In the service of the people

Pharma executives, especially those selling generics, constantly seek salvation through differentiation for their products. Even then, surprisingly, they never consider services. Conventional marketing wisdom informs us that when brands cease to differentiate, salvation lies in services.

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Yet, pharma seems unmoved by conventional wisdom, continuing to pursue marketing products while desperately seeking differentiation. In an environment that is poignantly referred to as ‘strategic sameness’, would it not be prudent to convince people about the difference one brings beyond the promise of quality and affordability?

When both these features are taken for granted, can one not seek to delight consumers by serving them better than anyone else in the market? Yes, “serving”. Pharma seems to ignore this constantly.

This begs the question, why?

Pharma has never thought of engagement as a business model. 

  1. Pharma refers to their consumers as ‘patients’ and not ‘people’. This belies the fact that pharma only targets the sick (hence ‘patient’). It has not considered those who are ‘well’ – yet. While half baked attempts have been made, they remain just that – half baked.
  2. Pharma probably knows that they have serious trust deficits with all stakeholders. People aren’t going to jump at services that are offered from someone they don’t trust. Conversely however, this would be a great opportunity to build trust.
  3. Engagement programs are never a chosen option for pharma marketing teams because they are always looked upon as expenses or costs. Never as a revenue stream.

And here lies the opportunity. If pharma considered services as a revenue stream, they would probably realize that they can make much more money through services. One only needs to examine the Costco model to know how.

Not just would pharma create a revenue stream at least as large (if not larger than its product revenue), it would kick-start the desperately needed transformation of its business model.

The 4Ps would then change as follows:

Product: To serve people, pharma would need lots of data to get to know them better. Pharma would wonder how to get that data and would stumble upon the right way to create, manage and attract people to their digital assets. And once it did that, realization would dawn that the market that is targeted (the sick) is a very small part of the actual one. To include the “well” into their services, different products would be required such as wearables, sensors, discussion platforms, communities etc.

All of them, very different from the current portfolio that pharma sells.

Place: Serving people would need companies to go where they are. Currently, when pharma sells only medicines, it focuses on hospitals, clinics and dispensaries. These are where doctors hang out. Not people. To get to the people, pharma would then think of how it could enter into homes where people live, malls where people shop, into gadgets that people wear and clubs where people come for entertainment.

This is how pharma would gain trust – by being with the people when they are happy and not serving as a constant reminder of their illness.

Price: When pharma would get to know how consumers think and how they feel about spending money, especially on superior goods, they would realise that current pricing systems are broken. People love deep discounts and are more willing to pay over longer periods of time than at one single time.

Here in come the lessons from the Costco model (and several others).

Promotion: Pharma is used to a “push” model of promotion. It believes that a persistent pushing of brands messages is the best way to create mind space. This is unlikely to work. In the digital economy, people do not like to be interrupted. People don’t like to be told what to do. They know what to do. People presume that companies know them well and become impatient when they don’t relate with the promotion they see.

In the digital world, the consumer sets the context. She isn’t interested in any content that does not fit her context or is old and dated, even by a few hours. She is also choosy about the channel through which she consumes content. In real time.

Now lets examine the current pharma model. It targets only the sick. Its marketing is interruptive. Its content is old and dated. It pushes messages that are out of context to the customer. It only cares about its products, and little else. It thinks medicines are the only products that it can sell. Isn’t it safe to say that this model may be broken?

Instead of seeking to differentiate such a self-serving model, why can pharma not seek to be in the service of people? Salvation may lie there.

 

 

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