Case Study: Developing a Customer Acquisition Strategy for a Pharmaceutical Manufacturer

Situation

A domestic manufacturing plant of a major multi-national pharmaceutical company was operating under capacity.  Although the plant had developed a world class technology for a pharmaceutical manufacturing process, the company could not utilize all of the plant’s capacity with their current products.  The plant management was given permission to offer contract manufacturing services to third party pharmaceutical companies to increase capacity and supplement revenue.  Plant management was required to develop the service as a new product and to introduce this product to the market. 

Although the pharmaceutical company had a well established brand they had never engaged in contract manufacturing and had neither the strategy nor resources in place for this activity.  Headquarters had given plant management permission to offer contract manufacturing services but headquarters considered this a low priority and provided little budgeting for the marketing of these services.

Goal

Precision Management Group was called in to develop and execute a strategy to communicate the availability of a new service offering to third party pharmaceutical companies in order to generate new manufacturing contracts.

Objectives

The objectives that were established to achieve the goal included:

  • Establish a brand that conveyed the identity of the plant without losing the clout of the parent company.
  • Communicate this brand and the new marketing message to the market via print, trade shows and Web.
  • Monitor the results to measure the effectiveness of the campaign.
  • Adjust the message and the media to maximize the results.

Analysis

The plant had been engaged in the manufacturing of pharmaceutical compounds for many years; however, the customers were always internal to the company.  The plant’s capabilities and capacities were well know to the company’s headquarters and thus required little in the way of promotion.  In order to acquire external customers, the plant had to develop a marketing communications program that would convey the message of the new services to the market.  Furthermore, these services were not offered by the company as a whole, but by this plant in particular. 

The plant had to capitalize on its brand recognition at the same time as it had to distinguish itself from the parent company.  Although the brand was well established, it did not convey the message that the plant wanted to the market, i.e. the brand signified a large multi-national pharmaceutical manufacturer.  This message did not communicate the fact that the plant was willing to offer contract manufacturing services to small- or mid-sized pharmaceutical manufacturers.  For this reason, a sub-brand had to be crafted that would convey both the strength of a multi-national along with the customer care of a local company.

Solution

A marketing campaign was developed, funded and launched to meet the four objectives set out above.  A brand was devised that communicated both the identities of the multi-national parent with the regional nature of the plant.  Advertisements promoting the brand and the new service offering were run in trade magazines, Web sites and trade shows.  The campaign focused on the few most widely read and attended trade magazines and trade shows.

Metrics were established prior to the campaign to determine the market’s perception of the plant’s capabilities and services.  The market had no awareness of services provided by the plant before the campaign was launched.  One metric of the marketing campaign was to raise the awareness within the market to the point where 10% of the market was aware of the plant’s new services within the first year of launching the marketing campaign. 

Another metric of the effectiveness of the campaign was to develop relationships with a minimum of three prospects that had a high likelihood of awarding manufacturing contracts to the plant within one year of launching the campaign.  Because the plant’s excess capacity was limited, and because the service was new and untried, a relatively conservative number of customers was targeted for acquisition. 

Results

Customer response to the marketing campaign was high.  Early responders were primarily requests for information.  The initial message advertising the contract manufacturing service emphasized the plant’s ability to manufacture in very large quantities.  Most early responders, and the small to mid-sized pharmaceutical market in general, were more interested in smaller batches.  As a result, the message had to be changed so that there was less emphasis on large batches and more emphasis on customer service.  When the message was changed, responses increased and requests for more detailed information and price quotes increased indicating more serious buyers. 

The objectives of the marketing campaign were met without exceeding the budget for the first year.  The objectives of the second year of the campaign are well on the way to being achieved.  A breakeven point, where the total budget of sales and marketing for contract manufacturing will be covered by revenues from the service is anticipated by the end of the third year of the program.