure future business earnings, and the rise in patient power and the availability of medicines, the brand will play an increasingly important role. First in helping customers to find and select products suitable for their requirements, and then as a symbol of high quality and value. This is exactly the role that the famous Coke and Pepsi brands play - and these brands now represent the most valuable assets that their owners possess (in the case of Coke, some

50% of the Coca-Cola Corporations stock market value). There is no reason why this should not become the case in the pharmaceutical industry; indeed, if the major drug companies are to maintain their historically high levels of profitability against a background of declining R&D productivity, it must do. Tom Blackett is Group Deputy Chairman of Interbrand, the worlds leading branding consultancy, and co-editor of Brand Medicine the Role of Branding in the Pharmaceutical Industry.