1.

Assess Medtronic’s decision to develop and market the new Champion heart pacemaker
in terms of the following reasons for new-product success: (a) “point of difference,” (b)
market attractiveness, (c) bad timing, and (d) economic access to doctors and patients

Points of Differences

A distinctive point of difference is the single most important factor for a new product to
defeat competitive one is having characteristic that deliver unique benefit to the user. From the
case study, the differences of Champion heart pacemaker are low price, simple structure, and
high quality. These correspond with the needs which Hooper listened from Chinese doctors and
patients, leaded Medtronic to success.

Market Attractiveness

The ideal market attractiveness is large target market with high growth and real buyer
needed. Based on the case study, the population of China has 1.3 billion. 4000 patients a year
are implanted with pacemakers. These people are the minority and the most of patients cannot
afford a highly priced pacemaker. These population are higher than the population of Germany
and French combined. There are more people who can have $2000 in disposable income in
coastal cities. This attractive market led Medtronic to succeed.

Bad Timing

Bad timing results when a product is introduce too soon, too late, or when customer tastes
change dramatically. From the case study, Medtronic does not have a manufacturing plant or
sales force distribution system. They need experienced heart surgeons. They have developed
their Champion pacemakers but it is a bad time to sell them in the Chinese market. They
equipped the sales people with proper knowledge of the cheaper pacemaker before selling it.
This leaded Medtronic to succeed.

Economic access to doctors and patients

From the case study, by talking with doctor and patients and researching the market prices,
Medtronic could set an attractive price which is desired by doctors and patients. Since the
pacemaker is implanted in many patients, the price is very low. This led Medtronic’s sales
increased. This decision of price led to Medtronic to succeed.
 2. Discuss the step in new product process as they relate to the Champion pacemaker.

New Product Development (NPD) is the total process that takes a service or a product
from conception to market. New or rebranded products and services are meant to fill a
consumer demand or an opportunity in the marketplace.

Idea Generation and screening

The new product idea need to come out from some sources. Therefore, for the idea of
new product it start with gather information as much as possible from employee, competitors
and customer. Employees should be encouraged to suggest new product ideas through
suggestion boxes. From the employee, the information will be gather by presenting the option
for new product for the company and let them choose which of the product should be created as
the new product. Based on the case study, the Griffin interviewed a number of Chinese
Physician. They wanted a highly reliable, basic pacing device that would allow them to serve
more people in need. From that idea for the new product is created.

The purpose of idea screening is to try avoid mistake in the early development process.
Idea screening process to identify the good one and drop the bad one. The company will select
the one that will bring profit. In idea screening, the company will try to evaluate the new offering
product such as thinking whether the product can be made within a stated time period to get it to
market when needed. The company will choose the best idea and the idea that follow the
criteria for the new product. Based on the case study, to meet Bobby Griffin’s audacious goal,
Medtronic chose its Champion pacemaker, a simplified version of the company’s existing pacing
system that could met specification of cardiologist in China. Mechanical engineering design
manager Bill Hooper had been supported the Champion pacing system through Quest, a
special engineer who want to develop project that wouldn’t otherwise receive funding. They
wanted to reduce the cost to make it affordable in Chinese market. By using a proven pacing
lead were able to save substantially.

Concept development and testing

To go on in the new product development process, attractive ideas must be developed

into a product concept. A product concept is a detailed version of the new-product idea stated in
meaningful consumer terms. As for the Champion pacemaker, the idea has passed the idea
screening and must now be developed into a concept. The marketer’s task is to develop this
new product into alternative product concepts. Then, the company can find out how attractive
each concept is to customers and choose the best one. Based on the case study, the product
concept for the Champion pacemaker is radical cost reduction in product design. The feature of
the product is high quality, low cost and ease of use. One of the important part of Champion is
the lead wire that was needed to flex whenever patient breathe, their heart beats or they moved.
They choose the best lead that had the best reliability. The design also did not include more
complex.

New product concepts, such as those given above, need to be tested with groups of
target consumers. The concepts can be presented to consumers either symbolically or
physically. Concept Testing is the investigation of potential consumers' reactions to a proposed
product or service before introducing the product or service to market. As businesses and
organizations look to launch a product or invest in the development of an idea, concept testing
is a valuable step to identify perceptions, wants and needs associated with a product or service.
Based on the cased study, in February 1995 the design of the product is completed and the
product had been tested.

Marketing strategy

The next step in the new product development process is the marketing strategy
development. When a promising concept has been developed and tested, it is time to design an
initial marketing strategy for the new product based on the product concept for introducing this
new product to the market. Based on the case study, the marketing strategy for the Champion
pacemaker is the product itself. The feature of the simplified product that ease the use of
Chinese physician and highly reliable. Besides that, the affordable price of the product as they
target to serve the people with reliable product.

Business analysis

Business analysis is when the company analyses the new product and estimate whether
the new product will be financially worthwhile to the company. If yes, the product will move to
product development. The business analysis review the product sales, cost and profit to see if
they can meet company objective. According to Claessens (2015), in order to estimate sales,
the company could look at the sales history of similar products and conduct market surveys.
Then, it should be able to estimate minimum and maximum sales to assess the range of risk.
When the sales forecast is prepared, the firm can estimate the expected costs and profits for a
product, including marketing, R&D, operations etc. For the new Champion pacemaker, the
company can analyses whether they have enough resources for the product such as labor and
material. Besides, the company can estimated the sales by calculation the breakeven of the
product.

Product development

The new product development process goes on with the actual product development. Up
to this point, for many new product concepts, there may exist only a word description, a drawing
or perhaps a rough prototype. But if the product concept passes the business test, it must be
developed into a physical product to ensure that the product idea can be turned into a workable
market offering. In this stage, the R&D will develops the product concept into physical product.
The prototype of Champion pacemaker will clearly run through the desired test and be
presented to target audience to see if changes need to be made.

Commercialization

Commercialization is the stage in which the product is introduced to the target market.
All the data obtained throughout previous stages of this approach are used to produce, market
and distribute the final product to and through the appropriate channels. The product is now
available to everyone and the "product lifecycle" begins. The life of the product is shaped by the
reception of the target market, the competition and subsequent enhancements to the product
offering. Based on the case study, in order to ensure the quality control, Medtronic directly
involve with in production and selling process. Over the three year, Hooper made 19 trip and
Ron Meyer, vice president of pacing group made 26 trip. They reported to each other via email
and telephone. From that, they can identify the challenge and solution need to overcome it.
4. Relate Medtronic’s decision to sell pacemakers in China to its corporate mission statement.
How does the decision relate to these Medtronic stakeholders: (a) shareholders of Medtronic
stock, (b) Medtronic employees, and (c) Chinese patients?

Based on the case study, the mission of the Medtronic is to contribute to human welfare by
application of biomedical engineering in the research, design manufacture and sale of the
instruments or appliances that alleviate pain, restore health and extend life.

a) Shareholder of Medtronic Stock

For shareholder of Medtronic Stock, they typically receive declared dividends if the company
does well and succeeds. The Medtronic’s decision to sell pacemaker in China will bring profit to
company as well as shareholder. This change is going to give the shareholder a chance to have
significance growth in their profit, along with satisfaction of owning a part of the world’s best
pacemaker company. They will become satisfied if the pacemaker selling well in the market
because they will receive the benefit as well.

b) Medtronic employees

It will give the employees the pleasure to say that they are the ones that creating these
pacemakers that are helping out China in many ways. The employee will become proud working
at the company because they feel like they also contribute and play major role in order to make
the new product successful. Especially the employee who involved in producing and designing
the product, it will give the satisfaction if they see that their product can help many people in
China.

c) Chinese patients

The company is staying true to their mission objective by helping people in need by producing a
pacemaker at much more affordable price range. The Chinese patient will be happy because
before this some of them are not afford to use and buy the pacemaker but with this new
simplified and cheaper pacemaker, many Chinese patient are able to take care of their health
and extend their life.