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The MarkeTech Group Scientific Method Webinar by Robert Enzerink and James Garvin How Much Are Clinical Customers Willing To Pay? -- Using Voice-of-the-Customer To Get Your Key Questions Answered Trying to determine what features and benefits you should go to market with or which of those features your customers truly value the most and are willing to pay a premium for,...can be one tough nut to crack. A common challenge in the medical field is to move beyond the internal filters and biases created when your input comes primarily through your sales force and KOL channels. KOLs tend to be early adopters and technology geeks; engineering teams are convinced that a more technically advanced product will sell itself; sales will push for lower prices so they can compete; and regulatory bodies like CMS keep tightening reimbursement pressures... Executives need credible information to guide decisions. The MarkeTech Group 502 Mace Blvd. Davis, CA 95618 www.themarketechgroup.com
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A Scientific Method to Determine What Medical Customers Really Want…and Are Willing to Pay For
Presented By:Robert Enzerink – Partner renzerink@themarketechgroup.com
James Garvin – Sr. Consultantjgarvin@themarketechgroup.com
For Audio : (512) 400-4809 Attendee Access Code: 641 6916
In 30-minutes, you will learn how to…
2012 The MarkeTech Group, LLC Confidential 2
Determine which product features are truly the most important
Evaluate how your new product will compete against the competition
Identify which features command the greatest
price premium
Find the optimal price for your products / services
Sell the right
product
at the
right price
1
2 3
4
2012 The MarkeTech Group, LLC Confidential 3
There can be a real problem with asking your potential customers “what they want”…
If you build a product based on what customer’s “say” is important… ….you design this
….and they are willing to pay this….but then they go and buy this?
$15.99
$1.50
In the end, it’s not about building what customers want, it’s about building what they will buy!
…trade-offs allow you to determine what is truly important and what your customers are likely to buy.
2012 The MarkeTech Group, LLC Confidential 4
Your marketing research needs to include real scenario trade-offs to make the research and therefore,
the results, more “real”.
$15.99Safest
Low versatilityMinimal functionality
$29.99Least safe
High versatilityGreatest functionality
vs.
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Define Objectives
Qualitative:Interviews & Focus Groups
Quantitative: Survey Design and Analysis
So, how do you make the research and therefore,the results, more “real”?
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Define primary Objective
Qualitative:Interviews & Focus Groups
Quantitative: Survey Design and Analysis
• Clearly define the question you want answered: CRQ
• Specify supporting objectives
So, how do you make the research and therefore,the results, more “real”?
2012 The MarkeTech Group, LLC Confidential 7
Define Objectives
• Clearly define the question you want answered: CRQ
• Specify supporting objectives
Qualitative:Interviews & Focus Groups
• Identify the real decision-makers
• Identify the real relevant purchase drivers
Quantitative: Survey Design and Analysis
So, how do you make the research and therefore,the results, more “real”?
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Qualitative Analysis
2012 The MarkeTech Group, LLC Confidential 9
Differentiating Characteristics
Brand
Price
Device Design
Durability
Removability
Procedure Type
Migration Rate
…and identify the truly differentiating characteristics.Qualitative Analysis
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Define Objectives
• Clearly define the question you want answered
Qualitative:Interviews & Focus Groups
• Identify the real decision-makers
• Identify the real relevant purchase drivers
Quantitative: Survey Design and Analysis
• Quantify the effects of things over which you have control:
• Product• Promotion• Placement• Price
So, how do you make the research and therefore,the results, more “real”?
Survey respondents are presented real-world trade-off scenarios to select their preferred product configuration…
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…and asked repeatedly with different sets of product configurations.
The Quantitative Analysis Team Processes The Data
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0
70
140
210
US1 US2 US3 US4 US5 China1 China2
Uti
liti
es
Brand
USAGermanyItaly
14
Trade-off analysis data is analyzed with a preference simulator
1. Which product features are most important?
2. How will your product compete?
3. Which features command the greatest price premium?
4. What is the optimal price?
2012 The MarkeTech Group, LLC Confidential
Germany (51) Italy (40)US1-Prod1 23.4 16.2US3 3.3 21.6US1-Prod2 19.1 20.2US2 52.9 40.2None 1.3 1.8
How your product stacks up today:
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Existing preference share is 3.3% and 21.6%.
simPRO™ Preference Modeler
Attribute name US1-Prod1 US3 US1-Prod2 US2Clinical Case Malignant Malignant Malignant MalignantDevice Design & Durability Metal, premium - 12 months Metal, premium - 12 months Metal, simple - 6 months Plastic - 3 monthsBrand USBrand1 USBrand3C USBrand1 USBrand2Removability Within 12 months Within 12 months Within 3 months Within 3 monthsProcedure Fast with Device Thinning Standard without Device Thinning Fast with Device Thinning Fast without Device ThinningMigration Rate < 0.1% < 0.1% < 0.1% < 0.1%Plastic Price 0 0 0 750Metal Price 4500 4500 3100 0
Your ProductProduct Scenario
Preference (%)
Your Product
2012 The MarkeTech Group, LLC Confidential
What if you:
Introduce a new Product?• New instrumentation design for faster
surgeries
Start a new Promotion campaign?• Communicate recent clinical data
2012 The MarkeTech Group, LLC Confidential 16
simPRO™ Preference Modeler
Germany Italy US1-Prod1 22.4 12.8US3 4.8 19US1-Prod2 18.5 23US2 53 43.5None 1.3 1.7
Attribute name US1-Prod1 US3 US1-Prod2 US2Clinical Case Malignant Malignant Malignant MalignantDevice Design & Durability Metal, premium - 12 months Metal, premium - 12 months Metal, simple - 6 months Plastic - 3 monthsBrand USBrand1 USBrand3C USBrand1 USBrand2Removability Within 12 months Within 12 months Within 3 months Within 3 monthsProcedure Fast with Device Thinning Fast without Device Thinning Fast with Device Thinning Fast without Device ThinningMigration Rate 0.2 - 0.5% < 0.1% < 0.1% < 0.1%Plastic Price 0 0 0 750Metal Price 4500 4500 3100 0
What your new product and promotion will do:
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Preference Impact: Minimal or negative
Germany from 3.3% to 4.8% Italy from 21.6% to 19%
simPRO™ Preference Modeler
Your company introduces new instrumentation to speed up the procedure.
Product Scenario
Preference (%)
Your Product
Your new marketing material highlights clinical data updating the poor migration rate of competitive product.
2012 The MarkeTech Group, LLC Confidential
What if you:
Change your Product launch plan?• Consider maintaining legacy product in
some markets• Introduce new product only in receptive
countries
2012 The MarkeTech Group, LLC Confidential 18
simPRO™ Preference Modeler
Germany Italy US1-Prod1 22.4 12.8US3 4.8 19US1-Prod2 18.5 23US2 53 43.5None 1.3 1.7
Attribute name US1-Prod1 US3 US1-Prod2 US2Clinical Case Malignant Malignant Malignant Malignant
Device Design & Durability Metal, premium - 12 months Metal, premium - 12 months Metal, simple - 6 months Plastic - 3 monthsBrand USBrand1 USBrand3C USBrand1 USBrand2Removability Within 12 months Within 12 months Within 3 months Within 3 months
Procedure Fast with Device Thinning Standard without Device Thinning Fast with Device Thinning Fast without Device ThinningMigration Rate 0.2 - 0.5% < 0.1% < 0.1% < 0.1%Plastic Price 0 0 0 750Metal Price 4500 4500 3100 0
What if you consider a two-product strategy?
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simPRO™ Preference Modeler
Standar
d
Inst
rum
ents
Germany Italy US1-Prod1 23.1 13.1US3 3.2 22.6US1-Prod2 18.9 20.8US2 53.4 41.8None 1.3 1.7
New (Rapid)
Instruments
Product Scenario
Preference (%) Preference (%)
Your Product
Preference Impact: Minimal, slightly improvedGermany from 3.3% to 4.8%Italy from 19% to 22%.
2012 The MarkeTech Group, LLC Confidential
What if you:
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simPRO™ Preference Modeler
Change your product Placement?• Consider an alternate sales channel
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Optimal price range can be estimated using the preference data
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$2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500
Product Price
Pre
fere
nce
x U
nit
Pri
ce
Price range for preference – maximized revenue
$2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500
Product Price
Pre
fere
nce
x U
nit
Pri
ce
Optimal price range can be estimated using the preference data…
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These prices maximize preference-weighted revenue but, in real life, other factors impact preference…• Sales force effectiveness• Marketing• GPOs, group discounting• Regulatory and reimbursement rulings
…so, if trade-off analysis helps me measure preference and price sensitivity, how do I predict revenue, profit, and market share?
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Market-calibrated preference share data
Ph.D. experts in pricing modeling
Real market, sales, and purchasing dynamic variable data
+ +
=A market model that can predict profit, revenue, or market
share maximizing prices
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1. Understand which product features are truly the most important
2. Evaluate how your product competes against the competition
3. Identify which features command the greatest price premium
4. Find the optimal price for your product
You’ve just seen tools to make well-informed business decisions to:
Remember these three things:
1. Declarative surveys mislead
2. Trade-Off analysis simulates real-world choices
3. Scenario modeling guides effective decision-making
4. Actually, four things:
2012 The MarkeTech Group, LLC Confidential 27
Hire The MarkeTech Group
www.themarketechgroup.com
28
www.themarketechgroup.com
2012 The MarkeTech Group, LLC Confidential
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