Mgmt 324 Sample Marketing Plan

Mgmt 324 Sample Marketing Plan - 82 The Marketing Plan...

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Unformatted text preview: 82 The Marketing Plan Handbook Marketing Plan Align Technology Inc. January 1999 - December 20001 1. Executive Summary The table of contents and the body of the marketing 2. Situation Analysis plah fhuow the structure 2.1. Company Overview Will-119d in Chapterfi 3-10- 22. Market Overview Section 2 offers an over- view of the company and 2.3. Target Customers the environment in Which it operates. It also identi— 3' Goal fies target customers 4. Strategy whose needs the company aims to satisfy with its 4.1. Target Market Ofiefing' 4.2. Value Proposmon Section 4 defines the key 5. Tactics (Marketing Mix) aspects of the target mar- ket (customers, collabora- 5. 1. Product tors, competitors, 5.2. Service company, and context) and develops a meaning— 5' 3' Brand ful value proposition for target customers, collabo— 5.4. Pricing raters, and the company. 5.5. Incentives Section 5 outlines the key 5.6. Commumcatlons aspects 0f the Offerings 5.7 . Distribution marketing mix that will carry out the. decided- 6. Implementation upon strategy. .1. I fr t t . . 6 n as we um Section 6 descnbes the implementation aspect of 6.2. Processes the offering. 6.3. Schedule Section 7 depicts the met— 7. Control . r1cs and processes used to 7.1. Performance Evaluation evaluate the company’s performance and the en- 7 2 nvnonmental Ana ys1s mmem m Wlmh 1t 0p 8. Exhibits crates. 1. Executive Summary Align Technology Inc. designs, manufactures, and markets the In- The executive summary visalign system, a new proprietary method for treating malocclu- 039“ 3 31199111“ Ovemew of the key aspects of the sion, or the misalignment of teeth. The Invisalign system corrects . . . . . offer-111g. malocclusmn usmg a sense of clear, removable apphances that gen- tly move teeth to a desired final position. The Invisalign system represents a significant technological ad- vancement in orthodontics. For patients, the Invisalign system of- fers superior aesthetics, improved dental health, and greater overall Chapter 11 Sample Marketing Plan for Launching a New Offering 83 convenience relative to conventional braces. For orthodontists, the lnvisalign system offers increased patient volume, higher margins, and reduced chair time compared to conventional braces. Our target customers are adults and adolescents with mature denti- tion who suffer fi'om malocclusion and are otherwise suitable for treatment using the lnvisalign system. This target group consists of approximately 65 million potential customers. Our long-term goal is to establish the Invisalign system as the stan- dard method for treating orthodontic malocclusion. We plan to turn a profit within three years of launching the lnvisalign system. We will begin commercial sales of the Invisalign system to orthodon- tists in July 1999 and plan to launch a national direct-to-consumer advertisement campaign in the second half of 2000. Because it ofiers a unique set of benefits, we believe that the In- visalign system will be well received by both orthodontists and con- sumers and will rapidly gain acceptance as the preferred method for treating malocclusion. This plan outlines our key marketing activities for the period J anu- my 1999 —— January 2001. Following successful implementation of this plan, we intend to take the company public in early 2001. ‘2. Situation Analysis 2.1. Company Overview Technology Inc. was incorporated in Delaware on April 3, 1997. Section 2.1 provides gen- The corporate headquarters are located at 851 Martin Avenue, Santa BT31 Mormation about Elara, California, 95050, where we house our manufacturmg, was the company’ Its goals! and resources (core com— mmer support, software engineering, and administrative personnel. petencies and Strategic We also operate two facilities in the city of Lahore in Pakistan. assets) We currently have 320 employees, of whom 120 are employed in the United States, with the balance employed in Pakistan. Our organiza- tional structure is outlined in Exhibit 3. Our management consists of e1) executive oflicers, (2) scientific advisory board, and (3) board of directors (listed in Exhibits 4—6). 'Our goal is to establish the Invisalign system as the standard method for treating orthodontic malocclusion. Our core competency is producing highly customized, close tolerance, medical-quality products in volume. Our strategic assets include intellectual prop- (prOprietary technology with pending patent application). We are currently building specialized production facilities, creating a network of orthodontists trained to use the Invisalign system, build- mg brand recognition, and creating an initial customer base. 84 The Marketing Plan Handbook 2.2. Market Overview 2. 2. I . Customers Malocclusion (misalignment of teeth) is one of the most prevalent Section 2.2.1 identifies an cal conditions in the United States, afiecfing more than 200 million 1111111913 01131301119? 119951 individuals, or approximately 75% of the population. Of those, ap- that the company ms to prommately two million peeple annually elect orthodontic treatment. fulfill with its ofl'ering. 2.2.2 Collaborators Individuals who elect to be treated for malocclusion are interacting Section 2.2.2 describes with two entities: (1) general—practice dentists, who typically diag- eFltllleS that mum Poten' - - - _ tially collaborate vvith the nose the problem and pI‘OVIde a referral to a spec1ahst, and (2) ortho- . . . . . . . . com an to fulfill the dentists who specmhze 1n treating malocclusmn. More Information (Justine); need identified on these two entities is provided below. in Section 2.2.1. - Dentists. General-pracljce dentists are certified to perform all oral health procedures, including orthodontics. Many general dentists, however, chose not to perform orthodontic procedures because of their complexity and the added risk of malpractice liability. There are more than 100,000 general-practice dentists in the United States. 1- Orthodontists. Orthodontists Specialize in treating malocclusions. Only board-certified orthodontists can refer to themselves as or- thodontists. This certification typically involves a two-year resi- dency after dental school. There are approximately 8,500 orthodontists in the United States. 2. 2. 3. Competitors The competition in the malocclusion market occurs on two levels: Section 2.2.3 describes between the providers of orthodontic services (e.g., orthodontists) Phefiumnimlélpfiestgrg and between manufacturers of orthodontic products that treat mal— m t 6 mar at e e y . . . th to d t- occlusmn (e.g., 3M Company, Sybron International Corporation, and 11:33:: 3229;01:1932? Dentsply International, Inc.) The providers of orthodontic services apply traditional techniques Because the Invisalign and principles of treatment deveIOped in the early 20th century. In System 0581‘s an entirely the United States, orthodontists treat malocclusion primarily with new meth‘j’d for” fiflfiflmg metal archwires and brackets, commonly referred to as braces. To customers needs that . . _ , has no competitors, the unprove treatment aesthetics, orthodontists occasmnally use ce- analysis focuses on the ramic, tooth-colored brackets or bond brackets on the inside, or lin- alternative means to ful- gual surfaces, of the patient‘s teeth. fill this need— , orthodontic services us- The average treatment takes apprommately two years to complete mg traditional braces. and requires several hours of direct orthodontist involvement, or chair time. To initiate treatment, an orthodontist will diagnose a ter, by tightening or otherwise adjusting the braces approximately every six weeks, the orthodontist is able to exert suficient force on the patient‘s teeth to achieve desired tooth movement. Because of the length of time between visits, the orthodontist must tighten the braces to a degree suficient to achieve sustained tooth movement during the interval. In a final visit, the orthodontist removes each bracket and residual cement from the patient's teeth. appealing lingual or ceramic alternatives. Fees are based on the dif- ficulty of the particular case and on the orthodontist's estimate of chair time and are generally negotiated in advance. Treatment that exceeds the orthodontist's estimate of chair time is typically covered by the orthodontist at no additional charge. and collaborators (ortho- dentists). 86 The Marketing Plan Handbook 2.2. 4. Context Laws regulating medical device manufacturers and health care pro- Section 2.2.4 ofi'ers a viders cover a broad array of subjects, including: 31111117118137 0f the context factors that concern the o The confidentiality of patient medical information and the cir- market defined by the cumstances under which such information may be released for 011313011191" Reads Outhned . . . ‘ 1 . , . in Section 2.2. For brev- mclusron m our databases, or released by us to thnd parties, are ity’ 0 my a subset of the subject to substantial regulation by state governments. State regulatory aspects of the laws and regulations govern both the disclosure and the use of context is included in thjs confidential patient medical information and are evolving rapidly. plan. .. 0 Provisions of the Social Security Act prohibit, among other things, paying or ofiering to pay any remuneration in exchange for the referral of patients to a person participating in, or for the order, purchase, or recommendation of items or services that are subject to reimbursement by Medicare, Medicaid, and similar other fed— eral or state health care programs. Most states have also enacted illegal remuneration laws that are similar to federal laws. These laws are applicable to the financial relationships with, and any marketing or other promotional activities involving, orthodon- tists’ customers. 0 Various states regulate the operation of an advertising and refer- ral service for dentists and may require registration of such ser— vices with a state agency, as well as compliance with various requirements and restrictions on how they conduct business and structure their relationships with participating dentists. 2.3. Target Customers Although we have clearance firom the FDA to market the Invisalign Section 2.3 identifies the system to treat patients with any type of malocclusion, we voluntar- 0113150319” to be memd . i . . . by the company’s offer- rly restrict the use of the lnv1sallgn system to adults and adolescents mg Nfite that the I t_ with mature dentition who are otherwise suitable for treatment. mg decision involves not We will not treat children whose teeth and jaws are still developing, as only mat Customers! but also those who are the efi'ectiveness of the Invisalign system relies on our ability to accu- not targeted rater predict the movement of teeth over the course of treatment. “— 3. Goal Our ultimate goal is to create value for our shareholders. Due to our Section 310utlines the national advertising campaign, the expansion of manufacturing ca- 9913133113” Slllfltmfiflfg €0,511 pacity, and continued research and development efforts, we expect to Wig a: :81: incur net losses for the next several years. We plan to turn a profit fies Ofs’ubgoals (Objec_ within three years of launching Invisalign. tives) focusing on . . . . . customers, collaborators, To achieve our ultimate goal, we have set the followmg objectives: the mmpany} and CORP 0 Customer objectites. Our key customer objectives are to create peumrs' awareness of the benefits of the Invisalign system among 20% of our target customers, stimulate their interest, and incite action leading to treatment using the lnvisalign system. Our goal is to have 50,000 patients initiate treatment with the Invisalign Sys- tem by the end of 2001. Chapter 11 Sample Marketing Plan for Launching a New Offering '- Collahorotor objectives. We aim to create awareness of the bene- fits of the Invisalign system among orthodontists, train them to use the system, and motivate them to promote it to patients as the standard method for treating malocclusion. Our goal is to cre- ate awareness among 90% of orthodontists and train 2,000 of them to use the Invisalign System by the end of 2001. I Internal objectites. We strive to constantly improve the proprie- tary technology that underlies our supply-chain management processes to enhance product quality, increase production capac- ity, and reduce both unit costs and production times. a Competitive objectives. Our primary competitive objective is to create barriers to entry for competitors. We will pursue further intellectual property protection through patent applications and non-disclosure agreements. We also seek to protect our proprie— tary technology under trade secret and copyright laws. 4. Strategy 4.1. Target Market 4.1.1. Customers Our target customers are adults and adolescents with mature denti- tion who sufler from malocclusion and are otherwise suitable for treatment using the Invisalign system. This group represents ap- proximately 65 million potential customers. Our proprietary research indicates that, based on the primary reason for treatment, there are two groups of target customers: (1) health con- scious and (2) appearance conscious. Health-conscious consumers are primarily concerned with strengthening their teeth for health reasons and are less concerned about their appearance during treatment. In contrast, appearance-conscious consumers are concerned about their appearance and might not select to undergo orthodontic treatment if it will afiect their appearance during treatment. These two segments are likely to difi'er in their preference for a treatment method. Because their primary concern is the health of their teeth, health-conscious consumers tend to rely on orthodon- tists’ recommendations for choosing the treatment method (tradi- tional braces vs. Invisalign). In contrast, appearance-conscious consumers are likely to approach orthodontists with a specific re- quest for Invisalign treatment. Health-conscious and appearance- conscious consumers are also likely to differ in their decision- making process. Health-conscious consumers first visit an ortho- dontist and only then select a treatment, usually following the or- thodontist’s recommendation. In contrast, appearance-conscious consumers are likely to choose Invisalign as their treatment method of choice based on Invisalign advertisements prior to visit- ing an orthodontist. Exhibit 8 provides additional information on the consumer survey. Section 4.1 follows the 5-0 framework Section 4.1.1 identifies the ofl'ering’s target cus- tomers. It summarizes the key aspects of the target segment outlined in Section 3.3., providing a detailed analysis of target customers. This section further iden- tifies two difi‘erent con- sumer segments that are likely to vary in their re— sponse to the Invisalign system. Note that the segmentation of custom- ers into appearance- conscious and health- conscious is later used to develop a segment- specific marketing mix, using a pull strategy for appearance-conscious consumers and a push strategy for he alth— mnscious consumers. 87 are U.S.-based licensed orthodontists. We expect orthodontists to cont 'bute to the success of the Invisalign ' ‘ ts about the availability and benefits of the Invisalign system, (2) immementing the Invisalign treatment, and (3) providing performance feedback that will enable us to im- prove the Invisalign system. Although dentists play an important role in informing patients key source of referrals to orthodontists, system available only to orthodon- the Invisalign system. In the bro that treat malocclusion, we are indirectly competing with 3M Comp any, Sybron International Corporation, and Dentsply International, Inc. Because the availability of the Invisalign system is likely to gener- ate new demand by attracting appearance-conscious consumers who would not otherwise choose an orthodontic treatment, we do not ex- urers of traditional pect an immediate response from the manufact roducts for malocclusion. However, over time we ex- pect the competition in this segment to increase with the emergence of new competitors with similar products. 4.1.4. Context In the United States, the FDA regulates the design, distribution, preclinical and clinical study, clearance, medical devices. The FDA classifies medical devices into one of three classes on the basis of the controls necessary to reasonably ensure target customem their safety and effectiveness. Class I or II devices require the manu- facturer to submit a premarket notification requesting permission for commercial distribution, which is known as 510(k) clearance. Class III devices, which are deemed by the FDA to pose greater risk than Class I and II devices, require FDA approval for a premarket ap— proval application which includes, among other things, extensive preclinical and clinical trial data and information about the design of the device and its components, manufacturing and labeling. The In- , the least stringent class, which uding labehng, premarket notifi- manufacturing, Chapter 11 Sample Marketing Plan for Launching a New Offering 89 4.2. Value Proposition Section 4.2 follows the 3-V framework 4.2.1. Customer Value 4.2.1.1. Value Proposition There is an unmet need among our target customers for a maloc- Section 4.2.1.1 outlines clusion treatment that eliminates many of the limitations of con- the key benefits fifthe ventional braces. Test market data presented in Exhibit 9 show Inmahgn Systemtotar' get customers. It answers that the Invisalign system ofl'ers a number of unique benefits to our the question: «Why would target customers: target customers opt to . . . . . strai hten their teeth 0 Excellent aesthetics. Ahgners are nearly mvrsnble when worn, the Invisahgn Sy8_ eliminating the aesthetic concerns associated with conventional tem?’ braces. Improved oral hygiene. Patients can remove Aligners when eat- ing, brushing, and flossing, a feature that can reduce tooth decay and periodontal damage during treatment. Greater safety. By replacing the six—week adjustment cycle of tra- ditional braces with two-week stages, the Invisalign system moves teeth more gently, decreasing the likelihood of root resorp- tion (shortening of tooth roots). Increased comfort. The lnvisalign system is substantially more comfortable and less abrasive than conventional braces. Reduced overall treatment time. The Invisalign system controls force by distributing it broadly over the exposed surfaces of the teeth while at the same time reducing the likelihood of unin- tended tooth movements. This could significantly reduce overall treatment time relative to conventional braces. Reduced incidence of emergencies. Lost or broken Aligners could be simply replaced with the next Aligner in the series, ing inconvenience to both patient and orthodontist. We believe that the combination of (1) superior aesthetics, (2) im- proved dental health, and (3) greater overall convenience will prove attractive to people who currently do not seek treatment because of the limitations of conventional braces. ' * ' Section 4.2.1.2 identifies «1.2.1.2. Posmonmg Statement 61: customers and the For adults and adolescents with mild forms of malocclusion, 111- main benefit of the In- visalign is the best treatment because it ofiers superior aesthetics, Vlsallgn System 130 these inlproved dental health, and greater overall convenience relative to cusmmers' It adopts a comparative frame, using conventional braces as a reference point. conventional braces. 4.2.2. Collaborator Value 4.2.2.1. Value Proposition (Orthodontists) We believe there is an unmet need among orthodontists for a treat- Section 4.2.2.1 outlines ment system, such as lnvisalign, that increases the predictability the k9}? benefits 0f the and eficiency of treatment and enhances practice profitability. 1:” 90 The Marketing Plan Handbook day workshop, and orthodontists can be equipped to submit cases immediately thereafter with minimal financial outlay. .ient base. Currently, less than one percent of the more than 200 million people with malocclusion in the United States enter treatment each year. The Invisalign system allows orthodontists to broaden their patient base by offering a new, at— tractive treatment alternative to people who would not otherwise elect treatment. 0 Higher nmrgins. The Invisalign system enables orthodontists to more accurately estimate the duration of the treatment, thus de- creasing the likelihood of underestimating the treatment length and increasing the overall profit margins per patient. Due to the substantial benefits to customers, orthodontists can also charge a premium for the lnvisalign system comparable to other more aes- thetically pleasing alternatives to conventional brace such as ce— - Decreased orthodontist and staff time. The Invisalign system re- duces both the firequency and length of patient visits. It elimi- nates the need for time-mtensive processes such as bonding appliances to the patient's teeth, adjusting archwires during the course of treatment, and removing the appliances at the conclu- sion of treatment. As a result, use of the Invisalign system signifi— cantly reduces orthodontist and stafi' chair time and can increase practice throughput. We believe the combination of (1) increased patient volume, (2) higher margins, and (3) reduced chair time will prove attractive to orthodontists because it has the potential to substantially improve orthodontic practice profitability. Section 4.2.2.2 . ' ' i the company’s mllabora-fi For orthodontists, the Invlsalign system is the best method for tors and the key benefi ' .. treating most cases of malocclusion because it ofi'ers increased pa— the 038m for these laborators. It uses a n. a: tient volume, higher margins, and reduced chair time relative to . . .. parat1vefi~ame, Wlth conventional braces. conventional braces % reference point. Chapter 11 | | | | { thy would _ t to use , tysz T ntional e The Invisalign system is a new method for treating mild forms of mal- occlusion that general-practice dentists can recommend to patients interested in an aesthetically nonintrusive orthodontic treatment. 4.2. 3. Company Value 4.2.3.1. Shareholder Value Proposition Our primary goal is to create value for our shareholders. Due to our Section 4.2.3.1 outlines national advertising campaign, the expansion of manufacturing ca- the Value Of the Ofiefing I . . to the company. Because panity, and continued research and development efi'orts, we expect to the key aspects ofmm_ l l i l w i i I l in the company’s goal, this section restates the . . . _ , goal outlined in Section 3. 7‘» e earn revenue pnmanly from the sale of our Inwsalign system, which consists of the ClinCheck fee and a per-Aligner fee. Our per- This section ouflines the :nstomer revenue is $1,180 and our per-customer gross profit is key benefits of the In- ' 75. With a market potential of 65 million customers, this implies “3311811 3373th ‘30 Shal‘e' . . . . holders. It answers the potential sales revenues as high as $75 billion. question: .Why Should shareholders invest in Invisalign instead of pur- suing other mvestment its sustainability. Section 4.2.3.2 identifies target investors and the 1 :1 :4 I iv 1 @133. Ex utive Co satio I so mpen n i a _ __'_ l-tflmpensation schedules for our executive oficers, scientific advi- W‘th .‘ board, and board of directors, as well as the composition of the imtive compensation committee are disclosed in Exhibit 7.. ,t, 92 The Marketing Plan Handbook 4.2.3.4. Employee Compensation Our full-time employees (excluding the sales in two ways: salary and stock options. Salaries are competitive with _ p t on performance . . . . . . 1111 ac ’ the high end of comparable posmons Within the mdustry. The stock employee compensation options are based on seniority with the company. We also ofler full is an mportant compw insurance benefits to all full-time employees efiective the day they ment in defining an ofl‘er- begin work. ing’s value proposition. Because sales force com- pensation constitutes a substantial part of the cent salary, 15 percent commission, and 25 percent bonus structure. 017913311 employee 831389- dltures and has a dJStlllCt Salaries are competitive with the high end of comparable positions ti n m within the industry. Commission is a function of the number of 82d 3038: "p; cases submitted and bonuses are based on nonsales objectives, such rate section. For many as number of workshops conducted for orthodontists. The compen- companies, sales force sation structure also includes a company car, stock options based on COHIPBIISEIUOII 13 one Of seniority, and fqu insurance benefits. the large“ BXPGHSBS- 5. Tactics 5.1. Product The Invisalign system is a proprietary new method for treating mal- Section 5.1 outlines the occlusion. It consrsts of two components: ChnCheck and Ahgners. Pdelct 38139“ Of the 111' Visahgn system. 0 ClinCheck is an mteracfive Internet application that allows or- thodontists to diagnose and plan treatment for their patients. ClinCheck uses a dental impression and a treatment prescription The ClinChBCk applica' submitted by an orthodontist to develop a customized, three- tion can 3130 be Viewed 3-5 a part of the service as— dimensmnal treatment plan that ‘sunulates appropnate tooth peat of the Inmahgn SW? movement m a series of two-week mcrements. ClmCheck allows hem (orthodgnfists do mt the orthodontist to view this three-dimensional simulation w1th a acquire the rights to the merely gain the right to use it on a limited basis); however, because it is an essential component of simulation. Upon the orthodontist's approval of the ClinCheck creating the product Simulation, the data underlymg the Simulation are used to manu- (AligneI'S). it is Presented as a component of the facture the atient’s Aligners. p product aspect of the of- - Aligners are custom-manufactured, clear, removable dental ap- fering. pliances that when worn in the prescribed series provide ortho— dontic treatment. Each Aligner covers a patient’ s teeth and is nearly invisible when worn. Ahgners are commonly worn in pairs (over the upper and lower dental arches) for consecutive two- week periods that correspond to the approved ClinCheck treat- ment simulation. After two weeks of use, the patient discards the Aligners and replaces them with the next pair in the series. This process is repeated until the final Aligners are used and treat- ment is complete. The typical Invisalign system patient uses 22 sets of Aligners over 44 weeks of treatment. Detailed product specifications are provided in Exhibit 10. . .I._ ___ I . ____ I . _ _ . 1- -'|-' nu' " .- ".- .-._ - 'J H I I _ .. ,': . - _l'._l —" |_- I __ I .1” IL.- - r+.- .-.---l . I H. . . 1 . I __ 1 I I r .-Iaer-ne filiafi Chapter 11 5.2. Service We ofi'er support services to orthodontists who elect to use the In- Sample Marketing Plan for Launching a New Offering 93 Section 5.2 outlines the visalign system. These services include initial training, assistance “Lie-MOE aspeflt 0f the 111' with current cases, and practice-building assistance. visalign system, focusing on the service provided to 0 The initial training is conducted in a workshop format by our OrthOdQfltiStS 118mg the sales and orthodontic teams. The key topics covered in training Inmahgn SYStem- include case selection criteria, instructions on filling out the In- visalign prescription form, guidance on pricing, and instructions on interacting with the ClinCheck sofiware and using the In- Visalign website. I- The practice-building assistance helps orthodontists promote their services to local general-practice dentists and to prospective patients through direct mail or other media. 5.3. Brand We use two brands to diflerentiate our offering: ClinCheck and In- visalign. ClinCheck name is our registered trademark. It Invisolzlgn. We use the brand Invisalign in reference to the proc~ ass of straightening teeth using a series of invisible Aligners. We use the Invisalign brand in our communications to consumers, or- thodontists, and general-practice dentists. We have filed applica- tions for several relevant trademarks with the US. Patent and Trademark Oflice, including Intisalign and Invisalign system, as well as the Invisalign system logo. Our brand identity marks are illustrated in Exhibit 11. 5.4. Pricing The price for the orthodontic treatment is negotiated by the ortho- dontist and the patient. We expect the average retail price for the orthodontists’ services (including Aligners) to be around $5,000 to $7,000 depending on the severity of the case. Align Technology charges orthodontists $300 for the setup fee and $20 for each Aligner. The ClinCheck fee is invoiced when the ortho- dontist orders ClinCheck prior to the production of Aligners. The fee for Aligners is invoiced when we ship them. The average cost of the Aligners to orthodontists is about $1,180 per patient (assuming a course of treatment consisting of 22 pairs of Aligners at $20 each and a setup fee of $300). \ Section 5.3 outlines the brands used by Align Technology to create a unique identity for its offering. Note that while both brands—ClinCheck and Invisalignhare promoted to orthodontists, only the latter is used in con- sumer communications. Section 5.4 outlines the price of the Invisalign system for both patients and orthodontists. Note that the Invisalign system is only one com— ponent in the malocclu- sion treatment provided by the orthodontist. Align Technology does not determine the retail price of the treatment, but only the price for or- thodontists. 94 The Marketing Plan Handbook 5.5. Incentives We ofi‘er incentives to both our target customers and collaborators. Section 5.5 outlines the ince ntives provlded to I Incentives for customers. Because the Specifics and cost of the target customers and treatment are negotiated directly between the orthodontist and collaborators. the patient, we are not ofl'ering direct incentives to consumers. - Incentives for orthodontists. We use a system of tiering orthodon- tists that encourages our sales force to devote more time to those orthodontists most proficient in the use of the Invisalign system. We use objective criteria, primarily the number of cases initiated with the Invisalign system, to tier orthodontists. Inquiries from prospective patients through our customer call center and our website are directed to higher tier orthodontists. This tiering process should incentivize the selected orthodontists, rapidly in- creasing the use of the Invisalign system by their offices. 1* Incentives to general dentists. We have no immediate plans to of- fer mcentives to dentists for referring potential Invisalign pa- tients to orthodontists. 5.6. Communications 5. 6.1. Consumer Communications Consumers can learn about the benefits of the lnvisalign system in one Section .6. 1. outlines the of three ways: (1) directly from us, (2) from orthodontists, and/or (3) mmmumcatmns to 13313913 from general-practice dentists. Accordingly, we use two basic strategies customers ‘ to reach our target customers. We use a pull strategy (direct-to- Note that the use Ofpun consumer communications) to target appearance-commons consumers VS. push Strategy in the who might not consider orthodontic treatment unless they are made case of djrect VS_ indjrect aware of the existence of an aesthetically appealing malocclusion communications follows treatment. In addition, we use a push strategy (informing and inoentiv- (Emilyfi'om 13119 @3913 izing orthodontists and dentists) to target health-conscious consumers $931091??? T13 57818 m who rely on orthodontists’ advice for the choice of treatment. 1- Direct-to-consumer (pull) communications «- Media. We promote the Invisalign system by communicating its benefits directly to consumers with a nationwide television and radio advertising campaign. We also provide consumers with formation on the lnvisalign system through our toll-free phone line (1-8-00-INVISIBIE) and our website (invisaligncom). The content of the mes- - Message. Because the direct-to-consumer campaign targets ap- . . sage to target customers pearance-conscmus consumers, our message Will focus on the aes- follows djrectly from the thetic benefits and the overall convenience of using the Invisalign value proposition and the system. positioning statement outlined in Section 4.2.1. RE 3 1- Slogan. Our slogan is “Clear alternative to braces.” - Indirect (push) consumer cornnmnications. To facilitate recom- mendations of the Invisalign system, we provide orthodontists and general-practice dentists with promotional materials that in- clude brochures, calendars, and posters to be displayed in their of- fices and/or given to patients who express interest. @EEEEQEEEQ Chapter 11 Sample Marketing Plan for Launching a New Offering 95 Additional information on our consumer communications is pro- nes the vided in Exhibit 12. ded to i t s and 5. 6.2. Colloborotor Communicottons 5 6 2 1 Communications to Orthodontists Orthodontists can learn about the Invisalign system from our mass Section 5 6 2 1 outlines media consumer advertismg as well as from our communications $9 00111133111113??? ‘70 - - e primary co 3 ra- targetmg orthodontists. mm Unhodonmts I» Media We use print advertisements in professional press target- ing orthodontists, event sponsorship for orthodontic conventions and conferences, as well as direct mail and telemarketing target- ing mdividual orthodontic practices. In addition, we have a sales team comprismg apprommately 30 saleSpeople experienced in or- thodontic product sales It Message. Our message focuses on the potential to substantially The content of the mes— iinprove orthodontic practice profitability through increased pa- $329 Dri?0dfi?0nflit§ f01- I. 1 s I .- . 1 I. yr '- m e t1ent vo ume, higher margins, and reduced chair time valuedupmecposmon and the Additional information on our communications to orthodontists is positioning statement profided in Exhibit 13_ outlined in Section 4.2.4. 5.6.2.2. Communications to General-Practice Dentists 31133? that General-practice dentists can learn about the Invisalign system Section 5.6.2.2 outlines arge from our mass-media consumer advertising, as well as fi‘om our tile mmmumcatlons t0 communications targeting orthodontists. t e éemnd'tler 0011.3“ 3' tors. ge neral-p ractioe 33 Pf Pun I Media. We use print advertisements in the professional press dentists. t targeting general-practice dentists, event Sponsorship for dental S fonows conventions and conferences, as well as direct mail targeting in- . 8 target dividual dental practices. 37818 m 1 Message Our message focuses on the benefits to the consumer The content of the mes- We beheve that the ability to provide more options to patients Will sage to general-practice increase patients’ sausfaction, thus indirectly creating value for (1911111553 fellows melt“le the dentist from the value propose ‘ tion and the positioning Additional information on our communications to general-practice statement outlined in dentists is provided in Exhibit 14. Semen 42.6. 5.7. Distribution .. the meg- The Invisalign system is distributed exclusively through orthodon- Section 5:7 outlines the ustomers tists and is not available for retail purchase by consumers directly (313‘??b1}t10¥1 Channel for from the from Align Technology. Only orthodontists are authorized to use the the “mahgn Sys'tem' 3“ and the lnvisalign system; it is not available to general-practice dentists. . ' :ement . . The description of the I him 4 2'1! Orders are processed through headquarters and shipped in batches dismbution Channel directly to orthodontist ofices from the manufacturing facilities in 1dent1fies the means by I . . . . ' recess of deliverin the air-month intervals until treatment is complete. Emduct to orthodflniists' Section 6.1 outlines the manufacturing and ser- vice infrastructure neces— sary for implementing the marketing plan. packaging of Aligners to a Mexico. We recently expan Santa Clara, California, together totaling ap square feet, which serve as our manufacturing headquarters. telephone support to handle information requests We outsource the al call center operator. and orthodontist referrals to a large nation 6.2.. Processes namission of treatment data to us. ing plan. orthodontist determines whether the Invisalign system is an appropriate treatment. The orthodon- tist then prepares treatment data that consists of an impression of the dental arches, x—rays of the patient‘s dentition, photographs of the patient, a wax bite depicting the relationship between the patient's upper and lower dental arches and an Invisalign system treatment planning form, or prescription. The prescription is a critical component, describing the desired positions and move- ment of the patients teeth. The orthodontist sends the treatment data to our Santa Clara '- Heparation of three-d' initial mlocclusion. Upon receipt, construct plaster models of the patients 0 Heparation of computer-simulated treatment and mowing of treatment using ClinCheck. In Pakistan, we transform the model into a customized, three- Chapter 11 Sample Marketing Plan for Launching a New Offering 97 make adjustments. At this point. the orthodontist may invite the patient to review ClinCheck, allowing the patient to see the pro— jected course of treatment. The orthodontist then approves the proposed treatment and, in doing so, engages us for the manufac- ture of corresponding Aligners. Constmction of molds corresponding to each step of treatment. We use the approved ClinCheck simulation to construct a series of molds of the patient's teeth. Each mold is a replica of the patient's teeth at each two-week stage of the simulated course of treat- ment. These molds are fabricated at our Santa Clara facility us- ing custom manufacturing techniques that we have adapted for use in orthodontic applications. I Manufacturing ofAligners and shipment to orthodontist. We ship these molds to Juarez, Mexico. where our contract manufacturer fabricates Aligners by pressure forming polymeric sheets over each mold. The Aligners are then trimmed, polished, cleaned, packaged and, following final mapection, shipped directly to the prescribing orthodontist. 6.3. Schedule We are currently engaged in the design, manufacture. promotion. Section 6.3 outlines the and distribution of Invisalign. In July 1999, we plan to commence 891391114119 fifth? 14?)? 30- * - - - tl‘VltleS Involved in un- pleme nting the marketing plan. teams. We hope to exit the development stage in July 2000. Our im- plementation schedule is outlined in more detail in Exhibit 15. 7. Control 7.1. Performance Evaluation We are constantly monitoring our financial performance to ensure Section 7 .1 outlines the that we are on track toward achieving our goals. The key financial key memes “Sad to ,_ measure the progress metrics reflectmg our perfmmance include net revenues, sales revs toward the goal defined in Section 3. 7.2. Environmental Analysis Our ability to sustain growth relies on our ability to respond to Section 7.2 outlines the changes in customer preferences, changes in our internal resources 13190935 0f monitorijflg for and competencies, changes in the value the Invisalign system deliv- fnhjligfif ers to our collaborators (orthodontists and general-practice dentists), _ _ i * pany operates. changes 1n the competitive landscape (e.g., entrance of new competi- tors), and changes in the economic, sociocultural. technological. regulatory. and physical context in which the company operates. 98 The Marketing Plan Handbook 8. Exhibits Exhibit 1: Financial statements and projections Section 8 includes the exhibits used to support Exhibit 2: Key assumptions djfferent aspects of the Exhibit 3: Organizational structure marketing plan (for brev- ity, the actual exhibits Exhibit 4: Senior management are mt included in this Exhibit 5: Board of directors plan)- Exhibit 6: Scientific advasory board Exhibit 2 outlines the Exhibit 7: Executive compensation key assumptions used in developing the marketing Exhibit 8:. Consumer survey plan. In cases when the marketing plan is used to Exhibit 9: Test market data develop the S 1 form for Exhibit 10: Product specifications an pubhc Ofiemg (1P0), these assumptions Exhibit 1 1: Brand identity ' ‘ . . . . translate mto the risk Exhibit 12: Consumer communications factors to the pmposed Exhibit 13: Communications to orthodontists 131191111353 mOdeL Wthh 15 . , , an mtegral component of most IPOs. 5.35131 53 not be used as a primary source of information for its ofi'erings. This marketing plan is largely based on the 5-1 registration statement for the initial public offering of Align Technology Inc... as filed with the Securities and Exchange Commission on November 14, 2000. Some of the information in Section 2.2.2. is based on Invisolign: Orthodontics Unwired (2004) by Anne fl F IE u u m & an fl-E'flElQ-E'fl S ...
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Mgmt 324 Sample Marketing Plan - 82 The Marketing Plan...

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