Writing financial objectives in a medical brand plan

Many new pharmaceutical marketers are surprised to learn that part of their role is to become a financial expert. And the more senior you become, the more you need to understand financial data.

While you most likely have support from a finance team, you should understand how to build and read a P&L (profit and loss) statement (REVENUE - EXPENSES = PROFIT or LOSS).

Marketers have substantial input in both the revenue and expenses for the brand:

1. Revenue (sales) forecast

2. Script (Rx) forecast (if applicable; ie. this would not apply to medical equipment)

3. Unit forecast

... and yes, you usually need the three forecasts for each SKU. So if your product comes in 10mL, 20mL and 30mL bottles, you should have a revenue, Rx (if applicable) and unit forecast for each of the formats.

Some marketers build their sales forecast based on Rx, whereas others start off with units. Either way, once you have one of these forecasts completed, you can usually convert pretty easily into the other two forecasts.

Marketers also propose the Direct Marketing Expenses (DME; the marketing expenses to promote the brand) and number of sales calls that they estimate necessary to achieve the sales forecast.

The formula for calculating the costs of your sales force will depend on how many representatives are calling on family physicians, how many are calling on specialists, and what selling position. A 'P1 product' is the sales rep's most important brand to sell. This is the brand that gets talked about first and takes up the most time during the sales call. Therefore, a P1 brand is more costly than a P2 (2nd position) or P3 (3rd position) and so on. Typically, the sales expenses are so complex that the finance department calculates this for the marketer.