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Of course the ties between animal and human health are strong. “We’ve been in the animal business for 45 years,” says Bob Fauteux of Pfizer Animal Health. “It’s not a new development. It arose quite clearly that some medicines for people had good clinical utility in animals.”
Animal health is profitable for the pharma business in many ways, not just on the bottom line. The financial impact of animal health divisions may be small -- usually just a few percent of total revenues -- but the divisions offer synergies and maximize investments in R&D; they sell products and have good PR potential.
So why have some companies chosen to keep the animal and human identities separate, while others place them under the same corporate brand?
Pfizer is openly committed to the close bond between its animal and human divisions. CEO Hank McKinnell points to Pfizer animal health as part of the company’s commitment to a healthcare continuum, with both the largest human and animal health R&D investments.
“The animal health R&D is much smaller, but it leverages the range of research on the human side,” says Fauteux. He believes that his division benefits from the corporate Pfizer brand too. “Anecdotal evidence suggests that people have become more aware of Pfizer because of our human operations. Familiarity with Pfizer Inc certainly helps to support people’s perception of Pfizer Animal Health. We’ve never heard a comment to the opposite, where people are confused by the human and animal aspects having the same brand. We’re absolutely committed to staying under the same corporate identity. It’s a decision we made without any hesitation.”
Those companies using the same corporate brand for both human and animal operations may start to see some brand synergy in years to come. The area of companion animals is perhaps where the branding has its strongest overlap. “There’s real room for growth in the pets business. People expect the same treatment for Fluffy and Fido as for Freddie and Jennifer,” comments Helena Spedding, Deputy Editor of Animal Pharm Newsletter. “Consumers widely understand that if animals can get the same bugs as us, it’s pretty obvious that they will need a similar form of treatment. I wouldn’t think they would have a problem with the same company selling both.”
The wider recognition of pharmaceutical companies stems from direct-to-consumer (DTC) advertising of human pharmaceutical products. “Before we had DTC advertising there was probably not much to say on this subject at all,” Spedding continues. “You went to the vet and the vet picked the drug. There was little relationship. But since DTC there is a relationship been drug firms and the end consumer. For example, if you take Bayer’s aspirin, you may notice Bayer makes your dog’s pills too. There’s a transfer of trust, some kind of halo effect. You do get some knock-on effect, but only in companion animals where there’s an influence. If someone has a dog with osteoarthritis and the drugs don’t work, if the doctor prescribes them a drug from the same company for their own osteoarthritis they may refuse it.
“Pfizer, for instance have done a lot to build their corporate image, and there must be some carry over into animal health,” Spedding explains.
Not everyone believes that these crossover brands will have any real advantage, though. Tim Evans, head of animal health consultancy at Wood Mackenzie, says that the important thing is for companies to find synergies between their operations. He doubts that the corporate brand plays much of a role. “After all, in DTC the corporate brand is very small. What is important is the product brand, not who makes it.”
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Dr. Joachim Hasenmaier, head of Boehringer Ingelheim’s animal health division, agrees. “It is important to have a brand that conveys a company image. Animal health is fairly distinct from human pharmaceuticals, but if the human side has a strong image then it will carry over to animal health. But I don’t think that not having the crossover damages an animal health company’s chances. What is important is the branding of individual products. These are much more important. It would be a disaster if we lost our product brands.”
The rise of Merial shows that independent animal health corporate identities have every chance of success. In 1997 Merck and Aventis both undertook a strategic reorganization of their operations. They merged their two animal health divisions into a single joint venture company, Merial, effectively creating a new brand in animal care. In half a decade the brand has grown to be the third largest animal health company in most markets.
Many of the other companies with separate brands for their animal care operations would simply highlight the historical nature of the company name -- most have been in existence for decades, when the marketing climate was different. They have built up their brand equity and now is not the time to change. Besides, incorporating the parent company’s name now would inevitably cause unnecessary confusion.
Hasenmaier suggests that, despite the current vocal support for animal health and his own company’s commitment to retaining the Boehringer Ingelheim name, most publicly owned pharmaceutical companies would still prefer to keep animal health separate from human pharmaceuticals. “If there’s going to be a trend I think it is still towards independent animal health companies. At the moment companies are keeping them mainly because there are no strategic buyers offering the right price. And as animal health is profitable, they are welcomed, but I think most would prefer to see animal health as a separate brand. Animal health has become so marginal that they don’t want the risk of animal health damaging the human pharmaceuticals brand or business.”
So the spotlight is really on the few pharmaceutical companies -- and Pfizer in particular -- that use the same corporate brand. These companies must prove that the operational synergies between animal and human healthcare are further enhanced by sharing the same brand. Otherwise Freddie and Fido may no longer share the intimacy of getting their drugs from the same manufacturer. [15-Sep-2003]
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Edwin Colyer is a science and technology writer based in Manchester, UK.
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Nov 24, 2003
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Low-Carbs: Are Brands Losing It? -- Dale Buss
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Food and beverage brands deal with the latest trend to hit the industry: the low-carb frenzy. Is it time to throw your entire product line down the trash disposal over a trend?
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Oct 20, 2003
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Taking Advantage of Women -- Edwin Colyer
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Would you like a loyal customer from cradle to grave? Pharmaceutical companies are missing out on opportunities for a long-term product line for women.
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Oct 6, 2003
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Made where? -- Ron Irwin
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English roses grown in Kenya, American skis built in China, Italian shoes made in Romania? Home brands insist offshore production is the only route for survival.
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Sep 29, 2003
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Turning Over a New Leaf? -- Edwin Colyer
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We care about our staff and the environment… right? Are businesses really improving their records on environmental responsibility? Or is this cynical marketing at work?
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Jul 28, 2003
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Samsung Shows its Strength -- Robin Rusch
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Five years ago Samsung Electronics was a cheap Korean brand; today it’s a quality name that climbs to number 25 in Interbrand and BusinessWeek’s top global brands survey.
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Jun 30, 2003
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Delivering Global Brands -- Edwin Colyer
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Global express distribution operators, like TNT and Exel, are consolidating supply chains to better service and win contracts with brands like Deutsche Post, FedEx and UPS.
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Apr 7, 2003
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Happily Ever After? -- Dale Buss
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Looking to ally forces in a co-branding relationship? Match-making is a skill fraught with pitfalls, but done right it can expand market and grow opportunities.
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Mar 31, 2003
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The Brands We Love to Hate -- David Liss
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What can we learn from the brands we just can't stand? WWE, Jerry Springer and NASCAR aren't as far from Tiffany's or BMW as we may like to believe.
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