Introduction
The market success of a drug or medical device is strongly determined by its value proposition. It is why designing and communicating a compelling value proposition to all the stakeholders is one of the most vital medical marketing activities.
The role of the product manager (whose responsibility is to lead a cross-functional team to develop the value proposition and ensure its communication at every interaction with the stakeholders) is a significant part of this process.
Reason being that the different stakeholders, healthcare professionals, patients, providers, and payers can have different or even divergent value perspectives, increasing the complexity of developing an effective value proposition for all the stakeholders.
This article is one of four series, and I’ll start here with the definition of the value proposition of a drug or medical device and how to develop a compelling one. To do this, I’ll use a practical tool – the value proposition canvas. So please follow along.
The definition
Firstly, note that the value proposition can apply to an entire company, a business unit, or products and services. In this series, I will only focus on the value proposition of medical products (drugs or medical devices).
Keep in mind that the value proposition describes the benefits customers can expect from your products and services. And customers generally are motivated to buy, prescribe or use a product or service on the basis of its value proposition.
The essence of the value proposition is that doctors and patients are not excited by products and services; instead, the prospect of improving their lives is the real attraction.
It also implies that customers are not interested in you, your company or your products. They are interested in themselves.
Knowing this, we can summarize the value proposition as a statement (positioning statement) that conveys what your product does, how it differs from competitors and the value it will generate for the customer.
The importance
I get surprised to find people in the industry (especially in MedTech) who do not see the benefits of the value proposition and, in turn misjudge its complexity.
For example, some consider the development of the value proposition a “desirable” option to be formed quite late in the product development.
Whereas, others think it is an isolated exercise just for the marketing team.
In reality, the value proposition of a drug or medical device is an iterative process that needs to start early on, involves a cross-functional team and is central to the product’s success.
A good value proposition, therefore, should capture and communicate the outcomes of a product and the differentiating points from competitors.
The Value Proposition and the holistic marketing
The holistic marketing view focuses on building long-term-relationships with the customers based on the “value” exchange between the company and the customer.
In fact, the image below explains it better. Notice how the value proposition is at the center of the activities around the value. That is how it should be.
That said, Value exploration is basically how the company identifies new value opportunities through market research and customer understanding. These activities are some of my strong points, like the VOC, ethnography and market segmentation. You can refer to my previous articles to understand these key points better.
Value creation is how the company creates value for the customer, developing features, clinical outcomes, economic evidence and clinical evidence.
Value communication is how the company communicates the value to the customer through the different channels. The goal is to create an integrated marketing communication to ensure that all the contacts with the customers or prospects are relevant and consistent.
Value delivery is how the company uses its or other organizations to deliver the product effectively and efficiently.
The Value Proposition Canvas
As seen below, the value proposition canvas is essential in developing a compelling value proposition. It helps to ensure that the product is developed and positioned around the customer’s needs.
The Value Proposition Canvas was created by Alexander Osterwalder, and is part of the Business Model Canvas.
The tool can function effectively and without adaptation to develop the value proposition of medical products, helping companies in decision making and product positioning. It is also a graphical representation of customer’s needs, producing alignment on these essential factors, as shown in the image below.
In the next post, part two of this series, join me to closely examine the main, often misunderstood part of the canvas: the customer(s).
Also, in the meantime, you can share your ideas about the value proposition below, and if you enjoyed this post, please feel free to share it with friends and suggest they subscribe or follow me on LinkedIn.