What Are IDEAs Made Of: Differentiation

Mike Rea

IDEA Pharma

One of the most abused words in the industry, differentiation is also often strangely ignored.

The word itself creates a problem, as there are three concepts involved: differentiation, differentiation and differentiation. Differentiation enables differentiation which leads to differentiation…

The first ‘differentiation’ surrounds the product. It needs an examination of its differentiating attributes, and a typical question would be ‘what makes you different’? Not a surface skim (‘it’s once a day, that means convenience, right?’), but a deep treasure hunt looking for those attributes that truly make it different (either as a molecule, or potentially as a brand). It is the hunt for intrinsic or extrinsic difference.

The second differentiation is to differentiate by clear communication. That is, if I choose to focus on studying and saying one thing well, and drive a perception of difference. This ‘differentiation’ is the demonstration of difference.

The third is the measured differentiation (do audiences believe and echo the hoped-for differentiation). That is, do your audience now believe you are differentiated. This ‘differentiation’ is the perception of difference.

Of course, none of these is self-evidently a good thing. It is incredibly easy to be differentiated (on items you’d rather not be differentiated by). Every product is a set of positive and negative attributes. If you are genuinely inventive, you might succeed in turning a negative into a positive (see KFC ‘Finger Lickin’ Good’ or Viagra for examples), but more often products become ‘differentiated’ by their safety profile, formulation problems or lack of a certain kind of efficacy. The hard thing is to find the perfect combination of the

thing / things your audience want and that you are or do better than any other product.

 

“Every product is a set of positive and negative attributes. If you are genuinely inventive, you might succeed in turning a negative into a positive…”

 

Differentiation, as a process, should begin with an assessment of the kind of difference audiences want to see. Do they want what they currently have, but better (‘sameness with difference’), or something different? Unfortunately, much market research (often masquerading as ‘insight’) tends to produce the former – “we would like it to be like what we have, but 10% better on this dimension, while not doing anything worse.” This kind of ‘differentiation’ is quantitative differentiation – the product is ‘differentiated’ only by being slightly or somewhat better numerically than its opponent.

More useful is ‘qualitative’ differentiation. Qualitative differentiation means finding something that the product ‘does’ that no other product does. This can look a lot like quantitative differentiation, but is a lot more powerful. For example, the difference between dropping LDL levels by 5% over the competition and getting patients to a tipping point that starts to reverse atherosclerosis might be no difference at all numerically, but one sounds a whole lot more valuable than the other. Unfortunately, a lot of pharma propositions fail to make this step towards a concrete qualitative proposition – what does a 25% increase in PFS mean to a physician or patient, or a 4 point increase in ADAS-Cog actually achieve for an Alzheimer’s Disease patient, for example.

Let’s go back to the ‘first’ differentiation. We always use the metaphor of diving for treasure. It matters who you send to look at the ocean floor. An inexperienced diver might bring up every piece of glass, wondering if it is a diamond. A lazy diver might bring up the first doubloon, and ignore the chest that sat one metre under the surface. Hand on heart, in hundreds of brands, we have never seen two products that were identical, that had no intrinsic differentiation – even the ‘me-toos’. Diving for real treasure needs a constant evaluation of ‘is this different?’ and ‘is this potentially valuable,’ and for that process to carry on until the ocean floor is fully investigated. It needs imagination and ingenuity, and there is no alternative, unfortunately, to the dredging that is necessary to ensure the real treasure is found.

It is also essential that the dredging includes the whole competitive set, not just the ‘same class’ competitors, and the whole market context. The world of ‘value’ provides so much opportunity that every direct and indirect competitor must be considered. It is too easy also to fall into the trap of self-deception – choosing a parameter that you really wish was more important to the market than it seems to be.

 

“…presenting a lot of messages about a great product can be worse than delivering one great message about an average product.”

 

Finding that treasure early and then choosing to focus on it is the ‘second’ kind of differentiation. Doing studies that differentiate may need a good deal of forethought, but companies that are now engaging in companion diagnostics, validated Patient Reported Outcomes or other endpoint evaluation, and more innovative trial design, find that the process of communicating difference is a whole lot easier after doing those things. Demonstrating difference does also need clear, focused communication, however. At least as many products fail on market because they ignore this simple truth that presenting a lot of messages about a great product can be worse than delivering one great message about an average product.

The third kind of differentiation is what gets tracked into those market research decks. One thing that is too seldom borne in mind is that these are lag indicators of what has happened in the market – that any differentiation seen in the market now is the result of what has been happening for the past year, two years. The direction of travel is more important than any one snapshot.

For such a critical piece of a commercial jigsaw (it is the corner piece that makes so much of the rest of the picture easier to find), differentiation has been remarkably poorly served. Like ‘positioning,’ it is a word that, in meaning so much, or having so many meanings, potentially fails to deliver its value to the uninformed.

About the author:

Mike Rea is a Principal with IDEA Pharma, who enjoys taking a look outside the industry to learn how it can think differently. For direct enquiries he can be contacted on mike.rea@ideapharma.com and for more information on IDEA Pharma please see http://www.ideapharma.com/what/default.htm.

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