Pfizer’s Big Bet

No doubt even the most financially secure are seeing quite a dramatic change in this recession. Even the most elite of society are cutting back.  Corporate jets are being taken away, bonuses are shrinking, hedge fund managers are firing their backup, backup, backup maids and even Jack Welch has to give back some of his retirement package from GE. In response companies are deeply discounting their products and adding as many incentives to purchase as possible. I was in a TGI Fridays last week and had a meal for two, drinks included for $13. Not bad considering it would have likely been double that a year ago. However, there is such a thing as over discounting.

If you remember not too long ago, General Motors announced its “employee pricing program” where retail car buyers could buy a GM vehicle using a discount as if they worked for the company. Sounds like a heck of a promotion, but how do you ever go back to full pricing? Well the short answer is that you don’t. No one is going to wake up one morning and go “damn, I guess I can’t get that 20% discount anymore, so I’ll just have to pay full price.” They will look at other cars. To combat that predictable phenomenon, employee pricing became employee pricing plus, where GM kicked in an even deeper discount than the employee price. At last check (when they still had money to advertise), it was employee plus, plus. I think if we had held out longer it would have been free car. It’s no secret that GM is paying the ultimate price for not only crappy cars, but an idiotic pricing strategy. There are plenty of others that are resting on this death bed.

As a stark contrast, Abercrombie & Fitch, one of my most admired brands in the history of retail has chosen not only to say no to discounting, but has made the protection of their brand first priority. This strategy worked extremely well for them in 2001 after the terrorist attacks, left malls empty and retailers like The Gap, practically begging consumers to purchase. Abercrombie didn’t discount and when the recession was over, they had one of the strongest brands in the ever competitive teen fashion market. Their clothing was never regarded as cheap nor was their brand.

Which brings us to Pfizer. Yesterday, they announced their Maintain (an acronym for Medicines Assistance for Those who Are in Need) program that will allow patients who have been taking a Pfizer drug for at least a month to obtain that medicine for free if they fall on hard times. Yes, jobless hornballs, this includes Viagra. The kicker for Pfizer is that they have planned to spend zero dollars on advertising the program and allow the internet and viral media to take the ball and run with it.

"Think of the goodwill, think of the brand advocates they're creating by providing these medicines. You have somebody who's going to say 'I lost my job but I can still get my Lipitor for free? I'm going to tell everybody.' And all the studies show that some of the biggest influencers in health care are friends and family. People are going to be talking about this." Said Dorothy Wetzel, the former VP-consumer marketing at Pfizer who now runs her own health-care ad agency, Extrovertic. (taken from AdAge)

Tell everyone they did. AirCheese started tracking Pfizer a few hours after the story broke and the Tweets, Facebook mentions, and blog articles have soured exponentially hour over hour. They message is clearly getting through. The real question is, how do you charge some people and not others? How do you start charging those who were used to getting their medicine for free? Will this really build brand goodwill with customer, or just another transparent ploy? More importantly, how many patients are brand loyal when it comes to pharmaceuticals? Are they loyal to the drug and the cure, or the brand and the company? That question seems self evident, but we will continue to track it. What do you think?