Sundeep Karnik co-wrote this blog post with Matt Singer. This is an excerpt from “Medtech, Look to Marketing for the Solution.”
We don’t need to tell you that the healthcare landscape is growing more complex and competitive, and that achieving growth is becoming more challenging for medtech organizations. We don’t need to mention that bringing true innovation to market—innovation that customers will pay for—isn’t as easy as it used to be or that many new product launches fail to deliver on expectations. We’ve sat in the offices of many industry leaders and discussed these very challenges.
In the past, medtech companies could rely on incremental feature improvements and sales reps’ relationships with clinicians to drive sales. But in a recent ZS survey with hospital executives in the U.S. and Europe, we found that 90% of respondents think that medtech manufacturers can’t succeed with product innovation alone. Customers are demanding something different. They are now much savvier and more selective about what innovations they’re willing to pay for, as shrinking budgets have driven them to economically driven decision-making in many cases.
In response to disappointing financial performance, we see most companies taking steps like restructuring or resizing their sales organization, changing out their R&D capabilities, or acquiring external companies or products—or, worst case, downsizing their organization to better align to the revenue growth. We believe that marketing, which is often overlooked, is the right solution to the new market reality in medtech. Many companies in other industries have gained a stronger competitive advantage via an empowered marketing capability, so why shouldn’t medtech?
Why Marketing Is the Answer
By “marketing,” we mean the discipline as it’s intended to be practiced, not as it currently exists within many medtech organizations. Philip Kotler, a professor emeritus of marketing at Northwestern University’s Kellogg School of Management who’s often considered the father of modern marketing, defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.” As Kotler put it:
“Marketing is the homework the company does to figure out what people need and what the company should make. Marketing determines how to launch, price, distribute and promote the product/service offering in the marketplace. Marketing then monitors the results and improves the offering over time. Marketing also decides when to end the offering. … When marketing is done well, it occurs before the company makes any product or enters any market; and it continues long after the sale.”
Is this what marketing does in your company today? Are your marketing teams consistently empowered to drive these objectives across all of your divisions, all the time, globally? Based on our experience working across medtech categories, we’d argue that, while great marketing does happen, it doesn’t happen consistently. As one medtech CEO we interviewed told us: “Historically, given the product orientation, marketing ends up being product management and not really being marketing. They end up supporting R&D and losing the connection to the customer. The companies that are doing very well think differently: Marketing does marketing.”
To learn how a more empowered marketing capability could help medtech companies improve their performance, profitability and long-term prospects, and what it will take to succeed, read our full article, “Medtech, Look to Marketing for the Solution.”