Using Industry Spending Data to Develop Strategic Marketing

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Kate Hammeke
01/17/2012

For CROs and CMOs to get the highest return on investment of marketing dollars, it is essential to develop marketing strategies that maximize opportunities to connect with potential partners. Knowing which sponsor segments to target, as well as which services respective sponsors are looking to outsource, can give insight into how to develop a marketing strategy that will cultivate opportunities and boost the impact of the financial outlay. Industry spending data can help influence the elements of a strategic marketing campaign, from where to place ads (and what to communicate) to which trade shows to attend and exhibit to make the most impact.

When looking at overall spending for 2011 and projected outsourcing spend for 2012, one can determine which customer segments to target based on how the services offered by providers compare to the needs of each segment. Big Pharma showed an increased need for bio-analytical testing, process optimization, stability storage and testing, cytotoxic projects and toxicology. Consequently, contract organizations should focus on highlighting these service offerings when pursuing partnerships with Big Pharma. Conversely, Nice Insight’s data indicated that Big Pharma would be reducing the volume of blending, chemical synthesis, high potency compound, lyophilization and consulting projects when compared to first quarter 2011. In light of these shifts in spending, this segment indicated they would be outsourcing five different services in 2012, up from an average of 3.74 in Q1, 2011 -- meaning their overall need for outsourcing partners remains strong.
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CROs and CMOs that specialize in high potency compounds and cytotoxic projects should target the Specialty Pharmaceuticals audience, as this segment showed a modest increase in outsourcing for these services. Contractors currently engaged by Specialty Pharma for bio-analytical testing, blending, chemical synthesis, consulting, custom manufacturing, lyophilization, process optimization, regulatory support, stability storage and testing or sterile compounds may need to look elsewhere to maintain their pipeline, as this segment indicated fewer projects would be outsourced in these categories. Marketing to Specialty Pharma companies should be approached with caution, as this customer group also indicated a 25% drop in spending on outsourcing when compared to Q1, 2011.

Unlike the cutbacks reported among the Specialty Pharma segment, Emerging/Niche/Start-Up Pharmaceutical companies specified there would be an increase in outsourcing across a broad category of services as well as an anticipated 40% increase in spending. As a whole, this customer group is looking to increase outsourcing of bio-analytical testing, blending, consulting, custom manufacturing, high potency compound projects, lyophilization, process optimization, regulatory support and toxicology testing. On average, Emerging/Niche/Start-Up Pharma companies plan to outsource three different services, so further research into which Emerging Pharma businesses align best with the CRO or CMO offering can improve the targeting.
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Biotechnology companies reported their spending on outsourcing will remain consistent between 2011 and 2012, with only a 1% shift upwards. The average number of different services outsourced will also remain consistent among this customer segment, at 4 services. Biotech companies showed an increased need for custom manufacturing, blending projects and sterile compound research and development. However, this segment showed a drop off in outsourcing of bio-analytical services, cytotoxic and high potency compounds, lyophilization, stability, storage and testing, and toxicology projects.

Contract organizations looking to partner with biotech companies may want to focus on aligning with emerging biotechnology companies, as this segment reported an anticipated 42% increase in outsourcing spending. Along with Big Pharma, Emerging Biotech companies also outsource the highest number of different services (~5) among the customer groups. CROs and CMOs that provide bio-analytical services, blending, chemical synthesis, consulting, custom manufacturing, stability, storage and testing, and sterile compound research and development can likely find opportunities for partnerships with the Emerging Biotech customer segment.

After identifying which customer bases to approach for new business (based on their expressed needs for the coming year) further research may be done to gain an understanding of where to reach each target audience. Publishers can offer details on the makeup of their readership, and help identify which of their magazines attracts the desired customer segment/audience. This information can also be used to pinpoint which trade shows to attend in order to maximize opportunities to connect with sponsors actively seeking specific services. Knowing whom to target with respect to customer bases and where best to reach these potential buyers—that is, in the places they are already looking—will offer insight into how and what to communicate to these prospects in order to boost the impact of marketing campaigns.

Survey Methodology: The Nice Insight Pharmaceutical and Biotechnology Survey is deployed to 40,000 outsourcing-facing pharmaceutical and biotechnology executives on a quarterly basis/four times per year [Q4 2011 sample size 2619]. The survey is comprised of 1000+ questions and randomly presents ~30 questions to each respondent in order to collect baseline information with respect to customer awareness and customer perceptions on 300 companies that service the drug development cycle. Over 1200 marketing communications, including branding, websites, print advertisements, corporate literature and trade show booths are reviewed by our panel of respondents. Five levels of awareness from “I’ve never heard of them” to “I’ve worked with them” factor into the overall customer awareness score. The customer perception score is based on six drivers in outsourcing: Quality, Accessibility, Regulatory Compliance, Pricing, Productivity and Reliability; which are ranked by our respondents to determine the weighting applied to the overall score.