The MarkeTech Group Scientific Method Webinar by Robert Enzerink and James Garvin How Much Are Clinical Customers Willing To Pay? -- Using Voice-of-the-Customer To Get Your Key Questions Answered Trying to determine what features and benefits you should go to market with or which of those features your customers truly value the most and are willing to pay a premium for,...can be one tough nut to crack. A common challenge in the medical field is to move beyond the internal filters and biases created when your input comes primarily through your sales force and KOL channels. KOLs tend to be early adopters and technology geeks; engineering teams are convinced that a more technically advanced product will sell itself; sales will push for lower prices so they can compete; and regulatory bodies like CMS keep tightening reimbursement pressures... Executives need credible information to guide decisions. The MarkeTech Group 502 Mace Blvd. Davis, CA 95618 www.themarketechgroup.com

1. For Audio : (512) 400-4809
Attendee Access Code: 641 6916
A Scientific Method to
Determine What Medical
Customers Really Want…
and Are Willing to Pay For
Presented By:
Robert Enzerink – Partner
renzerink@themarketechgroup.com
James Garvin – Sr. Consultant
jgarvin@themarketechgroup.com

2. In 30-minutes, you will learn how to…
2 3
1 4
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3. There can be a real problem with asking your potential
customers “what they want”…
If you build a product based on what
customer’s “say” is important… ….you design this
….but then they go and buy this?
….and they are willing to pay this
$15.99
$1.50
In the end, it’s not about building what customers want, it’s about building
what they will buy!
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4. …trade-offs allow you to determine what is truly
important and what your customers are likely to buy.
$15.99 $29.99
Safest Least safe
Low versatility vs. High versatility
Minimal functionality Greatest functionality
Your marketing research needs to include
real scenario trade-offs to make the research and therefore,
the results, more “real”.
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5. So, how do you make the research and therefore,
the results, more “real”?
Define Qualitative: Quantitative:
Objectives Interviews & Survey Design
Focus Groups and Analysis
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6. So, how do you make the research and therefore,
the results, more “real”?
Define primary Qualitative: Quantitative:
Objective Interviews & Survey Design
Focus Groups and Analysis
• Clearly define the
question you want
answered: CRQ
• Specify supporting
objectives
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7. So, how do you make the research and therefore,
the results, more “real”?
Define Qualitative: Quantitative:
Objectives Interviews & Survey Design
Focus Groups and Analysis
• Clearly define the • Identify the real
question you want decision-makers
answered: CRQ • Identify the real
• Specify supporting relevant purchase
objectives drivers
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8. Qualitative Analysis
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9. Qualitative Analysis
…and identify the truly differentiating characteristics.
Durability
Device
Removability
Design
Procedure
Price
Type
Differentiating
Characteristics
Migration
Brand
Rate
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10. So, how do you make the research and therefore,
the results, more “real”?
Define Qualitative: Quantitative:
Objectives Interviews & Survey Design
Focus Groups and Analysis
• Clearly define the • Identify the real • Quantify the
question you want decision-makers effects of things
answered • Identify the real over which you
relevant purchase have control:
drivers • Product
• Promotion
• Placement
• Price
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11. Survey respondents are presented real-world trade-off
scenarios to select their preferred product configuration…
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12. …and asked repeatedly with different sets of product
configurations.
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13. The Quantitative Analysis Team Processes The Data
210
140
Utilities
USA
Germany
Italy
70
0
US1 US2 US3 US4 US5 China1 China2
Brand
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14. Trade-off analysis data is analyzed with a preference
simulator
1. Which product features are most important?
2. How will your product compete?
3. Which features command the greatest price premium?
4. What is the optimal price?
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15. simPRO™ Preference Modeler
How your product stacks up today:
Product Scenario Your Product
Attribute name US1-Prod1 US3 US1-Prod2 US2
Clinical Case Malignant Malignant Malignant Malignant
Device Design & Durability Metal, premium - 12 months Metal, premium - 12 months Metal, simple - 6 months Plastic - 3 months
Brand USBrand1 USBrand3C USBrand1 USBrand2
Removability Within 12 months Within 12 months Within 3 months Within 3 months
Procedure Fast with Device Thinning Standard without Device Thinning Fast with Device Thinning Fast without Device Thinning
Migration Rate < 0.1% < 0.1% < 0.1% < 0.1%
Plastic Price 0 0 0 750
Metal Price 4500 4500 3100 0
Your Product
Preference (%)
Germany (51) Italy (40)
US1-Prod1 23.4 16.2
US3 3.3 21.6 Existing preference share is 3.3% and 21.6%.
US1-Prod2 19.1 20.2
US2 52.9 40.2
None 1.3 1.8
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16. simPRO™ Preference Modeler
What if you:
 Introduce a new Product?
• New instrumentation design for faster
surgeries
 Start a new Promotion campaign?
• Communicate recent clinical data
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17. simPRO™ Preference Modeler
What your new product and promotion will do:
Product Scenario Your Product
Attribute name US1-Prod1 US3 US1-Prod2 US2
Clinical Case Malignant Malignant Malignant Malignant
Device Design & Durability Metal, premium - 12 months Metal, premium - 12 months Metal, simple - 6 months Plastic - 3 months
Brand USBrand1 USBrand3C USBrand1 USBrand2
Removability Within 12 months Within 12 months Within 3 months Within 3 months
Procedure Fast with Device Thinning Fast without Device Thinning Fast with Device Thinning Fast without Device Thinning
Migration Rate 0.2 - 0.5% < 0.1% < 0.1% < 0.1%
Plastic Price 0 0 0 750
Metal Price 4500 4500 3100 0
Your new marketing material highlights Your company introduces new
clinical data updating the poor migration instrumentation to speed up the
rate of competitive product. procedure.
Preference (%)
Germany Italy
US1-Prod1 22.4 12.8
Preference Impact: Minimal or negative
US3 4.8 19
US1-Prod2 18.5 23 Germany from 3.3% to 4.8%
US2 53 43.5 Italy from 21.6% to 19%
None 1.3 1.7
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18. simPRO™ Preference Modeler
What if you:
 Change your Product launch plan?
• Consider maintaining legacy product in
some markets
• Introduce new product only in receptive
countries
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19. simPRO™ Preference Modeler
What if you consider a two-product strategy?
Product Scenario Your Product
Attribute name US1-Prod1 US3 US1-Prod2 US2
Clinical Case Malignant Malignant Malignant Malignant
Device Design & Durability Metal, premium - 12 months Metal, premium - 12 months Metal, simple - 6 months Plastic - 3 months
Brand USBrand1 USBrand3C USBrand1 USBrand2
Removability Within 12 months Within 12 months Within 3 months Within 3 months
Procedure Fast with Device Thinning Standard without Device Thinning Fast with Device Thinning Fast without Device Thinning
Migration Rate 0.2 - 0.5% < 0.1% < 0.1% < 0.1%
Plastic Price 0 0 0 750
Metal Price 4500 4500 3100 0
Preference (%) Preference (%)
Germany Italy Germany Italy
US1-Prod1 23.1 13.1 US1-Prod1 22.4 12.8
US3 3.2 22.6 US3 4.8 19
US1-Prod2 18.9 20.8 US1-Prod2 18.5 23
US2 53.4 41.8 US2 53 43.5
None 1.3 1.7 None 1.3 1.7
Preference Impact: Minimal, slightly improved
Germany from 3.3% to 4.8%
Italy from 19% to 22%.
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20. simPRO™ Preference Modeler
What if you:
 Change your product Placement?
• Consider an alternate sales channel
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23. Optimal price range can be estimated using the
preference data
Price range for preference
– maximized revenue
Preference x Unit Price
$2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500
Product Price
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24. Optimal price range can be estimated using the
preference data…
Preference x Unit Price
$2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $6,500
Product Price
These prices maximize preference-weighted revenue but,
in real life, other factors impact preference…
• Sales force effectiveness
• Marketing
• GPOs, group discounting
• Regulatory and reimbursement rulings
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25. …so, if trade-off analysis helps me measure preference
and price sensitivity, how do I predict revenue, profit,
and market share?
Market-calibrated Real market, sales, Ph.D. experts in
preference share data + and purchasing + pricing modeling
dynamic variable data
A market model that can predict profit, revenue, or market
=
share maximizing prices
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26. You’ve just seen tools to make well-informed business
decisions to:
1. Understand which product features are truly the most important
2. Evaluate how your product competes against the competition
3. Identify which features command the greatest price premium
4. Find the optimal price for your product
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27. Remember these three things:
1. Declarative surveys mislead
2. Trade-Off analysis simulates real-world choices
3. Scenario modeling guides effective decision-making
4. Actually, four things:
Hire The MarkeTech Group
www.themarketechgroup.com
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28. Questions?
www.themarketechgroup.com
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