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Medtronic

Pacing The Competition In Medical Devices

Challenges

  • Hospital administrators (the buyers) perceived all pacemakers to be alike; they had no knowledge of or relationship with manufacturers and their devices
  • Doctors began to view pacemakers as “yesterday’s technology”—they wanted to spend more time on patients who needed more sophisticated devices such as those for heart failure
  • Competitive parity on the sales and service side meant that all pacemaker manufacturers offered comparable services and expertise

Approach

  • Using strategic marketing to create a new pacemaker category by positioning Medtronic as a premium priced pacemaker manufacturer
  • Enabled Medtronic to combine their cutting-edge technology and service expertise and earn higher margins
  • New “Pacing Solutions” market allowed Medtronic to participate in the traditional pacemaker market while creating demand for higher value, premium-priced products and services
  • Became positioned well above the current market while positioning their competitors as “all the same.”

Results

  • By developing and owning this new category, Medtronic Italy has been able to achieve healthy, profitable growth in the pacemaker business and distance itself from the competition
  • Despite flat category growth overall, sales increased by 5% and profits by double digits
  • Growth is coming in the highest margin segments– up by 16% and 9.2% in the two highest segments alone

 

Case Study Medtronic BuyWay