The client: A leading medical devices company
Globally, the healthcare industry is witnessing the dire need to implement new business and clinical operating models to promise scalable, efficient, and high-quality healthcare services to the customers. The markets covered under the industry include pharmaceutical, in-vitro diagnostics, medical devices, medical imaging, and healthcare IT. However, at present, the healthcare industry players are more concerned about reducing healthcare waste, redundancies, and costs. The recent statics on the healthcare sector denotes that the percentage of GDP spent on healthcare may reach 10.5% by 2020. Although the healthcare industry is expected to witness promising growth, there are certain factors that will affect the growth potential of the industry. These factors include:
- Rising healthcare costs: In recent years, the spending on healthcare is increasing owing to an increase in the number of aging population and the growing prevalence of healthcare conditions. To meet the customer’s requirements, leading organizations are facing relentless pressures to implement cost-containment measures and improve the overall operational efficiency.
- Economic fluctuations: The global economic uncertainty is further affecting the growth of the healthcare industry. With the recent Brexit issue, the spending on healthcare has greatly reduced, and people are looking for effective ways to reduce their healthcare expenses drastically.
To address such concerns and meet the rising demand for healthcare services, leading organizations are incorporating marketing mix optimization as a part of their business strategy. Marketing mix optimization enables marketers to determine the best channel and target campaigns across various channels to maximize their returns on investment. Marketing mix strategy also helps marketers drive sales and profits by determining an optimal strategy to enhance business performance.
The Business Challenge
A leading medical devices supplier in the US wanted to build strong relationships with healthcare professionals (HCPs), to become the supplier of choice to the hospitals and healthcare organizations. Due to increasing regulatory transformations, the growth prospects of the medical device market was being driven by factors such as healthcare reforms, complex sales and contracting models, new promotional channels, and demands to reduce and reallocate costs. The client also wanted to make investments across channels and markets to address the demand for outcome-based models and diminishing physician influence in the purchasing function of the organization.
The primary concern of the healthcare organization was to quantify the return from their existing marketing investment, optimize the same to ensure maximum sales and revenue impact; thereby, maximizing ROI.
To identify the promotional channels with high growth potential, Quantzig’s marketing mix optimization experts created investment scenarios to allow commercial teams to optimize product marketing to caregivers and HCPs in core disease areas. The data collection process involved processes such as data understanding, data dictionary preparation, data integration– merging and aggregation. The experts also created statistical models to quantify the impact of growth drivers – using techniques such as Linear and constraint-based regression.
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The Solution and the Business Impact
[spacer height=”20px”]The marketing mix optimization analysis offered by Quantzig helped the client to optimize commercial investments across channels – such as DTC, E-detailing, Digital, and re-allocated budgets from underperforming media to those with a higher potential ROI. Additionally, the marketing mix optimization experts:
- Provided recommendations to embrace digital and social media channels to influence consumers, HCPs, and other stakeholders
- Helped the commercial teams to understand the most effective campaigns during different seasons, target marketing and promotional tactics that did well
Marketing Mix Optimization Predictive Insights:
- Yearly / Monthly trends for sales, media investments, and other variables related to various marketing tactics
- Activities that were more important in terms of generating sales – directly targeted to commercial teams and purchasing functions
- Provided historical ‘Due To’s’
- Weeks and months during which business grew or declined because of specific marketing, promotions, competitive, economic or other external/internal variables
- Campaign analysis of each individual campaign across media types to understand the ROI and incremental sales generated
- Based on the campaign responses and activity, we identified that by leveraging digital and social channels, the client could increase awareness about its products, support diagnosis and treatment choices
- Synergy Analysis to identify direct and indirect impact of media types on incremental sales and the ROI generated
- Digital media type (wellness communities and e-mails) performed better when campaigns were executed post direct to customer interactions – Detailing
Marketing Mix Optimization Scenario Analysis
- Developed ROI Simulator to run ‘what if’ scenarios across months or media types to identify incremental revenue opportunity
- Helped to effectively analyze the data in real-time and adjusted their promotional approaches accordingly
- Enabled stronger integration with the hospital ecosystem by re-aligning investments to direct and digital media types to help sales and marketing teams focus on specific targets and messages