MassMEDIC Boot Camp for MedTech Entrepreneurs

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MassMEDICBoot Camp for MedTech
Entrepreneurs Market Opportunity Assessment
October 18, 2005
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Good Morning, Entrepreneurs

• Market opportunity assessment
• Understanding innovation
• Asking the right questions - Looking beyond
  product attributes to the customer need
• Getting the right answers - Appropriate research
  methodologies to build market models
• Building sustainable brands for market change

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Understanding Innovation
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Health Care Innovation

• Principles of change
• The adoption of health care innovation requires
  a change in standards
• The rate of adoption is controlled by the
  benefits of innovation and the barriers to
  change of practice

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Innovation Diffusion
Adoption of medical technology has a steep
diffusion curve due to the influence of two
market segments.
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Target Organizations

• Behavioral change is driven by the acceptance of
  early adopters who will influence imitators.
• Innovators are not influenced by others in the
  timing of their initial product purchase.
• Imitators are influenced by the number of
  previous buyers in the timing of their initial
  product purchase.

Imitators
Early Adopters
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Barriers to Change
The speed of adoption will also be influenced by
the relative difficulty of change.
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Asking Questions
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Assessing Barriers to Change
Rogers Innovation ACCORD model Relative
Advantage to what it replaces Compatibility with
current behaviors Complexity of communicating
the benefits Observability of the products
benefits Risk of product failure Divisibility or
trialability
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Defining Audience Segments

• How can we segment the market in an effective
  way?
• Based on our core product attributes, who will
  this appeal to initially and in the long run?
• Who are the intermediary decision makers and end
  users?
• What are their barriers to change?
• Which segments are most attractive?
• What behaviors will need to change?

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Understanding the Value Proposition

• What benefits are they willing to pay for?
• Functional attributes defining quality
• Added benefits or services beyond product
• Economic benefits
• Psychological benefits

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Getting Answers
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Chaos to Concept - Getting Answers
Market assessment to brand development Sifting
through the market for customer behavior insights
Quantitative Demand Assessment - studies in
segments on price value acceptance
Positioning Message Development - market
development strategy and concept testing
Qualitative Behavior Studies - current behavior,
perceptions, decision process and values
Market Situation Analysis - current sales and
share, competitive SWOT
Product Value Proposition - trial customer
benefit statements
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Developing the Value Proposition
Constructing customer value models based on
qualitative and quantitative research findings
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Building Sustainable Brands
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Influencing Diffusion

• Marketing effort will influence both early
  adoption and imitation
• Awareness - advertising, promotion
• Accessibility - distribution, pricing
• Satisfaction - product design and modification
  service

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Brand Development

• Value Proposition The core value derived from how
  a company differentiates its offering from the
  competitors
• Positioning The statement that conveys what you
  do for whom, to uniquely address their need
• Message Sets Messages that will ultimately inform
  our customers on the benefit to change
• Creative Platform The words and images that
  present your brand to the market

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Thank You

• Remember, successful market entry requires more
  than innovation
• Ask the right questions
• Use the answers wisely
• Build a sustainable brand

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QA
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Source Materials
Frank M. Bass, A New Product Growth Model for
Consumer Durables (Management Science 1969, 15,
215-227) Everett M. Rogers, Diffusion of
Innovations, 4th ed. (New York The Free Press,
1995) David A. Aaker, Build Strong Brands (New
York The Free Press, 1996) Al Ries, Jack Trout,
Positioning - The Battle For Your Mind ((New
York McGraw-Hill, 2001) Hanssens, Parsons
Schultz, Market Response Models, 2nd Edition.
(Boston Kluwer Academic Publishers, 2001)