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OUTSOURCING INSIGHTS OUTSOURCING INSIGHTS By Victor Coker, director of business intelligence, That's Nice LLC CROs provide independent development services for the pharmaceutical and biotechnology markets. CROs have evolved from offering basic support, to providing a wide range of clinical, central laboratory, and analytical services that meet the present demand of the market and its sponsors. Currently, smaller CROs are consolidating (as defined by revenue market shares) and, coupled with acquisitions, are expanding and adding new services. As a result, there is a build up in early-stage research segments, creating a downward pull on growth rates and a severely price sensitive marketplace. Many management teams within these CROs have simply focused on pricing structure as a primary lever to sustain growth and encourage brand awareness amidst the current constrictive economic conditions. To investigate the validity of this business practice, we reviewed the Brand Index data from the recently released Nice Insight Contract Research and Manufacturing (CRAMS) report. First, we identified the top 10 CROs of which our survey respondents were most familiar — respondents indicated they either know the company well and/or have worked with the company. The companies were as follows (in no particular order): ICON (Prevalere Life Science), Lancaster Laboratories, Millipore, Huntingdon Life Sciences, Nanosyn, Boston Analytical, Covance, EMD Chemicals, West Pharmaceutical Services, and Capsugel. We found that the top 10 companies rated similarly on the perception of pricing; however, this close match in rankings did not transfer over to brand awareness. For example, Lancaster Laboratories and Capsugel aligned closely in pricing, rating 5.5 and 5.8 out of 10, respectively. In terms of awareness, however, 42 percent of respondents indicated they were either familiar with or had worked with Lancaster Laboratories, whereas only 20 percent indicated the same of Capsugel. This means that pricing structure alone is not an indicator of brand growth or recognition. Most management teams within the CRAMS industry view marketing as simply a support function to sales, instead of a tool to increase awareness among current and potential customers. Understandably, the problem of establishing an adequate benchmark for marketing ROI can make it a daunting investment. However, our observations from the Brand Index data indicate that the companies with the highest awareness — and thus the most productive pipelines — are those communicating a differentiated value to the appropriate target audience. It follows that the ability to leverage the product or services of an organization through targeted marketing could significantly improve lead generation. Survey Methodology: Nice Insight Strategic Partnering Surveys are deployed on behalf of Nice Insight clients to a targeted group of outsourcing decision makers. The surveys are comprised of ~40 questions geared towards understanding current outsourcing practices, present and future expectations from outsourcing partners, and which traits contribute to successful partnerships. The above data includes the combined results from six studies, two in each API manufacturing category. [n=200 per study] If you want to learn more about the report or how to participate, please contact Nigel Walker, managing director, or Salvatore Fazzolari, director of client services, at Nice Insight by sending an email to niceinsight.survey@thatsnice.com. Walker 18 LifeScienceLeader.com October 2013