PM360/MME SURVEY: Staying Ahead of the Competition

Our survey results show that marketers wish they knew more about how their competitors will respond to market changes—but at the same time feel they already spend enough time and effort getting to know the competition. What gives?

By E.M. (Mick) Kolassa, PhD

How well does this describe your situation? Your product is at least as good as the competitor’s and your promotional messaging is better. But your competitor—who is more opportunistic and cutthroat than you but not as honest, strategic, or smart—somehow is able to attain a higher share of the market. You think maybe that success is because your competitors are more aggressive in contracting, so payers prefer their product. Although understanding your competitors is an important part of your marketing planning process, you wish you understood them better. If this describes you, then you have a lot of company—because it also describes the majority of the respondents to our survey on competition along with the bulk of marketers in every industry. It probably describes your competitors, too.

Understanding and dealing with competitors is a key aspect of marketing, but something nobody in any industry really spends enough time doing. PM360 and Medical Marketing Economics undertook a Web-based survey that showed respondents hold views similar to those of people in other industries: We tend to think of our competitors as less honest, smart, or strategic than we are, but somehow they tend to do better in the marketplace than they should. Whether it’s because we “play by the rules” while they don’t or for some other reason, we don’t like them or accept their success as legitimate. The funny thing is, they think the same thing about you!

The Results

The respondents to our survey had a wide range of experience, averaging over 16 years in the industry, nearly 10 years with their current company and close to 5 years in their current position. Over 75% were from ph.gifarmaceutical companies, with the rest mainly from device and diagnostics firms. Most tended to feel that the actions of payers had the most effect on their ability to execute their marketing plans, allocating 32 out of 100 points to payers, with 27 points allocated to regulators, 21 to budgetary constraints or the economy, and slightly over 20 to competitors (see Figure 1).

Although understanding competitors was believed a vital part of the marketing plans of all participants and respondents felt they spent enough time and effort understanding their competitors, most also wished they knew more about their competitors and how they might react to market changes (see Figure 2). These seemingly contradictory findings are also consistent with those from other industries—we think we know them but, when forced to admit it, don’t really understand our competitors. The lack of a solid understanding of competitors seems to allow us to believe that the success of their products must be due to something they do that we don’t or can’t—this is borne out later when we see how the participants compared their competitors with themselves.

Contradictory Thinking
Importantly, a significant majority of the participants (72%) disagreed strongly that the effectiveness of their marketing programs was often thwarted by the actions of their competitors. Whether this means that they don’t believe the actions of their competitors can counter their marketing efforts, that other parties such as payers are bigger impediments, or that they simply don’t want to admit that the actions of their competitors affect their own performance, is it clear that these survey participants don’t believe the fate of their products is in the hands of their rivals. This may explain the next apparent contradiction we found.

An important aspect of competing successfully is understanding the rules of the game and who sets them. Our respondents tended to believe that they had more influence over the rules for success than did other market participants, such as payers and other customers, and they assigned the fewest points to their competitors (see Figure 3).

This is interesting because most described their product as either “one of many” or as a “niche player,” while almost half described their competitor as the market leader (see Figure 4). They felt that payers had the most influence in thwarting their marketing efforts. A fascinating finding was that the respondents who reported that their competitors were the market share leader were much more likely than those who reported themselves as the leaders to believe that they set the rules for success in the market (40% versus 25%). Does this mean that each product team sets its own rules and lets the competitors play whatever game they want? That may be, because our respondents also believed that they are very different from their competitors.

In assessing themselves versus their competitors, the respondents overall tended to believe their firms were more honest, smart, and strategic than their competitors, whom they believed were more opportunistic and cutthroat (see Figure 5).

In fact, the highest scores (on a 1 to 7 scale, with 7 being the highest) were given to themselves for honesty (5.7) and their competitors for being opportunistic (5.6).

Superior Competitors?
Although most marketers believed their competitors were relatively aggressive in all aspects of marketing, few admitted that their competitor was superior in any aspect other than share of voice. In terms of aggressiveness, roughly half the participants rated their competitors as very aggressive (6 or 7 on a 7 point scale) when it came to promotional spend and in pricing and contracting (see Figure 6).

But when it came time to compare their products or companies (see Figure 8), the effectiveness of their marketing, and the way in which the market views them, only a minority could admit that their competitors may have an edge (see Figure 7). In fact, it is only in terms of payers’ perceptions that more participants were willing to admit that their competitors might have an edge over their own product (which comports with their view of their competitor’s aggressiveness in contracting as well as payers’ power over the effectiveness of their marketing plans).

This difference in the way marketers view themselves relative to competitors has been found in every industry in which the issue has been studied: As in most other aspects of life, we tend to see ourselves as better than our opponents, whether the competition is in collegiate sports, international relations, or pharmaceutical marketing.

Our competitors can’t be as good as we are, and if they happen to succeed it must be because they either bent the rules or got a lucky break. It doesn’t matter if it’s two football teams or two statins, our team is always better.

Because the responses to this survey were anonymous, we have no way of knowing which companies and products were represented in our study, but it is quite possible that two or more respondents worked on directly competitive products. I would be willing to place a substantial bet that if you were to ask the members of your marketing team the questions from the survey, you would find similar attitudes about your competitors. Because it’s also likely that your competitors are reading this, too, if they were to poll their co-workers, they would find similar results.

So to return to our opening question: Do you believe despite the superiority of your product and your marketing efforts your competitors outperform you because they are more aggressive, a bit less honest, and more willing to give payers what they want? If so, your beliefs most probably align with your competitors’ view of you!

Download these slides for use in your own presentations, Click Here!

Mick Kolassa is CEO and Partner at Medical Marketing Economics (www.m2econ.com). He can be reached at mkolassa@m2econ.com