Competitor monitoring

Dealing with competitors has become an integral part of every marketing

personnel’s key result area, says Mala Raj

Much to every marketing personnel’s chagrin, there is perhaps, hardly

any therapeutic segment in the Indian pharma industry today where one
can enjoy the wishful situation of having no competitors. For, if you find a
molecule or a combination attractive in terms of future scope and growth, it is very
likely that other companies will also find such a proposition attractive. As years have
gone by, pharma companies in India are getting more dynamic and aggressive in
their outlook and marketing approach. As a result, dealing with competitors has
become an integral part of every marketing personnel’s key result area.

Who is a competitor?

Other organisations offering similar products to similar customers are your

competitors. And their objective is similar to yours, ie, to grow profitably and
succeed. Bear in mind that while you are constantly trying to induce both the ‘trade’
and ‘doctors’ to choose your products over those offered by your competitors, they
are also indulging in many activities to woo the same customers.

Effectively, the businesses are competing to gain the same resource and territory:
the customer. And in this competitive game, the winner is one who has a cutting
edge strategy.

Have you ever played or watched a game of chess? A smart chess player not only
plans the moves of his pawns/coins but also has an action plan for every counter
move that his opponent can make. He can clearly foresee at least the next 3-4
moves for every move that he makes and accordingly he decides either to strike, or
to sacrifice momentarily or to lay back, etc. As in the game of chess, so in selling.
And imagine you have to play many competitors at the same time!! To win, you need
a well planned strategy that is based on sound and adequate information of each
competitor’s activities. Monitoring competitors is the first step in this pursuit and it
involves finding answers to the following questions:

- Who are your competitors?

- What are their strategies and objectives?

- What are their strengths?

- What are their weaknesses?

- Where can they be attacked?

- Where is the risk of attack by them too great?

- What are their reaction patterns and so on.

Who is a competitor in business? Business competitors are:

- Other organisations offering the same product or service now.

- Other organisations offering similar products or services now.

- Organisations that could offer the same or similar products or services in the
future.

- Organisations that could remove the need for a product or service. For a product
manager, it is important to identify his competitors properly. Are they other brands
of the same molecule or all brands belonging to the same sub-group or still further
all products belonging to the same therapeutic group, etc. For eg: Competitors for an
atorvastatin brand could be other atorvastatin brands or other statin preparations
such as simvastatin brands, rosuvastatin brands, etc or other hypo-lipidemic agents
such as nicotinic acid brands or fibric acid derivatives or combinations such as
atorvastatin + ezetimibe, etc.

What is involved in competitor analysis?

- There are four stages in monitoring competitors — the four ‘C’s:

- Collecting the information

- Converting information into intelligence {Collate it, Interpret it and Analyse it

(CIA)}

- Communicating the intelligence

- Countering any adverse competitor actions.

(Source: http://www.competitive-intelligence.co.uk)

What information needs to be collected?

In the pharma industry, gathering the following type of information is pertinent to

the marketing teams.

- Description of the product with composition and packing

- Age of the product

- Concept of the product

- Main actions and benefits of the product

- Advantages and disadvantages of the competitor product vis-a-vis own product

- Comparative pricing based on price per pack, per dose, per day of treatment or for
the full course of therapy.
- Market share, growth rates, sales units and value at national level and also at zonal
and state level. Contribution of the competitor brand to the Organisation’s sales is
also important. Current data as well as past data.

- Main promotional platform of the competitor brand and major USPs highlighted

- Promotional activities carried out by competitors and the approximate budgets for
the same - at both doctor level and trade level

- No: of field force personnel of the competitor companies, depth of coverage

- Financial performance of the competitor company and so on.

Sources of information: Keeping Watch!

Information can be compiled from a variety of sources, both within the organisation
and external to it. To begin with ready sources of information include all the drug
indexes (CIMS, MIMS, Drugs Today, IDR, IPG, etc), text books (for scientific
comparisons), medline search, journal search, journal advertisements, retail audit
reports such as those offered by ORG/IMS, etc. But merely studying this will not
suffice. Remember, the greater your knowledge about competitors, better will be
your strategies to combat them.

So which other sources can be tapped? Quite a few:

MRs & field managers: Sales representatives deal on a daily basis with customers —
and will hear what the competitors have been doing. They are the business foot
soldiers — with an ear to the ground who can forewarn management about
impending enemy campaigns.

In fact, many MRs are well aware of what their competitors are up to, but
unfortunately, in many organisations, they do not realise the value of supplying
’Competitor Activity’ information to HO. A few MRs selected from different territories
spread all over the country must be trained to report regularly on a set of
competitors assigned to them. They must form the watch posts. Once they
comprehend the value of collecting information on competitor activities, they can be
trained to furnish regular details of markets of interest to you. They can collect and
transmit to the decision makers all competitor literatures, handouts, scheme details,
details of price changes, details of special activities and campaigns held by
competitors, etc.

Field visits: This is one of the best source for gathering first-hand information
through interactions with members of the trade, medical profession, other company
field-force, etc. Area managers must make it a practice to devote adequate time to
not only assessing the customers’ needs but also to gathering competitor
information. If inculcated as a habit, there are innumerable ways to gather
information while on field visits.

For eg. While visiting a stockist, do not merely sit in front of the proprietor and
enquire about your products. Take a stroll around his godown. Immediately you can
guage the stocking levels of your brand vis-a-vis your competitor brand. You can
even visit stockists of your competitor brand, even if they do not deal with your
company brands. Likewise while meeting doctors too, besides discussions on your
brand, also find out your customer’s views on your competitor molecules and brands.

Other departments in the organisation: Research & development may come across
new patents, purchasing may find out that a supplier is now also supplying a
competitor, market research department. can give feedback on the customer’s
perspective. Generally, in the entire organisation, there must be an orientation
towards being aware of not only customers needs but also of competitor activities.
Free exchange of such information must be ensured.

Suppliers: Valuable information can be obtained even through casual talk with
artists, printers, gift article suppliers, advertisement agencies, DTP and slide making
agencies, etc who often cater to many pharma companies. A visit to your printer will
very often give you assess to your competitors’ VA, which is also being printed at the
same press!

From new recruits, competitor’s employees companies can also collect a lot of
information from candidates during job interviews and from new recruits.
Conversation with competitors’ employees is also a source of intelligence gathering.
However, in such sources, care must be taken to stay within limits and not to use
unfair means of gaining information.

Conferences, seminars, trade shows: Leading companies often participate in medical

conferences to promote their products. Visiting the competitors’ stall or attending a
lecture sponsored by them can give a good amount of information regarding the
products on promotion, main messages, inputs distributed, etc.

Published materials or news briefs in print or through the web: Industry specific
newsletters can be a good source of information (eg. Express Pharma Pulse).
Information can also be found on the web also — many companies are now
advertising their services and some specialise in offering information on their
products in websites hosted by them. You too can access these sites!

Thus, with a little extra effort, product managers and marketing teams can easily set
up competitive intelligence systems that enable them in framing strategies with far
greater potential for success. It is important to set up the system. This calls for
identifying the vital types of competitive information, identifying the best sources of
this information and assigning a person who will manage the system and its services.
It is also important that data collection is on a continuous basis and is constantly
updated.

From information to intelligence

Having scanned the press, spoken to the sales force, customers, suppliers, etc, you
should now have a large pile of data on your competitors. However, much of this will
be repetitious, out of date, wrong or inaccurate, misleading, or incomplete. The
product manager needs to sort the data and focus his attention on interpreting useful
data. With practice, like a jigsaw puzzle, each piece can help build up the compete
picture or atleast give you a good idea of what the real picture actually is.
Such information should be regularly compiled and deviations from the previous data
need to be highlighted. This calls for maintenance of regular files on all competitors
so that when new information comes along, it can be quickly linked to similar
information that had previously been found. Finally, the relevance and importance of
each piece of information needs to be interpreted and analysed — on its own and in
conjunction with other information. This is where information starts to become
intelligence.

Besides this you must also try to estimate the competitors’ reaction pattern to any
moves that you make. Will he respond swiftly and strongly or will he not react
quickly or strongly or will he chose to react to only certain types of assaults?
Knowing this will help you choose and time your moves for maximum impact and
returns.

Communicating the intelligence

Competitor intelligence needs to be evaluated and selectively communicated to all

who need to make decisions based on what customers, suppliers, or other companies
in the market are doing or are likely to do. If you find your product wanting in
formulation technology and your competitor offering a superior technology, then you
should be conveying this information to your formulation development or R&D dept
so that suitable action can be initiated. If a new attractive packaging concept has
been adopted by your competitor, then convey details of the same to your purchase
dept and your R&D. If your competitor is conducting special campaigns that is eating
away your market share, then you need to call a meeting of your marketing team to
urgently address this issue and frame suitable counter strategies.

Countering competitor actions

Having identified what competitors are doing, you can now make your moves. By
knowing your competitors well, you may be able to predict their next moves, exploit
their weaknesses and undermine their strengths. Only by regular analysis of the
competitors can you spot areas of potential competitive advantage and dis-
advantage based on which you can frame suitable attack strategies and appropriate
defense strategies.

Various military strategies have been used to describe different approaches to

beating competitors - flanking strategies, encirclement and siege strategies, frontal
attacks and even guerrilla marketing tactics. However it should always be conducted
within the law. Although it is tempting to use underhand ways of gaining an
advantage, this must be avoided. Rather than following the maxim, ’All is fair in love
and war/marketing war,’ we need to reform to ’Do unto others as you would have
them do to you.’

In conclusion, while it does involve a little additional expenditure in terms of money,

time and effort in gathering competitive intelligence, the cost of not gathering it is
higher!