Practitioner Point of View:
Marc Konieczny has 13+ years of experience in Health Care, microbiology and biochemistry by background. He started his sales and marketing career in medical supply industry after his PhD (Natural Sciences) in 2000. Until 2003, he was product manager at Becton Dickinson (BD), Diagnostic Systems for Eastern Europe/Middle East/Africa (EMA). Until 2008 he took over increasing responsibilities in Marketing and Sales in EMA and Germany, Austria and Switzerland (DACH), respectively. In February 2008, he decided to leave BD for B.Braun Melsungen for development challenges in Marketing and Sales for Hospital Care (HC) division. Until 06/2013 he was acting as a Global Pricing Manager within HC Global Marketing and Sales working out of the B.Braun headquarter in Melsungen. Today, he is leading a management team for Abbott Medical Optics (AMO) focussing on Cataract Business in Germany.
Below, he shares with us the first in a series of posts from him on how to initiate and successfully drive a pricing initiative in Med-Tech industry.
Cuts in healthcare budgets, low-price competitors and increasing power of purchasing organizations increased the pressure of many medical device suppliers on their prices and margins. After having gone through a number of cost reduction measures, many companies become aware that pricing is a by far more effective lever for sustainable profitable growth.
In this series of five blog posts I like to highlight five important rules that should be considered when leading a corporate and/or local pricing initiative(s) and working towards the desired increase in profit.
RULE NO. 1/5: BECOME AN "INSIDER" AND TALK THE BUSINESS UNIT'S/THE COUNTRY'S "LANGUAGE"
A high identification with the strategy and the market(s) is essential to get the necessary internal credibility. If the strategy, the products, the application or the business environment is new for you take all (!) opportunities to get to know them. You will become „one of the team“, get an insight about the real situation besides all „political-correctness“ and identify possible conflicting projects/goals that might implicate a risk for your future project success.
Analyses of existing data and structured interviews with different levels of employees might be appropriate first steps in going forward. This might be aligned by sending out self-assessment questionnaires to get a first idea of the current status in pricing and thus increases the overall awareness of the topic. Finally, you give space to self-discover issues resulting in an increased buy-in. In addition, these self-evaluations might provide a concrete basis for developing specific business relevant focus topics.
The self-evaluations might address different pricing areas, e.g.
- Pricing Strategy: Is a clear pricing strategy defined for the defined segments and targets?
- Pricing Structures: Are clear pricing policies and guidelines defined? Are decision processes clearly defined? Is a consistent discount structure in place?
- Pricing Execution: Are customized argumentations for the different types of buyers in place? Are there value-based argumentations for the focus products available?
Finally, adapt your communication style according to the stakeholder, e.g. prepare specific business cases and figures for high level management and more specific day-to-day relevant content for sales managers and reps. By doing so, you should also establish new pricing specific standards for analyses or reporting, e.g. product profitability „Top-Flop“- lists, the price waterfall concept or pricing specific dashboards. This will result in inceasing awareness of the new initiative and finally establishes it in the day-to-day business practices and routines.
Dr. Marc Konieczny is a speaker at the 2nd Annual DACH Chapter Workshop to be held in Düsseldorf on 19 September. The language of this workshop is German. Register before 15 August to benefit from the early bird rate of 290 Euro instead of 490 Euro.