Biomedical Engineering Reference
In-Depth Information
Sales and distribution is a great challenge for companies in small markets.
Mainstream products in large markets typically use large-scale distribution
channels (e.g., nation-wide drugstore chains for simple crutches and canes).
A company selling a product in a large market can usually target sales chan-
nels, each with many outlets, all handled by a single representative. On the
other hand, a company selling a product in a small market must establish
relationships with distinct retail outlets in each geographical region - this is
a considerably more expensive and time-intensive process than is required in
larger markets.
11.1.2 AT-Specific Obstacles
Issues related more specifically to the AT industry include (1) additional
people in the supply chain, (2) education and training, (3) regulatory issues,
and (4) sales support and ongoing servicing and maintenance.
The supply chain of many businesses (e.g., bicycles) includes the manufac-
turer, distributor, retailer, and customer. The AT industry (e.g., wheelchairs)
also includes the clinician or prescriber as well as the funder. The process of
purchasing an AT device often takes several months and includes many people
besides the customer: a clinician and/or therapist, a funding agency repre-
sentative, a dealer salesperson, and possibly a manufacturer's representative.
A company introducing a new product into this group must educate and
train many people to promote product sales effectively. The more innovative
and different that product is, the more dicult the educational effort will be.
Furthermore, industry professionals often act conservatively when faced with
new products, preferring to recommend established companies and products
until the newer products have been proven over time. This pattern exacer-
bates two diculties for small market companies: long periods of time with
low revenues and the burden of sales education. Low revenues make it dif-
ficult to support the sales and education efforts. The burden of education
is even greater when an innovative product must break into a market com-
prised of united force (e.g., many competitors all selling the same type of
competing product) - a dicult situation for any company. Even if the com-
pany successfully completes the hard work of proving an innovative product
and establishing its market niche, it is entirely possible that larger competi-
tors may then enter the maturing niche market with significantly reduced
risk. The payoff of the innovating company's efforts could be claimed by its
mainstream competitors.
Most AT devices are developed and funded based on medical necessity.
Since medical devices typically fall under the jurisdiction of the FDA or its
equivalent, most AT devices are required to pass a regulatory hurdle, another
expensive and often time-intensive requirement. In the case of wheelchairs,
