Strategic Sales And Market Planning


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Overview of basic prinicpals of strategic planning for medical devices.

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Strategic Sales And Market Planning

  2. 2. THE MEDICAL DEVICE INDUSTRY• Definition: The United States medical device manufacturing sector is a highly diversified industry that produces a range of products designed to diagnose and treat patients in healthcare systems worldwide. Medical devices differ from drugs in that they do not achieve their intended use through chemical reaction and are not metabolized in the body.
  3. 3. THE MEDICAL DEVICE INDUSTRY• Layperson’s Terms: Medical devices range in nature and complexity from simple tongue depressors and bandages to complex programmable pacemakers and sophisticated imaging systems ( i.e. MRI’s)
  4. 4. THE MEDICAL DEVICE INDUSTRY• The borders are fading: • Bio-sciences • Drug delivery devices • Drug coated devices: i.e. Cardiac Stents • Increased complexity of FDA approvals
  5. 5. THE MEDICAL DEVICE INDUSTRY• Worldwide sales in excess of $265 Billion• US represents app. 40% of volume• US exports approximately $35 Billion annually• Industry employs over 350,000 people in US• 73% of companies are under 20 employees• Approximately 70% are privately owned
  8. 8. THE MEDICAL DEVICE INDUSTRY• US Industry Leaders: • Medtronic® • GE Healthcare Technologies® • Johnson & Johnson® • St. Jude® • Boston Scientific® • Baxter® • Becton Dickinson ® • Abbott Labs®
  9. 9. THE MEDICAL DEVICE INDUSTRY THE MYTH “The Healthcare Industry is Recession Proof.”
  10. 10. IMPACT ON HEALTHCARE TODAY• FDA Incompetency: • Extremely slow approval rates • 2 to 4 times longer • Increased cost of submissions • Increased cost of lost opportunity • Difficulty in attracting new investors • VC’s expect 30% return in 3 years
  11. 11. IMPACT ON HEALTHCARE TODAY• Economic factors: • Unemployment • Jobless rate does not portray true picture • Salary reductions • Increased healthcare delivery costs • US made products cost more in the US than abroad • Increased insurance costs and co-pays • Decrease in research funding • Private healthcare system is unaffordable for over 20% of population
  12. 12. IMPACT ON HEALTHCARE TODAY• Government – US and International • Fear of potential Obama Care • Reduction in reimbursements • Facility and physician • Price controls • Increased regulatory hurdles • Increased trade restrictions • Global deficits
  13. 13. IMPACT ON HEALTHCARE TODAY• Other • Purchasing groups and hospital associations • Off-shore manufacturing and increased foreign imports • Cost and removal of FDA hurdles • Public company’s focused on profits at expense of: • R&D • Sales, marketing, advertising and infrastructure • Aging population • Decreased or flat elective surgery market
  14. 14. WHERE ARE INCREASES COMING FROM• Exports up by approximately 10%• Price increases• New products• New procedures• Increased volumes in basic care • Increased average patient age
  15. 15. WHY PLAN STRATEGICALLY?• Concrete direction for 2-3 years • N.B. Must be flexible to changing conditions• Basis for annual tactical plan• Necessary for analysts and potential investors• Direction for R&D• Allocation of resources• Elicits cooperation between departments• Roadmap for sales and marketing efforts
  16. 16. WHY SALES AND MARKETING IN UNISON?• Translate marketing to English• Recognizes key factor “The Customer!”• Buy-in from sales organization• Reality checks• Coordinates activities• Saves effort and financial investment• TWO HEADS ARE BETTER THAN ONE!
  17. 17. ELEMENTS OF A SUCCESSFUL STRATEGIC PLAN• Know the market• Know the regulatory environment• Know the competition• Know the customer(s)• Know the economy• Know the investors• Know the realistic capabilities and resources• Know executive management expectations• Be Creative
  18. 18. ANALYSIS• Market share • Realistic view of domestic and global share • Often difficult due to lack of true statistical information • Many reports are a small slice of customer base • Skewed due to introspective mentality• Market Trends • New procedures • Customer profiling • New Products
  19. 19. ANALYSIS• Competition • Existing and evolving • Changes i.e. • New products, R&D, mergers, acquisitions, promotional perspectives, management and customer base• Regulatory changes• Economic climate• Health Care Systems and Reimbursement
  20. 20. ANALYSIS• Internal • What is company’s driver? • R&D, manufacturing, sales, marketing, finance, other • What are strengths, weaknesses, opportunities and threats? • Products • Pipeline • Departmental • Financial • External forces
  21. 21. PROJECTIONS• Realistic estimate of P&L for next 2-3 years• Sales and market share increases• What is needed to be successful • Products • Promotional activities • Organizational structure • Mergers, acquisitions and/or strategic alliances
  22. 22. A NEW VIEW• Marketing: • Avoid marketing myopia • Look further than 1 year’s sales and profits • Recognize and/or create trends • Beware of internally focused statistics • Listen to “constructive” feedback from sales – they are the voice of the customer • Realign resources • Are advertising dollars being allocated in most efficient manner? • Frequency versus placement • Does social media marketing apply strategically? • Review sales and promotion items • Exhibit costs versus educational seminars • Entertainment versus “lunch and learn”
  23. 23. A NEW VIEW• Marketing Cont’d • Sourcing new products • Strategic Alliances • Avoid “Not Invented Here” Mentality • University R&D Programs • Listen to the customer • It’s free! • Stay close to R&D, Regulatory and Manufacturing • Foreign Outsourcing
  24. 24. A NEW VIEW• Marketing Cont’d • Attempt to establish MKTG as the hub of communication and the driving force of the organization Executive Finance R&D/Regulatory MKTG Service Manufacturing Sales
  25. 25. A NEW VIEW• How • Become the resource for information • Take the time to participate on development teams • Lobby with the customer and KOL’s • Lobby with management • Make finance a “friend” • Take risks
  26. 26. A NEW VIEW• Sales • Relationship selling is a dying art! • Develop strategic/consultative selling approach • Know your customers’ “business” • Create value to the customer • Practice management • Facility efficiencies • Patient attraction • Patient flow • Education on new procedures and products • Latest IT and web modalities  EMR and Imaging systems  Social Media Marketing
  27. 27. A NEW VIEW• Sales Cont’d • Encourage “positive”, open communication with internal customers • “Do not” accept unrealistic plans..if possible • Provide relevant data • Forecast regularly and meet forecasts • Encourage dialogue with • Marketing • Manufacturing • Service • R&D
  28. 28. A NEW VIEW• Sales Cont’d • Invest in education of sales personnel • Products and procedures • Value added services • New selling techniques • Improved IT skills • Institute positive programs • CRM programs that benefit the sales process • Incentive programs that recognize penetration and retention
  29. 29. A NEW VIEW• Sales Cont’d • Maintain a healthy balance of experience and new blood • Plan development and career advancement • Target long term “difficult” new accounts • Project planning
  30. 30. A NEW VIEW• Coordination with other departments • Initiate communication with all departments • Finance, executive, R&D and manufacturing • There is a strong competitiveness for funding and attention • Marketing and sales are closest to the “real life” • Be open to new ideas, no matter how mundane or off direction • Be active on committees • Lead with facts, figures and market input • Use KOL’s
  31. 31. A NEW VIEW• Final Notes • You are the future of the organization • There is no right or wrong answer • Be creative and have an open mind • Leave your ego at home • Lead by example • Politics is wrong but a fact of life.
  32. 32. BIBLIOGRAPHY AND REFERENCES• Medical Device Manufacturers Association, Annual Report, 2011• Manufacturing: Industry Series: Detailed Statistics by Industry for the United States; U.S.• Department of Commerce, Bureau of the Census, 2007.• The Lewin Group, State Impacts of the Medical Technology Industry, prepared for Advanced• Medical Technology Association 2008• Manufacturing: Industry Series, Id.• Source: 2010 data compiled from tariff and trade data from the U.S. Department of Commerce• and the U.S. International Trade Commission.•, Medical Devices Industry Assessment• www.fda.gove, How To Market Your Medical Device, 2012• Yahoo Finance, Medical Device Market Looks to Innovations to Counter Cost Cuts, 2012• Medical Device and Diagnostic Industry. Market Trends, 2012• Zack Investment Research, Medical Device Industry Outlook, 2011• Advanced Medical Technology Association (AdvaMed),• Medical Device Manufacturers Association (MDMA),• Medical Imaging Technology Association (MITA),