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Tag : Quality

What sells lab products?

Carlton Hoyt 12:29 pm , October 26, 2011

Why do scientists buy any given laboratory products? How do they make their purchasing decisions? That’s the magic question that all of us seek to answer. While there is no one answer, and what answers we can attribute are dynamic, there is something that holds true. To sell life science tools and other lab products, there needs to be value, and this value can come from many places, such as:

  • Quality – value that comes from the product itself. The product may be more reliable, easier to use, technically superior to other products, etc. Scientists almost always desire reliable products that work on the first try and product consistent results. Building a great product is a big piece of the value equation.
  • Service & Support – value that comes from your company. This is an ongoing effort to make sure your customers have everything they need to successfully use your product. For best results, your support to the customer should not only be reactive, but should include proactive support as well, especially to customers who are using a particular product or product line for the first time. While perhaps not as important as the quality of the product itself, this is another highly important piece of the value equation for laboratory tools. In a study performed by BioBM, over 60% of scientists reported having refused to order a laboratory product because of a previous experience with the manufacturer or distributor selling it.
  • Marketing – perceived value created in the minds of scientists. The thing about value is that it either has to be experienced or communicated in order to be effective. Marketing is the communicator of that value, and how well you communicate that value will directly effect the perceived value of your products, especially for customers that have never used your products or dealt with your company before. If you haven’t communicated your product’s value, or if someone else hasn’t communicated it for you, scientists won’t recognize the value and therefore won’t buy your product.


If you fall short in one area of value creation, you can sometimes make up for it in another. For example, an imperfect product may be perfectly acceptable to a scientist so long as it is well-supported. Even if your product and support aren’t top-notch, but you make a compelling value proposition in your marketing and communicate it to a wide audience, your value will be understood and you’ll still get sales. (Note that the previous statements referring to lower value products be interpreted as lower value relative to similar products and not in absolute terms. Truly negative impressions of quality or support are difficult to overcome and you cannot be successful long-term if a high percentage of your customers are not satisfied.) The total perceived value is then weighed against the price and the customer’s price sensitivity when making the final purchasing decision.

Value comes from many places, and overall value is ultimately the driver of purchasing decisions made by life scientists. Understanding how to create and communicate value will make your laboratory research products, and your company, more successful.

"Seeking to improve the value of your current products, or build more value into future ones? Looking for the most effective or most efficient ways to communicate value? Contact BioBM Consulting and talk to one of our experienced life science business or marketing consultants. They can help you create desirable products, generate awareness and demand for your products, and much more."
Blog / Demand Generation / Marketing Communications / Marketing Strategy 12:29 pm , October 26, 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