For close to 3 decades now the industry has seen a spurt of new divisions in Pharma Industry. Many of these have closed down and some are already limping towards the inevitable end.
The broad purpose with which such divisions are created can be classified into following
1. Covering more customers including additional speciality or geography
2. Increase periodicity of visits to existing customers with an objective of improving the market share and ranking in a particular therapy area
3. Create space to promote additional products from an otherwise saturated scope and capacity of the existing field force
Industry has also seen mindless expansion in a few cases where additional divisions are launched to match the competition or follow the trends without actually doing an introspection and inspection of the internal capabilities to sustain
We have all heard about the 5 Ps of Marketing.
Find below the 5 Ps to be considered for launching and improving the success rate for new divisions:
1. PURPOSE
The objective and purpose of creating another division to be clearly spelt out and objectively mentioned in terms of deliverables. The Roadmap to be chalked out for at least next 3 to 5 years. It should not be a short-term target to address a burning issue, but long-term vision, as such initiatives are hugely investment intensive. If the medium to long-term vision in terms of portfolio/ revenue /direction and Profits is not clear or up to the mark, one should avoid entering such ventures
2. PREPARATION
The people who lead the project for launching new divisions should DEEP DIVE into an analysis of the skill and knowledge gaps existing in the organisation against the benchmark. Thus, plan to bridge this gap through internal or external training is important before embarking on this journey
Also, if skill and knowledge gaps are too wide to be bridged in reasonable period of time than it also helps to arrive at a decision to either shelve or defer the plan to launch the division
3. POSITIONING
The positioning of new division like brands is absolutely critical. Everyone from top to bottom in the hierarchy should have the identical understanding of the same. Appropriate positioning can compound the success by complementing the unmet needs from the existing basket. However conflicting and competing priorities against existing business will result in adversely impacting the outcome for the entire organisation
4. PORTFOLIO
Is the portfolio strong enough, with at least some part of the sales coming from the existing reasonably big brands with some equity in the market? Familiarity helps to gain recognition for the new venture among customers and facilitates optimal ROI to achieve breakeven. Thus, the new division has to have a good mix of existing brands with a potential to grow significantly along with new introductions to expand and strengthen the standing in the identified therapy areas.
The shift of product should also be done with the transfer of knowledge/skills/contacts from the existing team to give the desired momentum to the business in terms of push and pull from trade and HCPs for the new division. A division consisting of entirely new people may take longer to establish itself in the market
5. PROVISIONING
Do we have the wherewithal to provide for the resource required in terms of a right number of representatives for optimal coverage along with marketing budget to support the team and service customers?
The existing targeted competition could also be a benchmark for the same. More often than not there is suboptimal resourcing for the divisions and wait and watch policy is adopted. Actually, it becomes a “CHICKEN AND EGG “story.
If all other parameters are in place for the launch of new division one should not hesitate to support wholeheartedly. The half-baked support in such case would only lead to average or below average results.
I believe a careful analysis of the above mentioned 5 Ps before diversifying further should significantly increase the chances of success. Decisions based on the considerations above would help prevent failures, thus, avoiding the disarray in the teams and portfolio created to serve the objectives and save invaluable resources in an otherwise dynamic marketplace.
Remember there is an opportunity cost attached to such new initiatives in a tough market scenario. Therefore doing it Right the first time is essential.
