1. HBA-SF
Presentation
Idea to Product Launch for
Medical Devices
Jean M. Nelson
2/04/04
2. Idea to Product Launch – Medical Devices
• Topic 1
• Topic 2
• Topic 3
page 2
3. Timeline – Idea to Product Launch
Idea Product Product Product
Development Evaluation Launch
Concept Feasibility/Pre-Pilot Pilot Production Launch Preparation
5-10 years
page 3
4. Components of a Product Launch
“4 P’s in Marketing”
Placement Product
Promotion Price
page 4
6. Product - Positioning/Value
Proposition
• Positioning – What is the product? How is it different
from current options? Who are the constituents?
• Value Proposition – What is the benefit to the
customer?
• Positioning drives all of the other elements – Pricing,
Promotion, Placement
• Positioning evolves over time as the product is
developed and market dynamics change
• Need to “test market” positioning at customer
evaluation sites (not just clinical trial sites)
page 6
7. Price - Value /clinical benefit
“The successful producer of a an article
sells it for more than it costs him to
produce – that’s his profit. The customer
buys it because it is worth more to him
than he pays for it – that’s his profit. No
one can long make a profit producing
anything unless the customer makes a
profit using it.”
– Samuel Pettingill, US Congressman, 1930s
page 7
8. Pricing Considerations
• Tangible benefits → ‘Rational sale’
– User – Example: Can do more procedures per day
– Buyer – Example: Less costly supplies
• Intangible - Clinical benefit → ‘Emotional sale’
– Patient – Example: Less risky procedure
– Clinician – Example: Better patient outcomes
• Costs to produce
• Market dynamics
– Competitive products
– Customer expectations
– Impact on customer’s current practice
– User vs buyer
page 8
9. Pricing Strategy
• Innovative product
– Market-skimming pricing
• Segment the market based on price
• Target higher priced segments first
• Assumes sufficient demand at higher price
– Market-penetration pricing
• Gain market share quickly
• Potentially keep out competition
• Assumes highly price-sensitive market
• Imitative product
– Product position based on price/quality mix
Source: Marketing Management, Kotler, 5th. ed
page 9
10. Pricing Strategy: Price/quality mix
Price
High Medium Low
Premium Penetration Superb-
High
Strategy Strategy value
Strategy
Overcharg- Average Good-
Quality Med ing Strategy value
Strategy Strategy
Rip-off Borax Cheap-
Strategy Strategy value
Low Strategy
Source: Marketing Management, Kotler, 5th. ed
page 10
11. “Testing” the Price
• Formal market research
– Multiple focus groups
– Nationwide series of one-on-one interviews
– Conjoint-analysis
• Informal market research
– Clinical trial sites
– Clinical advisors
– Customer evaluation sites
page 11
12. “Funding” the Purchase
• Proformas to demonstrate cost savings or economic
benefits
• Reimbursement – Incorporate into development cycle
– Existing codes and level of reimbursement
– Outcomes data needed to support new codes and
reimbursement – Plan early in the process! Impacts pivotal
trials
– Explore all avenues – Medicare, insurance plans, private
pay
• Purchase options
– Leasing
– Disposable upcharge
– Per use fee
page 12
13. Promotion
• Product promotion
– Collateral development (brochures, pocket guides,
posters, web pages)
– Tradeshow plan
– Advertising plan
– Direct Mail program
• Market development programs
– Peer-to-peer selling (trade articles, sponsored talks,
sponsored meetings, webcasts)
– Public relations – trade and consumer
page 13
14. Promotion: Peer-to-peer selling
– Where do the evangelists come from?
• Clinical trial sites
• Beta sites
• “First customers” – Set up evaluation sites as
“centers of excellence” with formal agreements
– Set up lecture series – doesn’t require big
budget
– Produce webcasts or even less expensive, use
conference calling with sales reps for audio
presentations
– Peer-reviewed publication strategy – initially
defined during development evolves and
continues
page 14
15. Peer-to-peer selling
Professional Education Programs
•Speaker
training/support
•Speaker sponsorship
•Significant Society
Support
Educational Meeting
Sponsored Speaker
•Partnerships with key Local Education
Lecture Series
organizations
page 15
16. Promotion: PR – trade and consumer
• Need third-party validation (preferably with articulate
clinicians) and reference sites
• Trade Media
– Supplements peer-reviewed publications and may be more
timely
– Targets ancillary influencers
• Consumer Media
– More cost-effective than advertising to reach patients
– National program begets regional programs which can
directly benefit users/buyers by increasing volume
page 16
18. Market Pull
National Consumer Media
NBC
20 20
First for
women
>200MM Consumer Media Impressions
*Within 2 years
page 18
19. Market Pull
Regional Media
Seattle er Boston
nv
go
D e
ica
Ch
New York
Pittsburg
h
es
Angel
Los
>35 Million Regional Media Impressions
page 19
20. Placement
• Type of sales organization
– Direct – Entire sales force or use specialists?
– Distributor
– Hybrid – Both direct and distributors
– OEM partners
• Impact on margins
• Sales training program
– Clinical education
– Product education
– Target customer profile/buying rationale
– Sales process
– Beta site and evaluation site experiences
• Need reference accounts
page 20
21. “In a Nutshell”
• Understand customer requirements/needs
• Product launch is not an endpoint – it is a
process and “Marketing” is part of the
entire process
• This is not a sequential process
– Market research is ongoing
– Reimbursement planning starts early - build it
into the trial design
– Publication strategy starts with the trials
page 21
22. Product Launch Timeline:
Idea to Commercialization
Idea Product Product Commerciali-
Development Evaluation zation
Concept Feasibility/Pre-Pilot Pilot Production Final launch prep.
5-10 years
•Market •Prototype •Pivotal clinical •Promotional
research development trials launch plan
•Early studies •Regulatory •Distribution
•Market research clearance/reimb- organized
ursement codes •Customer
•Market research evaluation sites
•Multiple clinical
outcome trials
page 22
