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Best Practices in Expanding a Medical Device Product Portfolio Without Cannibalizing an Established Brand
 

Best Practices in Expanding a Medical Device Product Portfolio Without Cannibalizing an Established Brand

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Medical Device companies must regularly find ways to manage similar products within the same business units. It is a complex balancing act that requires companies' marketing functions and product ...

Medical Device companies must regularly find ways to manage similar products within the same business units. It is a complex balancing act that requires companies' marketing functions and product teams to grow new brands, while trying to extract market share from competitors without depleting the market for their own current products.

Maximizing the potential of each product (new and legacy) requires well-crafted marketing strategies and smart resource allocation plans. Marketers need to make sure of launching and marketing a new product or brand in a way that challenges external competition while sustaining the sales and value of the internal legacy brand.

Best Practices, LLC conducted extensive research to identify successful strategies and tactics for marketing multiple brands for the same indication or area of use without cannibalizing an existing portfolio. Special attention was given to strategies for managing resources and for avoiding or controlling product cannibalization. Marketers can use the valuable insights and exhaustive data in this research study to carefully plan and implement their marketing strategies to create multiple, high-performing brands.

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    Best Practices in Expanding a Medical Device Product Portfolio Without Cannibalizing an Established Brand Best Practices in Expanding a Medical Device Product Portfolio Without Cannibalizing an Established Brand Presentation Transcript

    • Best Practices, LLC Strategic Benchmarking Research Best Practices in Expanding a Medical Device Product Portfolio Without Cannibalizing an Established Brand
    • Table of Contents  Executive Summary pp. 3-9  Research Overview: Objective & Key Topic Areas pp. 4  Participating Companies pp. 5-6  Critical Success Factors in Marketing Multiple Brands pp. 7  Key Findings & Observations pp. 8  New Product Differentiators, Strategies & Impacts pp. 10-17  Marketing Spend & Budget Allocation pp. 18-22  Marketing Activities & Product Goals pp. 23-27  Qualitative Analysis pp. 28-48  Pitfalls to Avoid pp. 49-51  Best Practices pp. 52-54  Appendix pp. 55-57 2 Copyright © Best Practices, LLC
    • Copyright © Best Practices, LLC 3 Key Topics Covered Research Overview: Objective & Key Topic Areas Study Objective & Methodology Objective: This benchmarking study was designed to identify effective strategies and tactics for marketing multiple brands for the same indication or area of use. Special attention was given to strategies for managing resources and for avoiding or controlling product cannibalization. Methodology: Best Practices, LLC used an online survey instrument to collect quantitative data. Research analysts also conducted in-depth interviews to collect executive insights and to harvest best practices and lessons learned.  Effective methods of differentiating multiple brands  Positioning strategies that minimize product cannibalization  Operational changes that drive success when introducing a new brand into a product family  Positive & negative impacts of introducing a new brand  New product’s share of the combined marketing spend during first three years both are marketed  Marketing mix for new & legacy products  Marketing activities that drive continuing success for legacy brand  Best indicators of marketing effectiveness  Pitfalls, failure points and best practices BEST PRACTICES, ® LLC Best Practices, LLC conducted this research to help medical device companies in maximizing potential of their product portfolios or franchises. It identifies successful strategies and best practices used by managers and executives to minimize brand cannibalization.
    • Copyright © Best Practices, LLC 4 30 Companies Participated in the Benchmark Study Full Benchmark Class This study engaged 37 brand leaders from 30 leading pharmaceutical, biotechnology, and medical device companies. When appropriate, data in this report is presented separately for companies in the pharmaceutical/biotech and medical device/diagnostic industry segments. Medical Device Segment:Pharmaceutical/Biotech Segment:
    • The following findings emerged from this benchmark study. Key Findings & Observations 1. Benefits of New Brand: Nearly 80 percent of medical device companies said they were viewed as thought leaders after introducing a new brand where they already had a legacy product. Top benefits identified were expanded market share, market leadership, and improved reputation with physicians and specialists. 2. Negative Impacts: Twenty-two percent medical device participants indicated there can be negative impacts in introducing a new brand for the same indication or area of use as a legacy brand. Cannibalization, confusion in channel and sales priorities were some of the common concerns. 3. Minimizing Cannibalization: Medical device benchmark partners successfully use more than a dozen different strategies to control or minimize product cannibalization. Targeting different patient subtypes and delivery method /device are viewed as the most effective of these. 5 Copyright © Best Practices, LLC
    • 78% 67% 44% 33% 22% 22% 11% 11% 11% 0% Health outcomes Price Efficacy Safety Delivery method/ device Ease of use Quality of life Compliance Other (specify) Frequency of use/ dosing Q4. Which three of the following options are the most effective for differentiating two or more brands within one company for the same indication or area of use? (Select only three to indicate the top three most effective differentiators.) 6 Copyright © Best Practices, LLC (n=9) Health Outcomes Most Important Product Differentiator for Medical Device Companies Health Outcome is seen as the most effective product differentiator for potentially competing brands within a medical device company. As medical devices entail huge investments, price is also considered as an effective differentiator by 67% of medical device companies. Top 3 Differentiators: Medical Device Segment % Responses
    • 11% 22% 44% 44% 56% 67% 67% 67% 78% No change occurred Realigned sales force/ Changed sales… Expanded sales force size Revised sales coverage plan to… Shifted marketing resources from… Increased portfolio management… Revised sales force incentives Revised/expanded sales training Added new marketing funds for new… Multiple-Brand Marketing Spurs Many Operational Changes The sales and marketing groups often add training and revise incentives, while marketing adds and shifts resources to handle the complexities of product promotion. Medical device companies most often invest their new marketing funds in new product. Q8. What operational changes did your organization undergo in order to effectively manage more than one brand for a single indication or area of use when a new product was introduced? (Choose all that apply.) 7 Copyright © Best Practices, LLC Medical Device: Operational Changes That Drive Success % Responses(n=9)
    • Ten Critical Success Factors in Marketing Multiple Brands Multiple Brand Marketing Excellence 1. Take a Franchise- Centric Approach 3. Align Each Brand with Distinct Customer Segments 7. Align Marketing Mix to Reflect Market Entry Position 9. Price to Reflect Values of Individual Customer Segments 10. Plan for Migration to Newer Brand 2. Clearly Differentiate Each Product on Attributes 4. Set Realistic Goals & Objectives 8. Plan Early to Execute Anti-Cannibalization Strategies 5. Align Sales to Brand Goals 6. Provide Sufficient Resources for Each Brand Best Practices, LLC research identified a series of 10 critical practices or steps that lead to excellence in marketing multiple products for the same indication or area of use. 8 Copyright © Best Practices, LLC
    • Q22. What are the key pitfalls, or failure points, that companies need to avoid when marketing more than one brand for the same indication or area of use? 9 Copyright © Best Practices, LLC Pitfalls to Avoid  Failure to clearly differentiate/position individual products and their values  Internal competition for limited resources  Poor thought leader alignment  Insufficient sales force training Pitfalls to Avoid Key pitfalls identified by the medical device class in surveys and interviews are:
    • Q23. Please share three best practices for successfully marketing more than one brand for the same indication or area of use. 10 Copyright © Best Practices, LLC Best Practices  Provide clear product differentiation and unique positioning for each brand  Segment patient/ customer groups  Align sales force incentives with goals and train reps to deliver message  Focus on the whole franchise above individual brands Best Practices for Managing Multiple Brands Key best practices identified by the medical class can be grouped into four general categories.
    • Best Practices, LLC 6350 Quadrangle Drive, Suite 200 Chapel Hill, NC 27517 USA 919-403-0251 www.best-in-class.com About Best Practices, LLC Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics, and winning strategies of world-class companies. 11 Copyright © Best Practices, LLC