marketing biotech when funds dry up
DESCRIPTION
The Biobranding Group\'s first report on important issues in the Australasian Biotech sector.TRANSCRIPT
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 1
INTRODUCTION
THE economy is in as worse a state than many life-
science executives can remember. The sentiment
amongst management in the industry seems to be of
dubious belief in the effectiveness of advertising and
marketing in the current climate.
With no best-practice policies in place, management
is in limbo trying to preserve what they can whilst
trying to ensure that they stay afloat. Many
executives are choosing to drastically slash their
marketing budgets or cut them completely. Further
organisational pressures to achieve more for less
mean that buyers frequently end up in homogenous
groups, forcing the marketing department to develop
sophisticated and expensive ‘one size fits all’
marketing messages. What often results is the
marketing department wasting time (and funds)
trying to salvage campaigns rather than develop
new, more effective strategies.
The model suggested further on in this report
outlines a new marketing framework for biotech
companies to work from in hard times and best-
practice methods to carry over into the better times.
But first, we must outline both the short-term and
long-term negative effects of cutting advertising
expenditure.
THE MASS MARKETING CYCLE
THE cycle begins with budgets being slashed due to
unsteady cash flow, as seen recently in response to
economic crises. With this, marketing departments
begin cutting back on ad frequency and quality of
marketing collateral.
Still trying to reach the whole target market and
pressured to get the same results with far fewer
resources, ad campaigns end up with inconsistent
messages. The sudden fall in company marketing
During these hard economic times, it is common for companies to slash their marketing budgets
in order to improve their short-term bottom line and operate more efficiently. Australian small to
medium biotech companies are no different. To grow business when funds dry up, it is essential
biotech marketing departments change strategy rather than cut budgets. In this report, we
provide a brief overview of the short-term and long-term negative effects of cutting marketing
budgets and suggest a new marketing model for biotech companies to use in the current climate
and into the future.
Marketing Biotech When Funds Dry Up
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 2
activity and quality begins to send alarming
messages to investors, customers and competition
and the years of building brand equity often begins
to falter.
With brand equity slipping, marketing activity
significantly slowing and revenue falling, the
company begins hiring more and more salespeople
in the hope of lifting sales. To improve cash flow, the
sales force is pressured to look for short-term, high
profitability sales rather than cultivate long-term
relationships. Over time, with relationships dwindling,
sales prospects slowing, and brand equity falling
even further, revenue and investment funds begin to
dry up. Marketing budgets are slashed due to lack of
funds and the Mass Marketing Cycle continues on its
merry way.
Does this sound familiar?
The degree to which biotech companies experience
the Cycle can differ substantially, but one thing
becomes clear: whilst building brand equity may take
many years, it can be quickly eroded with long-term
negative impacts.
Small to medium biotech companies need a model
that can allow both effective and efficient marketing
on lower budgets.
THE NEW MODEL OUTLINE
THE marketing department’s role has always been to
communicate the company’s core messages to the
masses through what is known as mass marketing.
Herein lies part of the problem.
In times of short cash flow and limited budgets, why
scattergun homogenous, indirect messages through
traditional channels? Instead, we suggest a new
brand of marketing called Cluster Marketing.
Cluster Marketing focuses on separating target
customers into more similar demographic and
psychographic groups (clusters) and focusing more
unique, individual messages at them. The marketing
department can develop a ‘purple cow’ for each
cluster and develop warmer leads for the sales force.
The new model has a range of benefits. Firstly, it is
less expensive than traditional mainstream mass
marketing. Secondly, it helps build brand equity
more effectively in more markets. Thirdly, it creates
cohesion between the marketing and sales
departments. And finally, it allows for greater control
and measurement of ROI with real-time analysis.
CLUSTER MARKETING MODEL
THE Cluster Marketing Model is straightforward but
requires careful execution. The following steps have
been developed to provide a guide to ‘going
clustering’:
1. Advertise Smarter. As already outlined, instead
of advertising your product range’s many benefits
to a large audience, promote your brand to
smaller, more alike audiences. As Seth Godin
emphasises in his best selling book ‘The Purple
Cow’, “For big results, think small”.
This type of brand-focused marketing will fulfill a
number of objectives. Firstly, it will appear as a
new marketing campaign and make your
company appear innovative and energised. And
secondly, it will position your company more
effectively within your most important markets.
2. Marketing <-> Sales Collaboration. An
important part of the Cluster Marketing Model is
ensuring complete collaboration between the
marketing and sales departments. In order to first
develop the clusters, it is a good idea to hold
meetings with sales people to create short lists of
qualified target audiences. These meetings can
help better outline the target audience’s
psychographics, allowing for far more targeted
marketing messages.
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 3
These meetings should be made common
practice through the duration of the marketing
campaign, allowing real-time feedback of
marketing’s messages. Introducing sales activity
between marketing ‘attacks’ can help refine
messages and improve the marketing campaign
‘on the run’.
Another benefit of these regular meetings, the
marketing department can develop a better
understanding of the sales cycle and produce
inexpensive tools to help smooth the process.
These tools can include sales presentation
materials individually customised for the individual
clusters.
3. Develop Your Purple Cows. As Godin (The
Purple Cow, 2003) explains, “Being safe is risky.
Boring always leads to failure. Very good is an
everyday occurrence and hardly worth
mentioning. To be a Purple Cow is to be
remarkable.”
Now that you have done away with the limitations
of mass marketing, you can significantly increase
brand awareness and generate positive brand
attitudes amongst each cluster by creating unique
messages or purple cows for each. Using this
method, every piece of marketing collateral can
be personalised and customised and go a long
way in making the sales force’s job much easier.
4. Improve Your PR Program. A solid PR program
is a necessary part of any Cluster Marketing
campaign. When correctly implemented it can
strengthen the overall marketing mix, generate
warm leads for the sales force and make the
company appear active and energetic for a
fraction of the cost of mass marketing. Also, as
part of the Cluster Marketing campaign, your PR
program can be customised to each individual
cluster.
Collaborating with an experienced PR Firm who
has existing relationships in the necessary media
channels will all but ensure success.
5. Measure, Measure and Measure some more.
As your target market has now been separated
into smaller more manageable clusters, measuring
your campaign’s success will be simpler.
Sales tracking tools should be built into the sales
cycle and coupled with regular feedback between
the marketing and sales departments. With each
piece of marketing collateral able to be measured
through the Cluster Marketing Model, refining
messages and improving communications for
further campaigns becomes much easier.
CONCLUSION
THE Cluster Marketing Model provides a far more
efficient and effective framework than current mass
marketing models. With complete adoption of the
new model, small to medium biotech companies can
avoid The Mass Marketing Cycle.
Whilst providing a firm foundation for marketing
departments to work from in tough economic times,
the Model also provides a set of best practice
methods for carryover into better times.
With new cohesion between the marketing and sales
departments, a better understanding of the
company’s target market and more trackable
campaigns, adherence to the model will allow
protection of brand equity and business growth long
into the future.
‘Marketing Biotech When Funds Dry Up’ is the first
edition of The Biobranding Report. The Biobranding
Report is a monthly investigation into important
issues facing the Australasian biotechnology
industry.
The next report, ‘Exploring Cluster Marketing for
Biotechs’, will be available in July, 2009. To
subscribe to the reports, email
[email protected]. For more information
see over.
Marketing Biotech When Funds Dry Up - 1st Edition, June 2009. 4
Proud Member of:
About the Author:
David Ball is Managing Director of The Biobranding Group, a Brisbane-based brand strategy and identity
creation firm focused on the life-science industry. David has tertiary qualifications in biotechnology and
marketing experience through launching and running his own web businesses.
About the Company:
The Biobranding Group was founded to provide a unique offering to the Australasian biotechnology sector.
With real world science and high-tech expertise in-house, the company understands your needs because
they understand your technology.
The company is committed to improving scientific communications throughout the Australia-Pacific region
and help the biotechnology industry reach its potential. For more information please visit the company’s
website at www.biobranding.com.au or email [email protected].
About the Report:
The Biobranding Report is a monthly investigation into important matters affecting the life-science industry.
The content is based on research, literature and experience and is written from an independent perspective.
To subscribe to the report, please email [email protected].
© 2009 Zebras International Pty Ltd. All rights reserved. No part of this document may be reproduced or transmitted without obtaining written permission from the author.