1. University of Texas at Arlington
ALL
Global Marketing and Research and Development
University of Texas at Arlington
November 17th, 2010

2. Agenda The Need for Global Marketing
Evolution of Alcon Global Marketing
How has it changed
Why has it changed
Current Role of Alcon Regional Marketing
Current Role of Alcon Global Marketing
Alcon Global Advertising
Push vs. Pull Strategy
Alcon Integration of Marketing, R&D and Manufacturing

3. The Need for Global Marketing Alcon Geographic Sales Breakdown
United States
International
2000
2010*
The extent of our global reach is reflected in the breakdown of our sales by geography.
While the US is still our largest market, International sales account for almost half of Alcon’s global sales. In the surgical product arena, international actually contributes more than 50% of the sales volume.
* YTD - Q3, 2010

4. Global Reach Describe the operations
5 Research Centers
14 Manufacturing Plants
75+Operating Companies
72 Countries with Physician Training Centers
14,500 Employees
Alcon Headquarter Office
Alcon Research Facility
Alcon Manufacturing Plant
Alcon Operating Company
Describe the operations
Unparalleled scope and reach to all areas of the globe.
Importance of direct sales and marketing

5. Old Global Marketing Function
Research & Development
Global, Regional and Affiliate Marketing
Product Development
Brand Development & Promotion

6. Old Global Marketing Structure
U.S.
Japan
EURMEA
LACAR
CAFE
U.S.
Product
Manager
International
Product
Manager
Affiliate Product Managers

7. Old Global Marketing Structure
U.S.
Japan
EURMEA
LACAR
CAFE
Global Marketing Director
U.S.
Product
Manager
International
Product
Manager
Affiliate Product Managers

8. New Global Marketing Structure - Strategic Brand Building
Group
GMC
Strategic Brand Planning
Market Research
Commercial Contact for Product Development
Commercial Contact for Medical Affairs
Global Position & Campaign Creation
Global Communication Platform
Global KOLs
U.S.
JAPAN
EURMEA
LACAR
CAFE
75+ Legal Entities / Affiliates Brand Managers
Region execution of Global Strategy
Regional KOLs
Regional Phase IV
Affiliate oversight
Local Execution of Global Plan
In country share development

9. Current Global Marketing Function
Regional Marketing
Research & Development
Medical Affairs
R&D Alliances
Legal
Finance
Manufacturing
Business Development

10. Role of 2010 Regional Marketing Teams
Regional Marketing Plans
Global Messaging Compliance
Objective
Strategy
Critical Success Factors
Targeting
Demand Model
Market Research
Tactics
Resource Allocation
Compliance / Regulatory
List of responsibilities of Regional Marketing

11. Role of 2010 Regional Marketing Teams
Speaker Development Meetings
KOL Management
Promotional Meetings
Educational Meetings
Promotional Articles
Advertisement Placement
Sales Meeting Execution
Field Visitations
Message Management
Share of Voice Management
List of responsibilities of Regional Marketing

12. Role of 2010 Regional Marketing Teams
Forecasting
Regional development opportunities
Finance
Manufacturing
Provides regional input on acquisitions and portfolio planning
Pricing (within Global Guidelines)
Oversees affiliate activities and pricing
Regional training needs and capabilities
List of responsibilities of Regional Marketing

13. Role of Global Marketing Portfolio Management
Increasing eNPV
Internal Development Projects
Acquisition Targets
Licensing opportunities
One of the key performance indicators for Global Marketing (as well as the Therapeutic Unit Heads in R&D) is the management and growth of the estimated Net Present Value of the portfolio. This includes internal development projects as well as successful licensing of early stage compounds and technology and the acquisition of external products and opportunities.
As projects are advanced through the R&D stage gate model, their likelihood of approval (or probability of success increases). This equates into an increase in the estimated Net Present Value for the portfolio. and

14. Role of Global Marketing
Managing Portfolio Strategy
Strategic Planning Process
Global Reimbursement Strategy
Global Advisory Boards
Global Market Intelligence Requirements
Global Phase IV Plan
Global Meeting Execution
Global Field Visits & Market Support
Brand Resource Binders
List of responsibilities of Global Marketing

15. Alcon Corporate Governance
Project Review Meeting
Portfolio Management Committee
Global Marketing Committee
Within the past 2 years, Alcon has instituted a Corporate Governance Process. It is important for all of us to understand the process and how decisions are made within the organization.
The Portfolio Review Meeting (PRM) is an R&D led meeting that assesses the science supporting each project and makes decisions as to whether a project should advance to the next stage in the stage gate model.
The Global Marketing Committee (GMC) reviews and endorses marketing and commercial decisions.
The combined effort of PRM (Science) and GMC (Commercial) are presented to the ELT at the Portfolio Management Committee meeting who makes “investment” decision. Examples of this are to move projects from Exploratory B into confirmatory or review the Technical assessment (including R&D & Legal) and the commercial valuation for an external acquisition target.

16. Global Advertising?

17. Standardization of Advertising
For:
Economic Advantage – Economies of Scale
Creative Talent / Execution Concern
Global Brand Names
Against:
Cultural Diversity
Regulatory Concerns

18. Barriers to International Communication
Cultural barriers
Pepsi (SE Asia)
Changed the color of vending machines from royal blue to light blue
Light blue is associated with death and mourning in SE Asia
Source and Country of Origin Effects
Quality Perception (e.g. Japan)
Nationalism

19. International Marketing Mistakes
Parker Pens (Mexico)
“It won’t leak in your pocket and embarrass you”
Used embarazer (to impregnate) for emabarass
Translation:
Coors (Spain)
“Turn it loose”
Pepsi (China)
“Pepsi brings you back to life”
It won’t leak in your pocket and make you pregnant
Suffer from diarrhea
Pepsi brings your ancestors back from the grave

20. AZARGA Case Study

21. Alcon Branding Process (ABP)
GMC approval of positioning options to be tested
Creative Brief Approval
Meeting
GMC approval of final positioning and FOC
GMC approval of recommended concept
VALIDATE 1 2 3 4 5 6 7
Background Research
(Obtain background research from R&D, GMI, etc)
Identify Product Benefits
Develop Positioning Statement Options
Global Positioning Research
Create Brand Positioning Document
Develop Creative Brief
Generate Core Campaign Ideas
Global Concept Devt. Research
Develop Message Platform
(addtl message testing as needed)
Adapt Global Binder for Regional Execution
Incl. feedback from Regions & approval from VP, Mktg
Incl. approval from Director, GMI on Market Selection
Incl. feedback from Regions & approval from VP, Mktg
Incl. approval from Director, GMI on Market Selection
ALEX - Please use hidden slides (4-5) to talk to this slide.
Background Phase
Positioning Phase
Concepting Phase
Execution Phase
~40 weeks

22. Local Flexibility

23. Examples of Regional Support / Flexibility
Products
KYNEX® – Korea
VIGADEXA® – Latin America
CIPRODEX® Otic & PATANASE® – U.S.
Local Execution
Regulatory Claims
Targeting
Packaging Needs

24. Push vs. Pull Strategies
Pull Strategy
Mass Media Advertising
Push Strategy
Personal Selling
Factors to Consider:
Consumer Sophistication
Ability to Reach Audience
Channel length
Media Availability

25. Push vs. Pull Push Industrial or Complex products
Distribution Channels are short
Limited Advertising Media
Pull
Consumer products
Distribution Channels are long
Sufficient Advertising Media

26. Integration of Marketing, R&D and Manufacturing

27. Research & Development
Cross-functional Integration of Project Teams Helps Insure:
Project development projects are driven by customer needs
New products are designed with manufacturing in mind
Development costs are kept in check
Time to market is minimized

28. Target Project Profile
Project Code
22-XXXX
Specialty
Pharmaceutics
Anti-Inflammatory
Aspiration for value proposition at launch:
Base Case:
Upside Case/Aspirational Case:
Indication and Usage:
Patient Profile/Target Population:
Dosage and Administration:

29. High Performing Cross Functional Teams
“Heavyweight” Project Manager
high status within the organization
power and authority required to get financial and human resources the team needs to succeed.
Should be composed of at least one member from each key function
The team members should be located in one location if possible
Should have a clear plan and clear goals
Developmental milestones and budgets