In 1960, Theodore Levitt wrote the classic Harvard Business Review article Marketing Myopia. It’s about how companies miss growth opportunities by taking the wrong perspective. Levitt provides many examples of missed opportunities caused by companies defining their business too narrowly. Usually, it is because they see their business as selling products and not solving customer problems. It’s the failure to see the big picture that leads to wrong decisions and missed opportunities.
The traditional focus of marketing in many Med Tech companies has been fairly narrow. Usually, the focus was on marketing to the physicians or user buyers based on marginal clinical or ease of use differences. This made sense since the physicians played the key role in the buying process for many products. This is especially true for technologies early in the product lifecycle, and physician preference items.
From a broader perspective, the benefits or value to the hospital were largely an afterthought. If you think this is an exaggeration, just go through your sales bag and count what percentage of your products have a compelling, differentiated and quantified value proposition for the hospital. If you work in Med Tech and are like most Med Tech companies, the answer is probably not many.
The problem with the old marketing model is that healthcare reform and a number of other macro trends have ushered in changes that will have a profound impact on hospitals. Perhaps the area of the hospital that will be impacted the most will be the hospital supply chain. By all accounts, the hospital supply chain has been a sleepy backwater and is far behind supply chains in other industries. However, much of this is changing.
The hospital supply chain is poised to create significant value by taking costs out, finding new ways to do business, and by being on the forefront of bringing better value and outcomes to the hospital by leveraging the supplier network. For those of you who are doubtful, go check out the association of healthcare value analysis professionals. This group is dedicated to helping share best practices on evaluating healthcare services for clinical quality and cost-effectiveness. Also, take a look at the Association for Healthcare Resource & Materials Management (AHRMM), which recently launched a new initiative focused on costs, quality and outcomes.
The changes happening in hospital supply chains are signals that suppliers need to be prepared for a new future. With the hospital supply chain taking a more important role and by integrating value and outcomes into purchasing, the expectations for suppliers will increase dramatically. Those suppliers who are able to think broadly and market their products as solutions will have a clear advantage. Med Tech companies that suffer from marketing myopia will likely have problems.
Medical Technology Pricing 