Advanced Models in High-Tech Marketing Day 4- Positioning, Branding and Network Effect modelos avançados em marketing de alta tecnologia

Course Objectives Review of advanced models in high-tech marketing Implementation of these models by the participants in a unique project Implementação Único Projeto Copyrights reserved to Ronen Arbel 20122

Course Rational Innovation Diffusion of Innovation Positioning/ Branding Revenues Copyrights reserved to Ronen Arbel 20123

Course Rational inovação difusão da inovação Posicionamento/ Gestão de Marcas receita Copyrights reserved to Ronen Arbel 20124

Day 4 Objectives The 3 steps in targeting: 1.Segmentation  Target Market 2.Positioning 3.Branding Network Effect Copyrights reserved to Ronen Arbel 20125

1. Segmentation ->Target Market 2. Positioning 3. Branding

7 CONFIDENTIAL 7 SPIROCOR™ Respiratory Stress Test System Non-invasive No treadmill No adenosine No radiation No contrast Not expensive Office based 5 Patents Pending Computer unit with proprietary software Data Acquisition Unit PPG Sensor

8 CONFIDENTIAL 8 SPIROCOR –Respiratory Cardiac Stress Test A non invasive …2 minute respiratory cardiac stress test indicating significant Coronary Artery Disease (S-CAD)

Large Existing S-CAD Diagnostic Market – U.S. CONFIDENTIAL 99 $35B $9B $1B SPIROCOR is clearly a multi billion dollar per year opportunity $45B per year is currently being spent to find the answer!!

3 Steps Model 1.Segmentation ->Target Market 2.Positioning 3.Branding

12 Sent home or Follow-up Coronary angiography Non-invasive testing - SPIROCOR + Coronary Angiography Expected behavior of invasive cards w/office Pure noninvasive office only Invasive no- PCI w/office PCI w/office PCI only Medical history, physical examination, Vital signs, ECG 90%10%

13 Sent home or Follow-up Coronary angiography Non-invasive testing - SPIROCOR + Coronary Angiography/ SPECT Expected behavior of non - invasive cards Pure noninvasive office only Invasive no- PCI w/office PCI w/office PCI only Medical history, physical examination, Vital signs, ECG 90%10%

3 Steps Model 1.Target Market 2.Positioning 3.Branding

Concept Identified as Very Strong I see patients who I suspect may have significant coronary artery disease, but I am not sure because they have atypical symptoms or may even be asymptomatic. ( Suspect was a strong word! An earlier version of this ACB included language around being “hesitant to pursue expensive or invasive testing…” MDs did not relate to that language and the concept worked better when it was deleted.) New Test helps identify significant CAD among these atypical or symptomatic patients that I suspect may have the disease. That’s because New Test:  Is an accurate, non-invasive test for significant CAD.  Can be safely, quickly and inexpensively be used for screening on all patients, making it easy for patients to be tested (Some felt “screening” was good word and fit with their ideas of how to use the test. Others did not comment much on this word).  Clearly indicates patients that are at risk for or currently have significant CAD (higher than 70% blockage) (This was generally positive, but some of the language in “C” was stronger)  Provides immediate results, allowing for fast follow up (Important but covered in the first bullet point) Green=Very strong Blue=Somewhat strong Red=Additional comments

Positioning Lessons for FDA 1.Clinical Claim : Indicate the presence of S-CAD 2.Patient Population : All Patients suspected of S- CAD 3.Supplement Cardiologist Decision

17 Patient referred to Cardiac evaluation Medical history, physical examination, Vital signs, ECG Sent home or Follow-up Coronary angiography Non-invasive testing - SPIROCOR + Consider Coronary Angiography SPIROCOR in the Diagnostic algorithm

CONFIDENTIAL 18 How Much will Patients Pay Out of Pocket? Answers from 27 cardiologists in DC, LA focus group research Average : $210

Patient reaction to the product

CONFIDENTIAL 20 How Much will Patients Pay ? Answers from 15 patients in LA focus group research Average : $253

3 Steps Model 1.Target Market 2.Positioning 3.Branding: – Naming (LA) – Slogan (St. Louis) – Logo (St. Louis)

Team Recommendation Was most acceptable to the MDs Acceptable by patients

Network Effect - Definition The effect that one user of a product( or service) has on the value of that product to other people. When network effect is present, the value of a product or service is dependent on the number of others using it (also called network externality ) Copyrights reserved to Ronen Arbel

The classic example- Telephone The more people own telephones, the more valuable the telephone is to each owner. This creates a positive externality because a user may purchase a telephone without intending to create value for other users, but does so in any case Copyrights reserved to Ronen Arbel

Visual – tel. or fax or any network Copyrights reserved to Ronen Arbel

WAZE Case Study Copyrights reserved to Ronen Arbel

Critical Mass Network effects become significant after a certain subscription percentage has been achieved, called critical mass. At the critical mass point, the value obtained from the good or service is greater than or equal to the price paid for the good or service. after a certain number of people have purchased the good, additional people will due to the value exceeding the price. Copyrights reserved to Ronen Arbel

WAZE Critical Mass Copyrights reserved to Ronen Arbel

The more people own waze, the more valuable waze is to each owner. WAZE value dependent on critical mass the value of Waze is dependent on the number of people using it. As more people use the application is becoming more useful, efficient and convenient. For example, if there is a traffic jam, we will never know this if the waze users will not report it

Pre –critical mass A key business concern must then be how to attract users prior to reaching critical mass. The best strategy is to build a system that has enough value without network effects, at least to early adopters. Then, as the number of users increases, the system becomes even more valuable and is able to attract a wider user base. Copyrights reserved to Ronen Arbel

Pre –critical mass - WAZE Free GPS Copyrights reserved to Ronen Arbel

WAZE - Results Copyrights reserved to Ronen Arbel

Whatsapp case study Pre-critical mass offer – Free SMS Critical mass achieved by: – Groups – Works on all platforms Groups create outstanding value for each one Copyrights reserved to Ronen Arbel

Whatsapp results Copyrights reserved to Ronen Arbel