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Marketing & Sales News 3/11/12

State of Market Research: Analyze This

 

To whom do brands turn for help when they are calibrating their marketing mix for a coming launch? And, as some sales forces shift focus toward customer satisfaction instead of traditional sales quotas, how are commercial teams sizing up rep compensation? Last question: Who are drugmakers increasingly counting on to provide messaging to convince skeptical payers of a product’s value proposition?

The above are just some of the many requests folks in market research are getting these days. Yet, after a spate of layoffs, fewer of them are around to field those questions. And according to the most recent State of the Industry (SOI) survey, a declining number of market researchers expects to have a big influence on commercial decision making. Agreement on that score went from high in 2010 to lukewarm in 2011.

These trends—downsizing and the perception of waning influence, along with agreement that the pace of consolidation will rise—should serve as a wake-up call for a field that’s used to showing value for a decision but not necessarily touting its own worth.

“I don’t think anyone could argue the point that there’s a strong desire and obligation to improve how we package and deliver the insights that are generated from our analysis,” says Todd Francis, VP and head of commercial support and enterprise marketing for Sanofi US.

Analytical weak points in most urgent need of improvement are spotlighted by the SOI survey, along with a host of pharma marketing research trends like where research spend is pegged to increase. But the downsizing trend looms larger, for obvious reasons.

Down in the count

One soft indicator of the attrition rate is that in 2011 vs. 2010, 27% fewer manufacturers (137) responded to the SOI survey, which is developed in collaboration with TGaS Advisors and an advisory committee of the Pharmaceutical Marketing Research Group representing all PMRG constituencies (drug and device makers, as well as suppliers/consultants). Curiously, over that period the number of suppliers/consultants responding (169) rose by the same rate.

The reasons behind the downsizing are well known to anyone who follows the pharma industry. Brands are maturing and thus requiring less overall analytical support.

“New products are the ones that need the most information (primary and secondary research, ROI analysis, payer assessments, etc.),” explains T.J. Scott, director of marketing sciences, management advisor, for TGaS. Since the industry as a whole is supporting fewer brands, it’s reducing headcount per brand while boosting spend-per-person, a surrogate for effort. (Short of an accurate gauge on these industry stats, Figs. 1-2 are based on TGaS client data.)

With manufacturer-based marketing researchers going through similar trials and tribulations as their counterparts in sales and clinical research, research departments are spread thin, belying their importance. That has implications for those in the trenches.

According to Francis, who oversees the marketing research function for Sanofi US, “Some of the work that’s been done of late moves toward transactional activity. You’re spending more time waiting for the questions to be asked.”

He describes this focus on technical analysis as a “self-fulfilling prophecy,” an outgrowth of the cost-cutting environment researchers find themselves in: “With reduced [research] headcount, [and] the same number of marketers asking the same amount of questions, you become less able to think about what you need to be doing next and more focused on the questions that are being asked.”

If they’re not careful, market researchers can become stuck in this transactional mode, warns Praveen Advani, director/team leader, global market research & analytics at Merck. “We have traditionally seen ourselves as an expert in executing projects and providing recommendations,” Advani tells MM&M. “Frankly, this is how we have been rewarded by our employers. The world is changing.”

And market researchers, Advani says, need to change with it, adjusting for the new reality of slower product approvals, blockbusters going off patent and generics increasing their presence. “If we don’t evolve, Market Research could be outsourced and the function as we know it today could soon be obsolete.”

Analytical weak points

So, what are the areas most in need of improvement? Respondents to the SOI survey spotlight the biggest analytical weak points as being payer and ex-US secondary techniques (see Fig. 7). Notably, these are also among the areas where they see research spend increasing the most, in addition to larger outlays for qualitative and quantitative and for social media for research.

With managed care and government influence holding sway over therapy choice (Fig. 5), it’s no surprise that respondents are hungry for better payer analysis. But respondents to the SOI survey, fielded in November 2011, agreed strongly (8.1) that payer research needs to improve.

 

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