This month’s published document for The Orange Pages addresses rumors that some pharmaceutical companies are considering outsourcing, i.e., having all or most of the functions currently performed by in-house marketing research personnel conducted by an outside vendor. This move is being contemplated based on the belief that marketing research is not a core competency of a pharmaceutical company and, especially given the peaks and valleys of workload in this area, can be carried out more cost-effectively by an external organization. The focus on lowering costs has become a paramount goal among pharmaceutical companies and against this backdrop, the rumors must be taken seriously and consideration must be given to the pros and cons of such an approach.
A review of pharmaceutical marketing research history shows that, in some ways and in some companies, experience has already been gained in this area. For example, internal outsourcing has been used by bringing in relatively long-term, full-time consultants to do the work of what would usually require another full-time company employee. The changing nature of the contracts arranged between pharmaceutical companies and their agencies – from the three-bid requirement to agency-of-record relationships – has also allowed some of the historical functionality of the traditional pharmaceutical company marketing researcher to be outsourced.
While these few examples show that outsourcing is not a new concept in pharmaceutical marketing research, a company’s move to outsourcing its entire marketing research function is a different story. Before this can be considered, one must examine the key functions of the marketing researcher at present, what they will be in the future, which of these functions have been outsourced on a small scale historically, to what extent we see evidence of movement in this direction and, most definitively, to what extent it makes sense to outsource these functions.
Rather than turn to outsourcing as a reflexive response to cost-cutting pressures, companies must first take time to answer questions such as: Can marketing research really be done more efficiently if outsourced than if retained within the company? What kinds of organizations would we outsource our marketing research function to? And what would the rules be for outsourcing contractors?
To download the complete October 2008 discussion on the outsourcing of the marketing research function by pharmaceutical companies, please click here.
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