Situation
Our client, a Fortune 500 medical device manufacturer, was evaluating its sales strategy for a line of products sold exclusively in Eastern Europe. Our client was losing market share to an established competitor that had recently entered the region; the competitor was realizing double-digit growth while our client’s sales remained flat over a two-year period. In order to prepare an effective competitive response, our client required an analysis on the competitor’s distribution partners, sales strategy, and marketing initiatives.
Methodology
Maia Strategy first needed to identify the competitor’s contracted distribution partners throughout Eastern Europe. This required extensive research with pharmacies, hospitals, and medical providers throughout the area. Maia Strategy determined that there were three main distributors operating in Hungary, Poland and Russia. Maia Strategy then conducted extensive primary research on these distributor relationships.
Analysis
Maia Strategy determined that the competitor was selectively choosing a single distribution partner per country. Each distributor was responsible for developing the sales and marketing strategy for its designated country. While the manufacturer provided financial marketing support, each distributor was given significant autonomy to make decisions on target customers, messaging, and marketing activities. Distributors developed materials in native language, and leveraged personal account manager relationships to expand the competitor’s presence. This model proved to be successful, as the distributors truly understood the local markets and the marketing/messaging that would resonate best within those markets.
Impact
Based upon the findings, Maia’s client reevaluated its strategy in Eastern Europe. Prior to the study, Maia’s client utilized a “general” approach to Eastern Europe, with sales and marketing materials developed at company headquarters, with little differentiation by country. The client decided to implement a country-specific approach, working closely with local distributors and marketing agencies to develop tailored campaigns for key markets.