Phantom Markets

I love the title of Robyn Bolton’s blog asking if marketers are targeting phantom markets.  The blog is an interesting read from an innovation expert who works in consumer marketing.  Although not specifically talking about the pharmaceutical world, there are some very rich lessons that are worth pondering.

Robyn asks the reader to consider whether it is easier to get 1% of a huge established market or 100% of a completely new one.  That question alone should get your critical thinking skills cranked up.  The branded pharmaceutical world often thrived by going into large markets and assuming every product would get a certain share of the business.  We talked about the order of entry and had fixed percentage predictions for what we could expect to achieve by just doing routine sales and marketing work.  Those days appear to be over.  Perhaps what is needed is a more clearly defined market for every new market entrant.

The blog goes on to discuss that the size of a current market is really not all that important. What needs to be considered is the number of people with important issues or “jobs that need to be done” that are not satisfied with the current market offerings.  A new product needs to be able to do the job that is still needed or still unfinished for the consumer at a price that is affordable and in line with the job being done.  It really is all about realistic market definition.

The management guru Peter Drucker may be leading us to the solution when he said, “The aim of marketing is to know and understand the customer so well that the product or service fits him or her and sells itself.”  The key would be to clearly understand what is needed and be very realistic as to what each product offers relative to the competition.  Too often, it seems, we come out with marginally different products, demonstrate a level of efficacy and safety that gains FDA approval, price it at whatever level we think the market will bear and then try to slug it out with sales effort and marketing dollars.  This model is just not working any longer.

We read the Kellogg story about trying to sell cold cereal in India and smugly say that mistake would never happen in our marketing group.  Yet in our industry we continue to see launch after launch not deliver the expected results.  We blame this on managed care, no-see doctors, generics, Medicare formularies and a plethora of other issues, but perhaps there is something more going on.  The real issue may be that we don’t clearly recognize the patient’s and their provider’s view of the job that still needs to be done.

Perhaps it would be a valuable exercise to describe a market for your product where you could attain close to 100% market share and then compare that to the market you currently think you compete within.  How would you define your market if your performance grade was similar to what you got in school, a 90 share was an A and below 60 was failing?  You would have to first be absolutely sure there was a very specific market need for your product, not satisfied by competition and that the demand would be so strong that no barriers, including the financial ones, would get in the way of the product’s use.  You would then need to be absolutely sure that you were working with the right physicians who treated those specific patients and you would then focus all your marketing efforts like a laser beam against only that market opportunity.

I am not suggesting that this is the way we should go with all forecasting and marketing in the future.  I fully recognize there are grey areas where things such as demand are not clearly recognized and you would never want to cut off opportunity by setting expectations too narrow.  What I am suggesting is a little more realistic thinking in the way we market pharmaceuticals.  If a generic, that costs next to nothing, is delivering 90% on what needs to get done, it is unrealistic to expect payers, patients and providers to pay big money to get slightly improved results.  You see, most wouldn’t even think there is job that still needs to be done.

If no job needs to be done, then you are possibly chasing a phantom market.  Consider whatever product you are marketing along with Drucker’s quote.  Marketing should be easy, as you are simply giving patients and the system what they need and want.  If it isn’t quite so easy, then perhaps you need to quit going after phantoms.  In case you are wondering, the formal definition of phantom is something apparently seen, heard or sensed but having no physical reality!

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