This is a marketing strategy for a leading medical device company for a new product launch. This presentation won the Babson Marketing Case Competition - 2012 with prize money of $5000. 16 schools across the globe were competing in this competition.
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Marketing Strategy for a medical device company
1. MARKETING STRATEGY
FOR NEW CANCER
TREATMENT –
SHARP THINKING
BEYOND RAZOR/BLADES
Eric Siegel
Fred Ellis
Saurabh Malani
Aditya Thakur
2. What is the problem?
Paradigm shift: Treating to Preventing Cancer
Concerned stakeholders
Providers – Doctors, Hospitals
Limited time
Low budget for capital investment
Uncertain ROI
Patients
Awareness
Payers
Comparative costs
Reimbursement policy
3. Benefits to Believers
Patient
Minimally invasive
Reduced discomfort
Providers
Revenue stream compared to “wait and watch”
May replace colonoscopy treatments
Marketing opportunity on innovative treatment in
competitive environment for patients
Payers
Reduced long-term care expenses
4. Marketing Plan – Three Phase
Approach
Reaching out to different stakeholders at different
points in time in the course of next 2-3 years.
Phase 1: (Months 0-8)
Early Adopters/Influencers
Hospitals
Phase 2: (Months 9-16)
Insurance companies
Customers
Phase 3 (Months 17-36)
Mass markets (Hospitals, Clinics, etc.)
5. Phase 1 – Get the Early
Adopters
Get equipment in use at early adopters/influencer sites
Academic teaching hospitals
Leading edge practices
Easier target because they keep up with journal publications and
embrace innovation
Marketing Plan
License technology to hospitals
Rent generator $1,500 / month
Charge payment for disposables ($1,000 value) only when
insurance pays.
Assuming 50% insurance reimbursement rate
Worst Case: $3,125 income to hospital / month
Best Case: $260,000 income to hospital / month
$0 gain/loss to Company for disposables
6. Phase 2 – The Blanket
Leveraging benefits from Phase I
Widespread success with early adopters
Journal publications: GI Associations (PMC)
Generating critical mass for insurance
Insurance Companies (Goal: Blanket coverage)
Citing cost advantages
Assumption: 58k patients get surgery – Cost $1.16 Billion
Set a bar for reimbursements
Only for Low & High grade Dysplasia: Population 240k x $1500 = $360 Million
Cost advantage – Potentially $800 Million
Patients:
Marketing partners
AARP
Healthy food providers
Antacid
7. Phase 3 – Going Big!
Insurance companies launch “Blanket” policies
Launch to mass markets
Increase license fees
Procedures are fully reimbursed
New segments:
Towards community GI's
Reimbursement guaranteed
Easy to use and short duration process
Proven results with large patient population
Colonoscopy market replacement
Thoracic surgeons
Shrinking cancer market
8. Challenges
Time required per sell
Substantial initial investments in technology
licensing
Efforts in changing the "surveillance" paradigm
to "adoption" in GI associations magazines
Making sure that it does not go in the hands of
cowboy doctors
Cryotherapy: Competitive option if clinical trials
are done within time.
9. Summary
Sharp thinking beyond razor/blade sales
Three phase approach
Phase 1
Build credibility with early adopters
Reduce objections to investment & reimbursement
Phase 2
Marketing partnership towards patients
Leverage treatment experiences and journals to influence
insurance reimbursement policy
Phase 3
Go big
Capture mass market
Notes de l'éditeur
for $1,500/month ($18,000 / year sunk cost encourages frequent use)(assuming 8-15 generators licensed in Year 1 = $320,000 – 600,000 @ $40k each· Receive payment for disposables ($1,000 value) only when insurance pays (reduces financial risk to hospital objection)· Low estimate: 12.5 treatments / hospital / month: assuming 50% reimbursement rate $3,125 income to hospital / month (shared between doctor and hospital). $0 gain/loss to us for disposables· High estimate: 1,040 treatments / hospital / month: assuming 50% reimbursement rate $260,000 income to hospital / month (shared between doctor and hospital). $0 gain/loss to us for disposables