MARKETING Case Studies in Engineering Management Tamara Brown

MARKETING Case Studies in Engineering Management Tamara Brown April 18, 2007

ENGINEERING MANAGEMENT n Solving a problem well n Solving the right problem

TODAY’S DISCUSSION n n Choice of Topic: Automated External Defibrillators Approach n n Practical Lessons n Major Findings Impact of Study

TODAY’S DISCUSSION MARKETING ISSUES The sa me att ent detail and th ion to oro approa ch app ugh engine lied to “prob ering le engine ms” give mindse ers an ideal t to marke investigate ting is sues.

THE “PRACTICAL PROBLEM”

AUTOMATED EXTERNAL DEFIBRILLATORS n n News/ press coverage indicates a rapidly growing market Interest of new medical group Past career involvement with semiautomatic defibrillators Good fit with need for learning opportunity/ independent study project

APPROACH Various managers at my company n Who is audience? n Informing… Conveying an overall view of the market What information am I trying to convey? n Recipients will have better What will people do/understanding of the market learn as a result of and will be able to decide if there is any opportunity for this study? commercialization.

ORIGINAL PLAN Market Study: Automatic External Defibrillators 1. History and Evolution of/ Need for Cardiac Defibrillators 2. State of Market Today 3. Kinds of Cardiac Defibrillators (Overview of Three Main Types) - Differentiation, Users, Major Manufacturer, Examples 4. Focus on Automatic External Defibrillators - Manufacturers and Product Offering 5. Focus on Automatic External Defibrillators - U. S. Cost Information and Purchasing Patterns 6. Technology Assessment/ Product Differences Among Selected Suppliers/ Types 7. Emerging Opportunities for Automatic External Defibrillators - Market Trends/ Where Market is going, New Technology Developments or Potential Needs - Impacts (Legal, societal), Enablers and Potential Impact/Requirements 8. Key Resources (ex. Industry Associations, etc. ) 9. Summary

MARKET STUDY Automated External Defibrillators

History of Defibrillation n n n Initial efforts in dogs in 1899 by J. L. Prevost and F. Batelli (France) First U. S. work by Con Ed and Johns Hopkins in 1920 s Case Western Reserve University in 1930 s and 1940 s First open heart defibrillation: 1947 First non-invasive defibrillation: 1955 Later efforts: portability, lower energy

Need for Cardiac Defibrillation n n Heart-related disease is the leading cause of mortality in the United States. Sudden cardiac arrest causes 250, 000 deaths annually n n n due to change in heart’s electrical system most common cause is ventricular fibrillation (VF) treatable by cardiac defibrillation

Defibrillation Single greatest “determinant of survival”

Types of Defibrillators n n Implantable (Internal) External n n n Hospital Portable Automated External Defibrillators

Automated External Defibrillators n n Growing rapidly Three major manufacturers n n n Medtronic Philips Cardiac Sciences

Key Characteristics of Currently Marketed AEDs

Use of AEDs n n 30 % of Ambulances in US 15 % of Emergency Fire Units 2 % of Police Vehicles Training is relatively simple and inexpensive.

Enablers n n n Community Access to Emergency Devices Act Cardiac Arrest Survival Act Aviation Medical Assistance Act n n n Occupational Safety and Health Administration American Heart Association (AHA), American College of Emergency Physicians

Future Direction n n Medical Use Commercial Use Home Use Public Access Defibrillation *

Public Access Defibrillation n Rapidly growing segment Several studies in major airports (Midway and O’Hare) Effectiveness of minimally trained users based on sixth graders

Patent Review CATEGORY NUMBER OF PATENTS User-Directed Prompts Battery Related Charging Mechanism Casing for Device and /or Components Defibrillation Mechanism or Timing Energy Reduction/ Energy Control Training/ Self-Test/ Simulator Algorithm/ Rhythm/ Monitoring Alarm/ Response System/ Data Transfer Lead / Electrodes 1 3 4 4 4 5 6 7 8 9

Future Developments · · · Ease of Use: Public use demands the need for even simpler operation. Lightweight/ Easy to Carry: Most AEDs weigh under ten pounds, in the range of three to seven pounds. Miniaturization continues to be an important focus for these products. Improved Recognition of VF rhythm: AEDs will almost always – 90%-- shock in instances of VF and will rarely, if ever, deliver a shock in non-VF cases. Improved detection of rhythms can only help to improve safety as needed for widespread public and home use.

BACK TO THE “PRACTICAL PROBLEM”

SUMMARY OF MARKETING STUDY n n n Automated external defibrillators are a fast growing segment of the medical device market. Revenue from AEDs is expected to grow from $489 million in 2001 to $1 billion in 2012. This growth is partly based on the expansion of public access defibrillation. The escalation may also offer an opportunity for complimentary emergency products which may provide significant revenue.

USE OF MARKETING STUDY n n n Automated external defibrillators are a fast growing segment of the medical device market. Revenue from AEDs is expected to grow from $489 million in 2001 to $1 billion in 2012. This growth is partly based on the expansion of public access defibrillation. The escalation may also offer an opportunity for complimentary emergency products which may provide significant revenue. Possible new directions, new engineering problems to solve… Possible growth for the company

MAJOR “TAKE-AWAYS” n n n The final product may not be exactly the same as the original plan…. . OK! Proper management of rapidly changing data is key. Process for approaching marketing study: (Does this process sound familiar from Dr. Barnes’ lectures? ) The same as other endeavors; apply the same techniques.

Thank you!