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INTRODUCTION BY DR ANDREE BATES

Pharmaceutical marketers are understandably preoccupied with measuring marketing performance. The challenge is how to make the most of a limited budget with a programme that demonstrates measurable return on investment (ROI). The difficulty is how to distinguish the specific returns of individual programmes and the synergistic effects that exist between programmes to provide even higher return. If perfect ROI information was available then the task would be easy - but this appears to be elusive for many pharmaceutical executives.

In the past, much marketing mix allocation was determined using a combination of performance data, statistical modelling and human judgement. Although this has its value, subjectivity usually ends up playing a more significant role, with decisions often being made based upon marketers’ experiences, gut feelings and what they think their competitors are doing. The result is that the anticipated results are not achieved. Without rigorous systematic marketing measurement techniques it is easy to overlook key variables that can affect the results of the analysis and the impact of marketing on sales and profit.

A host of tools are now available to help marketers achieve more rigorous analysis of activities. However, despite all the advances in ROI analysis techniques, many companies would be hard pressed to prove which of their marketing activities are working to impact brand sales and which are not - and by how much. Why? Because, used as a marketing effectiveness measure, these techniques are often insufficient to guide effective decisions about where and how to spend to deliver real growth. Many of these techniques rely on historical analysis that is fundamentally flawed in today’s environment. In addition, they do a poor job of accurately pinpointing the bundle of activities that will generate the most profitable revenue and growth in the future.

This report will examine the different techniques being used and the optimal approaches available today, and how some of these obstacles can be overcome.


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