Tag : Branding

Product Lines: Breadth or Depth

Carlton Hoyt 9:25 am , February 1, 2012

Life science tools companies are constantly making important product development decisions, and almost all of these decisions involve making a tradeoff. Should your company focus its limited product development resources on entirely new lines, expansions to existing lines, or improvements to existing products? Much of this decision-making, especially for smaller companies, boils down to choosing between breadth and depth in the product portfolio. So what are the benefits of each, and when should each be given focus?

It’s certainly no easy question to answer generally. Without question much of the answer will depend on a company’s positioning and the opportunities that present themselves (a SWOT analysis is often good for helping to make such a determination), however there are many considerations that are less variable and can be discussed in a more general context. Let’s discuss a few of those.

Risk / Reward

To an extent, the 80/20 rule, or at the very least the rule of diminishing returns, comes into play in product development. A few key, highly differentiated products in any area are likely to make “80%” of your revenues in that area, assuming that you have such a product to begin with. Expanding on products in that area, or continuing to build on that key product through features, etc., will produce a far lesser return than did the development of the original product. Indeed, as more and more features are added to the key products, or more and more related products are added to the related product line, each improvement or addition will likely capture fewer and fewer customers. If the opportunity exists to build a disruptive product in another market, that will generally offer a much greater opportunity to build sales.

The risk of expanding into new markets, however, is much greater. Developing an entirely new product often involves the development or acquisition of new technology, and the cost is often much greater. It will involve markets that your company is less familiar with, and you may misjudge the market. Customers also gravitate towards holistic solutions, and if your offering doesn’t have the product support within your own line to stand alone, that may be viewed with significant negativity. Additionally, and this will lead us into the next point of discussion, if you don’t have a strong focus in any area then your company’s brand won’t be recognized as an authority in any area.

Having too narrow of a product line is a risk in and of itself as well. If you’re entirely invested in one market, and a competitor brings a highly disruptive technology into that market, you could be out of business. While building around a highly successful product line may be seen as risk-averse, small companies with limited product development resources still need to diversify to some extent.

Branding

If you have many great but unrelated ideas, continuously going after the “80%” may seem very tempting, but it does have its drawbacks. Not being known for any one area could have negative effects on your company’s brand. Especially if customers in a market have varied needs, you won’t be known as a go-to source for any of the types of products that you offer, even if you have that one standout product. If your product line is all over the place, having disparate, eclectic products with having a well-rounded offering for any particular need, customers won’t think to look to your company for anything, and that can certainly be problematic.

On the other hand, having a deep product line can help establish you in that area, again assuming your products are sufficiently differentiated. It also helps you focus brand-building marketing efforts, or at the very least makes them easier.

It’s worth repeating that there is no right answer or formula to follow that will tell you where you should focus your product development efforts. The decision must be dependent on your situation, risk tolerance, opportunities, and more. Align your company’s product development goals with your overall goals, carefully analyze your situation, and you’ll know what the right decision is.

"Are your product development efforts producing the results your life science company wants? Is your pipeline optimally aligned to deliver on future goals? Cut out the guesswork. Call BioBM Consulting and we’ll make sure your product development gives you the best opportunity to succeed."

Building Online Communities

Carlton Hoyt 9:54 am , January 26, 2012

Perhaps inevitable given the popularity of content marketing, the long-established importance of branding in the life sciences, and the growing propensity of companies to look for novel ways to create social marketing-style engagement, online communities are becoming all the more popular. Manufacturers, services provides, and distributors in the life sciences can’t be faulted for finding them all too appealing. They can be easy to create; a savvy web designer can have a branded, albeit basic, forum up and running in a few hours. The rewards are clear, especially to companies who already perform content marketing; an online community can provide a far larger audience for your current content marketing efforts and can build brand value through topic leadership / thought leadership. They’re also potentially great for SEO – lots of content. They can also be very easy to manage; a vibrant online community will grow and monitor itself with little effort from the sponsoring company. With so many benefits, why wouldn’t a life science tools company want to start an online community?

. . . Because it’s difficult at best.

People like to rhetorically benchmark against big, successful brands. All too many people who’ve built an online community want it to be the Facebook of [whatever]. That’s a recipe for failure. There already is a Facebook, it’s pretty darned good at this whole social thing, and just because you have a community that’s branded to target a niche demographic, that doesn’t mean that people will use it. It’s also a bad idea to assume that because some megacorp did it that you can, too. Fortune 500 consumer brands have tens or hundreds of millions of customers – many times more customers than there are life scientists in the entire world. To reach the critical mass necessary to create a vibrant online community they need 0.01% of their customers to use it. As a small or mid-size life science tools company, you probably have well under 100,000 customers. Although you can try to reach out to more than just your customers, the difficulty inherent in doing so will likely render you marginally successful in that effort at best. For your community to be successful, you need a much higher participation rate, and therefore your community has to be that much more compelling.

I hate calling companies out publicly, but to give my point some gravitas I’m going to do it here. If you need any proof that an online community is difficult to build and sustain, look no further than EpiExperts. New England BioLabs, a great company with a reasonably large customer base as far as our industry goes, set it up last year as “a scientific social network for epigenetics experts” with the “hope that [scientists] will use E3 as a communication platform to aid progress in the frontier of epigenetics”. It’s been around for about 10 months now. Aside from an NEB employee and a freelance writer who have the paid job of blogging, the site is pretty much dead. They still get a trickle of new sign-ups coming in, but no one feels compelled to do anything. The forum is effectively unused. People can form groups, but there’s only one created. You can add others as “friends”, but the overwhelming majority haven’t done so. Profiles have walls that people can post to, but almost all are devoid of any posts. The worst part about all this is that when someone goes to a community site and sees that it’s unused, that’s a disincentive for them to use it, so that makes it even harder to turn around the community into a vibrant one.

It’s a shame, really. There’s no reason EpiExperts shouldn’t have been successful, except that there’s no reason that it should have been.

Asking people to join a community is asking them to devote a piece of their life to it. In other words, the community that you create needs to have enough value that scientists are willing to repeatedly spend time on your community’s site rather than doing anything else with their time. In order to do that, your community, just like your products or services, have to be differentiated. In fact, it’s even more important that your community be differentiated on value than a product because an online community can’t be differentiated on price since it’s free. Before you decide you want to build an online community, you need to many similar questions that you would in product development, and more:

What needs do our scientist-customers have?
How will this community address those needs?
Will this community be sufficiently differentiated?
How will we create continuous value for the users? (so they keep coming back)

So how do we create success when building online communities? Thoroughly answer the above questions and you’ll be pointed squarely in the right direction. This post, however, is already too long so we’ll have to take the topic up more another day. Feel free to use the contact form below if you have any questions or you feel like I left you hanging.

"Looking for new ways to engage your customers? Want to find ways to make your brand more respected and recognized? No matter what your marketing needs, BioBM’s expert life science marketers are here to help. Just send us an e-mail or give us a call and we’ll see what we can do to improve your situation and grow your revenues. Contact us today."

Blog / Branding / Digital Marketing / Social Media 9:54 am , January 26, 2012

Your Slogan May Backfire

Carlton Hoyt 11:45 am , December 9, 2011

An article in the Journal of Consumer Research, recently discussed in the Harvard Business Review, found that while brands have priming effects slogans often have reverse priming effects. In other words, brands often influence consumers as intended but slogans often cause the opposite effect.

Quoting the HBR article…

[pullquote_left]After participants were exposed to brands associated with luxury (such as Tiffany and Neiman Marcus), they decided to spend 26% more, on average, than after they were exposed to neutral brands (such as Publix and Dillard’s). After they were exposed to brands associated with saving money (such as Dollar Store and Kmart), they decided to spend 37% less than after they were exposed to neutral brands. The brands had the intended “priming” effect.[/pullquote_left]

[pullquote_right]But when it came to slogans, the same participants exhibited the opposite of the desired behavior. After reading a slogan meant to incite spending (“Luxury, you deserve it”), they decided to spend 26% less than after reading a neutral slogan (“Time is what you make of it”). When a slogan invited them to save (“Dress for less”), they decided to spend—an additional 29%, on average. The slogans had a “reverse priming” effect.[/pullquote_right]

The research suggests that this is a result of behavioral resistance to perceived attempts at persuasion. While consumers do not view brands as an attempt to persuade, slogans are viewed as an attempt to persuade and therefore exert the opposite effect. This effect, which was measured in general consumers, is most likely heightened amongst a highly rational and critical scientific audience.

Quick note to our readers: do NOT take this result as an indication that you should use reverse psychology in your slogan. Simply be careful in selecting what your slogan will be and don’t be afraid to get creative.

"Is your brand doing its job and adding value to your products and company? If not, or if you’re not sure, it’s probably time to do something about it. One option: call the experts at BioBM and let us help you build a brand that’s powerful. A brand that makes a statement. A brand that sticks. A brand that will evoke respect from your customers, envy from your competitors, and pride from yourself."

Blog / Branding / Marketing Communications 11:45 am , December 9, 2011

MarCom: Leads vs. Branding

Carlton Hoyt 2:42 pm , August 4, 2011

Not all forms of life science marketing communications should be presumed to serve the same purpose and looked at in the same manner. Indeed, the audience themselves have a tendency to view various advertising platforms differently, and treat advertising on each platform according to their views of it. There are also technical considerations which make some platforms more suitable for branding and others for lead generation. By understanding the factors which come into play and how each method is likely to be perceived, we can align our life science marketing communications to be in line with our overall marketing strategy.

Generally, there is a large gap between digital and print advertising. Digital advertising is far more capable of easily promoting immediate action by allowing the process from advertisement viewing to lead generation and capture to be wholly smooth and uninterrupted. At no point do prospective customers ever have to get up from their computers. With print, calls to action are effectively asking customers to actively go and do something, be it make a phone call, go to a website, etc, and therefore are less effective for lead generation due to that additional motivational barrier. There are exceptions to this, however, as well as things that can do to augment any particular platform’s effectiveness at each. Print advertising, for example, can be made far more effective at lead generation by offering captivating promotions that provide additional incentive to take up a call to action. Digital advertising can be made more effective for branding through providing higher-value messages, such as in content marketing, and by increasing the quality of the advertisement itself (think along the lines of “production value” for movies). Social media marketing is an example of an exception to the rule. The rules of social media are different from most digital marketing and SMM is far more based around content, engagement, and other activities which are usually not geared towards short-term lead generation. Indeed, life science social media marketing efforts too heavily focused on traditional marketing and / or advertising are doomed to failure.

This understanding of various marketing platforms and their fit for different marketing purposes must then be reflected in the marketing communications across each platform. If we are looking for short-term revenues then we want to target platforms more amenable to lead generation and capture and design our marketing communications appropriately. For example, such marketing communications should have a strong call-to-action and, when possible, be directly actionable themselves (such as by being hyperlinked). If you are looking to improve your branding, then the marketing communication should make a broader, more generally positive sentiment about the company or product line, or provide value to the customer in ways that compliment and highlight a company’s competencies and products / services.

While not a dichotomy, many marketing platforms can be scaled based on their utility for lead generation or branding. By understanding the unique advantages of various marketing platforms, life science companies can better utilize those platforms to achieve their goals.

"Are your life science marketing communications and advertisements not generating the desired results? Are you looking for a partner who understands all aspects of life science advertising and marketing? Poor marketing communications can stunt sales growth, but BioBM Consulting can help your company conceptualize, create, and deploy high-value marketing communications. We can also revitalize your marketing communications strategy to ensure you’re sending the right messages at the right times to the right people. Call us today to start improving your life science MarCom and growing your sales."

Blog / Branding / Demand Generation / Marketing Communications 2:42 pm , August 4, 2011

A Note on Off-Site Blogs

Carlton Hoyt 2:53 pm , April 19, 2011

Going somewhat in step with our previous post on projecting expertise, I’ve noticed a recent trend of life science companies starting or sponsoring unbranded, off-site blogs. I have no problem with using such blogs as a marketing tool so long as the strategy for doing so is properly addressed. There are a lot of potential things that can be done wrong, strategically, and some key issues need to be considered before launching an unbranded off-site blog. Here are a handful:

Scientists don’t like underhanded marketing. If you’re promoting your company or products and you aren’t forthcoming about self-promotion (for example, neglecting to mention that the blog is written by a company employee or that the blog is funded by your company), scientists will think you are trying to trick them and that will hurt your reputation.
How will you target the desired audience? I’ve witnessed many of these blogs post information that doesn’t seem to have a well thought-out theme and end up being more general and less focused than the target audience. Remember the ultimate purpose: marketing.
Set goals, and make sure they’re well-defined. What do you want to achieve? How will you measure success? If the blog isn’t meeting the required metrics, take it down and focus your resources somewhere more worthwhile.
Have a valid reason for neither incorporating a blog on your main site, nor using your branding in a more prominent manner.

Off-site / unbranded life science blogs can be good marketing tools when used correctly, but all the rules of marketing still apply. Think strategically to make sure that you’re achieving your goals with such a blog.

"Have questions? We have answers. Contact us anytime if you’d like to discuss blogs or any other topic covering life science business or marketing."

Blog / Digital Marketing 2:53 pm , April 19, 2011

Creating Brand Champions

Carlton Hoyt 4:50 pm , March 17, 2011

Branding is an important part of marketing in the life sciences, as we’ve previously discussed in this blog. The ability to shape and manage the perceptions of your company in the minds of customers is a powerful thing. Simply having strong branding will certainly help your company in a multitude of ways, but you can do even more and leverage your brand to derive even more value from it. One such way is the cultivation of brand champions.

What is a brand champion?

A brand champion is someone who feel strongly about your brand, understands its message, and promotes it to others. You could say that brand champions are the “stewards” of your brand. While brand champions can be any stakeholder, we’re going to focus on customers as brand champions. Having customers as brand champions is of particular value.

How to Cultivate Brand Champions

Every brand champion starts as an enthusiast. Find customers who like your products and / or brand and have given you good feedback or maybe who your support or sales staff have a good relationship with. Pick customers who can identify with and support your brand values and goals. Once these customers are identified, define and execute strategies that improve engagement with those customers on a personal level. Give them that little bit of special treatment. Once your enthusiasts are engaged, be sure you have communicated the brand values to them. While there are many strategies to perform any one of these steps, so long as they are performed you’ll start creating brand champions out of your customer enthusiasts.

Leveraging Brand Champions

Once you’ve cultivated your brand champions you can leverage the value that you have created in doing so. One common way to extract value from your brand champions is by encouraging word-of-mouth marketing. Word-of-mouth marketing is both free and highly effective – your marketing message will be much more readily accepted by scientists when it comes from a colleague. (Curious how you can encourage word-of-mouth marketing among your customers or brand champions? Ask us.)

Brand champions are also great beta-testers. Have a product you’d like user feedback on before a full release? Ask your brand champions if they’d be interested in trying it out. Brand champions can be trusted to provide quality feedback and not be overly negative to colleagues about any flaws or unfinished aspects of your new product.

Testimonials and referrals are also great ways to derive value from brand champions. Scientists are more accepting of other products when they hear positive things from other researchers / customers regarding the quality of the product, the services of the company, etc, and brand champions will much more readily be the customers that flout your benefits to others.

Brand champions will also help you crowdsource. When you need the opinions of your customers, your enthusiastic brand champions will be right there to help you and provide the feedback or perspective you need.

There are more ways to leverage brand champions as well. No matter how you do so, be sure that your brand champions feel good about the interaction with your company and brand. If they begin to feel like they are simply being used or taken advantage of they’ll turn their cheek to your brand and you’ll lose a loyal champion. Don’t let that happen. Be sure your brand champions feel properly rewarded.

Cultivating customers into brand champions requires effort but is highly rewarding. Brand champions can be a strategic advantage to your business and provide unique value to your company that cannot be derived in other ways.

"Looking to build a lasting reputation with life scientists? Want to turn enthusiastic customers into couriers of your brand? Do you rely in part on word-of-mouth and want to get more out of it? Would you to reap the benefits of a loyal group of customers to help provide feedback, ideas, referrals, and more? The expert marketing consultants at BioBM are here to help you design and execute strategies to cultivate, leverage, and maintain brand champions. Contact us and we’ll put you on the right track to establishing ultra high-value customer relationships today."

Blog / Branding 4:50 pm , March 17, 2011

Building a Brand

Carlton Hoyt 6:41 pm , February 8, 2011

Life science companies frequently underestimate the value of building a strong brand. This is perfectly understandable – very often these companies are started by scientists or engineers and simply don’t think in terms of abstract marketing principles. Branding, however, is extremely valuable almost regardless of the product or service your company offers. The benefits and value created can be truly transformational, but care must be taken to establish a brand that facilitates such value creation. In this post, I’ll briefly go over why strong branding is valuable, provide some tips and thinking points on how to build a brand, and give you a ideas to actively leverage your brand once you’ve built it.

Why Branding is Valuable

As they are in their scientific endeavors, life scientists are notoriously cautious in their purchasing. They appreciate and value methods and materials that have been tried and tested. They want tools that have been published. They appreciate antibodies that have worked for the lab next door. Not everything relies solely on prior use, however. Scientists also give a degree of trust to certain companies and product lines, and this trust can be built and retained through the creation of a strong brand. Branding is the carrier of who you are or what your product is. Having no reputation at all is almost as bad as having a bad reputation, and having an indistinguishable brand is effectively the same as having no reputation. Without reputation, you cannot have that trust and confidence that is vital to life scientists in their purchasing decisions. In order for the “I’ve [seen / heard about / used] that before” factor to kick in, life scientists need to recognize your product or company (or, preferably, both). Along the same lines, strong branding helps you attract repeat business and creates a memorable impression among your customers. Once you’ve built a reputation and captured the customer’s loyalties, you’ll be able to spend comparatively less on marketing in order to maintain your market share.

Branding also gives your company a way to stand above competition is a crowded or commoditized marketplace. I won’t get into this because we discussed this in greater depth in a post about how branding can help companies avoid commoditization of their products a few months ago.

Establishing your brand as high-value also allows you to fetch a higher price for your products. By building your reputation through consistently high quality, value-added support and customer service, knowledgeable and helpful sales staff, etc., the overall higher value to customers that your brand conveys can be captured through higher pricing. Similarly, the higher perceived value will effectively entrench you against competition with weaker branding.

Branding also is used to establish market leadership. By “market leadership” I do not mean the company with the greatest market share, but the one with the greatest influence and respect within the marketplace. Being a respected leader offers you many strategies that may not be available otherwise and improves the effectiveness of many customer and business-to-business interactions.

Building Your Brand

When building a brand, you want to do two things: 1) make sure that your brand leaves an impression, and 2) control what that impression is. Obviously you want a positive impression, but your brand can be so much more than that. Think about how can your brand stand out from the rest. Let it express who you are, what you do, what your values are, or any combination of those. Use your brand to help captivate your audience. Does Thermo, for example, have a strong brand? Of course, but don’t think that putting your name in bold red letters on your products will be captivating. Thermo has the advantage of having those bold red letters in many places in labs across the globe and being a household (or perhaps I should say “lab-hold”?) name. Small life science companies will almost never have that benefit. Stop and think about what you really want your brand to say about you and creative and interesting ways to express that.

Once you have an idea of how your branding should take form and be expressed, be sure to express it across platforms. Your logo, advertising, website, product design, packaging design – incorporate your brand wherever you can to build and carry your reputation. Just be sure to express it consistently – you don’t want to send mixed messages to your target market.

Leveraging Your Brand

So you’ve built a strong brand, or are at least on your way. Researchers in your market know who you are and you’ve gained some trust and repute. Now what? As previously mentioned, a benefit of strong branding is being able to comparatively spend less on marketing to maintain your market share, but my suggestion would rarely be to simply benefit from the cost savings (unless you really need the cash). Instead, look at ways you can utilize your brand to continue to build your market share. I have mentioned just a few potential ways below.

One such way is to cultivate brand champions. Find who your best and most loyal customers are, those who hold your company and products in very high regard, and build personal relationships with them. You can get testimonials from them, use them as referrals, ask them to beta test new products, etc., etc. Be nice to them and they’ll spread the word of your company and products to those around them as well.

Having strong branding allows you to be far more effective at crowdsourcing. Be being a trusted, reputable brand, more customers will be willing to actively engage with you. Want to know what features you should add to your next product? Ask your customers. People want to be part of something important, and a strong brand makes you look more important to the crowd.

Perhaps one of the most powerful ways of leveraging strong branding is to put your weight into determining the future of your market. If you are becoming one of the most trusted brands in your space, you get to be the pioneer. If you’re developing innovative new products or technologies, put the weight of your brand behind it. You can even attempt to define future standards (for a familiar example outside of the life sciences, you can look at how Sony almost single-handedly killed the HD-DVD when it released the PS3 with a Blu-ray player).

Building a brand is not a simple task nor one to be taken lightly. Your brand will effect how customers everywhere perceive your products and your company, and the perceptions you build in the eyes of scientists will not easily be changed. Take care to purposefully build your brand and you’ll be able to grow your market share and realize a value that is difficult for your competitors to shake.

"Want to be more recognizable in your market? Looking to build a lasting reputation with life scientists? Being held down by larger competitors with stronger brands? The expert marketing consultants at BioBM are here to help you build the strong brand you need to grow and retain market share. Contact us and talk to us about the challenges your company is facing and we’ll inform you how we can help your company brave the marketplace and build a powerhouse brand."

Blog / Branding 6:41 pm , February 8, 2011

Private Labeling / OEM

Carlton Hoyt 4:24 pm , January 11, 2011

Private labeling presents a lucrative opportunity for many life science businesses. It can rapidly and dramatically increase market access and also transfer marketing, sales, support, and other costs outside your company. On the other hand, it can incur redesign costs and introduce inefficiencies that weigh on your profitability, hurt distributor relationships, dilute your brand, and have other potential negative consequences. The question of whether to allow private labeling, and under what conditions, is a complex question with many factors to consider. I will go over some common issues and considerations so you can be more prepared to answer the question: To private label or not to private label?

Perhaps due to my having a strong background in issues pertaining to distribution, the first issue that I often address is how a potential private-label partner would fit into the current distribution network. An obvious ideal situation is one where the private-label partner would serve in area where you are looking to increase distribution anyway – perhaps one in a region where your distributors are not meeting targets or where you have no distribution in the first place. Forging a private label agreement with a company that would serve areas in which you have solid distribution can damage valuable distributor relationships.

Another issue to consider is branding. Whose brand is stronger, yours or your private-label partner’s? If your brand is stronger, the private-label partner will be less likely to compete with products carrying your brand (which is good for distributors and would mitigate conflicts mentioned above) and there is less risk. If your partner’s brand is stronger, they may be able to sell more product, but they may also become in a position of power once the agreement is in place if most life science researchers know your product only through your partner’s brand. This can give them a huge amount of leverage. Another ideal situation to look for and attempt to leverage is if your brands are strong in different geographic regions or different market segments.

Lastly, and probably most importantly, be sure you can trust your private-label partner. A successful partner will be building a business around one of your products but the customer loyalty will be theirs. Ensure that you trust them enough to not develop an analogous product themselves, jump ship and begin private-labeling a competitor’s product, or even steal your technology! Selecting a partner with whom you have a good relationship, or one who is highly reputable, is extremely important.

Many factors play into the decision of whether or not to allow private labeling of your products. The reasons for doing so or not doing so are different for every company (and indeed are different for every OEM company / private label company combination) and every situation. Keep in mind what is important to your company, realize where the value lies for your partner, and carefully weigh the pros and cons. Always keep in mind that even if your company and another are not ideally suited to work as OEM / private label partners, contract terms can often be used to alter the dynamics of the relationship and provide a mutually beneficial environment for all stakeholders involved.

"Want help weighing the pros and cons of private labeling in your company’s particular situation? Our life science business consultants are here to help you find your company’s best route to long-term profits, regardless of the complexity and challenges of your market segment. Talk to us to discuss the issues that are most important to you."

Blog / Distribution 4:24 pm , January 11, 2011

Defend Against Commoditization

Carlton Hoyt 3:18 pm , December 13, 2010

Commoditization – the transformation of goods and services into a commodity – is a major problem when it threatens to rear it’s head. As technologies age, lose patent protection and become less expensive, there are often more competitors that will join the market. For many areas of the research products market, the eventual threat of commoditization is almost an inevitability. This is particularly true with reagents, chemicals, low-end equipment, plasticware, and glassware, but is also readily apparent in the market for kits and some kinds of proteins and antibodies. If these products lack a qualitative differentiator, they will all eventually become commodities. As such, customers will seek out only the lowest price goods and profit margins will take a huge hit. However, such is not always the case. In many of these markets there is still one factor that can make a huge difference. There is one way to add perceived value and differentiate your product from the commodities: branding.

When I use branding in this sense, I don’t simply mean some flashy marketing and design that contributes to brand or product recognition. Branding must mean the entire value that is behind the brand, including quality, customer service and support. Indeed, quality, customer service, and support are the things least likely to be replicated by competitors looking to sell low-price products. So then why are these things not the “one way to add perceived value”? Simple – all of these things get expressed through the brand.

Let’s take plasticware as an example. Eppendorf has an enormous share of the microtube market, and not for lack of competition. There are literally dozens of manufacturers of microcentrifuge tubes, and most microtubes are far cheaper than Eppendorf’s. So then why does Eppendorf maintain such a huge share of what should, at a glance, be a commodity? Entrenchment and longstanding brand recognition aside, they have an extremely high quality product (and I would know – I’ve put all sorts of microtubes through the gauntlet in my day), and that quality is consistent. This is then captured through the brand. People see the Eppendorf branding on a product and presume, usually rightfully, that they can trust it’s quality. Many other manufacturers who are trying to undercut Eppendorf are not able to replicate their quality at such a low price, so Eppendorf maintains the advantage of pricing its product higher due to the differentiation created by the higher quality product and expressed through the brand.

Another great example shines out in the Life Technologies 2010 Q2 earnings conference call question & answer session. Jonathan Groberg of Macquarie Research asked about Life Technologies’ PCR portfolio and commoditization in the PCR market. Gregory Lucier, Life Technologies’ CEO and Chairman, responded by saying:

…the relationship between price and volume is not a direct connection. And that’s due to a lot of the friction of publications, previous experiments. There’s just inertia to switching. And when you have market leadership like we certainly do in the PCR business, people are inclined to stay with their products, and so we benefited from that.

Again, this is a non-tangible perceived value addition. Life Technologies is attributing the continued success of its PCR line in part of the value that the brand conveys – in this case a “tried and tested” product. Scientists know that everyone uses Life Technologies PCR products, and they therefore trust them to be reliable.

If you’re on the outside of a bioscience market where commoditization is either already present or a serious risk and you’re trying to get in, or if you have a small market share and a brand with little recognition, these examples admittedly may not seem too helpful to you. While market entry is a topic large enough for a lengthy book, I will offer a few tips as they pertain to a partially or wholly commoditized market. 1) Look at your entrenched competition and use them as a baseline. What are they doing that allows them to avoid commoditization where everyone else fails? Can you position yourself to have an advantage other than price? Evaluate the hurdles that need to be overcome to do so. You can generally assume that your price point will need to be lower than the products of any well-known, entrenched marketplace behemoths (if they are present), but can be higher than the commoditized products. 2) Commoditized markets are most often very large (there’s an economic reason for this that I won’t get into) and trying to gain market entry across the entire market can often be too big of a task that dilutes marketing efforts and decreases marketing ROI. Find a particular sub-segment of the market that can be easily identified and marketed to and tackle that segment first. This strategy is almost always much more effective and gives you a foothold to expand your market share from.

Aging markets almost always lead to increased competition, but with a good marketing and business strategy, commoditization can be avoided.

"Are any of your products or the life science research markets they compete in at risk of commoditization? Want to form strategies for growing market share in a crowded marketplace with large amounts of competition? Need to develop a strong brand to fend off competition and establish your company as a market leader? BioBM’s expert business and marketing consultants are here to help you. Contact us to discuss your unique situation and learn how BioBM can help you maintain growth and profitability under pricing pressure and increasing competition."

Blog / Marketing Strategy 3:18 pm , December 13, 2010

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