Virtual Brand Management: Optimizing Brand Contribution

• Cognizant Solution Overview

The ChallengeThe pharmaceuticals industry today is facing nothing short of a crisis. For starters, a reduced number of new drug applications (NDAs) approved by the Federal Drug Administration (FDA) has created an aging product portfolio, with 50% of revenues generated in the industry attributable to mature brands by 2015.1 Moreover, increased pricing pressure is leading to lower revenues and investment in critical infrastructure. Add to this the change in influence patterns over pharma-ceutical product utilization increasing the clout of payers, patients and health systems, and you have an industry in search of a massive makeover.

To optimize revenue contribution across the lifecycle, life sciences companies need to pull the following value levers intended to optimize brand contribution:

• Virtualization

• Innovation

• Efficiency

• Effectiveness

How can life sciences companies work with strategic partners to optimize revenue contribu-tion across their product portfolios, thereby re-energizing brand management? Read on.

The Change ImperativeBrand management is a strategically-focused function that creates and executes marketing strategies that drive awareness, trial, adoption and, ultimately, product demand and utilization. The activities assumed by the brand marketing function enable business units to promote products quickly, cost-effectively and more effi-ciently. However, traditional brand management approaches often require significant infrastruc-ture, including many systems and large business operations teams to support the activities executed by a mass of internal and external resources.

Moreover, conventional marketing approaches focus on launch and/or growth-stage brands in an attempt to drive market share and revenue that must be available to sustain the correspond-ing investment. This creates an environment with predetermined financial contribution thresholds and competing priorities for individual brands, within the company’s portfolio.

Yet another challenge pharmaceuticals compa-nies face is aligning promotional investments with specific product lifecycle stages. A recent study on commercial models in eight major coun-tries, including the UK, Germany, France, Italy and Spain, estimated that $15 billion in promotional

cognizant solution overview | march 2012

2cognizant solution overview

Virtualization

Reduce Risk

Reduce Cost

Imp

rove

Rev

enu

e

• Align resource utilization with promotional lifecycle• Drive top line while optimizing costs• Extend promotional lifecycle• Loss of exclusivity and niche market launch capabilities

• Decouple competing brand resources• Leverage a strategic “best practices” partner model• Gain sustainability in a dynamic environment

• Benefit from one-source agency model• Optimize lifecycle-stage spend• Variabilize for peak support requirements

• Establish best practices• Improve compliance• Leverage product lifecycle insights• Reassess KPIs across targeted brands

Flexibility of resource

allocation, quality

Bottom-line impact, market

opportunity

ReduceOp-Ex

Reduce Cap-Ex, improve

utilization

BrandManagement

Efficiency

Effectiven

ess

Imp

act on

Bu

siness

Portfolio optimization is driving the need to overlay value lever solutions that focus on improving individual brand contribution.

Inn

ova

tio

n

Figure 1

Virtual Brand Management Overlaid Solution

spending could be more profitably spent else-where.1 The findings clearly highlight the need for brand teams to establish business objectives by individual product lifecycle stages that impact the product’s top-line and/or bottom-line contri-bution.

As noted above, virtualization, innovation, effec-tiveness and efficiency (see Figure 1) are driving life sciences companies to embrace business solutions that focus on portfolio management. Their goals:

• Maximize late-stage and/or niche-market brands with a scalable and complementary virtual marketing team.

• Improve individual brands’ top-line revenue by decoupling resources.

• Reduce cost by transitioning away from tradi-tional agency models.

• Cut business-cycle time and time to market by leveraging product lifecycle insights and optimizing resource allocation.

Virtual Brand Management: Strategic Partnership ModelIn our view, virtual brand management (VBM) must be delivered as a scalable commercial resource optimization framework that empowers life sciences companies to strategically decouple

management of non-core brands (those with low resource utilization contribution, i.e., legacy, nominally differentiated and/or niche market). This enables companies to focus on driving core brands that yield the highest level of returns on internal resource contribution in an environment absent of competing priorities.

As a strategic partnership framework, VBM must align end-to-end marketing value levers to optimize brand contribution (see Figure 2). For example, our VBM framework incorporates an optimal one-source agency model that consoli-dates overlapping spend per individual and/or multiple brand(s). It also eliminates redundant structural cost drivers and reduces total cost of delivery. By reallocating strategic resources from non-core brands, this approach potentially enables double annuity benefits — for example, increases in top-line revenue from “core” brands.

At the same time, revenues from “non-core” brands are optimized by moving to a VBM resourced model, based on the lifecycle stage of the brand.

The scalable VBM framework brings together a powerful combination of on-site project man-agement partnering, best marketing practices, leading-edge technology and lifecycle planning to identify and execute on actionable insights.

Figure 2

VBM Aligned With Key Marketing Value Levers

VBM Solutions Benefits

En

d-T

o-E

nd

Mar

keti

ng

Val

ue

Lev

ers

•Agency of record •Creative services•Medical communications•Message development/testing

•Optimized (consistent and efficient) agency service model

•Brand planning and customer segmenta-tion

•Launch planning•Tactical planning and metrics•Treatment and patient flow

analysis•Customer segmentation

•Top-line revenue growth driven by scalable marketing resource

•Stakeholder management

•Key opinion leaders development•Medical congress management•Contact management system

•Sustainable healthcare practitioner behavioral changes

•Portfolio and lifecycle management

•Mature/LoE/generic transition•New product assessments•Product line extension•Strategic portfolio planning

•Maximized portfolio value

3cognizant solution overview

Cognizant’s VBM Advantage

Underperforming Brand Portfolio

• Client’s actively promoted products consist of mature brands and seek to maximize overall portfolio revenue.

• Internal brand marketing resources are con-strained to support existing core launch and growth brands.

• Client seeking a strategic marketing partner that can help maximize revenue from other portfolio brands, regardless of promotional lifecycle stage.

“Brand A” Background

• 505b(1) NDA combination oral product.

• Originally received FDA approval in 2006.

• Not launched, as sales forecast did not meet internal contribution threshold.

Benefits

• Optimal one-source agency model.

• Completion of all strategy and content for launch timing requirements.

• Considering additional revenue growth opportunities suggested by our team.

DeliverablesWe exclusively managed entire Brand A promo-tional budget, developed branded Web site and executed a series of projects:

• Brand positioning and strategy, strategic drivers, market landscape, therapeutic area analysis, brand plan and tactical plans.

• Market research support, including qualitative and quantitative analysis.

• Development of reports and Web metrics of digital (Web site, media) and print (direct mail, e-mail) assets based on brand performance objectives.

• Optimization of digital media plan and account services associated with coordina-tion, planning, buying and placement of digital media.

• Creative development of static and brand Web-site interactive assets.

• Campaign management.

4cognizant solution overview

Figure 3

VBM Portfolio Mapping Framework

“Core” Brands

“Non Core” Brands

High

• First to second in class• Effective marketing mix• Growth mode• Personal promotion focus• Superior data

• Unique skill sets

This framework identifies potential partnering opportunities based on brand stage and contribution.

Product Segmentation

MatureLaunch

Low

• Declining market• Established class• Generic options• Market shaping• Niche market• Nominal differentiation• Non-personal promotion focus

• Extensive internal resources

• Dedicated or large sales force

• Support launch activities to maximize adoption

• Drive niche market brand

• Minimize rate of decline

• Augment declining budget/support

Traditional Model

VBM Model

Early Stage Mid-Stage Late Stage

Product Lifecycle Stage

Cont

ribut

ion

The ApproachOur VBM service consists of the following components:

• Scope definition and data collection: A typi-cal engagement kicks off with executive-level discussions to establish short- and long-term priorities and a definition of project scope. During this stage, data is also collected from secondary sources, including interviews and workshops across various key stakeholders.

• Non-core analysis: An in-depth portfolio assessment exercise is performed to iden-tify and prioritize non-core brands related to individual brand contribution comparisons. Furthermore, the portfolio is assessed for pro-motional spend by brand lifecycle stage, which has a direct impact on maximizing ROI.

• End-state definition: The portfolio mapping framework identifies potential partnering opportunities based on brand stage and con-tribution — whether to support, drive, augment or optimize a particular brand (see Figure 3).

• Final recommendations and roadmap cre-ation: From this point on, the client teams focus resources on core brands yielding the highest utilization returns. Meanwhile, the

VBM team, in collaboration with the client team, focuses on optimizing non-core brands. This is where the partnership exploits more efficient and effective promotional approaches to maintain or grow share, while streamlining costs. This is followed by a diversion of incre-mental internal resources toward core brands.

The key elements of a VBM framework encompass a strategic partnership approach that focuses on implementing a series of comprehensive marketing value levers on identified brands that drive incremental contribution.

ConclusionBusiness uncertainty and demands to optimize individual brand contribution are driving the need for strategic partnerships. This is why leading pharmaceutical companies are rethinking how best to re-energize their brand management models to optimize portfolio contribution to top- and bottom-line performance.

Virtual brand management is a single-point solution that leverages people, processes and technology across our life science Centers of Excellence to help clients meet future business challenges, today.

About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 137,700 employees as of December 31, 2011, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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Footnote1 “Major Reinvention: A Requirement for Success,” IMS Health, http://imshealth.com/imshealth/Global/

Content/Document/Intelligence.360%20Documents/Major_Reinvention_Requirement_for_Success.pdf.

About Cognizant’s Enterprise Analytics PracticeCognizant’s Enterprise Analytics Practice (EAP) combines business consulting, in-depth domain expertise, predictive analytics and technology services to help clients gain actionable and measurable insights and make smarter decisions that future-proof their businesses. The practice offers comprehen-sive solutions and services in the areas of sales operations and management, product management and market research. EAP’s expertise spans sales force and marketing effectiveness, incentives management, forecasting, segmentation, multi-channel marketing and promotion, alignment, managed markets and digital analytics. With its highly experienced group of consultants, statisticians and industry specialists, EAP prepares companies for the future of analytics through its innovative “Plan, Build and Operate” model and a mature “Global Partnership” model. The result: solutions that are delivered in a flexible, responsive and cost-effective manner.

About Cognizant Business Consulting With over 3,000 consultants worldwide, Cognizant Business Consulting (CBC) offers high-value consulting services that improve business performance and operational productivity, lower operational expenses and enhance overall performance. Clients draw upon our deep industry expertise, program and change management capabilities and analytical objectivity to help improve business productivity, drive technology-enabled business transformation and increase shareholder value.

For more information on how we can help you deliver virtual brand management as a scalable commercial resource optimization framework, please contact Jurgen Van Den Woldenberg at HJurgen.VanDenWoldenberg@cognizant.com or 908.392.5649 or Andrew Isaacs at Andrew.Isaacs@cognizant.com or 908.502.8300.