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Should your pharma company be building a branded house?

Given the growing role that the corporate brand plays in facilitating patient, provider, and payer decision-making—as well as to coordinating collaboration to drive innovation—today's pharma companies are deploying corporate-led brand strategies in greater numbers.
But not everyone has made the leap. Many of the world’s leading pharmaceutical and biopharmaceutical companies continue to leverage a product-focused brand strategy, primarily driven by a desire to mitigate risk and to improve individual product P&Ls. This translates into a house of brands approach to product architecture, which makes sense to communicate product identity with distinction and clarity.

The move to focus on the corporate brand asserts leadership in areas such as partnerships and joint ventures, and builds robust, direct connections with customers and stakeholders. As a result, we are tracking moves among pharma brands to lead with stronger corporate masterbrands, i.e., a branded house strategy, which can pay off in key ways:

Driving choice and preference throughout the portfolio

2013 InterbrandHealth study demonstrated that a corporate brand’s influence on a healthcare provider’s (HCP) decision to prescribe or recommend a medication (i.e., Role of Brand) was approximately seven percent. In 2017, that influence has increased substantially to almost eleven percent, representing a 57 percent increase in impact.

Note that the Role of Brand (ROB) metric varies greatly by region, based on local regulation and market structures. In Brazil, ROB is 14 percent, while in China it’s only 9 percent ROB also varies significantly by therapeutic area; from 10 percent in women’s health to 13 percent for infectious diseases.

Takeda Pharmaceutical Company provides a convincing case for a branded house approach. Having focused on strengthening its global corporate brand, it now over-indexes on ROB in comparison to category peers, registering 12.3 percent influence on global HCPs, versus an industry average of 11.9 percent.

Creating deeper, long–lasting relationships
It’s been shown that companies that are perceived as innovative and collaborative create deeper affinity with prescribing physicians, which accounts for higher growth rates and ROI. In the pharmaceutical and biopharmaceutical fields, innovation has evolved along with new technology and ways of working. New products are often the result of deep collaborations across teams and companies. A company’s total set of capabilities and expertise in science, innovation, and collaboration are as influential as incremental inventions on the product-level. This places a greater potential premium on a corporate brand-led approach.

A strong, partner-oriented corporate brand is also more likely to drive growth by attracting the best R&D collaborators, investors, potential M&A candidates, etc. For example, while AstraZeneca and GSK (and many of their pharma peers) employ a house of brands structure, these two firms have also elevated their respective corporate brands by positioning themselves as enterprising collaborators, capable of attracting the best research and marketing partnerships across therapeutic areas.

Building efficiencies and economies of scale
Today’s patients, providers, and end-customers “weigh” a growing range of functional, emotional, and values-based considerations when deciding to choose a product. They want to get behind the curtain and delve into sourcing, supply chain, production, responsibility, impact, CSR, and culture, to uncover a set of values that’s aligned with their own. As a result, they are assessing entire companies, not a single product unit, in order to make buying decisions. Focusing on the corporate brand drives efficiencies in marketing and operations that facilitate and streamline engagement at scale. Instead of splintering budgets by product, investing in enterprise branding supports initiatives that matter to decision makers across many or all product lines.

In terms of making a business case for a branded house approach, a stronger corporate-led brand strategy drives financial performance by:

  • Creating economies of scale in marketing and operations
  • Lowering the total cost of promotions/ads
  • Lowering the overall cost of building brand equity
  • Lowering product launch costs
  • Making it easier to extends brands within the portfolio
  • Making it easier to coordinate stakeholders within the portfolio
  • Allowing companies to leverage customer loyalty, and repeat and cross-purchases across the portfolio

There are, of course, financial risks to that must be addressed managed in order to make this strategy successful. For one, it narrows the potential market, where corporate brand equity and capabilities may effect credible play. It also creates higher risks in terms of competitors attacks (as a single house, you’re a bigger target) and reputation risks, where one product misstep could bring down the whole house. However, growing access to information and demands for transparency make it increasingly difficult for corporate entities to hide behind a house of brands, so this playing field may level out.

A branded house approach also does not mitigate the need for creating strong product names that are recognizable, create clear differentiation, and drive preference. It does, however, speak to the need and importance of the corporate brand as an enterprise-wide asset and emblem of category leadership. This is why many healthcare companies are now re-examining the role of their corporate brands and begining to leverage its influence.

Should you?

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