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Do medical device companies understand orthopaedic surgeons?

It’s relatively easy to create a brochure, website or exhibition describing your medical device product — list the technological innovations that make the device safer, easier to use and better-performing. Although these features are important, focusing exclusively on communicating them may not actually be convincing surgeons and administrators to purchase and use your devices. Websites, brochures, journal articles, exhibitions and more are all part of the marketing mix — and all can be excellent methods by which to get your message across. If your message is the one surgeons and administrators want to hear.

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Increasing the perceived value of medical products beyond ‘features’

The medical device industry is characterized by a high level of technological product innovation. New, innovative features are being developed all the time, and it’s hard for customers — a group that increasingly includes hospital administrators and patients, as well as physicians — to keep up. In order to increase the perceived value of their products, medical device companies have to go beyond simply enumerating ‘features’ and present ancillary solutions to make a strong case for value.

The Hierarchy of Product Attributes

In the book Principles of Marketing, Philip Kotler et al 1 suggested that benefit-building for products started with viewing a product on three levels, to extract all the benefits your product offers. This strategy is variously referred to as “Total Product Concept,” “Augmented Product” and the “Three Levels of a Product,” among others. Here, we’ll call it the Hierarchy of Product Attributes. This marketing methodology, which provides insights into the level of differentiation of a product, comprises three layers:

The Core Layer
This layer represents the minimal requirements customers have for a product. These attributes are a pre-requisite for the right to compete in the market — customers expect them as standard.

The Expected Layer
Many products are strongly marketed based on ‘unique’ features, a brand or appealing packaging. Although these attributes are very important, they are basic differentiators and therefore vulnerable to commoditization.

The Augmented Layer
The strongest differentiating attributes belong to the augmented layer. These are often complex forms of non-tangible, ancillary product benefits that are mainly related to a company’s ability to enrich products — and, therefore, customers — with valuable services and support. Perhaps counter-intuitively, these ‘non-tangible’ benefits can actually be the deciding factors: They’re so useful to the customer, they provide a key reason for buying the product.

 

Medical device product attributes

Figure 1. The Hierarchy of Product Attributes


Attribute Continuum

Over time, customers’ wants and needs change, as does the market, rendering previous major differentiators to the other, less-differentiating layers of the diagram; i.e., augmented benefits become expected benefits. Therefore, managers have to actively plan future-differentiation strategies and foresee when product and service attributes, together representing the perceived value, will become commoditized.

Applying Product Hierarchy to the Medical Device Industry

The five core product attributes of medical devices are safety, quality, performance, features and ease-of-use. While these core product attributes are important, they all belong to the expected layer. That’s why medical device companies have to focus on communicating or providing other benefits or services — ancillary solutions and value offerings that will help patients, physicians and hospitals.

Product Example: Hip Prostheses

To understand how the hierarchy works in practice, let’s take a look at the acetabular bearing component, the so called ‘liner’, used in hip prostheses. The liner forms the articulating layer between the metal acetabular component (the hip ‘cup’) and the ball head of the prosthesis (the hip ‘ball’).

The table below shows the liners of four leading medical device companies, together with the main sales arguments. This information was collected from the websites of the companies, but the original claim texts of the four most important features of each product were simplified to allow comparison.

 

Medical device product attributes comparison

Table 1. Comparison of product attributes

 

Points of Parity
In all four, the core product attributes show a surprisingly high degree of similarity. All companies claim that their liners are made with the most advanced technology, reduce wear dramatically, are stronger and offer oxidative protection. Because the claims are so similar and solely product-focused, these are mere points of parity: Each company essentially matches its competitors’ claimed benefits.

Customers won’t choose one product over the other based on these attributes — but, importantly, they’d switch brands if those attributes weren’t present. For example, all suppliers of hip implants now provide XLPE liners, and a client would be surprised if a company did not.

As such the claims displayed in the table belong to the Expected Layer rather than the Augmented Layer and, as such, do not offer strong differentiation. Consequently, products are often perceived to be alike, which results in a lack of persuasiveness and eventual commoditization of the product segment, putting prices under pressure.

Points of Difference
There are many ways to strongly distinguish products from the competition. In the case of the acetabular bearing component, it would be more effective — though not necessarily easier — to focus on factors beyond the physical product attributes. To identify successful differentiators, managers should conduct market research to understand the wants and needs of customers, in terms of systems, processes, service and value for money.

For example, an orthopedic surgeon may ascribe more value to benefits such as continuing medical education or support for improving the clinical outcomes and the efficiency of his practice. When the attributes from the augmented layer are strongly associated with a brand, clients will be reluctant to switch to competing products. These attributes should therefore also be strongly ‘tied’ to the brand and communicated together with the physical product benefits.

Create the perceived business value by packaging the physical product attributes and ancillary services in your message. Not only is this more effective in persuading customers, a message layered with complex differentiators is difficult for competitors to imitate — and that’s how the hierarchy of product attributes can give you a long-term competitive advantage.

 

References

  1. Armstrong, G., Adam, S., Denize, S., Kotler, P. (2014). Principles of marketing. Pearson Australia.

 

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