We can all agree that a successful product launch does not happen accidentally, as it is the direct result of understanding the measures and factors that influence a product’s success.
Since new product launches are a vital part of a medical device company, it’s appropriate to know how to do it right, and that’s what this article seeks to address. So please follow along.
Factors that affect medical device product launch
Let’s start with the most highly regulated products (like high risk medical devices and drugs). Notice that they require a long and complex process to reach the market, and when the regulatory approval is obtained, the launch then begins. Particularly, pharmaceutical products need a very long time to reach the market making the launch critical.
Having worked in pharma for several years, I frequently hear some people highlighting the importance of a successful product launch. Actually, in the pharma business, there is a consensus that the first six months of commercialization are critical to the long-term success of a drug.
According to a McKinsey & Company study, “about two-thirds of new drugs fail to meet pre-launch consensus sales expectations for their first year on the market.” More so, products not meeting sales expectations underperform even after three years post-launch.
I think the medical device launch scenario is changing and becoming somewhat similar to the pharma business. The environment has also been transformed by market disruptions, difficult market access, increase in regulatory requirements, healthcare providers evolution, and stakeholder engagement, making the launch phase decisive.
The importance of new product launch
According to Philip Kotler, every firm must develop and launch new products because failure to do so may adversely impact the company’s future. He also said customers want new products, and the competitors will make every effort to provide them.
We can further confirm the importance of new product launches by the huge number of papers that have investigated the connection between a firm success and new product launches.
What is a successful product?
Although there is no consensus on what a successful product and a successful launch are in our industry, I believe we cannot measure a product’s success by using one single success indicator.
According to Griffin and Page, there are 16 core measures of product success:
- Customer acceptance
- Customer satisfaction
- Meet revenue goal
- Revenue growth
- Meet market share goal
- Meet unit share goal
- Break-even time
- Attain margin goal
- Attain profitability goal
- Attain Return on Investment goal
- Development cost
- Launched on time
- Achieve product performance goal
- Meet quality guideline
- Speed to market
- Percentage of sales by new product
The success measures in bold are my favorite. However, each company is free to decide among these criteria which are the most relevant to define the success of their product.
The last element to consider when defining a successful product launch is the time perspective establishing short-, medium– and long-term levels of the indicators.
As for the success criteria, according to the product specificity, the time perspective could be significantly different.
For example, a device the patient can purchase directly, like a thermometer, could have short-term indicators expressed in months. Similarly, a large piece of equipment, like a surgical robot, could have a short-term indicator expressed in years.
Success Factors of New Product Launch
Earlier on, we talked about the metrics of a successful product. Now, let’s focus on the factors that affect and influence the launch of a new product in the medical device market.
When discussing the success factors of a launch, the focus is usually on tactical launch decisions. For example, the target market to prioritize or which price level to set.
In my opinion, strategic decisions are the main determinants of a successful product launch, and from these decisions, we should develop tactical decisions. I’ll discuss more on this next.
Strategic decisions
Basically, the strategic decisions are the answers to the four W questions: what, where, why, and when to launch a new product.
These decisions must be taken into consideration at the beginning of the product’s development, even better, before the project kick-off.
This reasoning supports the common idea that the product launch starts just after the decision to develop a new product is taken.
Furthermore, strategic launch decisions must express a higher level of coherence and be in close relation with these four strategies:
1. Product strategy: this includes the degree of innovation, the technology, the time to market, the scope of the project, the value proposition, and the positioning.
2. Market strategy: it includes the target market, growth rate, technology, and category lifecycle.
3. Competitive strategy: this focuses on the competitive landscape, the degree of differentiation, and the channels to reach the users.
4. Company strategy: it includes all the decisions to achieve the strategic goals of the company.
Tactical decisions
Product tactics are related to the 4P of the marketing mix i.e., product, price, promotion, and place. This also includes the price policy, branding, positioning, promotional tactics, targeting, differentiation, distribution decisions, etc.
A tactical decision is the answer to the question of how to launch a specific new product. These decisions happen when the product is finalised and ready to be launched in the target markets.
Furthermore, tactical decisions are what is usually considered the product launch.
Know that the strategic market decision made earlier in the product development process will heavily influence the tactical decision made before and during the launch.
Conclusion
New product launches are one of the essential drivers of a company’s performance, and this is enough reason to focus on it.
Although this short article is not entirely a recipe for success, I’ve clearly identified the key drivers of success for new medical device launches using a marketing approach.
As a quick reminder, the product launch starts just as the decision to develop a new product is made.
When launching a new medical device, the focus is mostly on tactical launch strategies to determine how to launch the product.
However, I think the determinants of a successful launch depend on how the strategic decisions affect the tactical decisions and a higher level of alignment and consistency among the strategic and tactical decisions.
I hope this article helps you plan your new line of product launches and avoid common mistakes. Let me know your thoughts in the comments section below, and if you like the content of this blog, don’t forget to subscribe or connect with me on LinkedIn.