Driven by the global squeeze on healthcare expenditure, low-cost medical device vendors are making significant in-roads on maturing med-tech markets. Over recent years medical device brands, previously dismissed as low quality by hospital decision makers, are not only making regular appearances on hospital tenders but are winning those tenders. A select group of low-cost medical device vendors are convincing users and decision makers that the “quality” of their product and service is comparable to that of the premium brand. While users may be reluctant to switch they often find themselves lacking a convincing argument to justify the additional expense of a premium and often incumbent brand.
The challenge for our clients (the premium medical device brands) is to justify a premium price and protect share and margins in markets where brand differentiation and prices are being eroded. IDR Medical’s global team of consultants has worked on a number of projects in 2011 to help companies understand and develop strategies to address this dynamic. Some of the specific issues we have focused on are:
- The role of product surrounds to differentiate and protect share and margins
- The opportunity and strategic/financial impact of leveraging lower spec devices to address the needs of a “value segment”
- Customer segmentation to determine which segments customers can best protect and how to achieve this
- Developing convincing cost-benefit models that resonate with decision makers
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