If you have been working in the medical device marketing for a few years; Then you’ve probably noticed that it is far more complicated to achieve growth in the current environment.
The good old times are gone. Incremental innovation at a premium price, product launches that almost always deliver the expectations. And rapid development projects with easy registration are becoming rare.
In the past, medical device companies could rely on incremental innovations, easy market access, fewer price constraints, and sales force relationships with the clinicians to deliver good results.
Today, the market is far more complex and competitive. To remain profitable, companies will need to leverage better, stronger, and effective medical device marketing.
What Is Marketing And Why Is It Important In Medical Device
According to Prof. Philip Kotler, the father of modern marketing:
“Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.
Marketing identifies unfulfilled needs and desires. It defines, measures, and quantifies the size of the identified market and the profit potential.
It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.
Marketing is often performed by a department within the organization. This is both good and bad. It’s good because it unites a group of trained people who focus on the marketing task. It’s bad because marketing activities should not be carried out in a single department, but they should be manifest in all the activities of the organization.
In my 11th edition of Marketing Management, I describe the most important concepts of marketing in the first chapter.
They are: segmentation, targeting, positioning, needs, wants, demand, offerings, brands, value and satisfaction, exchange, transactions, relationships and networks, marketing channels, supply chain, competition, the marketing environment, and marketing programs.
These terms make up the working vocabulary of the marketing professional.
Marketing’s key processes are (1) opportunity identification, (2) new product development, (3) customer attraction, (4) customer retention and loyalty-building, and (5) order fulfillment. A company that handles all of these processes well will normally enjoy success.
But when a company fails at any one of these processes, it will not survive.”
I’ve been working in medical device marketing companies for several years. And I have discussed with many marketers working for small and big companies during all those years.
Up till now, I haven’t found a marketing organization that does entirely what Professor Kotler describes as marketing.
I’m not saying that in medical device companies marketing is not done at all, but that there is ample room for improvement as what is called marketing in some cases is not marketing.
For example, I’ve seen opportunity identification often not well managed by the marketing organization because they lack the resources to explore the target market adequately or are strongly influenced by the sales organization and not based on solid data.
Moreover, in many companies, new product development is still driven by R&D, which is more focused on regulations, project management and technology than on market needs.
What Can Good Marketing Do For A Medical Device Company
To simplify it, let’s focus first on some upstream and then some downstream marketing activities.
Upstream Medical Device Marketing
Basically, upstream marketing is building products that customers want. It refers to the process of identifying and fulfilling customer needs and wants. Ideally, it starts at the beginning of the product development and defines which customer segments to focus on.
-Customer Focused Upstream Marketing
Upstream marketing analyzes how the end-user utilizes the product, what job has to be done, and what competitive advantage will be required to convince the customer.
By focusing on the “customer” and not on the product, the company can move from innovations that are technology-driven, incremental, and features-based to value-based innovations.
-Proper Business Case
Another area where upstream marketing can bring value is concerning the long-term product development process.
At the initial stage(phase 0), a detailed business case to support the product development is produced.
Unfortunately, due to the time needed to accomplish all the development phases, when the product is finally ready to be launched, the environment could have been changed from phase 0 (when the business case was created).
New competitors, technology shifts, reimbursement changes, new clinical guidelines, new surgical approaches, just to mention a few examples, can appear during the development process with an impact on the business opportunity.
It is the responsibility of the marketing team to update the business case, give attention to external environment changes and potentially stop the R&D project- because the product, despite not being launched, is already obsolete.
Although very painful; yet, the decision to kill a product before the launch because it’s not satisfying the customers’ needs is a way by which marketing can bring value to the company.
Downstream Medical Device Marketing
Downstream marketing works by making the customer want to buy the product, and it is usually what non-marketers think is marketing.
It involves several marketing practices such as campaign, advertising, promotion, communication, brand-building, etc.
While these activities are important, in my medical device marketing experience, companies spend a relevant amount of money on downstream marketing activities and tend to invest less in upstream marketing activities.
-Product Launch
Product launch- a strategic downstream marketing activity, is often more of a product release than a real launch.
Before launching, companies in the medical device sector rarely invest resources for market development, demand generation, patient engagement, and integrated multichannel marketing communication.
Because the medical device companies have launched so many line-extension products, they tend to replicate the same process without really differentiating between products that need a real launch and products that need just a market release.
To achieve success, a new product launch should be well planned in advance and well-resourced in order to capitalize on the opportunity.
-Product portfolio optimization
Product portfolio optimization is definitively an aspect where good marketing can be helpful.
In many companies, the product portfolio has been growing for years bringing complexity to many stakeholders internally, including the supply chain, production, regulatory affairs, sales, service & external users, administrators, and purchasers.
Retiring products from the market to reduce the product portfolio can be useful to increase profitability through cost reduction and boosting the sales force’s focus on the remaining products.
Moreover, a limited portfolio can free up resources that could be used elsewhere to generate more value.
The medical device marketing team is responsible for assessing the portfolio regarding evolving customer needs, competitive landscape, market dynamics, revenues, and gross margin.
With this data, marketing can lead the process of making informed decisions about obsoleting products.
-Integrated Marketing And Sales Commercial Execution
Having worked in sales and medical device marketing, I had the opportunity to notice that integration between the departments is often not optimal.
Building a compelling value proposition is a key marketing activity; however, if the sales team is not communicating it properly, the marketing strategy will likely not be implemented.
Marketing should work with the sales organization (direct or indirect) to create evidence, content, tools, campaigns and eventually drive the commercial execution.
How To Transform The Current Medical Device Marketing Function
Changing the marketing function is not an easy task; below are a few ideas worth trying.
Stop Doing The Hamster On The Wheel
The first thing to do is stop doing what is Not real marketing and focus on real value creation activities.
In some companies, the day-by-day product management tasks are dealing with backorders, managing inventory, planning with supply chain, supporting other functional initiatives like the sales organization with information, training, documentation, or the R&D organization in remediation or certification.
It is clear that someone has to do it; however, if you are spending most of your time on these tasks, you’ll have less time to do real marketing. And you’ll not be concentrating on the long term.
Stopping these tasks will free up marketing resources to perform value creation activities.
Ask For More Resources
In many companies, marketing is understaffed and underfunded to drive the upstream and downstream initiatives, as I have mentioned before.
Very likely, a larger budget won’t be available easily. However, the portfolio management and the business case update can generate cost savings that can produce resources for the marketing organization to do proper marketing.
Increase Marketing Influence
Marketing must influence the decision-making process, especially at the level of the company strategy.
Evidence generated by the marketing department should play a much larger role in facilitating any team decision in product development, as in business development.
This could be addressed in different ways, such as defining models to ensure that cross-functional teams follow and listen to the marketing voice. Or by allocating budgets to marketing from other functions.
Get Support From Senior Management
Better marketing can deliver a meaningful impact on the results of medical device companies. And meanwhile, solve some of the challenges we are facing.
However, the benefit of a well-developed marketing function is not evident to everyone; understanding these concerns and addressing them can facilitate the transition.
Luckily, providing solid data and examples of previous decisions where proper marketing could have made the difference can help to overcome how marketing is viewed.
Conclusion
Changing perceptions on the role of marketing in medical device isn’t easy.
It will take a while to convince the senior management and the rest of the company about the value that can be generated with better, stronger, and effective marketing.
Inertia in large and small companies is also a powerful enemy.
However, times are changing, and the market is telling us that they want something different from the medical device industry.
Having proper marketing can increase customer-centricity, differentiate from the competition, develop better products and produce long-term financial results.
Do you share my position on medical device marketing? Let me know your thoughts in the comments below and subscribe for more.