The Five Types of Competitors
Every marketer worries about their competition, but not every marketer thinks about competition the same way. Pharmaceutical and medical device brands typically focus on the competitors indicated for the same uses as they are, and of course this is the natural starting place when evaluating the competitive environment. But there are really five types of competitors, and savvy marketers at least consider all of them when making strategic decisions. So what are the five types of competitors, and how should marketers address them?
Direct competitors: as mentioned above, these are the brands that compete for use in your approved indications. To win against these competitors requires a clear understanding of your advantages (better data, better value, better customer experience, etc.) and pressing them aggressively. This is the area marketers think about the most, and are most comfortable addressing.
Indirect competitors: these are the brands that operate in the same disease state, and whose presence can alter what your opportunity looks like. For example, an oncology brand indicated for patients without a targetable mutation will see its market shrink as more targeted agents are approved and testing increases. When losing share to indirect competitors, you need to evaluate if there are credible ways to push back against this indication erosion, and ensure thought leaders support the widest possible use of your brand.
Mindshare competitors: These competitors may treat a completely different condition, but vie for the attention of the customers you need to reach and convert. If your brand needs to tell its story to rheumatologists, for example, you need to contend with the attention a brand like Humira demands. This is a particularly relevant consideration for launch brands: do your plans take into account the competing demands on your customers' time? If not, an otherwise effective message may go unheard.
Credibility competitors: The first three types of competitors can be thought of as concentric circles, with the direct competitors at the heart of your strategy, and the indirect and mindshare competitors less central. But credibility competitors are different: they have the potential to distort your relationship with your customers. This is not necessarily a brand, but a force in the market that changes the way your brand is perceived. For example, think of a KOL who advocates watchful waiting instead of treating the condition you're indicated for. Or maybe there is a celebrity arguing for alternative medicine. Perhaps there is a generic medication being used off-label for your condition, and despite the lack of strong evidence many physicians believe it is a good early treatment approach. If they divert people from your indication or undermine the credibility of your data, you need to address their arguments, whether directly or indirectly.
Engagement competitors: Somewhat similar to mindshare competitors, but broader. If you need to gain engagement with your target audience to convert them, then everything else someone could be doing other than engaging in your content or learning about your brand is a background "competitor". Traditionally, pharma and medical device brands minimized the threat from engagement competitors by employing large field forces that created engagement by brute force. But as more physicians deny reps access, and as companies like Pfizer announce plans to cut back their field force and invest more in other promotional channels, marketers need to ask how many customers will choose to do something else rather than open your email, watch your video, or visit your web site. The only way to overcome engagement competitors is to put in the effort and investment to ensure your content delivers value. Is your message clear and relevant? Is your ad creative and beautiful enough to reward a customer for giving it 15 seconds of attention? Does your video make them laugh or cry? If you aren't asking these questions, you risk losing your customers to apathy and inertia.
All of these competitor types are not equal, and their relative importance will vary based on each brand's situation. Still, thinking through these five categories will ensure you gain a more clear picture of the true competitive landscape your brand faces, and what actions you can prioritize to earn the attention, engagement and loyalty of your customers.