This document summarizes a study on strategies for expanding a product portfolio without cannibalizing an established brand. The study found that 96% of participants realized benefits from introducing a new brand, such as market leadership and expanded market share. However, over half also experienced some negative impacts, like product confusion. Effective strategies for minimizing cannibalization included targeting different patient subtypes and aligning with thought leaders. Marketing products together as a franchise was more successful than separately for most participants. The top differentiators for multiple brands were efficacy and delivery method. Operational changes usually involved shifting resources to the new brand and revising sales incentives. On average, the new brand received over 65% of combined marketing spending in its first year. Ten

1. Expanding a Product Portfolio Without
Cannibalizing an Established Brand
Best Practices, LLC
Strategic Benchmarking Research
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2. Research Objective & Key Topic Areas
Best Practices, LLC conducted this research to identify successful strategies and practices that can
be used by biopharmaceutical managers and executives to maximize the potential of multi-drug
portfolios or franchises.
Study Objective & Methodology Key Topics Covered
Objective: Effective methods of differentiating
multiple brands
This benchmarking study was designed to
Positioning strategies that minimize
identify effective strategies and tactics for product cannibalization
marketing multiple brands for the same Operational changes that drive success
indication or area of use. when introducing a new brand into a
product family
Special attention was given to strategies for
Positive & negative impacts of introducing
managing resources and for avoiding or a new brand
controlling product cannibalization. New product’s share of the combined
marketing spend during first three years
Methodology: both are marketed
Best Practices, LLC used on online survey Marketing mix for new & legacy products
instrument to collect quantitative data. Marketing activities that drive continuing
Research analysts also conducted in-depth success for legacy brand
interviews to collect executive insights and Best indicators of marketing effectiveness
harvest best practices and lessons learned. Pitfalls, failure points and best practices
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3. Universe of Learning: Companies Participating in Study
Participants in this benchmarking research included 28 respondents at 22 leading pharmaceutical,
biotech and medical device companies. Eighty-six percent of respondents are U.S.-based. Others
are based in Mexico, India, South Africa and the Middle East.
Participants
Survey Only
Participating companies include: Abbott, Alcon, Amgen, Baxter, Boehringer Ingelheim, CardioDynamics,
Centocor Ortho Biotech, Elixir, Genzyme, Lumenis, MEDRAD, Merck, Micro Labs, Monogram Biosciences,
Novo Nordisk, Pfizer, Schering-Plough, Shire, Solvay, Teva Neuroscience, Wyeth and Xanodyne. Participants
also referenced past experience at Eli Lilly, Roche, Bristol-Myers Squibb, Genentech & sanofi-aventis.
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4. Selected Key Findings & Observations
The following findings emerged from this benchmark study.
1. Benefits of New Brand: In all, 96% of benchmark participants realized benefits from introducing
a new brand where they already had a legacy product. Top among those benefits were market
leadership, expanded market share and improved reputation with physicians and specialists.
2. Negative Impacts: Just over half the participants experienced negative impacts in introducing a
new brand for the same indication or area of use as a legacy brand. The most common of those
was creating product confusion among internal and external stakeholders.
3. Minimizing Cannibalization: Benchmark partners successfully use more than a dozen different
strategies to control or minimize product cannibalization. Targeting different patient subtypes and
aligning with thought leaders are viewed as the most effective of these.
4. Franchise Approach: More benchmark participants (73%) have successfully promoted their
products together as a franchise than independently as separate brands (65%). Products that
have complementary treatments lend themselves to franchise marketing, while those treating
clearly different patient types are suited to marketing as independent brands.
5. Differentiators: Product efficacy is the attribute that benchmark partners most often find effective
for differentiating multiple brands for the same indication or area of use. Nearly two-thirds of
participants rated efficacy among their Top Three differentiators.
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5. Efficacy & Delivery Method Are Top Product Differentiators
Efficacy and delivery method head the “Top 3” list of most effective product differentiators for more
than half the benchmark participants. Frequency of use is also among the top three for 36% of
respondents.
Q. Which three of the following options are the most effective for differentiating two or more brands
within one company for the same indication or area of use? (Check only three.)
Top Three Product Differentiators
Efficacy 64%
Delivery method 50%
Frequency of use 36%
Price 32%
Ease of use 29%
Compliance 18%
Health outcomes 18% Other Top 3: Segmentation (including
Safety 14% audience type, customer type, identifying
unique patient types for each brand (2),
Quality of life 4% patient-specific needs, efficacy or safety
in patient population); Service & Support (2);
Other 32%
Positioning Statement.
(N=28)
% Respondents
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6. Multiple-Brand Marketing Spurs Many Operational Changes
Both the Sales and Marketing organizations undergo changes to accommodate introduction of a new
brand in an area where the company already has an established brand. At a majority of companies,
Sales adds training and revises incentives, while Marketing adds and shifts resources.
Q. What operational changes did your organization undergo in order to effectively manage more than one
brand for a single indication or area of use when the new product was introduced? (Choose all that apply.)
Operational Changes Resulting New Product Introduction
Shifted resources from older product to
79%
marketing for newer product
Revised sales force incentives 75%
Added new marketing funds for new product 68%
Increased portfolio management activities 68%
Revised/ expanded sales training 64%
Additional Changes=
Realigned sales force/ Changed sales territories 46%
• Educational activities
Revised sales coverage plan to accommodate increased & shifted
29%
more people and products
• Structure changed to
Expanded sales force size 29% support portfolio
objectives over
(N=28) individual brand
% Respondents
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7. Newer Brand Receives Larger Share of Marketing Spend
The new brand typically receives just over two-thirds of the combined new and legacy product
marketing budget during its first year on market. The proportion declines slightly, relative to the
legacy product, over the course of the first three years both brands are marketed.
Q. What percentage of the combined marketing spend (for the new and existing brands) should be
allocated for the newer product during the first three years that both are on the market?
Average Percentage of Combined Marketing Spend Allocated to Newer Product
100%
95%
90%
% Marketing Spend for New Brand
85%
80% High
67%
64%
61% Average
60% (Mean)
Low
40%
25%
20% 20% 20%
0%
(N=28)
Year ONE Year TWO Year THREE
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8. Ten Steps to Excellence in Multiple-Brand Marketing
Best Practices, LLC research identified a series of 10 critical steps that lead to excellence in
marketing multiple pharmaceutical products for the same indication or area of use.
10. Plan for 1. Take a
migration to franchise-centric
newer brand to approach 2. Clearly
9. Price retain patients to managing differentiate
products to after patent the brands
reflect values the products--
expiration both from each
of individual
customer segments other & from the
Multiple competition
8. Align Sales Brand
to brand goals with 3. Align each brand
appropriate incentives
Marketing with distinct customer
& clear positioning Excellence & patient segments
4. Conduct
7. Provide sufficient situation analysis
sales & marketing to craft marketing plan
6. Align 5. Set that best reflects
resources to new marketing realistic
brand to enable brand & franchise
its growth mix to reflect goals & opportunities
market entry objectives
position & strength for product sales
of franchise & adoption rates
offering
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9. Pitfalls to Avoid
Key pitfalls identified by the benchmark class in surveys and interviews are:
Insufficient buy-in/ cooperation from the sales force
Inadequate customer/patient segmentation
Failure to clearly differentiate/position individual products and their values
Unrealistic product goals
Lack of effective pricing strategy
Internal competition for limited resources
Poor thought leader alignment
Insufficient investment in the new brand
Failure to align thought leaders
Insufficient sales force training
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10. Best Practices – Fulltext Responses, 1
Key best practices identified by the benchmark class are:
Best Practices
Position clearly on customer value measures (price and/or features)
Identify key points of differentiating the new product and focus on just a few areas supporting those areas of
differentiation with additional clinical work
Clearly articulate the positioning and key differentiation points of new, old and competitor products
Provide Use case studies to develop patient types that paint a picture in the physician,s mind as to where to use each brand
clear
Some similarities in product branding, yet clear differentiation in product value
product
differentiation Pilot newer product with thought leaders to validate value points to effectively distinguish vs, older product
& unique Make sure MDs understand where to use each product for maximum patient benefit
positioning Make the indications as different as possible
for each
Differentiate product features by market segment
brand
Ensure speakers/champions have precise messaging on how & when to use each brand. Use case studies.
Optimize portfolio positioning
Products must have a distinct point of differentiation
Differentiated marketing mix
Positioning brands to be able to complement each other/clear differentiation
Develop product differentiation strategy before late-stage clinical trials begin
Clear differentiation between the two products
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11. About Best Practices, LLC
We are a research and consulting firm that conducts work based on the simple, yet
profound principle that organizations can chart a course to superior economic
performance by studying the best business practices, operating tactics and winning
strategies of world-class companies.
Best Practices, LLC
6350 Quadrangle Drive, Suite 200,
Chapel Hill, NC 27517
www3.best-in-class.com
For more information contact:
Martha Haswell
Senior Research Analyst
919.767.9249
mhaswell@best-in-class.com
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