BUSINESS BOOTCAMP IIIThe Value of Marketing in a Startup Company or Business Partnership Kathy S. Behr Technology Transfer Officer II April 15, 2010
Outline • Marketing Perspective: What do you need to think about when starting up a lifescience company? • Or when you are assessing a business company for a partnership or licensing agreement. • What is Marketing? • Why is it important? • A basic review, from pharmaceutical industry perspective • What is Positioning? • What is Advertising?
Outline • Pharmaceutical Industry used as example • What is Marketing Research – Fundamental Review • Preclinical to Phase IV Development • Industry Expectations for Licensing Opportunities • Scientists as “Market” Researchers • How can you assist us with marketing
Kathy Behr – Who is She and where did she come from? • Hired in February for part time position in Technology Transfer Dept • Focus is Marketing and Market Research • Pharmaceutical Industry Career: Marketing Research Manager Positions - Princeton, NJ • Novo Nordisk (insulin/diabetes) • Bristol-Myers Squibb (CNS area, BuSpar) • Start-up Virology Company, ViroPharma Inc. • Amersham Health(British nuclear diagnostic imaging products) who became GE Healthcare • Life-change – “Possibility City” - Louisville • Impressed with the stage of development and expanse of lifescience/biotech research.
Value of Marketing in Start-up Company • The foundation step is achieved - Funding for your start-up company or partnership • What is next? • Starting up own company, need to think about: • Business and Marketing Plan • How to develop and market the Product • Marketing Research • If partnering with Established Companies • Investigate their business and marketing plan.
Marketing – What is it? • Four P’s: Product, Place (Distribution), Price, and Promotion • Target Market - Key to Effective Marketing TARGET MARKET
Marketing – What is it? • Marketing applies to more than product or service purchases • Personal representation to society, family • Managing a Career - job searches • KSB example of positioning and marketing • Essential to understand market dynamics and environment in order to design spot-on marketing plan
What is Positioning? • Positioning is the overarching mind spot occupied by a product, or company • What you would say if someone “tripped” you and asked your impression or what you could remember about a product or company? • Example: GE Healthcare, what is their position? • Volvo • Papa John’s • Key foundation of effective marketing • Positions Product, Service, or Company • “The Sweet Spot”
What is Positioning? • Once developed and anchored in the market and minds of consumers, it should be left in place for a number of years. • Challenging Marketing Research to Conduct • Unusual techniques • Employ qualitative research to uncover psychographic and emotional elements. • Based on quantitative research to uncover key market segments • Then profile to obtain • Key Target Segments, Consumer & Physician
What is Advertising? • Communicates Positioning and Marketing Strategy • Most effective when targeted and based on marketing research • Segmentation • Identified Key customer segments • Test and Target advertising concepts and messages with key customer segments • Always test materials • Too much room for mistakes and do-overs • Remember: Feature/Benefit Statement
Value Proposition is Key • The value proposition is the key to developing the potential attraction of a product or service to a customer • Satisfy their needs/wants • It is the proposition which connects the key product attributes (features)with creation of value for the user (benefits) • Lots of people think “features” sell, they don’t • Benefits are what motivates and sells a product
Pharma Industry – How do they approach Business and Marketing? • Business Plans and Situation Analysis • Marketing Campaigns and Advertising • Market Research • Market Landscape and Sizing • Early Stage Value Assessments • Forecast Models • Formal procedures, channels of contact • Post-launch Performance Tracking
Drug Discovery Research Timeline FILE IND Market Launch Patent Expiration File NDA Drug Discovery Invitro Preclinical Testing - Animal studies Phase I First in Man Studies Safety/ Dosage Phase II Human Clinical Trials – efficacy Side effects Phase III Human Clinical Trials-long term usage in real world Approval 6 Mths To Year Phase IV Product on Market -Disease State Awareness -Market & Patient Need -Treatment Algorithms -Other products -Patient Population Sizing of Mkt -Early Market Forecast based On patient lives treated -Valuation of -Product Market Potential -Prelim Assessment of Product Profile with Physicians -Research any R & D questions, Product design needs -Physician or Consumer Environment -Assess needs And benefits Desired (early inputs on Positioning -Product Profile Features, Benefits -Product Positioning Study -Product Message -Brand Name, Logo -Physician Segmentation & Target -Consumer Segment & Targeting -Advertising Communication Development (Ad Agency) -Visual Aid & Creative Concept Testing -Marketing and Brand Strategy
What is the Marketing Process in Pharmaceutical Industry? • Key Founding Principle: Marketing Research! • Who do we advertise to? (key target) • What do we say? (promotion) • How do we price our product, where • does the market price our product • based on their perception of value • and benefit? (price) • What type of product do we develop, • and what are its unique benefits? • (product) • Where and how do we distribute • the product? (distribution)
What is the advertising process in big pharmaceutical world? • Big, Big Budgets • Advertising Agency assigned to each Product • Account Manager/Director • Creative Staff • Media and Placement Specialists (magazines) • Creation of advertising themes • Concepts jump-started by qualitative psychographic research • In some companies, the research step is skipped
Industry Expectations: Licensing Opportunities • Business Managers are the first people to review licensing opportunities • Then sent to company scientists for review • But, Final Decision to license is made in the Boardroom • Marketing the Intellectual Property • Key Benefit • Three to four features/attributes • What is unique? Are there competitive products? • Not necessary to provide quantitative market sizing/forecast
Scientific Researchers – How can you assist Technology Transfer? Bring the universities’ Technology Transfer in early to protect the invention and patent. The best method is “Scientist to Scientist. The industry’s staff scientists are the decision makers.” However, remember that the marketing introduction is through Business Development and eventually Boardroom. Provide your industry contacts to your Technology Transfer Office We can then market to these companies At conventions, put a note on bottom of scientific posters, “available for license.”
ADDENDUM Value of Marketing in a Startup Company or Partnership
Primary Research Project Management – Is there a Marketing Research Manager? Brand Team Company Senior Management • MARKET RESEARCH MANAGER • Project Planner/Overall Research Plan • Facilitator of Plan, Schedule, who is doing what • Summarize the burning questions • Identify key objectives • Think out past the company’s • or Brand Teams’ Needs • Power of a team to build study • Partner with Supplier, relay productdata, study objectives, sample pool Marketing Research Supplier -Recruit & contract study -Train and manage -Field study, moderate Research & Development Advertising Team