Industry Data: Developing Targeted Marketing Strategies

Manufacturing Chemist, February 2015 

The competitive landscape of the contract outsourcing market continues to become more aggressive. As the largest CMOs continue a practice of growth through acquisitions, smaller players are concerned about being completely squeezed out of the marketplace if they are unable to differentiate their company offering in a manner that attracts a healthy pipeline of business.

The primary way to generate awareness of the business and its offering is through the company’s marketing materials. For contract manufacturers to get the highest return on investment of marketing dollars, it is imperative to develop targeted marketing strategies that speak directly to the buying audience.

Unlike some industries where flooding the marketplace with a single message can attract enough customers to grow the business, decision makers at drug innovator companies respond better to a finely tuned message that speaks to their needs or pain points. Analyzing and understanding current industry data will provide insights that may be used to develop a strategic marketing approach that will maximize opportunities to connect with prospects. The foundation for a targeted marketing campaign and targeted sales approach begins with knowing which services are in demand by each buyer group and how that matches to your company’s offering.

In order to identify which manufacturing services will be in greater demand this year, the results from Nice Insight’s 2015 pharmaceutical outsourcing survey were compared to 2014 for both commercial scale and development Phase I/II clinical trials materials manufacturing. The results showed that there is an increased need for secondary manufacturing services in semi-solids & liquids (at the development and commercial stages) and specialty dosage forms among Big Pharma outsourcers. Big Pharma also indicated an increased need for CMOs with injectable capabilities at the product development and commercial scale. Ingredient processing, commercial scale semi-solids & liquids and large molecule API showed the strongest increases among midsize pharma outsourcers. Emerging pharma also expressed an increased need for injectables assistance at the development stage as well as commercial scale solid dose manufacturing. When it comes to biotechs, key need areas fall into secondary manufacturing; injectables and semi-solids & liquids showed the greatest changes. Emerging biotechs tend to rely heavily on CMOs, and while there are not as many changes in needs as the other buyer groups, it is important to stay abreast of emerging biotech buying behavior since they outsource a higher number of different services than any other buyer group.

When it comes to finding a service provider, a mix of both hard and soft traits play a role in the selection process.

Once information on which buyer groups seek the services your company can provide, it makes sense to review which factors carry the most weight according to each buyer group when it comes to selecting a CMO. If the qualities relayed in your marketing communications and sales calls address the points your prospects value the most, then it is easier to convert the prospect to a client. When it comes to finding a service provider, a mix of both hard and soft traits play a role in the selection process. Hard traits refer to easily quantifiable or measureable qualities. These are the “make or break” elements that separate potential contractors from ones that simply don’t fit the sponsor’s needs in terms of capacity, capability or location. It is important to note that changes to a business’ hard traits take a considerable amount of capital investment and time to take place. Soft traits refer to the touch points that make or break a relationship, but are not as easy to quantify or measure—it’s more of a feeling than a concrete certainty.

In prior years, the research has shown greater differences in which hard qualities are valued most by each buyer group. The results from the 2015 outsourcing study, however, show that there is a convergence in importance of various hard traits.  Interestingly, the top three factors are the same across four of the five buyer groups, but with variation in ranked importance. These factors are: experience, financial stability and a track record history of success. The exception, however, is that emerging biotech companies value “adaptability/flexibility with project needs” higher than experience. [Figure 1]

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Similarly, there is a lot of commonality in the soft traits that influence partner selection—however, these traits are easier to adjust not only as a whole within the organization (because they are not usually related to investment or long-term changes), but on a project by project / client by client basis. Four of the five main buyer groups stated that the company’s reputation in the industry, understanding of the sponsor’s requirements and good communication topped the list. Big Pharma’s preferences in soft traits varied slightly from the rest of the buyer groups, where “responsiveness” is selected by a higher percentage than “good communication.” [Figure 2]

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The third step, after identifying which customer groups are in need of the services your company offers (1) and understanding which qualities your company possesses that should be relayed in marketing communications and sales calls (2), is to investigate how and where these buyer groups seek information on new contract suppliers. [Figure 3] In a time when everyone is talking about “big data” it shouldn’t be surprising that industry research leads (67 percent) in methods for learning about new suppliers.  This is followed by two word-of-mouth methods—consultants (59 percent) and referrals from colleagues (54 percent)—reiterating the importance of networking and being top of mind with those connections. [Figure 3]

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More traditional methods of learning about new contract manufacturers like attending trade shows (40 percent) and industry publications (36 percent) are still used by a decent segment of the buying population and should be included in one’s marketing plan as budget permits. When pinpointing which events or publications will help reach the target audience, it makes sense to do some additional secondary research on who comprises the audience for the trade show or the readership for the publication. Knowing who to target with regards to the buying audience and then where to reach these potential buyers—that is, the places they are already looking for information on new suppliers—will help to boost the impact of your company’s marketing campaign and the return on marketing investment.  

 

Nice Insight

Nice Insight, established in 2010, is the research division of That’s Nice, A Science Agency, providing data and analysis from proprietary annual surveys, custom primary qualitative and quantitative research as well as extensive secondary research. Current annual surveys include The Nice Insight Contract Development & Manufacturing (CDMO/CMO), Survey The Nice Insight Contract Research - Preclinical and Clinical (CRO) Survey, The Nice Insight Pharmaceutical Equipment Survey, and The Nice Insight Pharmaceutical Excipients Survey.