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Results of the second Health Care Marketing Survey 2009

Health Care Marketing Congress0ctober 8th 2009

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Survey participants

2

Scope and numbers Sector

• Belgium and Europe

•More than 180 respondents participated to the survey, 93 completed the whole survey

Tota

lsa

mpl

e

36%

30%

20%

9%

Med

ical

equi

pmen

t

OTC

Oth

ers

Number of respondents

(%)

RX

5%

Bio

tech

Tota

lsa

mpl

e

Euro

pean

sc

ope

Wor

ldw

ide

scop

e

Nat

iona

l sc

ope

Oth

er

44%

35%

16%

5%

Job function

31,8%

Marketing Manager

Managing Director

Product/Brand Manager

Communication Manager

Other

Business Unit Manager

Sales Manager

Scope of responsibilities

Number of respondents

(%)

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Key concept: Net Average Index (NAI)Quantifying Health Care Marketers’ beliefs

3

How do you expect a certain parameter to evolve?

Options: Increase, decrease, will stay the same

Formula to calculate the index:

The percentage reflects a balance between the positive, neutral and negative views. It can vary from -100% to +100% depending on the amount of confidence.

A positive NAI indicates an increase of importance, the number reveals how relevant or outspoken this increase is.

The percentage reflects a balance between the positive, neutral and negative views. It can vary from -100% to +100% depending on the amount of confidence.

A positive NAI indicates an increase of importance, the number reveals how relevant or outspoken this increase is.

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True or false?

1. Physicians still have the largest decision making power

2. Pricing has entered the top 5 of most important marketing challenges

3. Health Care marketers’ marketing budgets are expected to decrease in the coming year compared to last year

4. Health Care marketers are more confident than marketers from other industries

5. Management decisions are always based on the most accurate customer & market data

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1. Physicians still have the largest decision making power

2. Pricing has entered the top 5 of most important marketing challenges

3. Health Care marketers’ marketing budgets are expected to decrease in the coming year compared to last year

4. Health Care marketers are more confident than marketers from other industries

5. Management decisions are always based on the most accurate customer & market data

True or false?

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6

0

1

2

3

4

0 20 40 60 80

Today, the Health Care marketer has to take into account the influences of multiple stakeholders

6

Siz

e/st

retc

h o

f th

e ch

alle

ng

e to

day

(sc

ore

)

Combination of high average and high frequency of occurrence results in 4 main challenges

Respondents (%)

1

1) Dealing with growth of generics/alternatives

2) Dealing with the decrease of reimbursement amounts from social security

3) Dealing with increased pressure from group purchasing organizations

4) Dealing with extended TTM from R&D to launch due to regulatory approvals

5) Rationalizing brand portfolio

6) Dealing with increasing innovation costs and higher requirements from regulators

7) Improve relationships with hospitals

8) Improve relationships with pharmacists

9) Dealing with stricter code of conduct towards prescribers

10) Improve relationships with specialists

2

3

4

5

67

9

+

+

N=93

Ranking of challenges by importance

10 8

-

Q: In your opinion, what will be the greatest Health Care related challenges of your division in 2009 -2010?

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Compared to last year, the importance of building relationships with hospitals and pharmacists has increased

7

Ranking of the 10 biggest challenges 2010 versus 2008

2009 results

2008 results

Respondents (%)

N2008= 89N2009= 93

LEGEND:

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The largest increase in influence and power in the coming year is expected to occur at governmental partiesOnly GP’s will decrease in influence

88

Evolution of influence/power of different decision makers

43%

43,8%

61%

66%

49%

47%

44%

41%

-14,4%

Pharmacists

Legal and regulatory institutions

General practitioners

Social security

Insurance companies

Patient associations

Patients

Hospitals

Specialists

N=89

16%

12%

10%

8%

-4%

6%

Wholesalers & distributors

laboratories

Research organisations

Net Adjusted Index (%)

Q: How do you evaluate the influence of the following “decision makers” on your business in the near future?

Presentation1

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Key concept: Net Average Index (NAI)Quantifying Health Care Marketers’ beliefs

9

How do you expect a certain parameter to evolve?

Options: Increase, decrease, will stay the same

Formula to calculate the index:

The percentage reflects a balance between the positive, neutral and negative views. It can vary from -100% to +100% depending on the amount of confidence.

A positive NAI indicates an increase of importance, the number reveals how relevant or outspoken this increase is.

The percentage reflects a balance between the positive, neutral and negative views. It can vary from -100% to +100% depending on the amount of confidence.

A positive NAI indicates an increase of importance, the number reveals how relevant or outspoken this increase is.

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10

The largest increase in influence and power in the coming year is expected to occur at governmental partiesOnly GP’s will decrease in influence

1010

Evolution of influence/power of different decision makers

43%

43,8%

61%

66%

49%

47%

44%

41%

-14,4%

Pharmacists

Legal and regulatory institutions

General practitioners

Social security

Insurance companies

Patient associations

Patients

Hospitals

Specialists

N=89

16%

12%

10%

8%

-4%

6%

Wholesalers & distributors

laboratories

Research organisations

Net Adjusted Index (%)

Q: How do you evaluate the influence of the following “decision makers” on your business in the near future?

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Key takeaway n°1

Changing environment of stakeholder influences

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1. Physicians still have the largest decision making power

2. Pricing has entered the top 5 of most important marketing challenges

3. Health Care marketers’ marketing budgets are expected to decrease in the coming year compared to last year

4. Health Care marketers are more confident than marketers from other industries

5. Management decisions are always based on the most accurate customer & market data

True or false?

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Competitive differentiation is still the biggest marketing challenge

13

Siz

e/st

retc

h o

f th

e ch

alle

ng

e to

day

(sc

ore

)

2

3

51

1) Differentiating from competition on target segments

2) Innovation, product development, R&D

3) Measuring ROI

4) Optimizing pricing to increase margins

5) Segmenting the market & consumers more efficiently

6) Building loyalty and trust

7) Building a strong brand

8) Knowing customers moment of truth

9) Increasing efficiency of marketing processes

10) Optimizing communication mix

11) Implementing a centrally constructed marketing initiative at local level

12) Rationalizing brand portfolio

-

+

+

4

7

8

6

10

11

12

Combination of high average and high frequency of occurrence results in 5 main marketing challenges

9

N=89

Ranking of marketing challenges by importance

Q: In your opinion, what will be the greatest marketing challenges of your division in 2009-2010?

Respondents (%)

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Compared to last year, innovation, measuring ROI and optimizing pricing are the three fastest growing marketing challenges

14

2009 results

2008 results

Ranking of the 5 biggest marketing challenges 2009-10 versus 2008

N2008= 89N2009= 90

Respondents (%)LEGEND:

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Compared with RX, ME focuses also on price management and ROI, whilst OTC is challenged more by customer loyalty, innovation and MarCom mix

15

Ranking of the 6 biggest marketing challenges 2009-10 by sector

RX sector ME sector OTC sector

OTC: N= 8RX: N= 30ME: N= 28Note: ME = Medical Equipment

Respondents (%)LEGEND:

Top challenges 09-10

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Key takeaway n°2

Differentiation remains the first key marketing challenge.

Measuring ROI and pricing are the new upcoming marketing challenges.

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1. Physicians still have the largest decision making power

2. Pricing has entered the top 5 of most important marketing challenges

3. Health Care marketers’ marketing budgets are expected to decrease in the coming year compared to last year

4. Health Care marketers are more confident than marketers from other industries

5. Management decisions are always based on the most accurate customer & market data

True or false?

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Health Care marketing budgets in 2008-09 were lower than previously stated and expectations for 2009-10 are even lower

18

7,6%

19,7%22,6%

17,1%

-0,7%

9,3%

-18,0%

14,3%

-14,0%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%Net Adjusted

Index (%)

2006 2007 2008

Marketing budgets

NAI of marketers from other industries for future budget

NAI of Health Care marketers for future budget

LEGEND:

NAI of Health Care marketer for actual budget

2009 2010

Q: In 2008, how did the total marketing budget available within your marketing department change and what are the expectations for 2009-2010?

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Sa

les

vis

its

of

sp

ec

s

Sa

les

vis

its

of

GP

’s

Co

ng

res

se

s

Ev

en

ts a

nd

tra

de

fa

irs

Ma

rke

t r

es

ea

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PO

S m

ate

ria

ls

Ab

ov

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he

lin

e m

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ia

Pu

bli

c r

ela

tio

ns

On

-lin

e m

ark

eti

ng

Dir

ec

t m

ark

eti

ng

Sa

mp

lin

g

Sp

on

so

rin

g

Ne

ws

pa

pe

rs/m

ag

azi

ne

s

Lo

bb

yin

g

Pa

tie

nt

su

pp

ort

gro

up

s

Pri

ce

pro

mo

tio

ns

Online communication methods and lobbying are expected to replace traditional channels especially during crisisSponsoring and print are the biggest losers in the expected budget shift

19

Average of MarCom

budget spent in

2008(%)

NAI, Budget expectations for 2009-10

Budget expectations for 2009-10

Average spent in 08

LEGEND:

N=66

Evolution of Marketing spending in Health Care

Total average spent in 08

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Key takeaway n°3

Shift towards cost effective channels due to budget pressure

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1. Physicians still have the largest decision making power

2. Pricing has entered the top 5 of most important marketing challenges

3. Health Care marketers’ marketing budgets are expected to decrease in the coming year compared to last year

4. Health Care marketers are more confident than marketers from other industries

5. Management decisions are always based on the most accurate customer & market data

True or false?

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The general marketers’ confidence index is at its lowest point in history Health Care marketers are even more pessimistic

22

Net Adjusted Index(%)

2006 2007 2008 20092005Year

General marketers’ confidence index

LEGEND:

A decrease in their marketing budget will negatively impact the Health Care marketers’ media expenditures and modify their marketing organization

A decrease in their marketing budget will negatively impact the Health Care marketers’ media expenditures and modify their marketing organization

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Marketers believe their pricing will be put under great pressure by governments, patients and pharmacists

23

8%

8%

6%

3%

4%

2%

2%

2%

12%

13%

17%

7%

19%

9%

12%

7%

40%

48%

47%

49%

42%

41%

24%

16%

14%

13%

15%

30%

27%

44%

59%

73%

26%

18%

15%

11%

8%

4%

3%

2%Government will push cheaper alternatives

Pharmacists will protect their margins

Patients will become more price sensitive

Patients will ask for generic / alternative products

Patients will be more critical/pro-actively compare treatments

Physicians will change prescription behaviortowards cheaper products

Loyalty of patients towards a product will decrease

Volume of medicines purchased by patients will decrease

N=87

Slightly disagree

Totally disagree

LEGEND:

Neutral Slightly agree

Fully agree

89%

88%

83%

63%

74%

37%

33%

26%

Net Adjusted Index (%)

Q: How do you expect customers to react on the current economical crisis?

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Key takeaway n°4

Health Care marketer’s confidence is hit by the crisis

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1. Physicians still have the largest decision making power

2. Pricing has entered the top 5 of most important marketing challenges

3. Health Care marketers’ marketing budgets are expected to decrease in the coming year compared to last year

4. Health Care marketers are more confident than marketers from other industries

5. Management decisions are always based on the most accurate customer & market data

True or false?

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Marketers understand the value that they provide to customers …

26

N=90

Q: To what extent do you agree with the following statements?

We have a good understanding of the unique value we provide to

customers

We can effectively communicate our value

Net Adjusted Index (%)

2%

1%

20%

12%

27%

13%

32%

37%

19%

37%

Slightly disagree

Totally disagree

LEGEND:

Neutral Slightly agree

Fully agree

82 %

58 %

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… but often lack the tools to efficiently measure that value

27

N=90

Q: To what extent do you agree with the following statements?

Slightly disagree

Totally disagree

LEGEND:

Neutral Slightly agree

Fully agree

Management decisions at my company are based on the most recent customer

& market data

My company has a detailed marketing and sales dashboard to track evolution

of KPI’s

My company leverages the data captured by our CRM system

27 %

26 %

0 %13%

12%

9%

22%

20%

18%

22%

23%

20%

30%

21%

35%

13%

24%

18%

Net Adjusted Index (%)

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Key takeaway n°5

Leveraging valuable customer data is still a challenge

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Key takeaways

1. Evolution of the Health Care industry:Traditional “push model” “pull model” with multiple stakeholders’ influence.

Speaker: François Meurgey "Who cares?"

2. Competitive differentiation becomes a real challenge:Value based pricing is expected to become an important differentiator.

Speaker: Philippe van Wilder “Affordable care”

3. Further develop skills to explore e-mail, online, and interactive marketing activities. Your customer is actively looking to acquire/generate content on the web.

Speaker: Fonny Schenck “How to (e-)care for your patients”

4. Make marketing processes more patient oriented and install tools to leverage valuable customer and market data.

Speaker: Luc Vermeersch “Which patient to care for?”

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