strategic sales and market planning

STRATEGIC SALES AND MARKET PLANNING:IN TODAY’S ECONOMY

Focus on Medical Devices

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.


• 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)


• The borders are fading:• Bio-sciences• Drug delivery devices• Drug coated devices: i.e. Cardiac Stents• Increased complexity of FDA approvals


• 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


• US Industry Leaders:• Medtronic®

• GE Healthcare Technologies®

• Johnson & Johnson®

• St. Jude®

• Boston Scientific®

• Baxter®

• Becton Dickinson ®

• Abbott Labs®


THE MYTH

“The Healthcare Industry is Recession Proof.”

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


• 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


• 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


• 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

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

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

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!

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

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

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

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

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

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”

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

A NEW VIEW

• Marketing Cont’d• Attempt to establish MKTG as the hub of

communication and the driving force of the organization

Executive

R&D/Regulatory

Manufacturing

Sales

Service

Finance

MKTG

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

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

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

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

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

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

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.

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.• http://ita.doc.gov, 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), • Dental Trade Alliance (DTA)• International Association of Medical Equipment Remarketers & Servicers

(IAMERS).

strategic sales and market planning

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