Columbia University Graduate School of Business

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1 Columbia University Graduate School of Business Professor Francoise Simon Tel: Spring 2005 HEALTH CARE MARKETING Fax: Thursday, 3:15-6:30pm B Room 331 Uris COURSE OBJECTIVES This course covers marketing strategy for all players, from biotech startups to pharmaceutical firms and service providers. It has two objectives: Present methods and models used in the life sciences sector, and demonstrate how they are successfully used in current business situations. Key learnings include how to segment consumer and medical markets, brand a new product/service, create a marketing plan for a startup, decide on a pricing approach and integrate online/offline communications. Students customize the course to their needs with a term paper (instead of final exam) based on a consulting assignment for a company. COURSE APPROACH We will use a combination of current readings, interactive lectures, extensive class discussions, videos and senior executive guest speakers to address these key questions: How is the healthcare sector restructuring? Key success factors for alliances? Best ways to market a startup to partners/investors? How are consumers and their relationships with physicians changing in the US and abroad? How will personalized medicine change marketing models for biopharmas and hospitals? How can we balance pricing and access to drugs? How do we identify our customers and create value for them? Who are our competitors and how do we successfully create differentiation for ourselves? Who are our target segments, and how do we globally brand our products or services? How do we develop an effective online/offline communication strategy? Text will be Prof. Simon s book with Philip Kotler, Building Global Biobrands (Free Press 2003) Other useful references: Eric Berkowitz, Essentials of Health Care Marketing (Aspen 1996) Eric Siegel, R. Ford and J. Bornstein, The Ernst &Young Business Plan Guide (Wiley) Gil Bashe and Nancy Hicks, Branding Health Services (Aspen 2000) Other readings: Current articles and reports (listed below), all managerial GUEST SPEAKERS Senior executives being finalized include: David Epstein, President/Oncology - Novartis Peter Brandt, SVP/Strategy Planning - Pfizer Wendy Gabel, VP - Biogen IDEC Mike Heslop, VP Marketing - Genzyme Cavan Redmond, EVP/Biopharmaceutical Business - Wyeth Charlotte Sibley, VP/Global Marketing Analytics - Millennium Ellen Sonet-Miller, VP Marketing, Memorial Sloan-Kettering 1

2 COURSE OUTLINE SESSION DATE TOPIC ASSIGNMENT 1. 1/20 INTRODUCTION: COURSE OVERVIEW Simon 2, Weber Marketing Strategy Framework 2. 1/27 INDUSTRY ANALYSIS Simon 3, Sawyer, Gilbert Case: Strategic Dealmaking at Millennium 3. 2/3 STARTUPS: KEY SUCCESS FACTORS Simon 1, Hamermesh Case: Novazyme 4. 2/10 MARKET AND CUSTOMER ASSESSMENT Bohmer, Aggarwal Case: Eli Lilly 5. 2/17 COMPETITIVE ANALYSIS Fraguas & Ricart, Case: Genzyme Kim & Mauborgne 6. 2/24 MARKETING NONPROFITS Midterm Case: Beijing Toronto Hospital Berry, Porter & Teisberg 3/3 & 3/10 NO CLASSES 7. 3/17 SEGMENTATION AND POSITIONING Simon 4, Sarvary, Case: Gleevec Buxton & Easton 8. 3/24 GLOBAL BRANDING STRATEGY Simon 5, Erickson, Case: Marketing Antidepressants Simon article (Spectrum) 9. 3/31 LIFECYCLE MANAGEMENT Simon 6, 7, King Case: Global Branding at Merck 10. 4/7 PRICING STRATEGY Simon 8, 9 Case: Merck Global Health (A) (B) Kleinke 11. 4/14 COMMUNICATIONS STRATEGY Simon 10, Esposito Case: E-Business at Novartis 12. 4/21 FINAL TERM PROJECT PRESENTATIONS Term Project Papers Due 2

3 COURSE REQUIREMENTS ASSIGNED READINGS should be completed prior to each class: A significant part of the total grade will depend on the quality of the class participation. TEAMS will be responsible for one oral CASE ANALYSIS. Group grades will be allocated to individuals after peer evaluation by group members. A MIDTERM EXAMINATION will consist of multiple choice questions and short essays that evaluate conceptual understanding and ability to apply principles to actual cases. A final term project MAY CONSIST OF ONE OF TWO OPTIONS, ALSO TO BE DONE IN TEAMS. 1. Choose a health care organization (either your own contact or a firm in the New York area). Prepare an audit of one aspect of its marketing activities (such as: segmentation, branding, competitive strategies, communications) and develop recommendations. Work should be based both on direct (company interviews) and secondary research Prepare a marketing plan for a startup company (include market, product and competitive analysis) Focus on a specific problem (identified through company interviews) and develop an analysis and action plan. Problems may include: Entry of a new competitor, reassessment of products/services, development of communications strategy, etc. 2. Choose a research topic dealing with one aspect of marketing strategy such as: Marketing startups (key success factors) Global branding strategy Competitive strategies E-business: best practices GRADING CRITERIA Final grades will be determined according to these criteria: Class participation 25% Midterm exam 25% Oral case presentation (group work) 20% Final Term project (group work) 30% 3

4 READINGS COURSE INTRODUCTION Stephen Bradley & J. Weber, "The Pharmaceutical Industry: Challenges in the New Century", Harvard Business School Note , 2003 INDUSTRY ANALYSIS Jim Gilbert et al, Rebuilding Big Pharma s Business Model, In Vivo, Nov Judith Sawyer, Millennium s New Game Plan, Pharmaceutical Executive, October 2003 STARTUPS: KEY SUCCESS FACTORS Richard Hamermesh et al, Note on Business Model Analysis for the Entrepreneur, HBS Note , Jan MARKET ASSESSMENT Sumit Aggarwal et al, "Predicting Commercial Success, Not Revisiting the Past", In Vivo, September 2004 Richard Bohmer, The Customers in Health Care, HBS Note , Jan COMPETITIVE ANALYSIS Chan Kim and R. Mauborgne, Blue Ocean Strategy, Harvard Business Review, October 2004 Rafael Fraguas and J. Ricart, Competitor Analysis, IESE Note , May 1998 MARKETING NONPROFITS Michael Porter & E. Teisberg, "Redefining Competition in Health Care", Harvard Business Review, June 2004 Leonard Berry & N. Bendapudi, "Clueing in Customers", Harvard Business Review, February 2003 SEGMENTATION AND POSITIONING Miklos Sarvary, Target Market Selection and Product Positioning, HBS Note , Aug Brian Buxton & R. Easton, "Blockbusters to New Engine Drugs: The Key Industry Shift", In Vivo, July/August 2003 BRANDING STRATEGY Françoise Simon, "Global Branding Strategy", Spectrum, November 2003 Deborah Erickson, "Branding Goes Global", In Vivo, May 2001 LIFECYCLE MANAGEMENT John King, Can A Drug Live Forever?, R&D Directions, April 2003 PRICING STRATEGY J.D. Kleinke, The Price of Progress, Health Affairs, Sept 2001 COMMUNICATIONS STRATEGY Michael Esposito et al, "The Evolution of E-Empowered Consumer Marketing", In Vivo, November 2000 MARKETING PLAN DEVELOPMENT Eric Siegel et al, Marketing Plan, The Ernst and Young Business Plan Guide, Wiley,

5 CASE LIST Strategic Deal-Making at Millennium Pharmaceuticals Watkins, Harvard, A Father s Love: Novazyme Pharmaceuticals Bohmer, Harvard, Eli Lilly: Innovation in Diabetes Care Christensen, Harvard, Genzyme: Engineering the Markets for Orphan Drugs Chesbrough, Harvard, 2002 IVEY 901A06 N.A. Beijing Toronto International Hospital Hardy, Ivey, 2001 Gleevec: Success by Design in Oncology Simon, Columbia, Marketing Antidepressants: Prozac and Paxil Moon, Harvard, 2003 N.A. Global Brand Building at Merck Simon, Columbia, Merck Global Health Initiatives (A) (B) Harvard, E-Business at Novartis McAfee, Harvard,