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Product Launch and Lifecycle Management

Guido Sandulli

Director of Marketing – Merit Medical

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Agenda

• Background• Academia vs Real World• Marketing’s Role• Pre-Launch – Upstream Marketing• Product Launch • Lifecycle Management

Launch Growth MaturityEnd of

Life

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Background

Decision Resources - Boston MA 1995-1999 Pharmaceutical Industry Market Research and

Strategy Consulting

IBM Life Sciences – San Francisco CA 2001-2005 Product Management/Marketing Management –

Life Sciences IT

Applied Biosystems / LIFE -- Foster City CA 2005-2012

Strategic Planning/Product Management – molecular testing

Merit Medical – South Jordan UT 2012-current Director of Marketing – Medical Devices

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Academia vs Real World

How to apply academic concepts?

“It works in practice….but does it work in theory?

How to learn from real world experience?

“This one time, we did this thing….”

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Role of Marketing

Marketing vs Sales vs R&D – Marketing is often the last one to the party

R&D already has an idea about what they want to build

Sales already has an idea about who they want to sell to

Marketing – identify where the value is being created – and plan the most efficient way to communicate and deliver it

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Market – Human Identity DNA assays

• DNA tests used by law enforcement – DNA profile from criminal suspects put into databases

• Samples from crime scenes analyzed and matched to suspects• Used to generate evidence and investigative leads

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Market Background – Human Identity DNA testing products

• Public and private contract labs use reagents, instruments and software to perform DNA analysis and deliver usable DNA profiles

• Testing reagents are extremely profitable – pharma-like margins

Quantitation Amplification Detection Data AnalysisDNA Extraction

• Customers are employees of government law enforcement agencies• Typically from science PhD background, often with long term

government service

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Pre-Launch – Upstream Work

Understand customers’: Segments Problems Priorities

Build Value Proposition and Targeting Plan Which segment are you targeting? How can you reach them? What do you say to them?

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Challenges facing forensic laboratories

More and more samples

Difficult and damaged samples

Political pressure to reduce backlogs

Shortage of trained scientists

Increasing quality standards

Workflow bottlenecks System validation

Sample preparation

Data analysis and report writing

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Upstream Work – Customer Segmentation

Databasing

Predictable Standardised collection High yield, high quality

DNA High throughput,

continuous-flow processing

Casework

Unpredictable Highly variable samples Low yield, low quality DNA Mixed source Aged Batch or custom

processing

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Upstream Work – Example: Identifiler Plus

Market research is your friend – use it early and often

Review the user specs – the value designed into the product is what you need to communicate

Key Requirements of a Forensic Casework Analysis Kit

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Identifiler® Plus Example

Better results from tough samples

Old Kit New Kit

Enable more uses for tests

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Pre-Launch – Value Proposition

What is the value your product is delivering?

Solve more cases, fewer wasted reagents, enable more DNA investigations

Who is realizing the value?

Society at large? Political leadership? Lab Management?

Who is the decision-maker and who gets to weigh in?

Lab Management? – Law enforcement leadership?

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Setting the Price

Value Extraction – how do we keep the value we created?• Pricing on value – how do we calculate this?

Forensics -- investigation time saved – $500,000 for successful rape investigation $40,000 for successful burglary investigation

Pharma – clinical benefit and cost savings over current gold standard

Medical Device – Procedure time saved Typical cardiac cath lab costs $1600 per hour

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Setting the Price

• Value extraction – what additional value are customers getting?• Price discrimination – can we package the value in a differentiated way

to different customers?• Competition will try to commoditize – how to prevent?

Package hardware, software, and services together

Price at Premium to gold standard

Avoid price war with competition

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Know your channel• Sales Channel Selection -- do your sales teams know the right people?• What if the channel you have isn’t the right one?

• Crime lab staff often not allowed to have access to email or web access• Travel budgets for crime lab staff extremely limited

How do you reach your target audiences?

Road ShowsCelebrity EndorsementsConferences

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Test Launch

• Limited release in 1 region vs. mass global launch• Test the assumptions in your plan• Extract the info you need• Adjust and scale

Test Sites candidates were prioritized based on Access to compelling casework samples Threat to existing business Opportunity for competitive win

Data from test sites confirm superior performance in difficult DNA casework samples.

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Launch Roll-Out

Repetition!Launch Plan from 2009:

• NA sales training scheduled for week of July 6 2009.• Communicate to US customers during roadshows in July-August 2009

Customer-facing presentation and Forensic News article distribution to field by end of August

• Formal US Launch at ISHI in Oct • Follow-on presence at ISFG and AAFS in Seattle in Feb 2010.

Old Kit

New

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Launch - Logistics

“Amateurs talk tactics – Professionals talk logistics”. -- Old Army saying

Goals• Support launch – but limit inventory carrying cost and scrap• Limit risk of quality failure• Limit risk of backorder

• 1st Lot– only enough to support test site evaluation• 2nd Lot– enough to support test site adoption• 3rd Lot – support single-region launch• Additional builds over next year to support additional regions.

• Manage expectations of executive team!

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Product Lifecycle – Growth

Establish strong market share as quickly as possible by:

1. Global Expansion – China, Russia, South Africa

2. Market Development – New applications enabled by new product

3. Line extensions -- additional product R&D

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Product Lifecycle – Growth

Geographic Expansion• Large countries with focus on security• Channel development needs to be done very carefully!

• Focus marketing on localized needs• China – trafficked children• Russia – terrorism• South Africa – sexual assault

• Training and Lab set-up are bigger needs• Needed to develop professional services team to support

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Product Lifecycle - Growth

Market Development – Property Crime

New Product enabled the analysis of more samples Made analysis and investigation of property crime much easier than

before, however….. Average property loss from burglary is $2,000 – investigation and

prosecution cost of over $40,000. How to convince law enforcement to use DNA in property crime? Pilot programs to demonstrate value – can catch one perpetrator for

multiple crimes!

Once a program is started, likely to stick with our product.

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Example: Denver Burglary DNA ProjectDenver focused on the use of DNA in solving property crimes and found:• $36.8 million in property loss was avoided and $5 million in police costs

were saved over 2 years.• $90.50 was saved for every $1 spent on DNA testing. • Cases with DNA:

• Eight times more likely to be prosecuted• Three times more likely to result in a conviction• 10 times longer prison sentences for home burglars and 6 times longer for

commercial burglars

• The burglary rate in Denver dropped 26%. Prior to the Burglary DNA Project, property crimes had increased by about 5% annually.

SOURCE: “Using DNA to Solve High Volume Property Crimes in Denver: Saving Money, Lowering Crime Rates and Making Denver Safer.” The Prosecutor, July/August/September 2008, ISS No. 0027-6383, National District Attorneys Association)

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Product Lifecycle – Maturity

Fight commoditization – preserve value extraction

• Highly profitable assay business draws strong competition

• As later entrants, try to mimic performance and compete on price• Attempt to commoditize market as much as possible• As global economies slowed, governments seek cost savings

aggressively

How to prevent head-to-head price comparisons?

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Product Lifecycle - Maturity

Delay commoditization by building/buying the workflow components competitors didn’t have:

• Instrumentation:• Services:

• Training• Validation• Lab set-up• Instrument service contracts and warranties

• Lab Automation

• Offered together at bundled price – difficult to break bundle or compare line-item pricing

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Product Lifecycle – Decline

Goal – maximize value extraction prior to end-of life

Repurpose:• different application• different customer/geography• different channel

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AuthentifilerTM Example

• Old Product discontinued

• Components reassembled, rebranded for new application

• New Channel• New Pricing• Value proposition and marketing plan

completely different

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Product Lifecycle – End of Life

Raise prices!• Offset operational inefficiencies• Help motivate users to move to new generation product

Make available as build to order only• Limit inventory carrying cost• Motivate users to move to new generation product

Provide advance notice of discontinuation and offer introductory offer on new product

Be disciplined enough to go through with it!

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Thank You

Questions?