IVD Firms Developing New Marketing Channels

Lab industry vendors want to find more effective ways to reach customers

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CEO SUMMARY: Manufacturers across the IVD industry are aggressively seeking new marketing channels to reach their laboratory customers in more productive ways. That means moving outside the traditional emphasis on the exhibit halls of laboratory professional association meetings. In the case of Abbott Laboratories’ Architour, it is a huge semi-tractor trailer rig that brings its newest product right to the lab’s doorstep.

EVOLUTION WITHIN THE LABORATORY TESTING MARKETPLACE is causing the nation’s major IVD (in vitro diagnostics) manufacturers to rethink how they market and sell their new products.

Many lab managers and pathologists have observed one visible sign of this trend. In recent years, several of the larger IVD companies revamped their presence in the exhibit halls that are part of the annual meetings of the major laboratory professional associations. Other IVD vendors are squeezing dollars out of their exhibit hall budgets.

Another Sign Of Change

Another visible sign of the change in IVD sales and marketing practices is the appearance of the semi-tractor truck which Abbott Laboratories is using to promote its newest instrument system. Starting last April, this big rig began a national circuit designed to bring this new product literally to the front door of laboratory customers.

It only took a couple of months before the success of this marketing channel encouraged Abbott to build a second big rig and, in July, put it on the national circuit as well.

THE DARK REPORT believes the different ways that IVD companies now use lab industry exhibit halls, combined with the arrival of Abbott’s diesel big rig as a “traveling trade show exhibit,” reflect deeper, more fundamental changes occurring within the IVD industry. These changes will steadily transform the way IVD vendors introduce their new products into the laboratory marketplace.

Curious about this phenomenon, THE DARK REPORT made a point to show up when the Abbott big rig, dubbed “Architour”, arrived in Austin, Texas recently. Certainly most of the major IVD vendors have, at one time or another, put demonstration vans on the road. But the size and scale of this demonstration “van” attracts attention. It also allows Abbott to interact with laboratory customers in ways which go beyond the capabilities of demonstration vans, which contain less display space.

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Abbott was willing to share the sales and marketing strategies which led to its decision to build two expensive demonstration trucks and keep them on the road for many months. “The seed of this marketing strategy is a new product which we felt was particularly special,” said Sherri Hopson, Abbott’s Vice President, U.S. Commercial Operations.

“The Architour is specifically designed to showcase our Architect ci8200 instrument system.” she continued. “It is an integrated chemistry-immunochemistry system and is the first truly integrated product in this category. We believe its capabilities and features represent substantial improvements over existing systems.”

Unique Marketing Channel

“This is where our marketing strategy begins,” added Suzanne Macaitis, Global Marketing Manager. “We wanted to give this new product maximum exposure. Our challenge was to find a different marketing channel to expose this unique product to as many laboratory customers as possible.

“Our first marketing premise was that it is not easy for many lab people to travel to industry meetings. We’ve observed how travel budgets—and travel opportunities—have declined for most laboratory managers,” she continued. “That means it is more difficult to get them to the exhibit hall, whether it’s a national meeting or a regional meeting. For government laboratories, travel is extremely difficult and, in some cases, travel is not allowed. With Architour, we wanted to be able to complement our other industry activities.”

“It quickly became apparent to us that the best way to reach a huge audience was to bring the instrument directly to their laboratory,” noted Hopson. “Because this is a large instrument system and we wanted to present a live demonstration of its full capabilities, we recognized that a full-size semi-tractor trailer would be needed to do the job. The size of the trailer also allows us to handle the maximum number of people per stop and per demonstration.”

During THE DARK REPORT’S visit to the Architour truck, several benefits to Abbott’s marketing strategy became obvious. First, the truck itself is set up in the parking lot of a hospital. It is within walking distance for lab folks working in that hospital. Also, because many cities often have clusters of hospitals in one neighborhood, it is frequently a short walk or drive for lab personnel coming from nearby hospitals.

More Lab Staff Involved

Second, the composition of the crowd definitely includes all levels of staff and management from nearby hospital laboratories. “This is an interesting dimension to our strategy,” noted Macaitis. “Often med techs who actually run the instrument first see it only when it arrives on site for set-up and training. The live demonstration allows them to see the instrument and interact with it. Hospital administrators, including CFOs, also show up and learn about the instrument.”

From the IVD vendor’s perspective, the Architour truck event helps develop relationships with the company’s regional sales, service, and technical support staff. “This is a great benefit for us,” offered Hopson. “Prior to the Architour’s arrival in town, our sales staff visits the laboratories to meet with people planning to attend a demonstration. This allows the sales staff to identify the unique needs of that laboratory and insure that the demonstration they see is tailored to those specific needs.

“At the time of the demonstration, our regional sales, customer service, and technical support staff do the presentation,” said Hopson. “Lab customers get to know the entire local team that supports this product. This is something we cannot do at the national trade shows.”

“Also, because the demonstration includes more people from their lab than would be at an exhibit hall booth, question and answer sessions can be more focused and detailed,” observed Macaitis. “The greater number of participants from the lab gives them the opportunity to review relevant issues in greater depth. That is also something that cannot happen during a national trade show exhibit.”

Marketing With The Internet

Abbott’s decision to literally bring an operational instrument to the doorstep of laboratories around the United States is only one aspect of the changes occurring to the sales and marketing of IVD instruments, reagents, and laboratory products. Abbott is also using the Internet to supplement and support the activities of its Architour trucks.

“Everyone recognizes that the Internet is a new marketing channel,” observed Hopson. “We are using it to supplement Architour activities in three ways: by e-learning, by e-mail, and by e-conferences.”

“Additionally, customers are offered the opportunity to participate in ongoing learning seminars covering a variety of topics that have CEU credits,” explained Macaitis. “The numbers are becoming sizeable. Last month more than 2,000 people logged on to our e-learning session.”

Has the Architour truck strategy succeeded in attracting laboratory customers to a demonstration? “We think so,” responded Hopson. “Through the end of August, more than 2,400 laboratory customers had seen the demonstration. Our prediction is that, by year’s end, the number will exceed 7,800.”

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Marketing Strategy

These are impressive numbers, given the relatively small number of laboratory organizations within the United States. It shows that this marketing strategy has accomplished one of its major goals: getting a new product in front of potential buyers. It has done this by going outside traditional marketing channels.

Laboratory managers and pathologists should watch how IVD manufacturers continue to develop new marketing and sales channels for their products that complement national lab trade shows. The fact that laboratory administrators and pathologists have less time to travel—and don’t have the budget to pay for travel—may make these trade shows less important in future years.

THE DARK REPORT finds it notable that one outcome of this particular marketing strategy is that it got multiple levels of hospital and lab decision-makers and med techs into a demonstration at one time. This is an attribute of the “Information Age”, where customers have access to more and better information before they buy a product.

Why IVD Marketing/Sales Is Undergoing Change

DURING THE 1990S, consolidation within the IVD industry was just as significant as consolidation within the clinical laboratory industry. Such consolidation had two major effects on the sales and marketing strategies of the IVD industry.

First, it created a new class of “super-big” laboratory customers. Among private commercial labs, regional, pathologist-owned labs were absorbed into larger commercial lab companies, particularly Quest Diagnostics Incorporated and Laboratory Corporation of America.

Within the hospital laboratory sector, consolidation of hospital ownership created 600+ integrated delivery networks (IDNs). Each IDN wanted to standardize its laboratory services and use exclusive purchase contracts to lower the prices it paid for instrument systems and reagents.

The second consequence of consolidation was that, within the IVD industry itself, the line-up of competitors had changed in important ways. Many IVD acquisitions were done as a way for the acquiring company to broaden its product line. There was a belief that the biggest lab buyers would prefer to buy chemistry, hematology, immunology, and other major instrument systems from a single source.

Now, almost halfway into the decade of the 2000s, there is evidence that the “one source” IVD vendor strategy—the concept that a single IVD manufacturer needs to provide almost 100% of the instrument systems used in a high-volume core laboratory—has not changed the primary buying strategies of the nation’s largest laboratory customers.

However, consolidation within the IVD industry and within the clinical lab industry has had an impact. It changed, in fundamental ways, the sales and marketing strategies of IVD vendors. It also changed the way laboratory customers evaluate and negotiate the purchase of new instruments.

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