Creating Growth in a Mature Market


Situation: For one of the top pacemaker manufacturers in the world, growth had flattened in a very mature category. Despite producing technology leading pacemakers, new growth was elusive for Medtronic Italy. Several factors impacted this:

  • Health care was funded and controlled by the government, which had fixed budgets.
  • Hospital administrators (the buyers) perceived all pacemakers to be alike; they had no knowledge of or relationship with manufacturers and their devices.
  • Doctors began to view pacemakers as “yesterday’s technology”—they wanted to spend more time on patients who needed more sophisticated devices such as those for heart failure.
  • Competitive parity on the sales and service side meant that all pacemaker manufacturers offered comparable services and expertise.

Core Strategy Group’s Approach: We quickly recognized that the client needed to develop a strategic approach that would reenlist the support of doctors and, simultaneously, create new interest among buyers. To accomplish this, we focused on creating a growth-oriented strategy; we then determined how to position our client and provided the activation guidance to make it a reality. Our recommendation was bold and risky—to create a new pacemaker category by positioning Medtronic as a premium priced pacemaker manufacturer—a space that they could fully own. This enabled Medtronic to combine their cutting-edge technology and service expertise as well as earn higher margins for them. This new “Pacing Solutions” market allowed our client to participate in the traditional pacemaker market while creating demand for higher value, premium-priced products and services. In so doing, we positioned our client above the current market while positioning competitive devices as “all the same.”

Results: Despite flat category growth overall, sales increased by 5% and profits grew by double digits. In fact, growth is up 16% and 9.2% in the two highest segments alone. By developing and owning this new category, Medtronic Italy has been able to achieve healthy, profitable growth in the pacemaker business and distance itself from the competition.

The Core Strategy Group Difference: The problem that most companies face is that while markets have changed fundamentally, the practice of marketing has barely changed at all. Core Strategy Group combines traditional business focused marketing discipline with the aggressiveness and drive of an insurgent strategic model. It is a model built for clarity, speed and impact. This is the new model for companies who are serious about improving their market performance, revenues, share and return on marketing investment. It provides the most effective way for any organization to compete—and win.