Description
The PPT is about the research report of envidea. The case at hand is about a quick Launch Plan for Monocryl Plus, an innovation in the existing Monocryl suture which was launched in India about ten years back.
ENVIDEA
Research Report
9/8/2009 Submitted by Team Atout, SCMHRD, Pune
ENVIDEA 2009
Contents
Executive Summary....................................................................................................................................... 3 Situational Analysis ....................................................................................................................................... 4 HealthCare Industry .................................................................................................................................. 4 Specialities ................................................................................................................................................ 4 Suture Market ........................................................................................................................................... 4 Monocryl Plus ........................................................................................................................................... 4 Research:....................................................................................................................................................... 6 Methodology:............................................................................................................................................ 6 Key findings: .............................................................................................................................................. 6 Segmentation ................................................................................................................................................ 8 Purpose of Segmentation ......................................................................................................................... 8 Suggestions ............................................................................................................................................... 8 Level of Segmentation .......................................................................................................................... 8 Segments............................................................................................................................................... 8 Calculation of Market Potential and Target Market ............................................................................. 9 Value Capturing........................................................................................................................................... 10 Product:................................................................................................................................................... 10 Price: ....................................................................................................................................................... 10 Place ........................................................................................................................................................ 11 Promotion: .............................................................................................................................................. 11 The 5 M framework ............................................................................................................................ 13
Team Atout, SCMHRD
Page 2
ENVIDEA 2009
Executive Summary
The case at hand is about a quick Launch Plan for Monocryl Plus, an innovation in the existing Monocryl suture which was launched in India about ten years back. Monocryl was not as successful in India as it was abroad. The Indian market for Monocryl is only 3 crores. So while designing a market launch plan for Monocryl Plus we have also addressed the problems which arose during launch of Monocryl. The company’s idea in launching the Monocryl Plus is from their past experience of launching Vicryl Plus Vicryl is the main stay product of JJMI. It was under threat form cheaper substitutes and Chinese Imports before Vicryl Plus was introduced.T he course of action taken by the company was essentially to provide greater value to their customers rather than competing on cost fronts. This emphasizes the importance the company attaches to the value proposition of an offering. This has been the mainstay in the suggested marketing plan. We primarily conducted an exploratory research to understand the reasons for the failure of Monocryl. The research was conducted amongst leading surgeons in the Metros, Tier-I, Tier-II and Tier-III cities. The findings of the exploratory research along with the secondary research brought to light the fact that that Vicryl was almost a household name in all hospitals across India. However Vicryl Plus is perceived to be overpriced in most markets. The research indicated that Monocryl is used day in and day out by some surgeons whereas Vicryl was vouched by most surgeons. For Monocryl Plus, the research concluded that we need to adopt segment marketing. The 5 C analysis has been used to gain situational insights. Value capturing step included the 4 P
analysis. This includes details on the product features, areas of distribution, pricing models and promotional strategies. The analysis also includes the value sustaining strategies. The ideas within the 5 Ms in advertising were then decided upon.
We conclude this report with a set of recommendations.
Team Atout, SCMHRD
Page 3
ENVIDEA 2009
Situational Analysis
HealthCare Industry
Healthcare market is one of the rapidly growing segments in our country. Major factors for this growth have been: ? ? ? ? Government’s focus on health, Increase in disposable income of patients (and hence the demand for better healthcare) Increase in medical tourism Increase in cosmetic procedures.
Al l these factors have also led to the rise of a new segment in Indian Healthcare Industry which are capable of providing best medical care though at a premium price ? ? Private Multi specialty Super Specialty hospitals.
Specialities
The Cosmetic Surgery Market is one of the fastest growing sections of Indian Healthcare Industry. Consumers are becoming more conscious for their looks and are willing to spend a premium for it. This also applies to other sections like Gynaecology, General Surgery, Cardio Vascular Surgery and Orthopaedic Surgery, where affluent patients are willing to spend more for better cosmetic results. These sections will be the targeted for sale of Monocryl Plus.
Suture Market
According to the research report by Frost and Sullivan 2009: ? ? ? Suture Market in US and Europe is a mature market with consistently low growth rates. Revenue growth within the sutures industry, currently at 1% is expected to decrease slightly by 2010 and then stabilize. The Absorbable Surgical Sutures market is forecast to grow by 6.5% annually for the next seven years in Japan, France, Italy, Spain, China, Canada, Brazil, Australia and India. The reason for this growth is that Absorbable Sutures are still in the Growth Stage in India and increase in per capita health expenditure makes them affordable.
Presently, the suture market in India stands at 218.4 crores of which Ethicon has more than 50% share.
Monocryl Plus
Monocryl Plus is a differentiated product for wound closure and has the following features:
Team Atout, SCMHRD
Page 4
ENVIDEA 2009
? ? ? Results in minimal scarring A Triclosan coating which has anti bacterial properties. According to many independent researches in USA, a single filament suture has been proved to give better effects on skin after a surgery than the multifilament sutures. Presently other monofilament sutures are available but they do not posses anti bacterial coating.
The main competitors of Monocryl Plus are the brands of Ethicon like Monocryl, Ethilon, Prolene, Vicryl and Vicryl Plus along with other cheaper substitutes present in the market. The issue of cannibalization would arise since our major competitors would be the brands of Ethicon. This however, should not be of too much concern since Monocryl Plus is a Premium product which would command a higher price and hence would increase the revenues for the company as a whole.
Team Atout, SCMHRD
Page 5
ENVIDEA 2009
Research:
Before the launch of Monocryl Plus, it was imperative for us to conduct a research. The research objectives were: ? ? ? To understand the reasons for the failure of Monocryl To delve deeper into suture market and To understand usage patterns of various kinds of sutures, which are skill dependent.
Methodology:
We conducted the following to meet our research objectives. ? ? ? Exploratory research Telephonic Interviews Secondary research Exploratory research and interviews were conducted across various hospitals and general clinics to understand the various types of sutures and the specific conditions under which each suture was used. Secondary research helped us to gain valuable insights into suture and wound closure market.
Key findings:
1. Lack of willingness to shift: Since surgery is skill driven, the surgeons who were using other brands or cheaper substitutes were not willing to shift to any other brand. Surgeons continued to use other cheaper alternatives to Monocryl 2. Lack of awareness: Surgeons in non-metropolitan cities displayed a lack of awareness towards the Monocryl sutures and its aesthetic properties. 3. Limited usage: Although Monocryl is a suture of good quality as other Ethicon products, its usage by various practitioners was very limited. 4. Price Sensitive: Price was an important factor in the selection of suture in India and surgeons used Monocryl suture only when surgeons believed that the patient will not hesitate to pay premium for the same. 5. Area of Focus: The two key areas of focus as opined by surgeons towards Monocryl were
Team Atout, SCMHRD
Page 6
ENVIDEA 2009
a. Price: Monocryl needs to be priced appropriately considering the current price index of Monocryl and market potential that can be tapped. b. Promotion: Extensive promotion would be required for Monocryl Plus to generate and increase its awareness by inducing trial. Hence the launch Campaign of Monocryl Plus should concentrate on these areas.
Team Atout, SCMHRD
Page 7
ENVIDEA 2009
Segmentation
Purpose of Segmentation
Organizations operating in a broad market cannot serve all customers in that market. Therefore it becomes important to choose or select its market and serve them well.
Suggestions
Level of Segmentation According to our Research, the surgeons were at different ‘buyer readiness’ (unaware, aware, informed, interested desirous and intends to buy) stages and hence the level of segmentation would be SEGMENT MARKETING. Segment marketing gives us the benefit to serve a large group without the need for customizing the product because it comes in between: Mass marketing : characterized by large potential market and low cost of production & Niche marketing: niche is a sub segment of a segment, a group consisting of a distinctive set of traits who seek special benefits Segments The identified segments are: ? Big Private Hospital Segment We will focus on the Hospitals which are giving the best quality care to the patients and where the patients are not price sensitive i.e. they are willing to pay for the benefits provided by our product. ? Nursing Homes Also we will focus on those Nursing Homes in Metros and Tier 1 cities which are not private hospitals but still provide better service quality and attract well- off patients. Hardly 1-2% of Nursing Homes come under this category. We take a conservative estimate of 1%.
Basis of our segmentation exercise ? ? ? ? Varying purchasing power Higher buyer readiness stage that these segments have as compared to government hospitals and other tier 1 and tier 2 hospitals. Fine tuning our marketing efforts to this segment only. Focus on competition in this segment only.
Team Atout, SCMHRD
Page 8
ENVIDEA 2009
Calculation of Market Potential and Target Market
The following table gives the present Market Potential for sutures in India. It includes the total operations in private hospitals, government hospitals and nursing homes under the various heads(SGeneral Surgery ,O-Orthopaedic Surgery, G-Gynaec Surgery, C-Cosmetic Surgery, CV-Cardio Vascular Surgery) Then we have calculated the target market by assuming a conservative estimate of 5% conversions of the total market potential. A detailed explanation of the table is given in Annexure-I Total Surgeries (no. of surgeries*no. of hospitals)
Private Hospitals-850 nos
No. Of Operating No. Of Operating Operations Days per Doctors Teams Per Day week S 10 to 12 4 3 4 O 8 to 10 3 3 4 G 8 to 10 3 3 4 C 1 1 2 4 CV 1 1 2 4 S O G C CV 2 to 3 2 to 3 2 to 3 0 0 1 1 1 0 0 3 3 3 0 0 4 4 4 0 0
Operating Days per Year(52 weeks) 208 208 208 208 208 208 208 208 0 0
Govt Hospitals4750 nos
Operations in an year per hospital 2496 1872 1872 416 416 7072 624 624 624 0 0 1872
6011200
8892000
Nursing Homes-50000 nos Total Surgeries Total Market potential Target Market
D
1 to 3
1
2
4
208
416
20800000 6219200 1915513600 95775680
Team Atout, SCMHRD
Page 9
ENVIDEA 2009
Value Capturing
The key drivers for growth for Monocryl Plus Suture will depend on the value proposition offered to the target customer in terms of the 4Ps of marketing. The individual propositions for the product are as discussed below.
Product:
We define the product in terms of a value added suture for wound closure applications with anti—bacterial and cosmetic properties which are not provided by existing product options in the sutures category. The product comes along with the following benefits: Core Benefit: Monofilament suture which has cosmetic advantages and provides easy handling. Augmented Benefit: Suture with anti-bacterial coating which prevents infection
Price:
Based on the findings of the research, we plan to promote Monocryl Plus as a premium category product which aims to provide value to the customers in terms of best anti-bacterial protection and cosmetic properties at the best quality standards. We plan to maintain prices of Monocryl Plus same as that of Monocryl ie Rs 308. Justification: Price higher than Monocryl is ruled out because: 1. Most of our target consumers already perceived as high priced. 2. Higher prices will hinder conversion of existing users of Monocryl to Monocryl Plus 3. Higher prices will prevent tapping of potential market. Price lower than Monocryl is ruled out because: 1. If Monocryl Plus is priced lower than Monocryl, customers may assume it to be of lower quality 2. It may hamper the bottom line of the company
Team Atout, SCMHRD
Page 10
ENVIDEA 2009
Modifications in prices can be done at a later stage in the life cycle of product based on the Experience Curve.
Place:
The product will be distributed through the already established distribution channel of other Ethicon products. For the initial implementation of the lanch plan we would target the Metros, Tier-I and Tier- II cities as our targeted segment is based in these areas.
Promotion:
The promotion strategy for Monocryl Plus will be done in 3 stages which are as follows: Stage 1: Prelaunch (2-3 Months) The steps to be followed during this stage are as under: Within the targeted segment identify those KOL’s (Key Opinion Leaders) who are: ? ? In a position to influence the potential users of Monocryl Plus. Existing users of Monocryl
Give them free samples to induce trial. These KOL’s would serve as product ambassadors at the time of the launch. Provide a period of 2 months to these KOL’s to evaluate the product. This will help them appreciate the product claims, understand the product usage patterns and training requirements Advertisements in medical journals and conferences will be given during this period. This will arouse curiosity and awareness about the product .The message that goes with the product would highlight the cosmetic and anti-bacterial advantages supplemented through research findings of the foreign market. After the period of 2 months we collect the feedbacks from these KOL’s. So by the end of 3 months we would have collated data of all these KOL’s. This one to one interaction can go a long way in bringing them into confidence about Monocryl plus. Training of Sales Force should also be done during this period.
Team Atout, SCMHRD
Page 11
ENVIDEA 2009
Stage 2: Launch (1 Month) The launch plan would include the following steps: During launch stage , mailers will be sent to the doctors, and sales representatives will be involved in 1 to 1 interaction with the doctors for the promotion of Monocryl Plus. Undertaking the distribution of Monocryl Plus using the existing distribution channels in the target market and ensuring the availability of the product. Organizing Regional Conferences by the Regional Managers of Ethicon to educate the surgeons about the usage of Monocryl Plus. Key points to be noted in this respect are: ? Specialty wise conferences for Gynaecs, Orthopedecians, General and Cosmetic Surgeons will be arranged ? The sessions will be conducted by KOLs who were contacted during the Pre-launch.This will give the potential users the first hand knowledge about the product ? Training sessions and workshops will be organized regarding the usage and advantages of Monocryl Plus followed by building of extensive distribution to ensure availability of the product.
Stage 3: Post Launch Focus to be extended to KOL’s of medical colleges as they are the doctors who usually practice in other nursing homes and they also have good influence over doctors working under them. Spread awareness about Monocryl Plus amongst medical students during their Post graduation so as to catch them young.Sutures is a skill dependent product so it is easier to influence surgeons to adpt a particular sututer well early in their career rather than to shift. Designing a web portal on the same lines as webcast to educate the doctors on product usage. Posters in Private Hospitals and Nursing Homes conveying the benefits of Monocryl Plus to the patients (A Sample Poster has been attached in the PPT). Ensure product availability at all leading distribution centers. Maintain extensive promotion to build awareness Tie ups with chains of private hospitals so as to push sales. This will ensure wide usage of our product across all the specialties in that particular group of hospitals Sponsorships of CME’s and Medical conferences.
We would be using the following 5M framework for our promotional strategies.
Team Atout, SCMHRD
Page 12
ENVIDEA 2009
The 5 M framework 1. Mission The main objective of the company would be: To inform: Since it is the launch stage of the product, where the objective is building a primary demand, therefore we focus on building the product image, by highlighting the qualities and differentiators To persuade: To induce trail by the potential users of the product 2. Money This M deals with deciding on the Advertising Budget The advertising budget is usually allocated based on costs incurred for the following: a. Even though our product is a brand extension, we still need to have a large advertising budgets to build awareness pertaining to the usage of the product. b. As we have to build share by increasing market size we require larger advertising expenditures. c. The average advertisement to sales ratio in the sutures market is 0.4%. Considering all the above factors Promotional Budget has to be at least 1% of expected sales plus few extra spend at the launch of our product. 3. Media Reach, Frequency and Impact- The product has to reach the KOLs in the first stage. They will have to be convinced to use it for their surgeries and note the results. The impact and feedback can be then noted.The following channels can be used to build awareness: a. Catalogs b. Websites c. Literature d. Seminars and conferences e. Cds 4. Message Message Generation: The Company should be to promote the anti-bacterial and monofilament properties as their main differentiating factor along with other competitive features like less traumatic. While executing a message the following should be kept in mind-style, tone, words used & format 5. Measurement: ? ? Quantitative Impact- The impact of our promotion will be measured by gathering the sales data 12 months after introduction of the launch campaign. Qualitative Impact- this can be measured by doing a segment specific survey or market research after a new promotional campaign has been launched.
Team Atout, SCMHRD
Page 13
ENVIDEA 2009
Annexure Annexure showing detailed Calculation of market potential and Target Market
1. To do the segmentation exercise for Monocryl Plus we should first estimate the total number of surgeries which we are looking at since there is a potential for usage of Monocryl Plus in each surgery. 1.1. The total break up of hospitals given in the case: Private Hospitals 850 50,000 Nursing Homes Government Hospitals 4750 Private Hospitals Usually in an average multi specialty private hospital – Number of Surgeons Number of Gyanecs Number of Orthos Number of CV Surgeons Number of Plastic Surgeons 10-12 (Including Senior Residents) 8-10 (Including Senior Residents) 8-10 (Including Senior Residents) 1 1
Usually 1 senior doctor and 1-2 junior doctors are required during a surgery, referred to as a Team. Therefore number of Teams operating at a particular time: General Surgery Gynaec Ortho Cardio Cosmetic 4 3 3 1 1
The number of surgeries done by a team in a day: Considering that an operation usually takes from 2.5 to 4 hours including patient preparation and anaesthesia, more or less 3 operations can be done by a team. Plastic and CV surgery being super specialized surgeries, the surgeon would be able to do 2 surgeries a day. Therefore total number of operations in a day: Team Atout, SCMHRD Page 14
ENVIDEA 2009
Total no. of teams * Operations done by a team in day = 10 * 3 + 2 * 2 = 34 Therefore we can say that total 34 surgeries take place in a private hospital. Surgeries in 850 private hospitals in a day = 34 * 850 = 28900 A Doctor (Surgeon, Ortho, Gynaecs) usually operate for 4 days in a week and other 2 days are devoted to Out Patient Consulting. Therefore Operating Days in an year = 52 * 4 = 208 Therefore surgeries in an year = 28900 * 208 = 6,011,200 Nursing Homes
Number – 50000 Usually a single team is there in a nursing home. And due to the fact that nursing homes do not have that good occupancy rates as those of private hospitals, we can assume that 2 surgeries take place in a day. Therefore total number of surgeries in Nursing Homes in a day – 50000 * 2 = 100000 Therefore total number of surgeries in Nursing Homes in an year – 100000 * 208 = 20,800,000
Government Hospitals Number – 4750 Usually a government hospital has a single team for each of the specialty and they usually don’t have Plastic and Cardiovascular surgeons. Therefore, total number of teams – 1 Ortho + 1 Gynae + 1 Surgery = 3 Number of surgeries performed by a team – 3 Therefore total surgeries in 1 Government Hospital in a day = 3 *3 = 9 Total surgeries in 4750 Government Hospitals in a day = 4750 * 9 = 42750 Number of surgeries in a year = 42750 * 208 = 8,892,000
Team Atout, SCMHRD
Page 15
ENVIDEA 2009
In this way we get the Traditional Market Segments. The total opportunity in each segment in terms of surgeries per year – Private Hospitals Nursing Homes Government Hospitals 9,180,000 30,000,000 12,825,000
Therefore Our Target Segment –All Private Hospitals and approximately 5000 Nursing Homes. Total surgical opportunities : 6,011,200 + 1% 0f 20,800,000 = 6,219,200 Total Market Potential : 6,219,200 * Price of 1 Monocryl Plus 6,219,200 * 308 = Rs 1,865,760,000 Targeted Market Potential at the end of 1 year : 5% Value : Rs 93,288,000
Team Atout, SCMHRD
Page 16
doc_863799152.docx
The PPT is about the research report of envidea. The case at hand is about a quick Launch Plan for Monocryl Plus, an innovation in the existing Monocryl suture which was launched in India about ten years back.
ENVIDEA
Research Report
9/8/2009 Submitted by Team Atout, SCMHRD, Pune
ENVIDEA 2009
Contents
Executive Summary....................................................................................................................................... 3 Situational Analysis ....................................................................................................................................... 4 HealthCare Industry .................................................................................................................................. 4 Specialities ................................................................................................................................................ 4 Suture Market ........................................................................................................................................... 4 Monocryl Plus ........................................................................................................................................... 4 Research:....................................................................................................................................................... 6 Methodology:............................................................................................................................................ 6 Key findings: .............................................................................................................................................. 6 Segmentation ................................................................................................................................................ 8 Purpose of Segmentation ......................................................................................................................... 8 Suggestions ............................................................................................................................................... 8 Level of Segmentation .......................................................................................................................... 8 Segments............................................................................................................................................... 8 Calculation of Market Potential and Target Market ............................................................................. 9 Value Capturing........................................................................................................................................... 10 Product:................................................................................................................................................... 10 Price: ....................................................................................................................................................... 10 Place ........................................................................................................................................................ 11 Promotion: .............................................................................................................................................. 11 The 5 M framework ............................................................................................................................ 13
Team Atout, SCMHRD
Page 2
ENVIDEA 2009
Executive Summary
The case at hand is about a quick Launch Plan for Monocryl Plus, an innovation in the existing Monocryl suture which was launched in India about ten years back. Monocryl was not as successful in India as it was abroad. The Indian market for Monocryl is only 3 crores. So while designing a market launch plan for Monocryl Plus we have also addressed the problems which arose during launch of Monocryl. The company’s idea in launching the Monocryl Plus is from their past experience of launching Vicryl Plus Vicryl is the main stay product of JJMI. It was under threat form cheaper substitutes and Chinese Imports before Vicryl Plus was introduced.T he course of action taken by the company was essentially to provide greater value to their customers rather than competing on cost fronts. This emphasizes the importance the company attaches to the value proposition of an offering. This has been the mainstay in the suggested marketing plan. We primarily conducted an exploratory research to understand the reasons for the failure of Monocryl. The research was conducted amongst leading surgeons in the Metros, Tier-I, Tier-II and Tier-III cities. The findings of the exploratory research along with the secondary research brought to light the fact that that Vicryl was almost a household name in all hospitals across India. However Vicryl Plus is perceived to be overpriced in most markets. The research indicated that Monocryl is used day in and day out by some surgeons whereas Vicryl was vouched by most surgeons. For Monocryl Plus, the research concluded that we need to adopt segment marketing. The 5 C analysis has been used to gain situational insights. Value capturing step included the 4 P
analysis. This includes details on the product features, areas of distribution, pricing models and promotional strategies. The analysis also includes the value sustaining strategies. The ideas within the 5 Ms in advertising were then decided upon.
We conclude this report with a set of recommendations.
Team Atout, SCMHRD
Page 3
ENVIDEA 2009
Situational Analysis
HealthCare Industry
Healthcare market is one of the rapidly growing segments in our country. Major factors for this growth have been: ? ? ? ? Government’s focus on health, Increase in disposable income of patients (and hence the demand for better healthcare) Increase in medical tourism Increase in cosmetic procedures.
Al l these factors have also led to the rise of a new segment in Indian Healthcare Industry which are capable of providing best medical care though at a premium price ? ? Private Multi specialty Super Specialty hospitals.
Specialities
The Cosmetic Surgery Market is one of the fastest growing sections of Indian Healthcare Industry. Consumers are becoming more conscious for their looks and are willing to spend a premium for it. This also applies to other sections like Gynaecology, General Surgery, Cardio Vascular Surgery and Orthopaedic Surgery, where affluent patients are willing to spend more for better cosmetic results. These sections will be the targeted for sale of Monocryl Plus.
Suture Market
According to the research report by Frost and Sullivan 2009: ? ? ? Suture Market in US and Europe is a mature market with consistently low growth rates. Revenue growth within the sutures industry, currently at 1% is expected to decrease slightly by 2010 and then stabilize. The Absorbable Surgical Sutures market is forecast to grow by 6.5% annually for the next seven years in Japan, France, Italy, Spain, China, Canada, Brazil, Australia and India. The reason for this growth is that Absorbable Sutures are still in the Growth Stage in India and increase in per capita health expenditure makes them affordable.
Presently, the suture market in India stands at 218.4 crores of which Ethicon has more than 50% share.
Monocryl Plus
Monocryl Plus is a differentiated product for wound closure and has the following features:
Team Atout, SCMHRD
Page 4
ENVIDEA 2009
? ? ? Results in minimal scarring A Triclosan coating which has anti bacterial properties. According to many independent researches in USA, a single filament suture has been proved to give better effects on skin after a surgery than the multifilament sutures. Presently other monofilament sutures are available but they do not posses anti bacterial coating.
The main competitors of Monocryl Plus are the brands of Ethicon like Monocryl, Ethilon, Prolene, Vicryl and Vicryl Plus along with other cheaper substitutes present in the market. The issue of cannibalization would arise since our major competitors would be the brands of Ethicon. This however, should not be of too much concern since Monocryl Plus is a Premium product which would command a higher price and hence would increase the revenues for the company as a whole.
Team Atout, SCMHRD
Page 5
ENVIDEA 2009
Research:
Before the launch of Monocryl Plus, it was imperative for us to conduct a research. The research objectives were: ? ? ? To understand the reasons for the failure of Monocryl To delve deeper into suture market and To understand usage patterns of various kinds of sutures, which are skill dependent.
Methodology:
We conducted the following to meet our research objectives. ? ? ? Exploratory research Telephonic Interviews Secondary research Exploratory research and interviews were conducted across various hospitals and general clinics to understand the various types of sutures and the specific conditions under which each suture was used. Secondary research helped us to gain valuable insights into suture and wound closure market.
Key findings:
1. Lack of willingness to shift: Since surgery is skill driven, the surgeons who were using other brands or cheaper substitutes were not willing to shift to any other brand. Surgeons continued to use other cheaper alternatives to Monocryl 2. Lack of awareness: Surgeons in non-metropolitan cities displayed a lack of awareness towards the Monocryl sutures and its aesthetic properties. 3. Limited usage: Although Monocryl is a suture of good quality as other Ethicon products, its usage by various practitioners was very limited. 4. Price Sensitive: Price was an important factor in the selection of suture in India and surgeons used Monocryl suture only when surgeons believed that the patient will not hesitate to pay premium for the same. 5. Area of Focus: The two key areas of focus as opined by surgeons towards Monocryl were
Team Atout, SCMHRD
Page 6
ENVIDEA 2009
a. Price: Monocryl needs to be priced appropriately considering the current price index of Monocryl and market potential that can be tapped. b. Promotion: Extensive promotion would be required for Monocryl Plus to generate and increase its awareness by inducing trial. Hence the launch Campaign of Monocryl Plus should concentrate on these areas.
Team Atout, SCMHRD
Page 7
ENVIDEA 2009
Segmentation
Purpose of Segmentation
Organizations operating in a broad market cannot serve all customers in that market. Therefore it becomes important to choose or select its market and serve them well.
Suggestions
Level of Segmentation According to our Research, the surgeons were at different ‘buyer readiness’ (unaware, aware, informed, interested desirous and intends to buy) stages and hence the level of segmentation would be SEGMENT MARKETING. Segment marketing gives us the benefit to serve a large group without the need for customizing the product because it comes in between: Mass marketing : characterized by large potential market and low cost of production & Niche marketing: niche is a sub segment of a segment, a group consisting of a distinctive set of traits who seek special benefits Segments The identified segments are: ? Big Private Hospital Segment We will focus on the Hospitals which are giving the best quality care to the patients and where the patients are not price sensitive i.e. they are willing to pay for the benefits provided by our product. ? Nursing Homes Also we will focus on those Nursing Homes in Metros and Tier 1 cities which are not private hospitals but still provide better service quality and attract well- off patients. Hardly 1-2% of Nursing Homes come under this category. We take a conservative estimate of 1%.
Basis of our segmentation exercise ? ? ? ? Varying purchasing power Higher buyer readiness stage that these segments have as compared to government hospitals and other tier 1 and tier 2 hospitals. Fine tuning our marketing efforts to this segment only. Focus on competition in this segment only.
Team Atout, SCMHRD
Page 8
ENVIDEA 2009
Calculation of Market Potential and Target Market
The following table gives the present Market Potential for sutures in India. It includes the total operations in private hospitals, government hospitals and nursing homes under the various heads(SGeneral Surgery ,O-Orthopaedic Surgery, G-Gynaec Surgery, C-Cosmetic Surgery, CV-Cardio Vascular Surgery) Then we have calculated the target market by assuming a conservative estimate of 5% conversions of the total market potential. A detailed explanation of the table is given in Annexure-I Total Surgeries (no. of surgeries*no. of hospitals)
Private Hospitals-850 nos
No. Of Operating No. Of Operating Operations Days per Doctors Teams Per Day week S 10 to 12 4 3 4 O 8 to 10 3 3 4 G 8 to 10 3 3 4 C 1 1 2 4 CV 1 1 2 4 S O G C CV 2 to 3 2 to 3 2 to 3 0 0 1 1 1 0 0 3 3 3 0 0 4 4 4 0 0
Operating Days per Year(52 weeks) 208 208 208 208 208 208 208 208 0 0
Govt Hospitals4750 nos
Operations in an year per hospital 2496 1872 1872 416 416 7072 624 624 624 0 0 1872
6011200
8892000
Nursing Homes-50000 nos Total Surgeries Total Market potential Target Market
D
1 to 3
1
2
4
208
416
20800000 6219200 1915513600 95775680
Team Atout, SCMHRD
Page 9
ENVIDEA 2009
Value Capturing
The key drivers for growth for Monocryl Plus Suture will depend on the value proposition offered to the target customer in terms of the 4Ps of marketing. The individual propositions for the product are as discussed below.
Product:
We define the product in terms of a value added suture for wound closure applications with anti—bacterial and cosmetic properties which are not provided by existing product options in the sutures category. The product comes along with the following benefits: Core Benefit: Monofilament suture which has cosmetic advantages and provides easy handling. Augmented Benefit: Suture with anti-bacterial coating which prevents infection
Price:
Based on the findings of the research, we plan to promote Monocryl Plus as a premium category product which aims to provide value to the customers in terms of best anti-bacterial protection and cosmetic properties at the best quality standards. We plan to maintain prices of Monocryl Plus same as that of Monocryl ie Rs 308. Justification: Price higher than Monocryl is ruled out because: 1. Most of our target consumers already perceived as high priced. 2. Higher prices will hinder conversion of existing users of Monocryl to Monocryl Plus 3. Higher prices will prevent tapping of potential market. Price lower than Monocryl is ruled out because: 1. If Monocryl Plus is priced lower than Monocryl, customers may assume it to be of lower quality 2. It may hamper the bottom line of the company
Team Atout, SCMHRD
Page 10
ENVIDEA 2009
Modifications in prices can be done at a later stage in the life cycle of product based on the Experience Curve.
Place:
The product will be distributed through the already established distribution channel of other Ethicon products. For the initial implementation of the lanch plan we would target the Metros, Tier-I and Tier- II cities as our targeted segment is based in these areas.
Promotion:
The promotion strategy for Monocryl Plus will be done in 3 stages which are as follows: Stage 1: Prelaunch (2-3 Months) The steps to be followed during this stage are as under: Within the targeted segment identify those KOL’s (Key Opinion Leaders) who are: ? ? In a position to influence the potential users of Monocryl Plus. Existing users of Monocryl
Give them free samples to induce trial. These KOL’s would serve as product ambassadors at the time of the launch. Provide a period of 2 months to these KOL’s to evaluate the product. This will help them appreciate the product claims, understand the product usage patterns and training requirements Advertisements in medical journals and conferences will be given during this period. This will arouse curiosity and awareness about the product .The message that goes with the product would highlight the cosmetic and anti-bacterial advantages supplemented through research findings of the foreign market. After the period of 2 months we collect the feedbacks from these KOL’s. So by the end of 3 months we would have collated data of all these KOL’s. This one to one interaction can go a long way in bringing them into confidence about Monocryl plus. Training of Sales Force should also be done during this period.
Team Atout, SCMHRD
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ENVIDEA 2009
Stage 2: Launch (1 Month) The launch plan would include the following steps: During launch stage , mailers will be sent to the doctors, and sales representatives will be involved in 1 to 1 interaction with the doctors for the promotion of Monocryl Plus. Undertaking the distribution of Monocryl Plus using the existing distribution channels in the target market and ensuring the availability of the product. Organizing Regional Conferences by the Regional Managers of Ethicon to educate the surgeons about the usage of Monocryl Plus. Key points to be noted in this respect are: ? Specialty wise conferences for Gynaecs, Orthopedecians, General and Cosmetic Surgeons will be arranged ? The sessions will be conducted by KOLs who were contacted during the Pre-launch.This will give the potential users the first hand knowledge about the product ? Training sessions and workshops will be organized regarding the usage and advantages of Monocryl Plus followed by building of extensive distribution to ensure availability of the product.
Stage 3: Post Launch Focus to be extended to KOL’s of medical colleges as they are the doctors who usually practice in other nursing homes and they also have good influence over doctors working under them. Spread awareness about Monocryl Plus amongst medical students during their Post graduation so as to catch them young.Sutures is a skill dependent product so it is easier to influence surgeons to adpt a particular sututer well early in their career rather than to shift. Designing a web portal on the same lines as webcast to educate the doctors on product usage. Posters in Private Hospitals and Nursing Homes conveying the benefits of Monocryl Plus to the patients (A Sample Poster has been attached in the PPT). Ensure product availability at all leading distribution centers. Maintain extensive promotion to build awareness Tie ups with chains of private hospitals so as to push sales. This will ensure wide usage of our product across all the specialties in that particular group of hospitals Sponsorships of CME’s and Medical conferences.
We would be using the following 5M framework for our promotional strategies.
Team Atout, SCMHRD
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The 5 M framework 1. Mission The main objective of the company would be: To inform: Since it is the launch stage of the product, where the objective is building a primary demand, therefore we focus on building the product image, by highlighting the qualities and differentiators To persuade: To induce trail by the potential users of the product 2. Money This M deals with deciding on the Advertising Budget The advertising budget is usually allocated based on costs incurred for the following: a. Even though our product is a brand extension, we still need to have a large advertising budgets to build awareness pertaining to the usage of the product. b. As we have to build share by increasing market size we require larger advertising expenditures. c. The average advertisement to sales ratio in the sutures market is 0.4%. Considering all the above factors Promotional Budget has to be at least 1% of expected sales plus few extra spend at the launch of our product. 3. Media Reach, Frequency and Impact- The product has to reach the KOLs in the first stage. They will have to be convinced to use it for their surgeries and note the results. The impact and feedback can be then noted.The following channels can be used to build awareness: a. Catalogs b. Websites c. Literature d. Seminars and conferences e. Cds 4. Message Message Generation: The Company should be to promote the anti-bacterial and monofilament properties as their main differentiating factor along with other competitive features like less traumatic. While executing a message the following should be kept in mind-style, tone, words used & format 5. Measurement: ? ? Quantitative Impact- The impact of our promotion will be measured by gathering the sales data 12 months after introduction of the launch campaign. Qualitative Impact- this can be measured by doing a segment specific survey or market research after a new promotional campaign has been launched.
Team Atout, SCMHRD
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Annexure Annexure showing detailed Calculation of market potential and Target Market
1. To do the segmentation exercise for Monocryl Plus we should first estimate the total number of surgeries which we are looking at since there is a potential for usage of Monocryl Plus in each surgery. 1.1. The total break up of hospitals given in the case: Private Hospitals 850 50,000 Nursing Homes Government Hospitals 4750 Private Hospitals Usually in an average multi specialty private hospital – Number of Surgeons Number of Gyanecs Number of Orthos Number of CV Surgeons Number of Plastic Surgeons 10-12 (Including Senior Residents) 8-10 (Including Senior Residents) 8-10 (Including Senior Residents) 1 1
Usually 1 senior doctor and 1-2 junior doctors are required during a surgery, referred to as a Team. Therefore number of Teams operating at a particular time: General Surgery Gynaec Ortho Cardio Cosmetic 4 3 3 1 1
The number of surgeries done by a team in a day: Considering that an operation usually takes from 2.5 to 4 hours including patient preparation and anaesthesia, more or less 3 operations can be done by a team. Plastic and CV surgery being super specialized surgeries, the surgeon would be able to do 2 surgeries a day. Therefore total number of operations in a day: Team Atout, SCMHRD Page 14
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Total no. of teams * Operations done by a team in day = 10 * 3 + 2 * 2 = 34 Therefore we can say that total 34 surgeries take place in a private hospital. Surgeries in 850 private hospitals in a day = 34 * 850 = 28900 A Doctor (Surgeon, Ortho, Gynaecs) usually operate for 4 days in a week and other 2 days are devoted to Out Patient Consulting. Therefore Operating Days in an year = 52 * 4 = 208 Therefore surgeries in an year = 28900 * 208 = 6,011,200 Nursing Homes
Number – 50000 Usually a single team is there in a nursing home. And due to the fact that nursing homes do not have that good occupancy rates as those of private hospitals, we can assume that 2 surgeries take place in a day. Therefore total number of surgeries in Nursing Homes in a day – 50000 * 2 = 100000 Therefore total number of surgeries in Nursing Homes in an year – 100000 * 208 = 20,800,000
Government Hospitals Number – 4750 Usually a government hospital has a single team for each of the specialty and they usually don’t have Plastic and Cardiovascular surgeons. Therefore, total number of teams – 1 Ortho + 1 Gynae + 1 Surgery = 3 Number of surgeries performed by a team – 3 Therefore total surgeries in 1 Government Hospital in a day = 3 *3 = 9 Total surgeries in 4750 Government Hospitals in a day = 4750 * 9 = 42750 Number of surgeries in a year = 42750 * 208 = 8,892,000
Team Atout, SCMHRD
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In this way we get the Traditional Market Segments. The total opportunity in each segment in terms of surgeries per year – Private Hospitals Nursing Homes Government Hospitals 9,180,000 30,000,000 12,825,000
Therefore Our Target Segment –All Private Hospitals and approximately 5000 Nursing Homes. Total surgical opportunities : 6,011,200 + 1% 0f 20,800,000 = 6,219,200 Total Market Potential : 6,219,200 * Price of 1 Monocryl Plus 6,219,200 * 308 = Rs 1,865,760,000 Targeted Market Potential at the end of 1 year : 5% Value : Rs 93,288,000
Team Atout, SCMHRD
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