Register  |   Contact Us  | 

Home » CEB Marketing Blog, Marketing & Communications, Uncategorized » How Marketing Creates Real Value

How Marketing Creates Real Value

In the process of this year’s B2C research, we’ve been looking into the notion that there are two kinds of ways marketing creates real value – the first being the typical “funnel” activities we normally associate with what marketing does, and the second being contributions to core, underlying economic drivers of business success. These are things that must be true in order for the business as a whole to succeed.

What do we mean by that? Well, take the pharmaceutical industry. Pharma marketers spend much of their time on “funnel” activities – moving consumers and doctors from awareness to purchase or prescription. And having more customers to sell medicine to is important. But, speaking generally, if marketing stopped doing those things, pharma companies could continue to create and distribute medicine. Revenue might not be as strong, but the core, underlying function of the pharmaceutical industry – taking the brainpower of scientists and converting it into treated diseases – wouldn’t be disrupted.

But what would disrupt that function? Well, for starters, regulatory issues; if the FDA or the UK’s MHRA or the EU’s EMA decide not to allow a drug to come to market, that’s scientist brainpower not being converted into treated diseases. Supply chain is key; if factories go offline or a rare drug ingredient runs out, the function is disrupted. The innovation pipeline is of extreme importance. And, finally, patient adherence is a barrier to treated diseases – scientists and supply chains can make the medicine, but what the patient actually does with it is up to them.

That’s why it was encouraging to read on Pharmalot that pharma marketers are doing more and more to ensure patient adherence. Budgets devoted to adherence have rocketed from an average of $400,000 in 2009 to $1.53 million this year. Now, to be sure, there are funnel elements to this play, as well. Patients who take their medicine as scheduled get refills sooner, and it’s easier to keep your existing patients than acquire new ones. Cutting Edge, the market research firm Pharmalot’s Ed Silverman cites, reports that 25% of overall sales were diminished by poor patient adherence, while drugmakers can rescue 31% of revenue with tactics to increase adherence.

But more importantly, if people don’t take their medicine as directed, the drugs don’t work. And if they don’t work, patients will, first and foremost, blame the drug instead of their lackluster efforts to take it as directed. Not only is a customer lost – a funnel consideration – but the core purpose of pharmaceutical companies is disrupted.

It’s interesting to see more and more marketing organizations supporting core business drivers in addition to funnel considerations. Have you noticed the same kind of thing at your company? Let us know in comments.

Be the first to share a comment

*

Commenting Guidelines

We hope conversations will be energetic, constructive, and provocative. All posts will be reviewed by our editors and may be edited for clarity, length, and relevance.

We ask that you adhere to the following guidelines.

1. No selling of products or services.

2. No ad hominem attacks. These are conversations in which we debate ideas. Criticize ideas, not the people behind them.