11 New Strategic Brand Management by Philip Kotler   4th Edition
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11 New Strategic Brand Management by Philip Kotler 4th Edition

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brand Malesan 15 years ago,
followed since then by Baron de Lestaque. It is
true that there are more than 3,000 Bordeaux
wines named \u2018château\u2019, and the unevenness of
the taste quality and the low prices have
undermined the confidence once placed in the
\u2018château\u2019 label. Malesan owes its success to its
ability to supply in quantity a product that
customers like, for every day, and therefore at
an accessible price. The first condition for a
table wine brand is the existence of production
capacity able to meet the expectations of mass
distribution: from this point of view
Languedoc-Roussillon, the world\u2019s largest
vineyard, offers genuine opportunities and the
necessary flexibility for adapting supply to
demand, rather than the other way around.
Pharmaceutical brands
Some might be surprised to hear talk of phar-
maceutical brands, since the role of a drug\u2019s
constituents, and therefore of the intimate link
of the active ingredients with the success of the
drug, seems to defy any other element.
Nevertheless, doctors do not prescribe
products, but brands, where the generic
product is not available. Science comes to us
not in the form of the international scientific
denomination of the chemical compound, but
in the form of its brand name: Zantac, Tagamet,
Clamoxyl, Prozac, Viagra and so on, not to
mention medicines sold without prescription,
which fall under classic marketing (Malox,
Aspro, Doliprane and so on).
The medical environment is characterised
by several factors that outline how and why
\u2018brand building\u2019 is specific to it:
I All prescribers are known, put on file and
stored on a database, some even visited
directly several times a year (if they
represent large volumes). In each country,
there are a limited number of doctors,
specialists and so on. It is therefore a closed
environment. Each laboratory has one or
more sales forces, known as medical dele-
gates, who personally meet with all the
doctors in order to inform them of the
progress of the medicines they are tasked
with promoting.
I The available information is almost
complete. Through doctors\u2019 panels and
pharmacists it is possible to know which
doctor is prescribing what, and in what
quantities, for what conditions, together
with which other drugs, and so on.
I In this market, it is possible to model
demand in an econometric fashion, due to
the completeness of the information. Each
laboratory is aware of the pressure it exerts
on each doctor (measured by the number of
visits, the time of the visit, the number of
calls, time spent on the internet, etc). Since
they also know the effect on sales through
medical prescription, it is possible to
establish a mathematical function linking
inputs with outputs, causes with effects.
I The subject is highly scientific. Even if
\u2018business to consumer\u2019 communication is
now sometimes permitted under certain
stringent conditions, the end client has
little say in the final prescription decision,
although this does not mean no say at all.
In fact, a general public medical culture has
grown up in our ageing, over-informed
societies: all mass-media magazines regu-
larly talk about advances in the treatment
of this or that ailment. Without citing the
drug prescribed by name, they talk of active
ingredients. The internet has also consid-
erably increased the general public\u2019s level
of awareness \u2013 nowadays, although people
respect their doctor, they also have their
own opinion. Furthermore, general practi-
tioners wish to generate loyalty in their
clientele: they listen to their clients.
I Prescription is increasingly influenced by
the final payer: this is particularly true of
generic drugs. Aware of the enormous and
growing black hole of health spending,
public authorities have exerted pressure for
a compulsory switch to generic drugs,
where possible. The pharmacist has even
been given the right of substitution: if a
generic exists, the pharmacist has authority
to substitute it for the brand-name drug
indicated by the doctor. If the patient
refuses, he or she will receive a smaller
reimbursement from their mutual fund.
I It is a market where, given the short
lifespan of patents \u2013 20 years \u2013 the day and
year of the generic drug\u2019s launch can be
predicted. Brand-name drugs attempt to
delay this date, the signal for their
programmed decline, which may be slower
or faster depending on the country:
\u2013 for example, through patenting of
original medicinal forms;
\u2013 or through continual modifications to
the product, in order to extend the
patent\u2019s duration of protection;
\u2013 or through hyper-segmentation of the
range and the dosages, in order to make
the generic drug less profitable;
\u2013 or through a lowering of prices at the end
of the product\u2019s lifecycle to make the
switch less attractive.
Public authorities, however, tend to oppose
these manoeuvres, because the pressure on
public health finances demands drastic
We should also note that certain countries,
such as Thailand in February 2007, have
decided to bypass intellectual property rights
by authorising the manufacturing and storing
of generic forms of two famous anti-AIDS
drugs, while they are still under patent
protection. The Thai government invokes the
argument of protecting its population: these
two drugs are too expensive and therefore not
accessible. AIDS is causing devastation in
Thailand. Note that France did the same when
it was a question of building stocks to protect
the French population against the risk of
anthrax, in the case of a chemical terrorist
I It is an increasingly regulated market.
Given its low margins, if too many generic
producers offer the same product, they will
struggle to turn a profit. Thus, in some
countries, the state gives one leading
generic producer leave to market even
before the expiry of the patent, or to enjoy
a temporary monopoly.
I It is a market where counterfeits now
flourish. In fact, the active ingredients of
drugs can be bought at very low prices in
India or China. It is therefore easy to manu-
facture counterfeits. To date they have been
sold via the internet, at the internet user\u2019s
own risk. However, they are now finding
their way into pharmaceutical channels.
Case study: How branding affects
medical prescription
Brands create value both for the company and
to those that decide to use them. This is done
by a dual quest of differentiation on tangible
dimensions but also on intangible dimen-
sions. This quest is often not simultaneous:
most brands start as the mere name of a
product innovation. Once they achieve
success, they are copied and the intangible
dimension created by the communication of
brand identity creates a form of protection:
products may be similar but consumers
choose one brand instead of another. This is
the effect of habit, of proximity, of leadership
and pioneering aura, and essentially of the
need for reassurance. However, protections do
not last: there is a need to recreate a material
differentiation by innovation that delivers
tangible benefits through improved products
or services.
Very few sectors demonstrate the value of
branding as much as the pharmaceutical
sector. This sector is dominated by the
ideology of progress through science. Those
prescribing drugs are rational and make what
they perceive as the best choice for the
patient. Normally this should imply a
product-driven market, in which brands are a
forbidden word.
Recent research has shown however that
medicines have a personality, as do all brands.
By \u2018personality\u2019 we mean that both generalist
doctors and specialists find it possible to
attribute human personality traits to medi-
cines. Not only did they not refuse to answer
questions about brand personality, but statis-
tical data analysis showed that some