Originally Published January/February 2001
Marketing to the Brave New Healthcare World
If you haven't yet developed a strategy, start with these five essential principles.
Donna Krupa
The impact that the mapping of the human genome will have on health and medicine has been likened in significance to Neil Armstrong's l969 walk on the moon and mankind's subsequent understanding of the universe and space. To be sure, the secrets to be revealed from understanding human DNA and the interaction between genes and disease will bring about radical new scientific realities and drive significant changes in medical and professional practices.
But such discoveries will also have an equal, if not greater, effect on the commercial principles of the healthcare industry and the infrastructures—manufacturing, marketing, sales, etc.—that support the industry. Medical device and diagnostic manufacturers and the healthcare industry are today where rocket ships and the space program were some 30 years ago. Then, as now, things will never be the same.
Against this backdrop, how can marketers prepare their organizations so that they not only adapt to but become pacesetters for the coming megatrends?
To get ready for this coming reality, every company should first conduct a ruthless analysis of the specific opportunities and threats likely to be posed to its market sector in general and its organization in particular. The conclusions that each company reaches and the decisions that flow therefrom will affect its financial prospects and public profile for years to come. The five essential principles outlined in this article should act as a prism through which the adequacy and flexibility of specific marketing plans should be assessed.
One-Size-Fits-All Marketing Is Dead
The first essential principle for marketing today has its roots in marketing's past. Before the mid-l970s turbulence in America, marketing was based on the simple principle of homogeneity—the notion that all consumers were alike. The call for women and ethnic minorities to be recognized as distinctive groups paved the way for consumer-goods marketers to sell any given product using strategies specifically tailored for and aimed at distinct market niches.
Since then, nearly half of the Fortune 500 companies have developed marketing programs emphasizing appeals along gender, racial, or ethnic lines. The entry into this kind of marketing strategy by powerhouses such as Levi Strauss (jeans), Sprint (long-distance phone service), and PepsiCo (soft drinks) has made distinction or niche marketing the rule rather than the exception. Mass marketing, where one size fits all, is for textbook study only. Now, more than two decades later, the medical device industry—first cousins of the merchandise marketers—must follow suit.
Why change marketing strategies now? The reasons are multifold. At the most fundamental level is the mapping of the human genome coupled with its first offspring, an emerging field called pharmacogenomics. This new branch of human sciences, which explores the relationship between genes and the effects that medicines have on the body, has shown that identical medications can act differently from one person to the next. Pharmacogenomics is proof positive that people are not genetically homogeneous, just as they are not culturally homogeneous.
As with consumer-product marketing, medical device firm marketers must recognize that generic, one-size-fits-all marketing campaigns are defunct. New marketing strategies emphasizing customization are the order of the day. Put simply, successful consumer marketing at the end of the twentieth century required a marketing component based on cultural diversity. At the beginning of the twenty-first century, medical device marketers must get in the game and create marketing plans based not only on cultural but genetic diversity as well.
Prepare to Market to Genetic Diversity
A number of pharmaceutical manufacturers began pharmacogenomic exploration in the l990s. The premise behind this emerging science is that most medications are transformed by the biochemical processes of the body, which in turn activate or deactivate the drugs. In addition, drugs can also interact with receptors that determine how the medicine will affect the body.
Riding in on the coattails of these findings is a new era for health and medicine. It is the era of personalized medical therapy. Among the advances that personalized medical therapy will bring to patient care are specific formulations of medicines constructed with the individual's genetic makeup in mind. It is expected that such formulations will achieve greater efficacy and better clinical outcomes.
This new dimension of healthcare offers two unprecedented opportunities for the industry. The first is the ability to add customized versions to existing or in-the-pipeline products. Obviously, the most cost-effective product add-ons should be rolled out first, using a communications plan that targets the user and primary beneficiary.
Enhancements to Existing Technologies. For example, a company that designs, manufactures, and sells blood-monitoring devices might modify certain products to account for the fact that Asians experience fewer side effects with low doses of certain psychotropic drugs than do Caucasians, or that tranquilizers remain in the systems of the elderly much longer than in the systems of middle-aged persons. Technology upgrades should take into account the fact that different groups may metabolize drugs at higher or lower rates, and the benefits of continuous drug monitoring to the patient should be aggressively marketed.
New Stratifications for Existing Product Lines. Similarly, a manufacturer of neurostimulators might realign its current product offerings based on the intensity of nerve stimulation certain types of patients may need. A device required for a young college athlete recovering from a sports injury is not likely to be equally efficacious on a frail, elderly man suffering from back pain. More generic—and more sophisticated—levels of stimulation can be designed, repackaged, promoted, and priced accordingly. In short, medical devices will experience a dramatic shift, from "one test fits all" to "some tests fit many."
The second opportunity comes from defining the benefits of technology in a new way. Manufacturers can begin to set the climate for patient testing before, as well as after, medication is prescribed or interventions undertaken. By knowing a patient's genetic makeup in advance, specific baselines can be calculated and better assessments made.
HMOs, often criticized for taking an off-the-rack approach to healthcare, can benefit by encouraging the use of enhanced products that take into account how gender, ethnic, and racial differences play a role in the patient's response to drug treatment and other therapies.
Maintaining the Status Quo Means Regressing
While pharmacogenomics is creating a new calculus for health and medicine, a second engine is driving a new wave of demands for services by an aging and culturally and racially diverse patient population.
Today, the median age for whites is 33 years of age. Among Asians it is 27; African-Americans, 25.6; and Hispanics, 24. As the age wave swells, it will create differing needs based on where patients are in their life span. At the same time whites are aging, diversity is increasing. For example, in l980, two-thirds of Californians were whites of European ancestry. Within the past two decades, the state has become composed of a majority of minorities. Politicians are fond of saying, "As California goes, so goes the nation." This adage will serve marketers well during their strategy formulation phase.
From a marketing standpoint, these demographic shifts will thoroughly change the way target markets are reached. Just as broadcasting was a marketing staple for the l970s, "narrow-casting" is coming into its own to keep pace with the new focus on diversity in the United States and abroad. No longer is it sufficient to rely on network or cable television, magazines, and Internet banners to reach patients, and new mediums should deliver messages in languages other than English.
One element of any successful marketing plan must be a clear, correct understanding of the "authentic voices" to whom a particular market turns for information. Is it the clinic physician? The neighborhood beauty salon stylists? The parish priest?
What about the parish priest? In one program the Krupa Cos. (Washington, DC) worked to promote, a Hispanic parish offered women a program for cervical screening, diagnosis, and treatment. Although one-fourth of the participants had never had a Pap smear—or had let five years elapse since their last screening—50% had seen a physician at least once during the preceding year.
The exit questionnaire used to assess this nontraditional health-and-marketing strategy revealed that early promotion of the event conducted at the church enhanced program participation, and that the familiar environment of the community parish acted to motivate participation in the cancer-screening program. The feedback also revealed that women's knowledge of cervical and other gynecological cancers increased significantly after participating in the program.
The bottom line is this: successful marketing programs should be integrated into culturally familiar and trusted community settings. The benefits for companies can be an increase in utilization and an increase in patient awareness and participation.
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Medical device marketers will play a key role in preparing their companies to meet the marketing realities of the new era. But first, companies will have to test the adequacy of their current marketing plans against the opportunities and threats they are likely to face in the future. The old rules will provide little help for those seeking to devise marketing plans to meet the needs of the changing healthcare market. In their place, device marketers should consider the five principles outlined in this article, which can help them assess the adequacy and flexibility of their marketing plans.
1. One-Size-Fits-All Marketing Is Dead. Companies should be prepared to address their audiences using distinction and niche marketing strategies. |
Look for Piggybacking Opportunities
Anyone who watches television is aware that pharmaceutical manufacturers are promoting their products using direct-to-consumer (DTC) marketing strategies. DTC marketing was sparked by a realization that the physician is no longer the only, or primary, decision maker today. DTC expenditures have soared; in 1996, the healthcare industry pumped $4 million into DTC advertising and marketing; by 1998, that figure had jumped to $1.5 billion.
Just as pharmaceutical manufacturers have struck out into nontraditional marketing practices to promote their products, so, too, have cosmetic surgeons and laser vision correction physicians. These trends are significant; the medical device industry will have to change its marketing approaches, too.
Can medical device and diagnostic companies also employ nontraditional marketing strategies without the vast expense of DTC marketing? The answer is yes. Medical device firms must begin joint marketing efforts with specialty organizations. These organizations may be specialty hospitals (for cancer, fertility, children's health, etc.) or special-interest groups (such as the National Association for Rare Disorders). The purpose is either to piggyback on or joint market with an existing customer base.
One such example can be found at a division of a Midwest-based company. The division develops and produces therapeutic proteins and other methods to treat hemophilia, immune deficiencies, and additional blood-related disorders. While product information is necessary for the doctors prescribing the company's medications, it's not necessarily need-to-know for those who use the product.
To reach those people, many of whom are children, the company developed a Web site aimed at them, filled with a range of material on hemophilia and patient support services. Traditionally, such information would have been available only through nonprofit support organizations. Now, patients and their families can benefit directly from the resources available from the biotech company itself. As an additional service to its consumers, the Web site also provides links to the National Hemophilia Foundation and other hemophilia-related chat rooms.
Never Believe That Healthcare and Politics Can Be Separated
In devising a maximizing marketing strategy, it is important to recognize that medicine and politics cannot be separated. The nature and vulnerabilities of both are rooted in the interest groups involved and the implications of particular policies for the electorate. The politics, people, and process for a new era of healthcare can be used by the medical device industry to position it for the future.
As we go to press, a new presidential administration sits poised to run the country, but regardless of the outcome, two things are certain. First, the healthcare marketplace and its challenges are changing faster than ever. Second, in order to succeed, medical device marketers will need to filter all communications strategies through at least these five essential principles as part of their marketing plan.
Donna Krupa is the founder of the Krupa Cos. Inc. (Washington, DC), a niche firm specializing in healthcare marketing and public relations.
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