Down But Not Out

Times are tough for marketers everywhere, and no less so in the pharmaceutical sector. But take heart – he latest marketing priorities survey from Frost & Sullivan shows that marketers are not giving up the fight.

Frost & Sullivan's Growth Team Membership recently completed its 2008 marketing priorities survey. Marketing executives in North America and the European Union were asked to identify the most pressing challenges facing the marketing function for 2009. The results were as reported by Director-level or above executives from companies with revenue of $100 Million/ €70 Million or more.

Frost & Sullivan conducted the survey to better understand the business environment factors and the key issues facing Marketing executives in 2009

Current impact

Respondents were asked to select the top two environmental factors. The top business environment factors were the global economic downturn (54 percent) and the increasing need for product/service innovation (10 percent). The secondary business environment factors were decreasing customer demand (20 percent) and intensifying competition (17 percent).

In response to how the business environment factors are impacting Marketing, the top three ranked factors were judged to have a negative impact - global economic downturn (80 percent), intensifying competition(70 percent), and decreasing customer demand (80 percent).

The survey contained 12 questions broken out into three sections: company demographics; business environment; and key marketing issues.

Company demographics

The majority of North American respondents (70 percent) work for public companies and more than 90 percent operate in a business-to-business (B2B) environment. Sixty percent work for firms with revenues higher than $1 billion.

Conversely, 55 percent of EU respondents are from private companies and 98 percent of the EU work in B2B companies. Fifty-seven percent of respondents report working for companies with revenues higher than €700 million.

The healthcare and life sciences (20 percent), and information and communication technologies (18 percent) industries had the largest participation.

When asked about the effectiveness of their marketing function, only three percent of North American and four percent of EU respondents rated it as 'exceptional'. Sixty-one percent of North American peers rated their effectiveness as 'good', and almost 30 percent rated it 'fair' or 'poor'. Forty-five percent of EU marketers rated their effectiveness as 'good' and 51 percent consider it 'fair' or 'poor'.

Challenges

In both North America and the European Union, the survey data highlighted the negative nature of the business environment and its effects on customer demand and competition (see Table 1).

While there is some variation in the key issues shaping marketers' decision making in North America and the EU, there are many shared challenges. Accordingly, Marketing has to justify its expenditures yet create new sources of growth for the company (see Table 2).

Respondents were asked to identify whether their top three issues were primarily an issue of "staff, technology, or process." Overwhelmingly in North America, respondents identified 'process' at the crux of their top three issues. In the EU, 'process' and 'talent' were identified as the main factors.

Going forward

The global economic downturn is having the biggest impact on marketing decisions. Marketers have to justify their budgets as companies squeeze spending in light of falling customer demand. At the same time, Marketing is under pressure to spur growth opportunities whether through finding new markets or developing innovative products and services. This pressure will be telling as many respondents feel the effectiveness of their function could be improved.

As expected, the data highlights the negative nature of the economy and it effects on

customer demand and competition. However, this recessionary environment also provides new growth opportunities in emerging markets, demand for enhanced products and services, and innovation in green and sustainable offerings.

The top five key issues are focused on monitoring and justifying expenditures or creating new sources of revenue. The data highlights that although budgets are being scrutinized,

Marketing continues to be charged with catalyzing growth through identifying unmet customer needs, or speeding up innovation.

Credit Note
The research for the survey was carried out by Holly Lyke Ho-Gland, Donald Savant and Keith P. O'Brien.

Top five business environment factors

Factor: North America | European Union

Global economic downturn: 64% | 47%
Decreasing customer demand: 24% | 19%
Intensifying competition: 21% | 17%
Emerging global markets: 17% | 11%
Increasing need for product/service innovation: 14% | 28%

Key marketing issues

Issue: North America | European Union

Measuring market spend effectiveness and efficiency: 30% | 16%
Identifying emerging customer needs and preferences: 30% | 21%
Justifying the ROI on marketing budgets: 28% | 29%
Enhancing the pace of new product and service introductions: 25% | 24%
Identifying new, adjacent market opportunities: 23% | 24%
Evaluating and prioritising innovation investments: 18% | 29%
Improving Sales and Marketing integration: 18% | 26%

GRAPHS

Top six primary business environment factors

 

Marketing function effectiveness