benchmarking insights measuring promotional roi benchmarking insights march 16, 2004 presented...
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Measuring Promotional ROI
Benchmarking InsightsBenchmarking InsightsMarch 16, 2004
Presented to: Presented by:
The Pharmaceutical
Marketing Club of Quebec
2©The Mattson Jack Group. All rights reservedCONFIDENTIAL
PromotionalPromotionalBenchmarking & ROIBenchmarking & ROI
Presented by:
Richard C. (Dick) AndersonRichard C. (Dick) AndersonVice President & Managing Director
Mattson Jack ROI9 Campus Drive
2nd Floor EastParsippany, New Jersey 07054
3©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Analyzing the Promotional Campaign
• Why analyze the CAMPAIGN?• Integrated Analysis of Promotion Yields:
Measures of effectiveness regarding the interaction & impact of each promotional element within the campaign and in a market
Impact of the Products Promotional Campaign versus the competitive environment and competitive activity
Optimization of promotional mix:» Levels within & between products» Balanced within product by modality» Timing and timed relations by modality
Analysis of competitive campaigns Promotion and mix insight into future competitive market conditions
4©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Promotional Benchmarking
• MJG Research has shown that:
All forms of promotion CAN WORK if they are done correctly, under the proper environmental conditions and budgeted properly.
The BALANCE, TIMING AND LEVELS, within the promotional MIX are critically important to the effectiveness of your promotional program.
5©The Mattson Jack Group. All rights reservedCONFIDENTIAL
The Role of Promotional Optimization
• First, nothing said today negates or replaces basic marketing or promotional theory. It is simply a means of measuring and quantifying the sequence of events that must occur for promotion to work.
• Create and Convert new prescription and market share Instability (or
volatility) into:
New Prescription
Market Share
• Our extensive research reveals that (on average) 35%* of your results are
directly attributable to your promotional campaign, while the remaining
65% is dependent upon your product’s market and competitive
environment.
Note: **MJG has seen instability accountability ranges of 5% to >60% MJG has seen instability accountability ranges of 5% to >60% attributable to the marketers promotional campaignattributable to the marketers promotional campaign
6©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Promotional Benchmarking Inputs
• 60 months of product level data for all products in competitive set: NRx and TRx’s Audited
» Details – Primary, Secondary, & Tertiary; w & w/o samples» Samples – Samples & Extended Units» Physician Meetings & Events – Dollars & Events» Professional Print – Pages & Inserts» Direct-to-Consumer:
Television – Network, Cable, Syndicated, Spot, etc. Print – Pages, Dollars
Magazines Newspaper
Radio – Network, spot, etc Other client driven data
7©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Promotional Benchmark Input
• Financial Inputs: Average/Marginal Cost of a call – and allocation
across primary, secondary and tertiary position Marginal Cost of a sample Average/Marginal Cost per Pages Average/Marginal Cost of an PME Event Average/Marginal Cost per GRP/TRP
» For Television – by type» For Print – by type» For Radio – by type
Marginal Profit contribution of 1-Rx
8©The Mattson Jack Group. All rights reservedCONFIDENTIAL
IntegratedIntegrated Competitive Environment Competitive Environment
Market EnvironmentMarket Environment
Promotional EnvironmentPromotional Environment
Disease E
nviron
men
tD
isease En
vironm
ent
Prod
uct E
nviron
men
tP
rodu
ct En
vironm
ent
TotalTotalCompetitiveCompetitiveEnvironmentEnvironment
This is the heart & soul of efficient & effective promotional planning
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What Constitutes each of these Environment?What Constitutes each of these Environment?
•Market Environment•Size – NRx’s & TRx’s•Dynamics
•Acceleration•Velocity•Momentum
•Econometric Structure•Instability – NRx’s and Market Share•Concentration
•Location•Dominance
10©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Environment - continued
•Promotional Environment•Level of Activity for each modality•Dynamics – of each modality
•Acceleration•Velocity•Momentum
•Econometric Structure – of each modality•Instability – NRx’s and Market Share•Concentration
•Location•Dominance
11©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Environment - continued
•Product Environment Number of competing products Age of each of these products Number of competing therapies Age of each of these therapies Product usages
Indication(s) Acute -vs- Chronic Spectrum
12©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Environment - Environment - continuedcontinued
• Disease Environment• Acute -vs- Chronic • Severity• Type• Treatment Rate• Awareness
13©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Benchmarking Measures & IndicesBenchmarking Measures & Indices
• Leading indicators :
Acceleration
Velocity
Momentum
Level of Activity
You must develop an understanding of You must develop an understanding of
the product & market dynamicsthe product & market dynamics
• Market Responsiveness or Elasticity:
Concentration (uniformity)
Product position
Momentum• Market Instability
• Product Accountability: Effect of promotion product gain &/or
loss month
• Strategic Brand Planning Marginal ROI Analysis
AccelerationAcceleration
VelocityVelocity
MomentumMomentum
NRx ShareNRx Share
14©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Velocity & Acceleration
-8
-4
0
4
8
12
16
Jan
-99
Ap
r-9
9
Ju
l-9
9
Oct-
99
Jan
-00
Ap
r-0
0
Ju
l-0
0
Oct-
00
Jan
-01
Ap
r-0
1
Ju
l-0
1
Oct-
01
Jan
-02
Ap
r-0
2
Ju
l-0
2
Oct-
02
Jan
-03
Ap
r-0
3
Ju
l-0
3
Oct-
03
Sh
are (
%)
-0.40
-0.20
0.00
0.20
0.40
0.60
0.80
Sh
are V
elo
cit
y
-0.60
-0.50
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
Jan
-99
Ap
r-9
9
Ju
l-9
9
Oct-
99
Jan
-00
Ap
r-0
0
Ju
l-0
0
Oct-
00
Jan
-01
Ap
r-0
1
Ju
l-0
1
Oct-
01
Jan
-02
Ap
r-0
2
Ju
l-0
2
Oct-
02
Jan
-03
Ap
r-0
3
Ju
l-0
3
Oct-
03
Sh
are V
elo
cit
y
-0.120
-0.100
-0.080
-0.060
-0.040
-0.020
0.000
0.020
0.040
0.060
0.080
0.100
Sh
are A
ccele
ra
tio
n
Market Share
Market Share Velocity
Market Share Acceleration
Market Share Velocity
The Modeling ProcessThe Modeling Process
Creating the Proper Analytic Variables
16©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Promotion at Work
• Starting questions: Is the impact of promotion on NRxs and Market Share direct or
indirect? Is the impact of promotion independent of product age? Is the impact of a given promotional modality independent of other
promotional modalities? Is the impact of promotion, for a given product, independent of the
competitive products? Is impact of promotion affected by inconsistency and/or Instability? Etc., etc., etc.
17©The Mattson Jack Group. All rights reservedCONFIDENTIAL
ProductPromotion
NRx Accountability
Share Accountability
Share Acceleration
Share Velocity
Share Momentum
Market Share
Pro
du
ctPromotional Impact & Interaction
AggregatedPromotion
(all Products)
Market Impact:NRx InstabilityShare Instability
Market Acceleration:NRx Growth
Market Velocity:NRx Growth
Market Momentum:NRx Growth Market NRx’s
Mar
ke t
Example MarketsBenchmarking Insights
19©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Markets Examples
• ADHD• Antihistamine• Antidepressant • Contraceptives• Antihypertensive – All classes
20©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
ADHD Antidepressant Antihypertensives Contraceptive Antihistamines
21©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Velocity Definition
• Velocity is the rate at which time series data are changing.• Basically, it is the smoothed change of one month over the prior month of
either prescriptions or any form of promotional modality.
15,000
15,500
16,000
16,500
17,000
17,500
18,000
Jan
Feb
Mar
Apr
May Jun
Jul
Aug Se
p
Oct
Nov Dec
New
Pre
scri
pti
on
100125
150175
200
225
250
275
300
325
350
22©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Velocity Measure of Growth
• Definition: The rate at which a variable is growing or declining in: NRx’s/Month Market Share Points/Month Details/Month Pages/Month Etc.
• Benchmarking insight: Positive Market NRx Velocity is indicative of new patient growth Positive Product NRx Share Velocity tends to make your promotion
more effective
23©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Velocity
-200,000
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
200,000
250,000Ju
l-98
Oct
-98
Jan-
99
Apr
-99
Jul-9
9
Oct
-99
Jan-
00
Apr
-00
Jul-0
0
Oct
-00
Jan-
01
Apr
-01
Jul-0
1
Oct
-01
Jan-
02
Apr
-02
Jul-0
2
Oct
-02
Jan-
03
Apr
-03
Jul-0
3
New
Pre
scri
ptio
ns V
eloc
ity
ADHD Antidepressant Antihypertensives
Contraceptive Antihistamines
24©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Acceleration Definition
• The rate at which Velocity is changing.• As an example, look at the change in NRx’s between March &
February versus the change between February & January.
15,000
15,500
16,000
16,500
17,000
17,500
18,000
Jan
Feb
Mar
Apr
May Jun
Jul
Aug Se
p
Oct
Nov Dec
New
Pre
scri
pti
on
100125
150175
200
225
250
275
300
325
350
(125-100)=25 (150-125)=25
(175-150)=25 (200-175)=25
(225-200)=25
(250-225)=25
(275-250)=25
(300-275)=25
(325-300)=25
25©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Acceleration Change in Velocity
• Definition: the (current month over prior month) rate at which Velocity (rate of growth or decline) is changing in: NRx’s Market Shares Details & Samples Pages DTC, etc.
• Benchmarking insight: Acceleration is a powerful leading indicator of market dynamics Product share Acceleration is a leading indicator of promotional
impact
26©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Acceleration
-15,000
-10,000
-5,000
0
5,000
10,000
15,000Ju
l-98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
Acc
eler
atio
n
ADHD Antidepressant Antihypertensives Contraceptive Antihistamines
27©The Mattson Jack Group. All rights reservedCONFIDENTIAL
MomentumCreating Strategic Options
• Momentum is a function of Velocity and mass (level of activity). For example: NRx Velocity and level of NRx Share Velocity and level of share Pages Velocity and level of Pages
• Momentum of a promotional activity considers the timing, levels and balance of the promotional mix.
• Benchmarking insight: Positive market Momentum is created by consistent, balanced & well timed
promotion Positive product Momentum enables the marketer to select between promotional
strategies: continue to maintain or reduce/reallocate levels of promotion
28©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Momentum
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0Ju
l-98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
ptio
ns M
omen
tum
Ind
ex
ADHD Antidepressant Antihypertensives Contraceptive Antihistamines
29©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Instability OpportunityNew Prescriptions and/or Market Shares
• Instability – An aggregate measure of monthly market & brand variances: Absolute Variances Standard Deviation Mean Absolute Deviation
• Benchmarking insight: Goal of promotion is to create market Instability Instability is a function of promotion and/or market growth Markets with high Instability present opportunity
» Converting market share & NRx’s Markets with low or no Instability may require the marketer to
create the Instability » Cost vs. benefit (ROI)
30©The Mattson Jack Group. All rights reservedCONFIDENTIAL
InstabilityDefinition
• A measure of dispersion.• Mathematically it is the sum of forward changes and/or a sum of absolute
changes.• For example:
• Instability is computed for a host of measures: NRx’s, Market Share, and any form of promotion.
• Instability is plotted over time to examine the growth and/or decline, as well as the patterns and levels, which are used to judge opportunity.
Difference -1,000 500 1,000 100 1,000 1,600
Abs. Difference 1,000 500 1,000 100 1,000 3,600 => NRx Instability
Product 1 Product 2 Product 3 Product 4 Product 5 Total
Aug-03 90,000 20,000 70,000 50,000 6,000 236,000
Sep-03 89,000 20,500 71,000 50,100 7,000 237,600
New Rxs
31©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Instability
-500,000
0
500,000
1,000,000
1,500,000
2,000,000Ju
l-98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
In
stab
ility
ADHD Antidepressant Antihypertensives Contraceptive Antihistamines
32©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Market Share Instability
0
5
10
15
20
25
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
Mar
ket
Sh
are
Inst
abili
ty
ADHD Antidepressant Antihypertensives Contraceptive Antihistamines
33©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Instability
ADHD Market
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
In
stab
ility
-4
0
4
8
12
16
Ma
rke
t S
ha
re In
sta
bili
ty
NRx
Share
34©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Instability
Antidepressant Market
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
In
stab
ility
-4
0
4
8
12
16
Ma
rke
t S
ha
re In
sta
bili
ty
NRx
Share
35©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Instability
Antihypertensive Market
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
In
stab
ility
-4
0
4
8
12
16
Ma
rke
t S
ha
re In
sta
bili
ty
NRx
Share
36©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Instability
Contraceptive Market
0
100,000
200,000
300,000
400,000
500,000
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
In
stab
ility
0
2
4
6
8
10
Ma
rke
t S
ha
re In
sta
bili
ty
NRx
Share
37©The Mattson Jack Group. All rights reservedCONFIDENTIAL
New Prescriptions Instability
Antihistamine Market
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
New
Pre
scri
pti
ons
In
stab
ility
0
2
4
6
8
10
12
14
16
18
20
Ma
rke
t S
ha
re In
sta
bili
ty
NRx
Share
38©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Accountability ScorecardNew Prescriptions & Market Shares
• Accountability – Percent of monthly Instability attributed
by a given product and its promotional program measured in
gain or loss of:
NRx’s
Market Shares
• Benchmarking insight:
Measure of promotional effectiveness
Instability creates opportunity Accountability tallies the results
39©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Accountability Scorecard
• Accountability:
You can both CAUSE and CONVERT
You can CAUSE and NOT CONVERT
You DO NOT CAUSE but CONVERT
You DO NOT CAUSE nor CONVERT
40©The Mattson Jack Group. All rights reservedCONFIDENTIAL
AccountabilityDefinition
• Accountability is a continuation of Instability analysis.
• It is the percent of monthly Instability attributed to a given product.
• The key driver of Accountability, is the quality, level, and mix of the promotional campaign.
Difference -1,000 500 1,000 100 1,000 1,600
Abs. Difference 1,000 500 1,000 100 1,000 3,600 => NRx Instability
Product 1 Product 2 Product 3 Product 4 Product 5 Total
Aug-03 90,000 20,000 70,000 50,000 6,000 236,000
Sep-03 89,000 20,500 71,000 50,100 7,000 237,600
New Rxs
Product 1 Product 2 Product 3 Product 4 Product 5
Sep-03 -28% 14% 28% 3% 28%
New Rxs Accountabilty
41©The Mattson Jack Group. All rights reservedCONFIDENTIAL
-30
-20
-10
0
10
20
30
40
-50
-40
-30
-20
-10 0 10 20 30 40 50
Market Share Accountability
New
Pre
scri
pti
ons
Acc
oun
tab
ility
1998
1999
2000
2001
2002
2003
Product A - OldAccountability
Jun-2003
May-2003
Jan-2003
Feb-2003Apr-2003
Mar-2003Jul-2003
42©The Mattson Jack Group. All rights reservedCONFIDENTIAL
0
5
10
15
20
25
30
35
40
-50
-40
-30
-20
-10 0 10 20 30 40 50
Market Share Accountability
New
Pre
scri
pti
ons
Acc
oun
tab
ility
2002
2003
Product A - NewAccountability
Jun-2003
May-2003
Jan-2003
Feb-2003
Apr-2003
Mar-2003
Jul-2003
Aug-2002
Sep-2002
Oct-2002
Nov-2002
Dec-2002
43©The Mattson Jack Group. All rights reservedCONFIDENTIAL
-50
-40
-30
-20
-10
0
10
20
30
40
-50
-40
-30
-20
-10 0 10 20 30 40 50
Market Share Accountability
New
Pre
scri
pti
ons
Acc
oun
tab
ility
1998
1999
2000
2001
2002
2003
Product B - OldAccountability
Jun-2003
May-2003
Jan-2003
Feb-2003
Apr-2003
Mar-2003
Jul-2003
44©The Mattson Jack Group. All rights reservedCONFIDENTIAL
-10
-5
0
5
10
15
20
25
30
35
40
-50
-40
-30
-20
-10 0 10
20
30
40
50
Market Share Accountability
New
Pre
scri
pti
ons
Acc
oun
tab
ility
2002
2003
Product B - NewAccountability
Jun-2003May-2003
Jan-2003
Feb-2003
Apr-2003
Mar-2003
Jul-2003
45©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Concentration Measures of Uniformity
• Concentration measures: Location – percent of market accounted for by your product and
all products with smaller market shares
Dominance – your percent of location
Concentration/Location Dynamics – what is happening to your position within the Concentration Curve?
• Benchmarking insight: Highly concentrated markets favors promotion of market
leader(s)
46©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Concentration
• Measure of UniformityNrx’sSharePagesDetailingEtc., etc., etc.
• Roots: Income distribution theoryLorenz Curve
47©The Mattson Jack Group. All rights reservedCONFIDENTIAL
ConcentrationExample
Product ShareProd A 2.5Prod B 12.1Prod C 8.7Prod D 30.7Prod E 11.1Prod F 4.2Prod G 7.8Prod H 6.2Prod I 1.7Prod J 15.0
100.0
Product ShareProd I 1.7Prod A 2.5Prod F 4.2Prod H 6.2Prod G 7.8Prod C 8.7Prod E 11.1Prod B 12.1Prod J 15.0Prod D 30.7
Product Share CumProd I 1.7 1.7Prod A 2.5 4.2Prod F 4.2 8.4Prod H 6.2 14.6Prod G 7.8 22.4Prod C 8.7 31.1Prod E 11.1 42.2Prod B 12.1 54.3Prod J 15.0 69.3Prod D 30.7 100.0
Product Share CumProd I 10.0 10.0Prod A 10.0 20.0Prod F 10.0 30.0Prod H 10.0 40.0Prod G 10.0 50.0Prod C 10.0 60.0Prod E 10.0 70.0Prod B 10.0 80.0Prod J 10.0 90.0Prod D 10.0 100.0
Theoretical
ConcentrationLocationDominance
Product CDominance = 100*(8.7/31.1) = 29.97%
48©The Mattson Jack Group. All rights reservedCONFIDENTIAL
ConcentrationConcentrationMeasure of Uniformity1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
The Lorenz Curve
A
B
Concentration Index = 100A
A+Bx[ ]
Prod W Prod X Prod A Prod K Prod F Prod V Prod Y Prod M Prod S Prod U
Theoretica
l – if equal s
hares
Actual
V
Y
M
S
U
Loc
atio
n P
rod
uct
S
49©The Mattson Jack Group. All rights reservedCONFIDENTIAL
NRx Share Concentration
30
40
50
60
70
80
90
100
Jul-
98
Oct
-98
Jan-
99
Apr
-99
Jul-
99
Oct
-99
Jan-
00
Apr
-00
Jul-
00
Oct
-00
Jan-
01
Apr
-01
Jul-
01
Oct
-01
Jan-
02
Apr
-02
Jul-
02
Oct
-02
Jan-
03
Apr
-03
Jul-
03
Con
cen
trat
ion
(%
)
ADHD Antidepressant Antihypertensives Contraceptive Antihistamines
50©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Base Promotional Activity and Measures
PagesSamplingPrintPMEDTC TV
DTC MagazineDTC Radio
DTC NewspaperDTC Other
Primary % Secondary % Tertiary %
Samples Extended Units Days of Therapy
Pages Inserts Dollars
Events Dollars
Tot GRP Network GRP Cable GRP Syndicated GRP Spot GRP
Network $ Cable $ Syndicated $ Spot $
Pages Dollars
Total GRP Network GRP Spot GRP Syndicated GRP
Network $ Spot $ Syndicated $
Units GRPs Dollars
Units GRPs Dollars
And, And, StructureStructure and and Share-of-VoiceShare-of-Voice measures for each modality measures for each modality
51©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Base Promotional Environmental Measures
Pages ………….Sampling ………Print …………..PME …………..DTC TV ………
DTC Magazine ..DTC Radio …….
DTC Newspaper .DTC Other ……..
Instability Accountability Acceleration MomentumInstability Accountability Acceleration MomentumInstability Accountability Acceleration MomentumInstability Accountability Acceleration MomentumInstability Accountability Acceleration Momentum
Instability Accountability Acceleration MomentumInstability Accountability Acceleration Momentum
Instability Accountability Acceleration MomentumInstability Accountability Acceleration Momentum
52©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Base Variables & MeasuresInteractions
Question: What is the impact of 60 Pages-per-month of Professional Print?What do you need to know to answer this question?
• Product age?• Pages SOV?• Unit size – pages -vs- inserts?• Number of competing products?• Concentration of Professional Print across competing products?• Dynamics of class? Growth Acceleration, Velocity & Momentum?• Market Concentration?• Level of Print Instability and your products contribution to that Instability• Level of Share Instability in the market• Etc., etc., etc.
53©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Base Variables & MeasuresInteractions - continued
Question: What is the impact of 60 Pages-per-month?
How does Professional Print impact and how is it impacted by:
• Sampling?
• History of Pages?
• Detailing?
• PME?
• DTC GRPs?
ExampleCase Study
55©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Case Study:Established Product
• Crowded set (40+ products)• Mature product (7+ years old)• New claim – 18 months earlier• Promoted new claim through DTC print – 18 months• Professional target: FPs, GPs, IMs, & one Specialty• Consumer target: Specified Subgroup• Considering an Multi-Million dollar television campaign• History: Sales force reduction 3-years earlier• History: NO faith in professional print
56©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Case Study:Client’s Questions
• Should we implement this DTC television campaign?• Planned start is July 1998 – is this justifiable?• What is our promotional ROI likely to be?• How do we insure success?• How should out professional campaign be structured?• Do we need to alter our current professional promotional
mix?• Justify all projections and predictions!
Recommendations
58©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Delay start of DTC Television for six months. Get professional up to speed!
Add 2xx++ Sales people before DTC. Increase professional advertising by
$1,400,000. Keep sampling in step with detailing. Increase Primary Care activity.
Case Study: Case Study: Established Product
Recommendations
Projections&Results
60©The Mattson Jack Group. All rights reservedCONFIDENTIAL
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
t-12
t-10 t-8
t-6
t-4
t-2 t
t+2
t+4
t+6
t+8
t+10
t+12
t+14
t+16
t+18
t+20
t+22
t+24
t+26
t+28
t+30
t+32
New
Pre
scri
ptio
ns
Forecast - Base
Forecast - Campaign
Actual
Case Study 1: New Prescriptions/ROI Forecast
ProjectFinishedProjectFinished
New Campaign StartsNew Campaign StartsNew Campaign StartsNew Campaign Starts
90% ConfidenceForecast Line90% ConfidenceForecast Line
Note:Note:ROI = 836%ROI = 836%Note:Note:ROI = 836%ROI = 836%
Hire Sales RepsProf Print Start
Launch Velocity Model
Based on 63 Product Launches
62©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Function ExampleProduct Launch Velocity Model
VelocityVelocity = 1.99 = 1.99
R2 = 96.5%F(22,57) = 69.68; Prob>F=0.0001
Notes:1. All coefficients are significant beyond the 95% level.2. All but 2 coefficients are significant beyond the 99% level
**AdvsovAdvsov(1.20-0.001*NRx Instability-0.08*Share Instability)(1.20-0.001*NRx Instability-0.08*Share Instability)
**ProddtlProddtl(1.42+0.0003*NRx Instability+0.10*Share Instabilty-0.002*Age)(1.42+0.0003*NRx Instability+0.10*Share Instabilty-0.002*Age)
**DtlsovDtlsov(0.75+0.0003*NRx Instability)(0.75+0.0003*NRx Instability)
**SmpsovSmpsov(0.91-0.0002*Class Sampling)(0.91-0.0002*Class Sampling)
**TC AccelTC Accel(0.38)(0.38)
**NRx InstabilityNRx Instability(0.22)(0.22)
**Share InstabilityShare Instability(0.20)(0.20)
**ConcentrationConcentration(0.0008*Class Velocity)(0.0008*Class Velocity)
**AdvAdv(1.46-0.001*TCAdv-0.10*Share Instab-0.05*Age+0.001*TC Acc)(1.46-0.001*TCAdv-0.10*Share Instab-0.05*Age+0.001*TC Acc)
Env
iron
men
tal
Env
iron
men
tal
Scenario Analysis
Change in DTC Program
64©The Mattson Jack Group. All rights reservedCONFIDENTIAL
ScenarioReallocated DTC across 2004ScenarioReallocated DTC across 2004
DTC Print
0%
2%
4%
6%
8%
10%
12%
14%
16%
Jan-
04
Feb-
04
Mar
-04
Apr
-04
May
-04
Jun-
04
Jul-
04
Aug
-04
Sep-
04
Oct
-04
Nov
-04
Dec
-04
Print Prior Plan
Print Scenario
DTC TV
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Jan-
04
Feb-
04
Mar
-04
Apr
-04
May
-04
Jun-
04
Jul-
04
Aug
-04
Sep-
04
Oct
-04
Nov
-04
Dec
-04
TV Prior Plan
TV Scenario
65©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Scenario:Scenario: Reallocated DTC across 2004 Reallocated DTC across 2004Implications of ScenarioImplications of Scenario
-0.70
-0.60
-0.50
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30Ja
n-04
Feb
-04
Mar
-04
Apr
-04
May
-04
Jun-
04
Jul-
04
Aug
-04
Sep
-04
Oct
-04
Nov
-04
Dec
-04
NR
x Sh
are
Cha
nge
(%)
-70,000
-60,000
-50,000
-40,000
-30,000
-20,000
-10,000
0
10,000
20,000
30,000
NR
x C
hang
e
Share Change
NRx Change
Decrease in net sales of $68 MM
Loss of 432,000 NRxs
Loss of 865,000 TRxs
66©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Summary
67©The Mattson Jack Group. All rights reservedCONFIDENTIAL
The Simple World of Promotion
NewNewPrescriptionsPrescriptions
MarketMarket
ShareShare
DetailingDetailing
SamplingSampling
AdvertisingAdvertising
DTCDTC
MailMail
Dinner MeetingsDinner Meetings
Etc., etc., etc.Etc., etc., etc.
C C A A MMP P A A I I G G NN
68©The Mattson Jack Group. All rights reservedCONFIDENTIAL
The Structure of Promotional ImpactProfessional Print, Detailing, Sampling, and Mail
DetailingDetailing
SamplingSampling
MailMailMailMail
AdvertisingAdvertisingAdvertisingAdvertising
XXXX
XX
XXOOOOOOOOOOOOOO
OOOOOOOO
DTC/DTPDTC/DTPPrint & TelevisionPrint & Television
69©The Mattson Jack Group. All rights reservedCONFIDENTIAL
The Real World of Promotion
InstabilityInstability
VelocityVelocity
AccelerationAcceleration
NRx’sNRx’s&&
ShareShare
AACCCCOOUUNNTTAABBIILLIITTYY
Marketing EnvironmentMarketing Environment
Promotional EnvironmentPromotional Environment
ProductProductEnvironmentEnvironment
DiseaseDiseaseEnvironmentEnvironment
DTCDTC
DetailingDetailingSamplingSampling
Mai
lM
ail
Adv
erti
sing
Adv
erti
sing
70©The Mattson Jack Group. All rights reservedCONFIDENTIAL
Summary
• Promotional modalities are not independent of one another
• Promotional modalities are not independent of competitive promotion
• Promotional modalities are not independent of the four principle environment
• Promotional modalities are not independent of product age
• Promotional modalities are more efficient at maintaining momentum, rather than building momentum
• Loss of Momentum in 4th Quarter, do to budget cuts, is considerably more costly than most people realize!!!
Thank You
““The best way to predict the future is to create it”The best way to predict the future is to create it”