Marketing communications campaign for Smith & Nephew's Anthology hip replacement system

Marketing Communications/Communications Campaign: Smith & Nephew's Anthology Hip Replacement System

Innovations in medicine, improved diets, and the eradication of many diseases have all combined to contribute to longer lifespans for many people today, particularly in the industrialized nations of the world. One of the harsh realities that goes hand-in-hand with longer lifespans, though, is the frailty and infirmness that frequently accompany the aging process. Because older people tend to become less stable and frailer over time, it is not surprising that there has been an alarming increase in the number of hip fractures that occur each year, and these rates are projected to continue to increase well into the foreseeable future. More troubling still is the fact that a fracture of the hip can represent a death sentence unless interventions are provided to help address the multifaceted effects this injury can cause in the elderly. On such intervention is the use of various surgical hip replacement systems that can help the elderly regain their mobility and resume an independent lifestyle to the maximum extent possible. To determine how one major medical device manufacturer, Smith & Nephew, could promote their Anthology Hip Replacement Systems, this paper provides a background and overview of the salient issues that are involved, a marketing report concerning the Anthology Hip Replacement Systems, and a communications campaign to operate in a business-to-business (B2B) mode, followed by the specific details of each communication strategy.

Review and Discussion

Background and Overview

According to Mossialos, Mrazek and Walley (2004), the company, Smith & Nephew (hereinafter alternatively "the company"), is a major manufacturer of various medical devices and orthotics with an increasingly globalized market. The company also emphasizes close collaboration between its research and development efforts, it sales staff and the physician community it serves (Gebhart 2002). In this regard, the company's promotional literature states that, "Today, Smith & Nephew is a public limited company incorporated and headquartered in the UK and doing business in many countries around the world" (About us 2011, p. 1). The company is also listed on the London and New York stock exchanges and became a constituent member of the FTSE-100 index in the UK in 2001, meaning that the company is included in the top 100 companies currently traded on the London Stock Exchange measured in terms of market capitalization (About us 2011). Smith & Nephew plc develops, manufactures, markets, and sells medical devices in the orthopaedics, endoscopy, and advanced wound management sectors worldwide. The company competes in three business segments: Orthopaedics, Endoscopy, and Advanced Wound Management which are described in Table 1 below.

Table 1

Description of Smith & Nephew Business Segments

Business Segment

Description

Orthopaedics

This business segment offers reconstruction implants, including hip, knee, and shoulder joints, as well as ancillary products, such as bone cement and mixing systems used in cemented reconstruction joint surgery. This segment also provides trauma fixation products consisting of internal and external devices, and other products, including shoulder fixation and orthobiological materials used in the stabilization of fractures and deformity correction procedures; and clinical therapies products comprising bone growth stimulation, joint fluid therapies, and outpatient spine products.

Endoscopy

This business segment develops and commercializes minimally invasive surgery techniques, educational programs, and value-added services for surgeons to treat and repair soft tissue and articulating joints. It offers specialized devices and fixation systems to repair damaged tissues; fluid management equipment for surgical access; digital cameras, digital image capture, scopes, light sources, and monitors to assist with visualisation; radiofrequency wands, electromechanical and mechanical blades, and hand instruments for resecting damaged tissues.

Marketing Report

Analysis of the market, trends, competitors and company/division current position. Current market trends indicate a growing demand for the company's Anthology Hip Replacement System in the future. For instance, according to Schultz, Noelker, Rockwood and Sprott, "Hip fractures are increasingly common injuries in older persons and have a profound effect on morbidity and mortality. They often result in hospitalization and institutionalization. The incidence of hip fractures virtually doubles with each decade over age 50, and women have two to three times the rate of hip fracture as men" (2006, p. 515). The demand for hip replacement devices is also expected to continue to grow as the population of many countries continues to age more rapidly than it is being replaced (Chang, Wu & Lin 2008). For instance, Chang and his associates emphasize that, "With an estimated two-fold increase in the elderly population from 2000 to 2020, the total number of fall-induced hip fractures will increase by 17.2 times, making it an increasingly prominent medical problem demanding attention" (p. 687). It is important to note that Chang et al. state "17.2 times" rather than "17.2%," making this an alarming exponential increase in the incidence of hip fractures. In addition, advances in the surgical techniques used for hip replacements have significantly improved clinical outcomes in recent years (Kagansky, Rimon, Naor & Dvornikov 2004).

In the medical appliances and equipment industry, the company's competitors include Johnson & Johnson, Stryker Corp. And Zimmer Holdings, Inc. Smith & Nephew's stock performance vs. these major competitors is illustrated in Figure 1 below.

Figure 1. Stock Performance of Smith & Nephew vs. Three Top Competitors: Past Five Years to Date

Key:

SNN

Smith & Nephew

JNJ

Johnson & Johnson

SYK

Stryker Corp.

ZMH

Zimmer Holdings, Inc.

As can be seen from Figure 1 above, Smith & Nephew has consistently outperformed its top three competitors during the period from January 2007 to date.

Objectives to be achieved. The marketing campaign envisioned herein has three overarching objectives as follows:

1. To better educate the medical community concerning the superior attributes of the Anthology Hip Replacement System for the elderly with hip fractures to promote brand awareness.

2. To establish strategic partnerships with medical device vendors and other third-party jobbers that can facilitate the distribution of the Anthology Hip Replacement System in current markets; these strategic partners could also help develop new geographic markets in countries where the company does not currently compete.

Elements of marketing communication to be involved, specifying reasons for selection. The marketing communication component of the marketing campaign envisioned herein will use both collaborative communication as well as autonomous communication strategies for the reasons discussed further below. According to Varey, the overall aim of effectively managing marketing communications is to position the provider "as an efficient preferred source of solutions to problems experienced by people as buyers and consumers" (2002, p. 6). In the case of hip replacement systems, though, the marketing communication effort is complicated by a dearth of empirical experience with these devices among business partners and purchasers. For instance, Varey adds that, "Marketing communication is a form of social narrative with the primary task of conveying those fictional social relations that can only be fulfilled in and through product ownership and use" (2002, p. 9). Therefore, the marketing communication techniques to be used in the marketing campaign envisioned herein will feature graphic elements that highlight the desirable and superior attributes of the Anthology Hip Replacement System, including the use of animation where appropriate (i.e., PowerPoint presentations and Web-based content).

Communication in marketing channels can enable people to persuade, inform, foster participative decision-making, coordinate programs, exercise power, and encourage commitment and loyalty. Communication moderates distribution channel conditions (which may be structural and behavioural, such as the pattern of exchange relationships, power, climate, etc., for example in contracted trading) and channel management outcomes (such as member coordination, satisfaction, level of commitment, performance, and so on. Research has shown that channel outcomes are enhanced when:

1. A collaborative communication strategy is pursued in relational, supportive, symmetrical channel conditions; and,

2. An autonomous communication strategy is pursued in transactional, unsupportive, asymmetrical channel conditions (Varney 2002, p. 139).

Therefore, marketers at Smith & Nephew can fine-tune their marketing communications with business partners and customers depending on the existing relationship in order to maximize the return on their investment of resources in the marketing campaign (Varney 2002). These respective communication strategies are set forth in Table 2 below.

Table 2

Collaborative and Autonomous Marketing Communication Strategies

Collaborative communication strategy

Autonomous communication strategy

Interaction is frequent and prolonged with bi-directional flows of data through informal media, and direct efforts to change behaviour through requests, recommendations, promises, and appeals to legal obligations

Interaction is infrequent and mostly unidirectional and formal, concentrating on indirect efforts to change the beliefs and attitudes about the desirability of intended behaviour with no specific request for action (e.g. discussion of general business issues and operating procedures)

The structure is relational (joint planning, long-term perspective on high interdependence) with a supportive climate and a symmetrical balance of power.

The structure is centered on discrete exchanges on an ad hoc basis with a short-term orientation and low interdependence.

Source: Varey 2002, p. 139

Details of the Communication Method

Strategy for each Marketing Communication method selected.

Collaborative communication strategy. This communication strategy will be used with the company's strategic business partners.

Autonomous communication strategy. This communication strategy will be used with the company's existing medical community clientele as well as with potential clientele.

An outline of costs involved. The costs associated with the development of effective marketing campaign materials for these two communication strategies are estimated in Table 3 below.

Table 3

Estimation of Respective Costs for Collaborative vs. Autonomous Communication Strategies

Communication Strategy

Initiative

Projected Costs

Collaborative communication strategy

1. Implementation of a company-sponsored intranet that provides strategic business partners with access to sales forecasts, promotional materials,

The costs of this type of intranet range of zero for open source applications to between $3,000 and $4,000, depending on the level of in-house expertise available (Spoolstra, 2009).

2. Distribution of graphical presentation of Anthology Hip Replacement System to business partners highlighting their superior qualities and functionality in restoring range of motion using PowerPoint presentations on DVDs and CDs.

Typical costs of a professionally produced PowerPoint presentation by third-party providers begin at just $99, and even highly sophisticated versions can be produced for slightly higher but still relatively modest amounts (TaskForce Presentations 2011). The costs of the blanks DVD/CDs and distribution costs are minimal.

Autonomous communication strategy

1. Addition of computer animation and graphics contained in PowerPoint presentation to corporate Web site.

There will be no additional costs incurred for this initiative beyond the Web site administration costs.

2. Distribution of graphical presentation of Anthology Hip Replacement System to potential medical community customers highlighting their superior qualities and functionality in restoring range of motion using PowerPoint presentations on DVDs and CDs.

There will be no additional costs incurred for this initiative beyond those described in the foregoing section.

Methods for measuring the effectiveness of the marketing communication methods. The same method will be used to measure the effective of both the collaborative as well as the autonomous communication strategies. A code will be placed on all marketing materials indicating which communication strategy was used and this code will be requested on the company's Web site or by sales representatives to identify the number of inquiries and referrals received and the time required to achieve these responses.