Young companies regularly discover that their product, their innovation does not generate the sales they had hoped for. The sobering answer is usually that the market does not need the product as it is. But what should they have done differently, or how can they prevent this situation from occurring in the first place? The solution: a Go-To-Market Strategy.
Companies that want to launch a medical or diagnostic product on the market for the first time face a variety of challenges. In particular, market approval, or medical device certification, is a concern for many. With the new MDR coming into force, this is of course an important issue. However, certification is only one aspect and rarely do new medical devices fail the certification process. We more often encounter the situation where the new product - despite certification - fails to generate the desired sales and the revenue growth is sluggish. The far greater problem is in fact the inadequately prepared market launch. The importance of the market launch is so great that large companies have "Launch Excellence Centers" specialized in this task. The procedure for a successful market launch is the development of a Go-To-Market strategy and its implementation with the help of the corresponding Go-To-Market plan, which any company can use regardless of its size.
A Go-To-Market Strategy Is Not Marketing
A Go-To-Market strategy should not be confused with the preparation of the product launch, which primarily involves the marketing and sales team a few months before the actual launch date. A well thought-through Go-To-Market strategy includes not only marketing and sales but also aspects of product development and manufacturing, the business and pricing model, as well as clinical trials, regulatory requirements and reimbursement with health insurance companies. If this has not been considered, planned and implemented early on, the future market launche will quickly falter. Attention must be paid to the right product-market-fit and worked out early. This means working with potential customers, KOLs, clinicians, physicians or patients to adjust product development and better design clinical trials if necessary.
In our view, Go-To-Market planning must extend far beyond the market launch date. This is because newcomers, i.e. companies with innovative products that are difficult to explain and usually unknown in the target market, have additional challenges to overcome e.g., explain the benefit of their innovation, build brand awareness, establish market access, etc.. Plan for product adaptations and further clinical studies and utilize agile principles and lean frameworks to optimize the product-market-fit and minimize risks. And, just as scientific hypotheses are falsifiable and testable, the same rigor should be applied to the Go-To-Market activities.
Go-To-Market Strategie Is Waste of Time
Many technology companies shy away from the effort required for a good Go-To-Market strategy and its implementation and prefer to postpone the topic until shortly before the market launch date. They prefer to invest their valuable time in research and development. However, if the goal is to make money with the medical device and make it accessible to the appropriate patient groups, there is no way around a sophisticated Go-To-Market strategy. Apart from the fact that without appropriate planning, sales development after launch will be weak, the costs of, for example, reworking a product, catching up on a clinical study or then spending a lot of energy on marketing are much higher.
Perhaps one might argue that the topic of market launch has already been dealt with in the business plan or business case. But honestly, business plans rarely contain sophisticated Go-To-Market strategies and usually rely on many assumptions that need to be verified during product development or become outdated after years of development work.
If you think too much about glossy brochures and a fancy website when it comes to marketing, you might want to consider the following study on Real-World Evidence. In this study, 10% of the pharmaceutical companies investigated achieved a so-called "Excellent Launch" (including fastest uptake of sales growth and top 20 market leadership in the target market; (1)). These companies published 150% more real-word evidence than the peer-group.
Medical marketing with peer-reviewed publications of clinical data or real-world evidence is crucial to convince physicians and health insurers with company-independent documentation and must therefore be part of the Go-To-Market strategy. This becomes even more important for medical devices under the new MDR as the requirement for clinical data has grown.
When to Establish the Go-To-Market Strategy
The time to develop the Go-To-Market strategy should be two to three years before market entry. This varies from product to product, but the time frame for market introduction of innovative medical products are generally longer than for consumer goods, for example. This may contradict traditional practice to postpone market-forming activities as long as possible and initiate them only shortly before market entry because they do not generate immediate sales beforehand. However, new studies clearly show that early investment in the market launch is an important success factor, especially for newcomers (2).
From a technical point of view, the Go-To-Market strategy needs to be defined well before the design freeze and before the start of the clinical trials in order to have sufficient room to better align the product with the market and to adapt the study design accordingly. With the example on real-world evidence, it is also clear that medical marketing needs to be initiated early considering the times for publication.
Young companies that need further financing as well as existing companies that want to raise capital for the development of their medical device product are well advised to have a coherent Go-To-Market strategy in place, as investors will attach great importance to it.
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(1) Drug Launch: Winning the Evidence Battle; PharmExec.com (1.9. 2020)
(2) Neue Standards für First-to Launch-Spieler; PharmExec.com (14.9. 2020)