Core Competence and Evolving Dynamics of Healthcare Marketing

When you closely observe developments across different sectors of industry including other spheres of healthcare and overlap them with those in the pharmaceutical arena, interesting patterns emerge. These days, strategy planners within a wide range of healthcare-related businesses are forced to constantly evaluate new market opportunities while navigating through endless diversions created by hype. From the most respected scientific journals to leading marketing and financial publications, the noise emanating from media (social or otherwise) regularly publicizes the promise of new technologies, diagnostics and therapeutics and the amalgamation of all three into “Emerging Markets” strategy. This brings to fore the need to discuss whether core competencies of companies will remain the same? In other words, will a pharmaceutical company limit itself to just that, or will the demarcation between companies and other healthcare providers blur significantly?

Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value. In the pharmaceutical sector, this means that companies focused on creating better products than competitors since that was the best thing they could do. The core business model remaining the same – product made, brought to market, information created through clinically studying that product, and that information disseminated to customers (doctors) and consumers (patients/patients’ families or caregivers). The model did have its share of “innovation”, yet remained more or less the same.

In the last few years, technological advancement has allowed collaboration to present itself as an opportunity to wary marketers who considered themselves boxed in by ever tightening regulations. Health – a public good – and providing healthcare – more privately run than by the state – has been steadily identified as an opportunity to grow in by companies across industries. Information technology (IT) providers, for instance – both hardware and software – have made remarkable strides in creating products and services ranging from supercomputers used to decipher the human genome to complex software used to design personalized medicines, to hand held mobile health solutions for the end-user.

A need to collaborate with IT providers for creating customized products, with telecommunication companies to distribute those products, services and information to the far reaches of the Earth, with public and private hospitals to use both the products and improved information is required to tap into high-potential markets. Learning from the creative solutions created in other sectors also will become more a “need-to-do” strategy.

While there are enormous gains to be made in multiple emerging markets, these opportunities are overwhelming, and often “the next best thing.”  The somewhat ambiguous concept of “emerging markets” encompasses the majority of hyped claims. However, at the end of the day, any improvements in patient outcomes through these initiatives are the need of the hour. At the moment, pharma executives and health practitioners alike may regard these ideas, and many similar novel tools to hit the market in the near future, as investigational or unproven. Despite a lack of clarity, some novel tools such as mobile health or mHealth, telemedicine, initiatives such as ITC’s E-chaupal model to spread health awareness, using tourists, the Indian Postal system and other volunteers as cost-effective distribution channels at ‘bottom-of-pyramid’ locations etc. will drive the development of market microcosms, each with fairly significant growth projections.

After all, in the rapidly changing environment, pharmaceutical companies must look at an evolved model so that:
1. It provides benefits to patients
2. It is not easy for competitors to imitate
3. It can be leveraged widely to many products and markets (esp. less developed ones)

Most Big Pharma companies have traditionally done everything from research and development (R&D) through to commercialization themselves. However, by the end of this decade, this model will no longer work for many organizations. If they are to prosper, they will need to improve R&D productivity, reduce costs, tap the potential of emerging economies and switch from selling medicines to managing outcomes – activities few, if any, companies can accomplish on their own. Even the largest pharmaceutical companies will have to collaborate with other organizations to develop effective new medicines more economically, help patients manage their health and ensure that the products and services they provide really make a difference. To achieve this, they may have to step far outside the sector to find some of the partners they need.

7 thoughts on “Core Competence and Evolving Dynamics of Healthcare Marketing

  1. Nice article Salil. It will be interesting to see how the pharma companies innovate and come up with customer centric models. There will be a definite need for cross industry collaboration.

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  2. Thanks Partha! I am glad you liked it. The cross industry collaboration is – at this point – virtually non-existent, at least in the public domain. That is quite regressive. I hope someone somewhere is thinking about it – in India, I mean.

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    1. Mr. Salil, really you wrote fruit full things about pharma market.Today from making of product to launch of product we are doing same thing. Now it’s time to change the scenario like you explained or emphasis on Mhealth or telemedicine. As we know rate of literacy and use of internet in increasing day by day so these tools would play vital role in changing scenario.

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  3. An Eloquent and impressive article!I am sure there would be some organizations who would be showing the path of exploring it as a model to …and some may have to be forced to follow suit…to remain competitive amidst the changing customer perception of value.

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  4. Very insightful and bold. Yes, at the end of the day we need industry insiders to separate the hype from the facts.Analysts write for the stock markets, but business managers have responsibility for making right decision based on facts. Sure its good to have John Mack, but its great to have Salil Kallianpur too!

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