the marketech group - scientific method webinar

A Scientific Method to Determine What Medical Customers Really Want…and Are Willing to Pay For

Presented By:Robert Enzerink – Partner [email protected]

James Garvin – Sr. [email protected]

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


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.


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.


Define Objectives

Qualitative:Interviews & Focus Groups

Quantitative: Survey Design and Analysis

So, how do you make the research and therefore,the results, more “real”?


Define primary Objective



• Clearly define the question you want answered: CRQ

• Specify supporting objectives



Define Objectives

• Clearly define the question you want answered: CRQ

• Specify supporting objectives


• Identify the real decision-makers

• Identify the real relevant purchase drivers




Qualitative Analysis


Differentiating Characteristics

Brand

Price

Device Design

Durability

Removability

Procedure Type

Migration Rate

…and identify the truly differentiating characteristics.Qualitative Analysis


Define Objectives

• Clearly define the question you want answered


• Identify the real decision-makers

• Identify the real relevant purchase drivers


• Quantify the effects of things over which you have control:

• Product• Promotion• Placement• Price


Survey respondents are presented real-world trade-off scenarios to select their preferred product configuration…



…and asked repeatedly with different sets of product configurations.

The Quantitative Analysis Team Processes The Data


0

70

140

210

US1 US2 US3 US4 US5 China1 China2

Uti

liti

es

Brand

USAGermanyItaly

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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


What if you:

Introduce a new Product?• New instrumentation design for faster

surgeries

Start a new Promotion campaign?• Communicate recent clinical data



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%


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.


What if you:

Change your Product launch plan?• Consider maintaining legacy product in

some markets• Introduce new product only in receptive

countries



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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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%.


What if you:



Change your product Placement?• Consider an alternate sales channel

Optimal price range can be estimated using the preference data


$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…


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?


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


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:


Hire The MarkeTech Group

www.themarketechgroup.com

http://www.themarketechgroup.com/info_case_studies.php

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www.themarketechgroup.com


Questions?

http://www.themarketechgroup.com/info_case_studies.php

the marketech group - scientific method webinar

Business

llc confidential10

llc confidential15

new product

product features

real question

product stacks

real problem

device thinning standard