MedTech Portfolio Optimization: Choice Modelling for Product Launch Success

Introduction:

In the ever-evolving landscape of healthcare technology, new product development and commercialization of Medical Devices can be a daunting task. One of the greatest challenges faced by product management and marketing leaders in the MedTech field is determining which product features to prioritize. The choices made during product development can significantly impact market competitiveness, adoption, and profitability. That’s where conjoint analysis comes into play as one of the most powerful techniques available for product leaders to make evidence-backed decisions on product features and trade-offs.

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Conjoint analysis is a sophisticated market research methodology designed to help understand how customers make choices when presented with multiple options, simulating the actual buyer experience. It helps uncover the relative importance of key attributes that influence customers’ preferences and purchase decisions. In the context of medical technology, this translates to understanding what features matter the most to healthcare professionals, institutions, and end-users, and what trade-offs they are willing to make. Conjoint Analysis helps inform different strategic initiatives from enhancing market penetration to portfolio optimization to strategic go-to-market decisions:

  • 1. Enhancing Market Penetration: Conducting market simulations using conjoint analysis helps predict how different product configurations might perform in the real world. By identifying the optimal combination of features and attributes, medical technology companies can refine their product development strategies in a way that optimizes customer preference share. The conjoint analysis can also reveal market segments with distinct preferences and can help tailor product offerings and go-to-market strategies to different customer groups, enhancing market penetration.
  • 2. Product Portfolio Optimization: Medical technology companies often offer a range of products with varying features and specifications. Conjoint analysis aids in optimizing the product portfolio by identifying the most desirable features and product configurations (See case study). This not only enhances customer satisfaction but also ensures that the product lineup is strategically aligned with market demands. Conjoint analysis plays a crucial role in helping med tech firms strike the right balance between innovation and practicality by providing insights into customer preferences, priorities, and trade-offs. This could include factors such as product functionalities, specifications, usability, interoperability, brand, price, and other elements that contribute to the perceived value of medical technology products.
  • 3. Pricing Decision Support: Determining the right pricing strategy for medical technology products is a complex task, especially with different pricing models (such as Device as a Service (DaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) coming into the picture. Conjoint analysis enables businesses to gauge the perceived value of different features and assess how price sensitivity varies across customer segments. This information is invaluable for setting optimal price points that maximize revenue while maintaining competitiveness (See case study).
  • 4. Guiding R&D and Innovation Strategies: Conjoint analysis results guide research and development efforts by highlighting which features resonate most with users. This enables med tech firms to focus their innovation strategies on areas that are not only technically feasible but also aligned with market demands. It helps avoid investing resources in features that might be innovative but are not valued by the end-users.
  • 5. Strategic Decision-Making: The insights gained from conjoint analysis inform strategic decision-making processes. Med tech firms can make data-driven decisions about product launches, updates, or discontinuations based on a clear understanding of customer preferences. This ensures that investments in innovation are strategic and contribute to the overall success of the product portfolio. Conjoint analysis enables medtech firms to stay responsive to market changes. As preferences evolve or new trends emerge, med tech firms can adjust product offerings in real time. This agility is crucial in the dynamic healthcare industry, allowing companies to stay ahead of the competition and remain relevant in the eyes of their customers.

How does it work?

When designing a new medical device and utilizing conjoint analysis to discern optimal feature configurations. The conjoint survey presents various hypothetical ultrasound designs with different levels of attributes such as clinical applications (such as cardiac, OB& GYN, general radiology), portability (laptop, cart-based, handheld, console, etc.), probes, advanced features (3D, 4D, AI, etc.), price models, etc. Survey participants then engage in trade-off decisions, expressing their preferences by selecting one combination scenario of attribute levels over another. This process provides a nuanced understanding of the relative importance of each attribute and its impact on product preferences.

In summary, in the realm of healthcare technology, where innovation, precision, and cost-effectiveness are paramount, conjoint analysis emerges as a top strategic tool. This methodology not only demystifies the complexity of feature prioritization but also enables data-driven decisions that resonate with the right target audience. Want to learn more about Conjoint Methodology and how it can support your business objectives? Click here

Vera Borislavova

Vera Borislavova

Vice President - Global Client Engagement

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