Competitive Simulation and War-Gaming: How To Ensure Success

The Pharmaceutical market is getting increasingly competitive – especially in therapeutic areas such as Oncology and Diabetes, which brings even greater challenges to marketers than ever before.



Earlier this year I attended a conference in New Jersey with several sessions on war-gaming, which I found of great interest. I saw several approaches to war-gaming and competitive simulations.

Typically, in all of these, brand teams got into groups to represent themselves and their competitors with the objectives of testing marketing assumptions and strategy in order to understand the various market environmental factors that could impact the results, understand competitor plans and approaches, testing the brands’ strategies and tactics as well as planning follow-on steps. Some of these featured two head-to-head competitors - some featured more - including generics.

They usually involved testing competitive messages or positioning; however, some tested more areas including marketing plans in general. Interestingly, the types of war games and competitive simulations involved a set of templates that were modified according to the brands’ needs.

While this was all very interesting, what interested me more was that no-one seemed to be using validated current data analytics on their brands and the competitors for any of these competitive simulations. Surely this should be the basis of everything – real world predictive algorithms? How can you test something accurately without having access to what will actually happen with real data? It seems these two need to be married up - and fast - for accurate war-gaming.

One of our Clients in Japan wanted to not only see the impact of making changes within a category (for example, making changes to specific messages, or increasing or decreasing specific rep activity, or making budget allocation changes across marketing channels), but they also wanted to be able to do this between categories; so for example, if I want to decrease sales force by x%, how much should I increase e-Detailing to compensate before I start to lose sales and market share? In addition, what impact will this have on my brand, and my competitor brands’ market shares? Good question Brent! This was worked out and then delivered through our portal, and the same could be modeled for competitors because all data is collected on all brands in a therapeutic category as a requirement for accurate modeling. So if you heard a competitor was doing something (e.g. cutting sales force, or focusing on a message, etc.) then you could model this and see what their actions will do to your market share.

Then another client in Australia said, “Well, if we can do it for our brands and for our competitors, could we then do some war games to combine these results so we can model competitors making changes in any category (e.g. messages, sales force, communication channels, etc.), or us making changes in any category, and see the combined impact on market share for all brands in the category?” Good question Andrew! Our mathematical teams worked on this and now it’s possible. It has been tested with real data from real Clients and found to be highly accurate.

So, if we can do that with accuracy, why not use this data as the basis for war games because that way you can already see, from the analytics, what the competitors are focusing on, model them - improving results on what they are focusing on, and see exactly what you need to do in all areas (messaging and positioning, sales force, marketing pricing, etc.).

Seems obvious but I guess many companies doing war-gaming do not have access to this kind of high level accuracy of modeling simulation. However, by incorporating this kind of data into a war-gaming exercise, you can not only see what the optimal focus of your brand is across all areas of your marketing, but you can also see what impact competitor changes will have on your brand’s sales and market share. In addition, the analytics will also allow you to make the market changes (yours and competitors) and then calculate the optimal actions for you across all areas in order to remain competitive against any threats.

So, in war-gaming, brand teams take their analysis of the market, their segments, their targets and their resource allocations, and then attempt to stress test them with each other. That is all well and good, and indeed it would be great if analytics had not come as far as it has. Nevertheless, analytics using current market data has come a long way and is now highly accurate, so the value of war-gaming could be greatly extended if you actually knew what the real world sales impact of pulling specific levers (both yours and competitors) would have! Let’s examine a real world case study using analytics in war-gaming.

Case Study

Situation

A brand was entering the market. It had existing competitors, although the clinical data for this brand was much stronger. However, at launch and probably before, the competitors (realizing that they could not compete on efficacy) brought questions up about the safety profile of the drug. Although both brands were fairly similar on safety, and the brand was indeed far stronger on efficacy, it appeared to have a slightly higher rate of adverse events than the competitor, although frankly, it was not a statistically significant rate. Nonetheless, the competitor alerted all stakeholders about this and attempted to create a major issue for the brand.

Objective

Solve the problem so that the perceived safety issue did not cripple the brand as this tactic had done previously with other brands. I am sure you can remember a famous case of this tactic being employed successfully almost 10 years ago.

Solution

Using the analytics, the Client brand was able to move the dial on safety to see how much market share would be lost if the mud around that issue stuck, and then recalculate what needed to be done in terms of messaging and channel allocation for maximum impact before too much damage was done.

Results

The brand was able to fend off the attack by showing the safety data in context as well as knowing which channels would have the most impact with each of their segments. The brand launched successfully and claimed the top position in its market within 2 years.

Conclusions

War-gaming used to be utilized when a new competitor launch was planned. These days, if one uses analytics as the basis of war games, the value is extended as something that can, and indeed should, be done regularly (perhaps every 6 -12 months) to ensure all strategies and tactics are fresh and continue to reap rewards in light of the dynamic changes in the marketplace - which may include new launches, but equally may simply be new data, new labeling, additional indications, repositioning, competitors’ action changes, changes in the market environment (e.g. pricing, code changes, an adverse event comes to light, etc.).