First of all, a very happy new year to you all! It’s that time when you make yourself all sorts of promises and resolutions. You look forward to a fresh start and lay out all the things you will do differently this year compared to last. Any chance your list includes a resolution to invest more in the corporate brand?
The pharmaceutical industry is experiencing a time of unprecedented challenge. Patent expiries, regulatory issues, and increased pressures from healthcare providers have combined to create an environment where the sector is associated with lower growth and higher risk. Clearly focusing on reputation should be everything for you right now? Or should it?
In an industry subject to a lot of scrutiny, we hear the term ‘Corporate reputation’ used a lot. It is often used alongside ‘corporate brand,’ perhaps even in the same sentence to mean the same thing. The CEC’s quantitative research from ‘Building Stakeholder Preference through the Corporate Brand’, however, confirms that reputation and brand are two means to two very different ends. The end goal for reputation is stakeholder acceptance (i.e., “would I consider doing business with you?”), and the end goal for corporate brand management is stakeholder preference (i.e., “would I as a health care professional choose to prescribe your drug in preference to your competitor’s?”)
Our findings indicate that corporate brand strength is a significant predictor of company preference, even a predictor of a stakeholder’s willingness to recommend the company, an important behavior for achieving company objectives. It is true that good reputations reduce “rejection” of an organization; but reputation has no demonstrable impact on company preference.
In a crowded pharmaceutical market, lists of product advantages and features no longer cut it when it comes to differentiating one company’s offerings from another. If we apply the findings described above, then we understand the importance of selecting brand attributes that are meaningful to your stakeholders and different from those of your competitors, and consistently conveying them in your messaging. (Note: CEC members, use the CEC’s Corporate Brand Differentiation Audit to understand stakeholder perceptions of your brand and compare yourself to the attributes of your competitors.)
This idea of brand versus reputation is a Communications truth that can be applied to any organisation regardless of the industry, but let’s think about what this means for pharma. For me, two things come to mind:
1) Should you invest more in your product brands or the corporate brand?
2) As you think about focusing on branding, how would your efforts differ across stakeholder groups (e.g. doctors, employees, patients)?
When thinking about it, perhaps it could be argued that the corporate brand stands for a set of values. Commitment to R&D and quality control may be more important factors in the doctor’s decision making process; while for the patients, the product name may play a more important role in their perception of effectiveness and improved health conditions.
I suspect doctors would feel more secure prescribing a drug, especially a new one on the market, if it comes from a company of a stronger corporate brand. They would want to have some degree of “security” that in case anything goes wrong, the company behind the drug would have a supposed greater sense of responsibility and accountability.
On the other hand, the success of the corporate brand is a result of a series of individual product successes. If individual products fail to cure illness, consumer confidence is lost no matter how strong the corporate brand is. Successful individual products challenge the corporate brand to maintain the standards set by these products.
One other issue to consider is the time it takes to see returns. Naturally the payback time on corporate brand investments is by far longer than that of individual product brands.
What do you think? Do you make distinctions between corporate branding and reputation within your company? How? I would love to hear from you. Until next time.