How to spare money doing trade marketing? A case for pharmaceutical companies

Andre Bergmann, Key-Account-Manager, Navicon

Conducting marketing activities at the points of sale and permanent sale promotion via partner network require solid investment. How to plan successful marketing campaigns and assess their efficiency? Our answer is in the article of Evgeniy Golubitskiy, Product Head at the Department of Innovations, Navicon.

For a long time work of medical representatives has been the main way of successful pharmaceutical product promotion. However, now pharmaceutical manufacturers have to search additional ways of communication with clients, in particular, trade marketing campaigns (remedy promotion via partner networks and work with pharmacists). Currently in Russia it is one of the largest budget items on the pharm manufacturers’ budgets: large market players spend on sales promotion from 100 million RUR to 1 milliard RUR yearly.

Obviously, as investment in trade marketing increases, top management wanted to understand, what outcome companies receive from their marketing campaigns. Precise assessment of ROI would be helpful to identify terms of partner marketing agreements afterwards. However, pharmaceutical manufacturers faced the problem of ROI calculation for traditional promotion tools due to lack of reliable data. Calculating ROI, marketers usually count only direct cost of the campaign and sales growth at the end that is incorrect. But how can they calculate sales growth as the outcome of a precise campaign if 3 or 4 campaigns were conducted simultaneously via different channels? Which indirect costs were paid by the company including merchandisers’ and medical representatives’ time spent on conducting and controlling the campaigns? What campaigns will give immediate outcomes? Answers to these questions will help to understand how to organize marketing activities with maximum outcome.

Tip 1. Gather data and use it with maximum outcome

In order to make decisions about marketing campaigns or assess their outcomes, a lot of data should be processed and analyzed in a short term. For instance, it is important to define the right time, place and channel, as well as product, which will satisfy the customer. That is why activities should be planned taking into consideration historical and external data. It is important to understand, what time is the best for selling precise remedies, how the consumer buying behavior depends on the season, what channels are the most efficient in terms of sales: exposure, recommendations or specific signs. Previous experience and data from external sources must be also taken into consideration, for instance, marketing research data provided by the agencies.
Automated trade marketing management solutions, such as Navicon Hermes Pharma, help to collect and process a lot of unstructured data (about sales via distributors and pharmacies), taking into account historical and actual data.

Tip 2. Complementary marketing activities must be considered in analysis
It is usually impossible to calculate effectiveness of just one marketing activity. Marketing uses a lot of tools, which include advertising, personal sales, public relations, sales promotion and partner relations.
Pharmaceutical manufacturer can organize more than 10 activities at the same time using different channels, heading by different managers and each of them will influence growth of loyalty, sales and purchases.
For instance, TV advertising campaign can be accompanied by special signs in the pharmacy. What will be the reason of demand growth then? Maybe a customer has heard about the product by word-of-mouth and went to the pharmacy then. That is the reason why we use the term “integrated marketing communications”. Only analyzing the mix of activities, which includes all company’s marketing activities, we can make conclusions about incentives of growth or decline of sales, which are closely related to current situation.

Tip 3. Make tight connection between key account managers and medical representatives Signing an agreement with pharmacy network the company should define a set of marketing activities, which must be conducted by the partner. All conditions must be communicated to field personnel, but usually this process is badly organized: merchandisers and representatives do not get necessary information on time and cannot check how terms of agreement are met in points of sale. We can put aside feedback and communication of the control results to managers.
In order partner contract functioned, key account managers and field staff must work in the same information filed, where information about any marketing activity will be transmitted to medical representatives’ tablets, and control results – to key account managers, with user friendly interface. At the same information environment, tools for deep analysis must be available, otherwise the problem will be partially solved. Navicon Hermes Pharma has this complete functionality.

Tip 4. Look at Excel as a tool for analysis, but not as data management toolCalculation of main efficiency figures in Excel is inconvenient, takes a lot of time and leads to many mistakes. In this case most manual operations with figures in the tables are done by analysts and key account managers. Now you can eliminate these routine tasks from their schedule and lead their work to their direct work tasks such as marketing expansion in the region or improvement of partner relations. One more example, trade marketing data management solution Navicon Hermes Pharma is not just limited by marketing agreement monitoring, but integrated with CRM to control medical representatives’ work outcome.
In other words, to ensure effectiveness of trade marketing activities the company must develop and control them in such environment, which allows considering many business conditions and factors. In order to see the whole picture, all marketing agreements must be collected in a single database and unified methods of planning, communication, control and plan-fact analysis must be implemented. Automated tools for interaction with pharmacy network help to connect all these elements. They help to make decision based on objective data and, according to our statistics, provide 10% or more increase in efficiency of marketing campaigns. Eventually, working time of key account managers and analysts costs a lot. Therefore, it is worth to spend it on developing relations, whereas data collection and calculation can be done by the system.