New Adventures in Language
As Pharmaceutical companies branch out from established countries towards untapped emerging markets, Neil Gleghorn, CEO of Kallik, warns them not to get lost in the mire of managing translations.
A sea change in the industry over the last decade has seen opportunities for growth dwindling in the more developed Western world markets. In response, the focus on reaching the four billion people within the growing markets of China, India, Indonesia, Russia, Brazil, Turkey, and Mexico is gathering pace. As a counterbalance to declines in Western markets, a combination of improved healthcare coverage, large populations and lower labour costs is increasingly tempting pharmaceutical investment to the new economies.
With most predictions suggesting that emerging markets are soon set to overtake more developed countries, the timing for such a global effort is perfect. PriceWaterhouseCoopers estimate that the GDP of China, India, Indonesia, Russia, Brazil, Turkey, and Mexico will triple over the next decade. Next year, with a GDP of more than $8 trillion, China is poised to become the world’s third-largest pharmaceutical market. By 2013, it will account for an additional $40+ billion in annual sales. Brazil, Russia and India are expected to add $5-15 billion per country in annual sales to the global pharmaceutical market and a third tier of 13 countries is expected to contribute $1-5 billion per country. Although still at a relatively early stage, emerging markets will continue to drive growth in the industry.
Addressing the barrier on the path of internationalisation head on
But no matter how great the scope for growth and opportunities, success is far from assured. With every new market having its own language, governance and regulation, the complexities of shipping goods internationally are compounded when emerging market countries are involved. When it comes to packaging requirements, companies are presented with a variety of unique challenges and difficulties, not least of all multi language labelling, the management of which is inherently complex. The packaging efforts of Pharmaceutical companies looking to tap into the potential of these markets will need to be shaped by factors which, while maybe not new, have a far more pronounced importance than in developed markets. One thing is for sure, competing on cost alone can be short-sighted.
Learning to speak the emerging markets language
When it comes to managing the globalization process of packaging and labelling, the approach needs to accommodate many local languages, writing systems and conventions. Companies need to embrace the complexities of the nuances of dialect and locale. With around 6,800 spoken languages, 34 writing systems equating to approximately 79 written languages, managing the complexity of these is a sizeable challenge. English may well have become a lingua franca with almost two billion people worldwide speaking it, but if a company wants to interact successfully with consumers in new markets, assumptions about language and communications need to alter radically. On-pack language cannot be approached from an Anglo centric view.
To counteract the risk of getting it wrong, the content, translation and localization of corporate and product documentation needs to be managed with globalization in mind and companies must be active in complying with the growing language requirements associated with emerging markets making it easier to attract and keep global customers... Standardization, the basis for many labelling production efficiencies, is no longer the answer to success.
Obscuring market opportunities
Failing to manage the myriad of languages within any given market is simply not an option. Labelling and translation issues alone can delay product launches dramatically. In some of these languages, even an asterisk in the wrong direction changes the meaning of the word entirely so making sure every letter is correct with the right marks over the top of it is crucial. When you consider that certain countries, including China and South Korea, have issued their own sets of regulations requiring their languages, the proofreading process takes on paramount importance. With the prospect of possibly having to increase package sizes to accommodate the new languages, space optimisation is also a factor that comes into play. Re-designing packaging, whilst retaining brand benefits that play such a central role in taking existing products into new markets, can involve wide ranging changes that may need to be replicated across many other products within any given range. It is an undertaking that many Pharmaceutical companies fear will incur significant delays and higher manufacturing and packaging costs.
Very real potential for brand damage
Defects and errors in pack copy and artwork are primary reasons for product recalls. Getting drug label translations wrong can pose a very serious threat. The potential impacts of revenue and market-share losses and any negative publicity that threaten reputation can be catastrophic to any brand.
Recent product recalls have seen product safety, product quality and environmental standards in emerging markets rise up the boardroom agenda. According to a survey by Deloitte, roughly one-quarter of both developed market and emerging market executives said their companies had experienced a product recall over the past five years. As a result, companies are increasingly recognising that it is necessary to adhere to more rigorous standards that can cope with the differing requirements of each region. A proactive approach to balance the very different language variants of all of the countries within which you distribute is essential along with robust processes that will help companies ensure safety and quality across far-flung supply markets.
Meet the needs of a diversified client base
As packaging is a fundamental component of regulatory compliance, inconsistency on product labelling content is a critical issue. Aside from the language barriers, global packaging also needs to be tailored to the unique legality requirements of any local market. A maze of very differing legal, compliance and regulatory factors is further complicated by the systematic inefficiencies and frequent regulatory changes inherent within these markets. Companies must anticipate and manage the related risks with great caution in order to continue to reap the benefits that emerging markets provide.
Getting the right balance in how effectively and quickly a company can conform to the demands of the varying markets and the changes within them, will be crucial. In the face of such variation and volatility, both key factors of the new economy, the ability and flexibility to accommodate rapid changes in multi-language packaging and label artwork is paramount. If not managed and navigated adequately, growth can be seriously inhibited. When things change, the packaging artwork itself often changes. Reworking a project can incur many additional expenses and much extra work and lost time. Subsequent changes or additions may not be possible without massive revisions. Since packaging and artwork changes engage almost every functional discipline inside the company – margin may quickly dissipate. Against this background, artwork management has become a very high-stakes game and success will be based on the greater agility to respond faster to market change.
To minimise the risk and to be able to respond to the growing complexity that entering an emerging market brings, many Pharmaceutical companies will have to make some fundamental changes to their operational structures.
Uniform processes for the creation, approval and management of labelling content across a pharmaceutical firm, are sorely lacking. The current state of the labelling and packaging systems at most Pharmaceutical companies is inefficient with the processes of artwork creation and approval often being a resource-intensive process that relies on inefficient methods for sharing and communicating information. With labelling documents stored across the company in different systems and databases, changes to labels and packaging is rarely handled efficiently or systematically. This reliance on outdated, manual processes means that many are lacking the agility required to control the complexity of language variations and regional regulatory requirements required for these new market environments. Addressing regulatory and language systems with separate processes makes very little sense, adding additional layers of complexity to an already complicated process.
As companies from developed markets enter and local players intensify their focus, competitive pressure across the value chain is set to increase. Pharma’s major strategic weakness in the new markets could well be a propensity to be risk-averse when it comes to innovation. This in turn means that they lack the integration required to handle phrase and translation management, whilst addressing the labelling standards of each region effectively.
In the risk-averse Pharmaceutical industry, the strategy has always been a conservative one, yet the complexities of the new market environments could well precipitate a fundamental shift in the way that they operate.
Clear market leading positions in developed markets are certainly no guarantee to success in the new world. Yet as well as significantly improving efficiency and accuracy in the regulatory process, the issue of multi languages and effective phase and translation management provides a very real opportunity to change the way they view the labelling processes. The challenge of emerging markets actually offers a compelling opportunity to reduce risk by ensuring greater content consistency across a broad range of products. Only with technology can the ultimate benefits of reuse and reduced complexity be established. Payback comes from streamlined processes, faster approval and processing times and increased re-use of content.
Ironically, being too risk-averse to make changes in order to ease their competitive entry, could well pose to be the greatest menace. Rather than looking at this as a burden, might it be a catalyst to implement bold changes to operational structures to ease the journey into the new markets? The time is right to implement the correct technology and processes necessary to assure the long-term viability. Let’s not wait for a product recall to occur that will close the newly opened door.
