Identifying your competitors in pharma

Identifying Your Competitors in pharma | A fundamental step in developing a strong marketing strategy is analyzing the market place and determining what market you are actually in – that is, defining your market definition and scope. However, are you finding that your teams are falling short of identifying their ‘real’ competitors, and sticking to the traditionally obvious ones like another pharma companies?

Nothing has changed over the years, that is, competing head to head is remains cut-throat, especially when the market is flat or slowing (HBR, 1999). So, consider expanding or changing your market definition to find new ways to compete and see your competition from a different perspective. You may just find an empty space where needs are unmet, extending your product lifecycle and maximizing its long term value

Market Definition

Often we spend a lot of time and effort fighting the competitor only to be side-swiped by a non-traditional player who we do not consider a competitor, therefore we are absolved of any accountability.

Here is a definition from NetMBA.com that captures the typical meaning:

In marketing, the term market refers to the group of consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product.

You begin with the total population, and then using various funneling criteria, you end with a smaller market scope where you feel your product or service sits well, and you feel (based on evidenced-based criteria) that your offering can compete successfully.

For example, the leading iron supplement in Australia is the product Ferrograd C and it could be the ‘medicated iron deficiency’ market for the treatment of moderate to severe iron deficiency. This would then narrow the competitors to those producing other iron supplements for moderate to severe iron deficiency. But, if the market was defined more broadly as the ‘vitamin supplement’ market, this would include competitors offering supplements, alternative health products and services, and even food. Remember the classic case study of Amtrax in the USA, who defined themselves as being in the ‘train’ market (a narrow market with few competitors) and not the ‘transportation’ market, thereby missing the emergence of the low cost airline industry.

Which market definition you choose will then determine who is your competition and what they are offering.

3 Categories of Competition

No matter what industry or product category we are competing in, generally competition falls into 3 categories: direct, indirect, and substitute/ alternative/new entrants.

Direct: Direct competitors are those who offer what you believe is a similar product or service and there is an evidence of an obvious choice between your product or service and the other.

Indirect: These types of competitors offer a product or service that differs substantially from your own offering, however, you should not ignore them off, because an indirect competitor always has the potential to turn into a direct competitor.

Substitute/ alternatives/or new entrants: These types of competitors are those who offer a product that is similar to yours, and while they might not sell the exact same thing as you, they offer similar benefits or fulfill the same need in a different way. So these competitors are very important right now as our industry transform and expectations change. For example, DVD rental is a substitute service to cable TV. Home Depot is an alternative or substitute for professional contractors. There could be new companies or entrants coming on the scene that might change your industry completely, such as satellite radio has done to the radio industry, and Uber to the taxi industry, and AirBnB to the hotel industry. Don’t be resistant to thinking this will not happen in healthcare, because it already is with Apple Health, self-monitoring apps, online doctors and pharmacies.

A great question to ask yourself is: ‘if we weren’t around, who would supply to fill the customer/patient need and what would the offering be to solve their challenges?

In answering this ‘customer centric’ question, don’t restrict your thinking only to companies similar to your own. Consider firms outside of the realm of possibility such as those who compete in the industry from other strategic groups’ and buyers or members of the healthcare value chain viewpoint. When contemplating your longer-term strategy, it’s necessary to envision any number of possibilities.

Use Technology

We now have great technology to help us in determining trends in the market place to support our traditional market research. Google Trends, Google Alerts and other tools are available to monitor trends, key words, sentiments and more. It can be overwhelming and some specialist assistance may be helpful. Educating yourself of what is possible will ensure you are not completely ‘blindly’ dependent upon your agency.

Check out the short article for 6 ways to use Google Trends to analyse your marketing place : here

Robust Market Analysis

When you think you have narrowed it down, using robust methodology, determine market attractiveness:

Identify what makes a market attractive by determining relative weight of each factor such as market potential, growth, intensity of the competition and how much budget you would need to compete in this selected market as defined.
Look at internal competitive strengths such as market share growth, market share, lifecycle stage, any synergies across the portfolio and your value proposition.
Use tools such as the GE Matrix or similar to map the potential.

Old Fashioned But Reliable

Never overlook the obvious but invaluable source of market insights – your customers, patients and own employees. Customer Insights are not just used for the creative side of your campaign, but also when understanding who are your competitors.

Also, knowing your competitive advantages and weaknesses relative to your key competitors will guide your strategy. Of course, your analysis should always include a financial analysis to ensure the market definition and the potential is assessed in line with the financial goals of the organization.