Global Medical Devices Survey 2012–2013: Market Trends, Marketing Spend and Sales Strategies in the Global Medical Devices Industry

The medical devices industry anticipates marginal revenue growth in 2012
Of respondents across the industry, 54% are "more optimistic" about revenue growth for their company over the next 12 months as compared to the previous 12 months. With the current volatile market situation, the medical devices market is expected to register different rates of growth between the developed markets in the US and Western Europe and the emerging markets of Asia-Pacific and Latin American countries. However, strong growth in emerging markets such as India, China, and Brazil, has contributed to an increase in revenue optimism.

The top three key expected changes for 2012 are the introduction of "new products and services," business "expansion in current market and abroad" and "improvement in operational efficiency." Overall, the key expected changes in business structure for medical devices manufacturers in 2012 have not changed considerably from those identified in 2011.

Mergers and acquisitions in the industry is expected to increase in 2012
Industry executives expect to see increased levels of consolidation, with 63% of respondents anticipating either a "significant increase" or an "increase" in merger and acquisition (M&A) activity over the next 12 months.

Incidentally, there has been no substantial change in expectations of consolidation among medical device companies in 2012 when compared to the 2011 survey results. Finally, high operating costs, rising competition, the need to increase geographical presence in key markets, stringent government regulations, high R&D costs, increased time to develop and introduce new technologies, business competence, and pressure on bottom-line performance are the key stimuli for switches to inorganic growth.

China, India and Brazil are the most important emerging markets
Respondents identify that China, India and Brazil will offer the highest opportunities of growth among emerging markets. The expansion of business activities in emerging markets, together with stronger economic growth than other regions of the world, government funding and reforms, changing consumer lifestyles, increasing penetration of medical insurance products, and a rise in disposable income, has increased the demand for quality healthcare services. This, in turn, is expected to increase the demand for medical equipment and other support services.

The US, Singapore, Taiwan and Hong Kong, South Korea, Germany, and Canada are identified as the most important regions for growth among developed regions. 

Although concern over the implementation of healthcare reforms starting from 2013 has reduced growth optimism in the US, the growth prospects are still high amongst the developed countries. With an aging Baby Boomer population, high unmet medical needs and increased incidence of lifestyle diseases including cardiovascular diseases, diabetes, hypertension, and obesity, the US medical device industry continues to grow at a brisk pace.

Companies face key challenges in ‘market uncertainty’, ‘responding to pricing pressure’, and ‘regulatory change,’ 

"Market uncertainty," "responding to pricing pressure," and "regulatory change" are the most immediate business concerns for the industry. Additionally, "market uncertainty" and "responding to pricing pressure" are considered leading business concerns for respondents from small and medium-sized companies, whereas "regulatory change," and "cost containment" are concerns expressed by respondents from large companies. Furthermore, buyer respondents across all regions rank "innovate products" as the leading action suppliers should take to secure business, while senior-level executives identify the need to "innovate products," "improve payment terms," and "reduce prices" as key initiatives for suppliers to secure buyers' business. 

Average annual marketing budget of suppliers is expected to remain stagnant in 2012 in comparison to 2011 ICD Research's industry survey revealed that on average, the marketing budgets of global medical device industry supplier respondents are expected to increase by 7% over the next 12 months. Moreover, in 2012, 72% of supplier respondents anticipate an increase in marketing budgets, as compared to 61% in 2011. 

In 2012, the average size of the annual marketing budget of global medical device industry suppliers is US$1.7 million, as compared with US$1.9 million in 2011. Incidentally, the European debt crisis, increased price transparency, and global competition have led to neutral expectations of annual marketing budgets. However, 76% of companies have a marketing budget of less than US$250,000 for the same period, which implies that companies intend to keep budgets low, spending less time and money on marketing strategies. 

"Online content sites", "email and newsletters" and "social media and networking sites" to dominate future investment 

"Online content sites," "email and newsletters," and "social media and networking sites" are expected to register the strongest investment. Conversely, "radio," "newspapers," and "television and video" are expected to show the least investment gains. In the next 12 months, global marketing budgets are expected to demonstrate an increasingly significant proportion of spending towards digital media, including emails, internet searches, social media, and networking sites. Additionally, "market intelligence research," "CRM systems" and "competitor intelligence research" emerged as important areas of investment among marketing and sales solutions activities, in 2012. 

"Customer retention," "customer acquisition," and "lead generation" dominates key marketing aims of suppliers for 2012–2013 

"Customer retention," "customer acquisition," and "lead generation" are identified as key marketing aims for global medical device industry suppliers by 77%, 54%, and 31% of industry respondents respectively. In 2012, the key strategy that industry suppliers plan to employ is to "focus sales efforts on generating new business," as identified by 53% of respondents. Moreover, supplier respondents are expected to invest more in new media, such as "networking through social media websites," "email promotions," and "email educational messages" to increase business.

"Ability to target specific audience niches," "flexibility in customizing services," and "thorough reporting and analysis" are the three leading critical success factors for suppliers in 2012

The "ability to target specific audience niches," "flexibility in customizing services," and "thorough reporting and analysis" are considered chief success factors for marketing agencies. Survey results indicate that critical success factors have changed slightly since 2010 and 2011, and although the leading critical factor of the "ability to target specific audience niches" remained in pole position throughout 2010–2012, the importance of "flexibility in customizing services," and "thorough reporting and analysis" has increased substantially in the recent survey. Additionally, customizing sales processes ensures conformity with the customer buying process and suppliers look for marketing agencies that offer products and services which add value, to attract customer attention.

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