Medical Device Company Marketing

A medical device company must learn their lessons or repeat mistakes

By Tom Dougherty

Medical Device Company MarketingWhen you look at the global economy today, one of the few segments that seems to best weather the economic storm is medical devices and medical products. One would think that this might be a category from which we could all learn some important lessons in brand differentiation. Yet medical device company marketing looks mush the same.

You Would Be Wrong

While it is true that the category has grown in the past few years and most of the medical device brands have earned profits, this has been more due to a rising “category” tide then because of brand value and differentiation.

Medical Device Company MarketingNow, I am not arguing that a few medical device brands in some of the categories seem to enjoy greater preference and market leadership. What I am arguing is that all of the market leaders are in danger of losing their preferred position if any of the challengers wake up and look into the motivations that drive their customers to choose. This is a category ripe with opportunity because no category we have ever looked at or worked in was more selfish and self consumed.

The Medical Device Company Marketing Must Be Global

For the most part, these markets are all global. Medtronic, Johnson & Johnson, Edwards Lifesciences, St Jude Medical, Boston Scientific, Stryker, Sorin, Biotronic, Smith & Nephew, Zimmer and B Braun all sell their medical devices and products (note I did not refer to them as brands) globally. This means, that aside from regulatory issues, this medical branding must reflect the needs and wants of a very diverse market. (See work Stealing Share did for Biomimetic which is now owned by Wright Medical here)

Medical Device Company MarketingIncreasingly, price pressures are dominating the preferred choice. Those companies that enjoy market leadership are finding their legacy products under increasing price contractions. This is counter-intuitive because legacy brands in consumer goods are generally most immune to pricing pressures.

Medical Device Company MarketingFor example the BMW 7 series rarely finds itself in a price squeeze because of the introduction of the Nano. Apple never discounts its Macintosh, even if you buy it on-line and regardless of the dropping price of net books. They just don’t have to. Why then are medical device manufactures forced to react to the price pressures brought about by generic products and smaller players?

Preference Is Not Strong

Medical Device Company MarketingWhen you dig into the medical device market, you will find preference but not STRONG preference. For the most part, customers prefer the product they were trained on. But they absolutely believe that everyone’s products are great and reliable even if they are not currently choosing them.

Medical Device Company MarketingThe depth of loyalty only goes as far as habit. Therefore, as a result, price becomes increasingly important whenever a surgeon or medical professional is asked to fall on a sword for a product that they prefer. There is rarely a great reason to keep paying more for the old habitual purchase so few surgeons and medical specialists are willing to fall on that sword. They have other battles that are quite simply more meaningful for them.

The Rise Of The Rep

As a result, medical device companies have relied on a highly skilled and highly trained sales force that “reps” their products to hospitals and medical professionals all over the globe. The advantage to this model is that is excuses the medical device manufacturers from developing brands that have meaningful global appeal, leaving the selling argument in the hands of the rep.

One-on-one, the rep carries the selling message and, as anyone in sales knows, the selling argument is always about the salesperson. The product is secondary.

What this means is that the rep carries the value because it is the rep that the customer is truly buying. In this high stakes game of “marketing globally,” the tail wags the dog.

Wake Up To The Truth

Medical Device Company MarketingInterestingly, the equity markets have not woken up to this truth yet. Analysts talk about the new products or devices that are in R&D and the regulatory approval that is either anticipated or denied when they assess the company’s value. What they should be assessing is the brand value (next to nil) and the strength of the rep network. Ask any manager or CEO in the industry exactly what happens when a sales rep leaves with their Rolodex and sets up camp with a competitor. The customers switch too.

Increasingly, as the global market matures, real brand messages that carry a promise beyond the minimum requirement to be a medical manufacturer — effectiveness and reliability—begin to define the category. The sales model is simply inefficient and places the companies’ fortunes in the hands of talented but Machiavellian sales people who are willing to pull up stakes when the wind of more money blows through their sales.

The Solution

The solution to this quagmire is simple. Start acting like a medical device brand. Understand what really drives your target market once you take the table stakes out of the equation. Understand the highest emotional intensities in the market that are unclaimed by the category’s players and make them REAL in your organization. This means that you must be ready to embrace a new model for your business that prepares your organization for the challenges ahead.

This is not simply a drive for a new global marketing message, although one is certainly needed. It is a quest for a new brand. A new meaning for your company that forces a new thinking about everything you do, say and manufacture. If what you uncover, does not force broad change in your entire organization, then I guarantee you have not found the right answer. (See work Stealing Share did for St Jude Medical here)

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