Systems Marketing A Paradigm Shift in Pharmaceutical Marketing Strategy The opportunity for breakout returns from pharmaceutical marketing won’t come from tweaking the margins and incremental adaptations. It won’t come from creating more – more sales people, more promotion, more press releases, more e-mails, more data, more branding, more share of voice. And it won’t come from outspending the competition. The real shift will come from re-imagining what it means to market. In an exclusive interview with PharmaVOICE, John Singer, principal of Blue Spoon Consulting, addresses the need for a new marketing paradigm. Systems marketing responds to the fundamental change needed in thinking about pharmaceutical marketing and communications strategies. It applies a systems-level perspective to the canvas for marketing integration, knocking conventional marketing wisdom out of its grooves and writing new rules for the game. This has almost nothing to do with discovering new information-technology applications, but rather it is about using systems thinking to optimize connections and interactions between components and making pharmaceutical marketing more congruent with reality. One dimension to this model is grounded in the field of system dynamics. Founded in the 1960s at the Massachusetts Institute of Technology, system dynamics is a body of tools, techniques, and ideas to manage complexity. According to John Singer, principal of Blue Spoon, fast-evolving technological, social, and environmental changes are transforming the world of pharmaceutical marketing, challenging managers to think and act in fundamentally new ways. With more creative, promotion, and media options than ever before, there’s more brand confusion than clarity. And as the dynamic complexity of brand communications and customer relationships multiplies, marketers will need to develop an ability to look at their world holistically, as an integrated system in which everything is connected to everything else. “Pharmaceutical marketing has many pieces, many layers, many interdependencies and feedbacks between human, physical, and technical systems of behavior,” Mr. Singer says. “There’s a wealth of marketing partners and vendors serving the pharmaceutical industry, conceiving, executing, and measuring their programs in isolation. The way to transform pharmaceutical marketing will be through understanding how these systems of behavior intersect, where the high leverage points for marketing innovation and collaboration are, and how to synchronize these through interconnected thinking and action. “Systems marketing achieves competitive advantages through connectivity, opening a new world of possibilities to grow business,” Mr. Singer continues. “Systems marketing can be applied to many different areas, such as campaign management, marketing resource management, addressing the issues of mirror salesforce territories, harmonizing sampling management with field-level marketing campaigns, clinical-trial optimization, and marketing efficiency. Ultimately it responds to the challenge that Jim Stengel, Procter & Gamble’s global marketing officer, made to marketers at a recent media conference; that today’s marketing model is broken, and that those who stay loyal to antiquated thinking will be left behind.” Systems marketing can be applied through tactical systems that integrate, for example, publication planning and publicity components with field-level data collection technologies or on a creative strategy level around the idea of information branding linked to the CRM platform and customer segmentation technologies. Systems marketing also can be used to gain formulary advantage by designing and branding state health-learning systems through the public-health infrastructure, to getting a more realistic picture of behavior response from a media mix, or on an even larger enterprisewide level that aligns pharmaceutical research, commercial, and manufacturing operations. A second dimension introduces the latest ideas from information management to the dialogue about brand planning. “Information management organizes a wide range of issues around a shared understanding of business strategy and brings together completely different ways of seeing the world, harmonizing the diverse mindsets, functional groups, and technologies used in all stages of marketing activity,” Mr. Singer says. One of the challenges that companies struggle with is integrating their disparate groups and addressing the different “mental models” of these groups, according to Mr. Singer. “The public relations people and the advertising people, for example, have a very different way of thinking about the world and how the world works, and that in turn is different from how the salesforce thinks and acts, which in turn is different from how information technology people think and what they need, which is different from the manufacturing group and their timing needs,” he says. “The challenge is developing a unified framework that everyone can attach themselves to and begin synchronizing their thinking and planning.” According to Mr. Singer, information management includes: a network theory to understand the points of information exchange with customers at a field level; information processing to ensure functional groups are acting with the same mental models of product development, performance criteria, target market, positioning, and business objectives; information orientation so that marketplace content is aligned around collaborative message strategies; data transmission that sequences information flows to the marketplace, efficiently captures feedback from the exchange process with customers, and allows reflexive response times to changes in the information environment; and an information value chain that organizes brand content along the concept of value from the customer’s perspective. The final dimension to systems marketing is to plan a communications strategy for the common consciousness. “Women and primary-care physicians have been receiving intense promotion for nearly all drugs past, present, and future,” Mr. Singer says. “It’s standard practice for drug companies, and their agency account teams, to design communications strategies for these target audiences as if their marketing plans will be unique, individual, fresh, compartmentalized experiences for their brands alone.” Systems marketing shifts the focus of creative strategy away from discrete product branding, for example somehow trying to establish an emotional bond between customers and a drug, and dissolves silos between communications disciplines. “Instead, creative energies are aligned on a primary-care platform using variations on a theme, are centered on simplifying the customer’s decision-making process, branding the organization and its information asset, and having branded information become a part of a modular product offering, one that marries prescriber profiling technologies and office-based dynamics,” Mr. Singer says. “Marketing needs to be designed and created first from the consumer’s point of view. The current general marketing strategy is, ‘this is what I want to say about my drug, and now let me brand it and get it out on a mass level.’ This mentality is a big part of what has to change. There are some very deep, entrenched assumptions about marketing that are obsolete. The rules of the marketing game have changed. Yet, there are hundreds of millions of dollars of resource allocation decisions being made on these old rules. Shifting this thinking is critical but it’s very hard to do. “Big pharma is in an arms race, and diminishing returns are rapidly setting in,” Mr. Singer continues. “Theirs is not a share of voice problem. It’s not a promotional problem. It’s not a question of adding more sales people to the mix. It’s not about discovering breakthrough advertising or repeating the product branding in as many different media channels and countries as possible. The challenge is finding a different conceptual framework to approach marketing and sales, where all the connection points with a customer are synchronized and accounted for.” F PharmaVoice welcomes comments about this article. E-mail us at [email protected]. VIEW on systems marketing

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