SARTA: How to do Marketing Research for Your Business Plan. February 2012.

SARTA: How to do Marketing Research for Your Business Plan.

February 2012

SARTA Leadership Series - Marketing Research 2

TMTG propaganda

VOC(Voice of

Customer)

Expert Research Client Defined

Qualitative

Quantitative

Segmentation Analysis

Customer Satisfactionand LoyaltyCustomer and

Product Requirements

Go To Market Planning

TechnologyAssessment

Product Concept Testing

Pricing

Opportunity Analysis

Post LaunchAcceptance

Technology Sourcing Product CreationLaunch

Preparation Product MonitoringPre-Launch Post-Launch

Healthcare IT

Device and

Diagnostic

Pharma and

Biotech

Medical Imaging

February 15th 2012


TMTG Clients (partial list)

February 15th 2012

http://www.bracco.com/Bracco/?idCountry=0000


Global coverage

February 15th 2012


Agenda

A. Marketing 101: more than a brochure factory!

B. Why bother: validate your marketing plan?

C. Market vs. marketing research

D. How to do this

February 15th 2012


MARKET ‘ING

CUSTOMER SELLING

$

A. Marketing 101

February 15th 2012


TECHNO

CUSTOMER

$

Hard to doYears of academic trainingCost money Must be protected

The easy partA couple of brochuresMay not even need a salesmanPeople will fight to get it

A. Marketing 101: Classic thinking, the brochure factory!

February 15th 2012


CUSTOMER NEED

PRODUCT

DEMAND

Do not tell me you know everything about the customer

“problem” you are trying to solve

Do you have it?

“solution” you bring

This is really what you are after

A. Marketing 101: Correct thought process

February 15th 2012


MARKETING

CUSTOMER NEED

PRODUCT

DEMAND

Technology & Service to fulfill an unmet need or rather address a need better.

Right time, right place, right price.

A. Marketing 101:How do we go from product to demand?

February 15th 2012


We're doing it backwards: you should always start with a customer problem and find a technical solution to solve the problem– Often we start with technology and then we look

for a problem– That's okay, just don't forget the problem! Without

it, you will never get paid– There are lots of reasons to start a company, but if

you don't get paid, your company will die

A. Marketing 101:Sometimes we go the wrong way

February 15th 2012


A. Marketing 101:So you need to VALIDATE THE market

Market

Customer

Competition

Size

Speed

Who is the customer?

Units vs. $?

Who is the enemy?How bad will they

want this?

February 15th 2012


STEP 1: to figure out the magnitude of the problem – How many potential customers have it?– How much do they care about the problem?

(does the problem cost them lots of money, horrible disfiguration, or terrible distress?)

Now you have a market

Target

Addressable

TAM

A. Marketing 101:Size and speed …

February 15th 2012


STEP 2: target the customer segment

• Ok, but what is segmentation?

“dividing customers into homogenous groups who will exhibit uniform purchasing behavior when exposed to

the same marketing mix”

• Simply put:

Segment 1 Segment 2 Segment 3 Segment 4

A. Marketing 101:Customer Segmentation

February 15th 2012


Technology products follow a predictable adoption cycleby customer type—these types often determine segments

InnovatorsEarly

AdoptersLate

MajorityLaggards

Enthusiasts Visionaries SkepticsConservatives

Time

EarlyMajority

Pragmatists

A. Marketing 101:Customer Adoption Cycle

February 15th 2012


It does not allow work that way – so prioritize well.

InnovatorsEarly

AdoptersLate

MajorityLaggards

Enthusiasts Visionaries SkepticsConservatives

Time

EarlyMajority

Pragmatists

$$ $ $$

$$

$

Sometime like this

February 15th 2012


TALK TO THE

CUSTOMER (S)ASSESS NEED /

INTEREST IN PRODUCTLook for their reaction and classify them by Psychographics Motivational drivers Purchase behavior / decision making

PRIORITIZE SEGMENTS• Be able to explain why a particular segment will

be attacked first: use rationale like size, affinity for new solutions, or intensity of market need

• What are you going to do next?

TARGET AND POSITION

• Develop your marketing plan to each segment• Adjust your offering• Determine the right price

A. Marketing 101:Positioning

February 15th 2012


STEP 3: define your marketing mix

• Message• Push / pull

• Benefits• Value prop

• Channel• Margin vs.

speed

• Model• Sensitivity

/ decision

Price Place

Promo

Product

A. Marketing 101:Marketing mix

February 15th 2012


All this is nice ….

But why bother?

February 15th 2012


• Market size: VCs focus on it right away, so be honest.– If you can multiply price by the # of potential customers, you can

validate your assumptions about market size– It doesn't matter if you are wrong but if you don't pick a number, we

are going to make our own assumptions

• Price vs. demand: “most contentious” with VC

Make sure you drop the anchor and pick a price– Cost plus, Competitive, EVC (Economic Value to Customer)

Make sure you can be profitable and yet create demand

Get paid now– paid pilot projects validate your market well

B. Why bother: credibility for your investors

February 15th 2012


• Product positioning: what is the value proposition?

Consider the different types of new product– Brand new, complement, line extension, brand extension

Define core benefits which make the product a "must buy"

Predict speed to market, product life cycle, and customer adoption patterns

Yes there is competition – Where is your product / service fit ? Which box do you fit in, which

category?

B. Why bother: define your marketing plan

February 15th 2012



• Promo: Message, Medium, Budget

Consider the different methods and mockup material– PR, Ad, Sales Incentives (promo), Personal selling– Awareness is generated by your promotional plan

February 15th 2012


• Channel: “go to market” is also looked at

Don't recreate the wheel– Don't build out your own channel capabilities if someone else's will

be more effective

Don't be naive– Managing channels effectively is one of the hardest things to do

and can be very costly. – If your assumptions about building out an indirect channel are too

aggressive, you are going to look like an amateur

Remember the customer!– How do they want the product to be made available? – Availability is created by your channel plan


February 15th 2012


Market vs. Marketing Research

February 15th 2012


• Market research = secondary research– This is a market analysis (size, structure, etc.)– Data is already out there

Examples?

• Marketing research = primary research– This is a VOICE of customer analysis (preference,

perception) – The data do not exist: you need to collect that data– It is hard to do it right (unbiased)

Examples?

C. Market vs. Marketing Research

February 15th 2012


• The role of research as a decision making tool– Be an investor, not a gambler

• But you need to be smart about this investment (time and money)

– Follow a rigorous process just like you do it for engineering– Key Steps:

1. Define a problem and scope (why spending $?)2. Design carefully (garbage-in/garbage-out)3. Collect data (scientifically)4. Interpret (define actions)5. Act on findings (leverage your investment)

C. Market vs. Marketing Research

February 15th 2012


C. Marketing Research Qualitative methodologies

IN-DEPTH INTERVIEWSDescription: 30-60 minute ONE-on-ONE interviews

Value:

• Segmentation criteria.

• Purchase process and drivers

• Product needs and expectations

Process:

• Recruitment with screener.

• Discussion guide: open ended question

• Interview scripts.

Cognititian

Talk-The-Talk

Interactive

Why

us?

Phone

Face-To-Face

Dyads

Opt

ions

February 15th 2012



OBSERVATIONAL FIELD WORKDescription:Customer visit analysis.

Value:• Contextual knowledge • Workflow and organizational behavior• Understand product use.

Process:• Customer site selection• Field observation. • .Interview and summaries Non-Intrusive

Deep

Focused

Why

us?

Observation

Cross-Review

Forum

Opt

ions

February 15th 2012



FOCUS GROUPS Description: Consists of a moderated exchange among decision makers within a target customer segment

Value:• Consensus feedback. • Product concept testing• Group dynamics

Process:• Recruitment with screener• Moderation guide (few open end)• Summary of key points

Knowledge

Direct

Fun

Why

us?

Tryads

Mini FG

Mock-Up Trial

Opt

ions

February 15th 2012


C. Marketing Research Quantitative methodologies

SURVEYSDescription:Close format questionnaire administered over the phone or self-administered.

Objectives:• Descriptive and causal research / perception/satisfaction• Statistical validation

Process (similar for all surveys):1. Survey questionnaire2. Sampling (randomized, stratified) & Pre-test. 3. Incentive scheme4. Administration: email, Fax, Phone (CATI), Web-Based. 5. Coding and editing6. Rule-based data entry and QA. 7. Presentation of results in graphic or tabulated format

Design

Rich

On-Time

Why

us?

Phone/Fax

Web-Based

Conference

Opt

ions

February 15th 2012

February 15th 2012 SARTA Leadership Series - Marketing Research 30

Vendor Perception Map(Ratings based on the combined top tw o highest scores)

0

10

20

30

40

50

Best long-term magnet upgradeability program

Reliable and dependable service

Brand appeals to referring physicians

Represents excellent investment (best value)

Technology innovator

Dedicated, accessible clinical application support teams

Excellent spatial resolutionBest solution for reducing motion artifacts

Fastest patient throughput for my studies

Best coil design and/or handling

Reliable abdominal imaging

Technologists master scanners produce high quality

imaging

Reduce patient anxiety

GE Philips Siemens ToshibaV1 V2 V3 V4

C. Marketing Research Quantitative methodologies: perceptual

maps


Vendor 1

Vendor 3

Vendor 4

Vendor 2

Best long-term magnet

upgradeability programReliable and dependable service

Brand appeals to referrin

g physicians

Best value

Technology innovator

Dedicated accessible support teams

Excellent spatial resolutionReliable abdominal imaging

Fastest patient throughput

Best coil design and/or handling

Techs master scanners & produce high quality image

Reduce patient anxiety

C. Marketing Research Quantitative methodologies: brand perception


(Normalized to 100 pt scale)

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

4 4.1 4.2 4.3 4.4 4.5 4.6 4.7

Average Brand Ratings

Mid

Pri

ce in

Th

ou

san

ds

GE Signa Excite HD 1.5T

Philips Achieva 1.5T

Siemens Symphony 1.5T

Siemens Espree 1.5T

Siemens Avanto 1.5T

The 45o line intersects the overall average price and brand rating value.

proportional to the

product’s market share as estimated by Vendor 1.

Number of Data Points:GE: 36Philips: 7Siemens Symphony: 35Siemens Espree: 9Siemens Avanto: 13The number of data points is insufficient for meaningful statistical comparisons.

(Normalized to 100 pt scale)

P415%

P520%

P120%

P330%

P215%

C. Marketing Research Quantitative methodologies: price-to-value



CONJOINT/ TRADE-OFF ANALYSESDescription:Objective estimation of the value buyers place on the attributes or features which define products and services.

Value• Predictive rather than descriptive results.• Demand curves, substitution effects, and cannibalization• Quantification of product attribute value trade-offs• Price sensitivity testing

Process:1. Definition of relevant product/service attributes/features 2. Selection of conjoint methodology3. Experimental design to calculate main effects and key interactions 4. Utility / part-worth estimate per respondent5. Simulation mode to predict the impact of changes in product or price

Integration

Expertise

Consultative

Why

us?

Choice-Based

Adaptive

Full-Profile

Opt

ions

February 15th 2012

A DERIVED MEASUREMENT OF YOUR CUSTOMER PREFERENCE SHARE


C. Marketing Research Quantitative methodologies: survey screenshot

February 15th 2012

SARTA Leadership Series - Marketing Research

C. Marketing Research Quantitative methodologies: why conjoint

35

Ratings vs. Conjoint Trade-Off Methodology

• Self-explicated ratings tend to not discriminate enough• Ratings can even provide wrong answers:

• in this example customers may state that they performance and they prefer a specific brand, …

• … but when confronted with reality and trade-off choices, they will clearly favor economic factors such as price and MPG.

Perfor

man

cePr

ice

MPG

Brand

00.5

11.5

22.5

33.5

44.5

54.8 4.6 4.5 4.7

Import

nace

Stated Importance(Ratings-based) Pe

rfor

man

cePr

ice

MPG

Brand

00.5

11.5

22.5

33.5

44.5

5

1.5

4.6

3.5

2Im

port

nace

Derived Importance(Conjoint-based)

February 15th 2012



MODELING / SIMULATION Description:A family of methodologies for simulating real-world market behaviors in order to predict expected outcomes.

Value:• Decision-support• Forecast and prediction• Pricing

Data Access

Health Economics

Partnerships

Why

us?

Decision Trees

Markov Models

Monte CarloSimulation

Opt

ions

February 15th 2012


D. How to do this

1. Sizing the market• TAM = from secondary data• Unmet need = from voice of customer

2. Customer segmentation• Behavior = from VOC

3. Value prop• Competitive benchmarking• SWOT

4. Pricing vs. adoption• Elasticity • Modeling

February 15th 2012


D. How to do this:Sizing the market

• Secondary analysis• Market reports• Web• Gvt data• Associations / trade

groups

• Count the units first

February 15th 2012

TAM

Units x count

Addressable 1

Addressable 1

First YEAR

Segment specific

Adoption curve

$

Annual Market Size (DEVICE + Consumables) $276,128,711 $ASPAnnual Market Size of DEVICE $27,624,046 $1,875

Annual Market Size of Consumables $248,504,665 $10.32*Includes Universa l

Consumables

Forecasted Growth (3 yrs; 12% CAGR) 2011 2013 2014Total Annual Market Size for DEVICE and Consumables 276,128,711 $346,375,855 $387,940,958

Annual Market Size Opportunity Annual Sales % brand Sales $27,624,046 10%Branded Consumables Sales $246,095,759 89%Universal Consumables Sales $2,408,906 1%

Market size by Public / Private Segments Total # of Beds % of Market Market ValuePublic Hospital Market 372,811 74% $204,568,177Private Hospital Market 130,414 26% $71,560,534

DEVICE Market Size Total Install Base $ASP Annual RevenuesVolumetric DEVICE 338,855 $1,875 $25,414,122Syringe DEVICE 29,466 $1,875 $2,209,924TOTALS 368,321 $27,624,046Total Annual Market Size for DEVICE $27,624,046

Consumables Market Size Annual Units Sold Annual Revenues % of RevenueBranded Medication Consumables Use per Year 19,512,138 $221,486,183 80%Branded Nutritional Consumables Use per Year 2,168,015 $24,609,576 9%Universal Consumables (Medication + Nutritional) 2,408,906 $2,408,906 1%Total Annual Market Size for Consumables s 24,089,060 $248,504,665

brand Market Opportunity

Consumables Market Opportunity

Total Market Opportunity

DEVICE and Consumables Market Size in BrazilSeptember 2011

Market Size by Market Segment

10%

89%

1%

Annual Revenue by Product Line

brand Sales

Branded Consumables Sales

Universal Consumables Sales

$200,000,000

$220,000,000

$240,000,000

$260,000,000

$280,000,000

$300,000,000

$320,000,000

$340,000,000

$360,000,000

$380,000,000

$400,000,000

2011 2012 2013 2014

Forecasted Annual Annual Market Size


D. How to do this:Need Assessment & Customer segmentation

• ASK the customer

February 15th 2012

SEGMENTATION

Segment 1

Segment 2

Segment 3

Customer

Custom

er

Customer

untargeted, suboptimal sales potential

cost effective, time efficient, standardized

set of segments with identified requirements

YOUR CUSTOMER

MARKETING RESEARCH

THE RESULT

Customer

Custom

er

Customer

Customer

Price is Key Service

is Valued

Product Quality


D. How to do this:Value proposition and positioning

• SWOT • Competitive table

February 15th 2012

YOU Comp 1 Comp 2 Comp 3

Feature 1 Feature 2 Feature 3 Feature 4 Feature 5 Feature 6 Feature 7 Feature 8

S: we are the best

O: world is ours

W: not bold enough

T: uneducated customers

Customer research will help correct any potential myopia


D. How to do this:Pricing vs. adoption

• Price sensitivity • Preference model

February 15th 2012

Market simulators

Price vs. adoption


1. Market sizing– TAM– Addressable

Okay, let's try it…

February 15th 2012


2. Value proposition and customer segmentation Let us define the top 10 questions we would ask a potential

customer of the following product

– Motivation: if you collect good information, you can learn valuable information to refine your business model

– You probably won't learn everything with one or two customers, you need to decide how much data validity you need (directional vs. accurate)


February 15th 2012


3. Competitive positioning– From customer data– From intelligence


February 15th 2012


4. Price vs. demand (adoption)– You would need to decide if you want to spend

money in a large scale survey


February 15th 2012


Remember:

• Be open minded • Accept study findings• Interpret what this means• Implement • Measure again

February 15th 2012

Contact Us


www.themarketechgroup.com

USA502 Mace Blvd, Suite 15Davis, CA 95618 United StatesPhone: (+1) 530-792-8400Fax: (+1) 530-792-8447

EUROPE / FRANCE3, rue Emile Péhant44 000 Nantes FrancePhone: +33 (0)2 72 01 00 80Fax: +33 (0)2 40 48 29 40

BRASILRua Girassol 756-82Sao Paulo, SP Brasil

05433-001Phone: +55 (11) 8799-0507

http://www.themarketechgroup.com/info_case_studies.php

SARTA: How to do Marketing Research for Your Business Plan. February 2012.

Documents

Transcript of SARTA: How to do Marketing Research for Your Business Plan. February 2012.