Buzz. Brand recognition. Point of sale. Focus groups. Any veteran of the consumer marketing wars would recognize these terms--they're all part of the lingo of selling. And as a Pepsi-Cola Co. exec, Thomas Ebeling used all the marketing skills he could muster. In one stint, he even turned around Pepsi's woefully underperforming German operation.
But these days, the German-born, 42-year-old Ebeling isn't promoting Pepsi anymore--or potato chips to teenagers or facial tissues to working moms, for that matter. He has found far greener pastures: the high-pressure, high-margin world of drugs. As CEO of the pharmaceutical business at Switzerland's Novartis since July, he has created a marketing machine that has given a nice boost to earnings. The company announced Feb. 15 that annual sales at the pharmaceutical division rose 7%, to $10.6 billion, while profits jumped 16%, to $3.2 billion. "Ebeling has put a much greater emphasis on building global brands," says Andrew Baum, European pharmaceuticals analyst at Morgan Stanley Dean Witter & Co. in London.
Novartis Chairman Daniel Vasella had already started restructuring the marketing operation before Ebeling arrived. When he drafted Ebeling from the company's consumer-products division, some senior managers found the situation "awkward," says Vasella.
HONED PITCH. But Ebeling knew how to get results, and Novartis needed a boost after years of mediocre performance. Besides, says Ebeling, selling cola isn't all that different from selling pharmaceuticals: "Both are extremely competitive markets." And both require an in-depth knowledge of consumer behavior.
To reach doctors better, Ebeling has increased the sales force by 14%, to 14,800 reps worldwide, split sales teams into areas of therapeutic expertise, and laid out demanding performance goals. Novartis now spends half its sales and marketing budget on its five best-selling drugs, double the amount before.
One of Ebeling's first moves was to figure out what doctors thought about Novartis products. He discovered physicians were getting bombarded by pitches from his rivals and generally gave each pitch about two minutes of their attention. So he paid doctors to meet with Novartis' detail teams, then ran thousands of sales pitches by them, honing them to make them stand out. He also worked out a plan to inform sales teams immediately of any new claims to performance or efficacy Novartis' labs had figured out for its drugs.
The result has sometimes been spectacular: In the case of Diovan, Novartis' anti-hypertension drug, sales reps were instantly alerted when researchers discovered that the drug proved effective in treating heart failure. This new message helped drive Diovan sales up 60% last year, growing faster than industry leader Merck & Co.'s rival product. Diovan is now Novartis' fifth best-seller, with 2000 sales in excess of $720 million.
BILLION DOLLAR BABIES. Now, Ebeling is applying the lessons of Marketing 101 to the five drugs Novartis will be introducing in the next 18 months. He plans to spend more than $1 billion to launch these drugs, including Zelmac, a therapy for irritable bowel syndrome, and Starlix, a treatment for diabetes.
In the case of Zelmac, Novartis must create awareness among physicians and consumers about the condition it treats. One warning sign: Two rival drugs were recently yanked off the market as a result of side effects. And for diabetes drug Starlix, the competition will be fierce. But Ebeling is too busy preparing the pitch to stop now. Novartis has interviewed more than 10,000 sufferers from irritable bowel syndrome about their symptoms and what they seek from a drug. There's a name to this approach: Give the customers what they want. Simple in theory, hard in practice. But Ebeling sure is trying. By Kerry Capell in London