Post-Pandemic Marketing Strategies for IVD Distributors: A Case Study of PT. Sinergy Diagnostic

The in vitro diagnostics (IVD) industry has long been a cornerstone of the healthcare sector, enabling accurate and timely disease detection. The COVID-19 pandemic, however, catapulted the IVD industry into the global spotlight, drastically altering market dynamics. PT. Sinergy Diagnostic, an established IVD distributor in Indonesia, has navigated these turbulent waters, and its post-pandemic journey offers valuable insights into the evolving IVD distribution landscape.

Fig.1 PT Sinergy Revenue Realization 31/12/2022. (Mulya M. K. F., et al., 2024)

The Pre-Pandemic Landscape for PT. Sinergy Diagnostic

Company Background

PT. Sinergy Diagnostic, with a 17-year-long history, has firmly rooted itself in the Indonesian IVD market. Starting as a CV. Sinergy Diagnostic was founded in 2004 and, later rebranding, it has its headquarters in Bandung, West Java. The company has built an extensive clientele network, serving major hospital groups such as Hermina, Hasna Medika, and Mitra, public hospitals (RSUD) in regions like Cianjur and Tasikmalaya, and private institutions like Santosa Hospital Central and RS Advent.

Business Model: Kerjasama Operasi (KSO)

A defining feature of PT. Sinergy's success is its use of the Kerjasama Operasi (KSO) or Operational Cooperation model. In this model, the company provides diagnostic equipment to laboratories. In return, the laboratories commit to purchasing reagents from PT. Sinergy or sharing test volume data. The KSO process is a well-structured five-stage affair:

Data Collection: Clients estimate their monthly test volumes, which is crucial for determining costs. For example, a medium-sized hospital might estimate its monthly blood test volumes based on historical data and projected patient influx.
Price Estimation: PT. Sinergy then provides quotes, taking into account the test volume and the chosen cooperation model. If a hospital has a high test volume, it may be eligible for more favorable pricing.
Negotiation: Terms such as price, contract length, and the level of technical support are hammered out. A long-term contract might come with more comprehensive technical support.
Installation & Maintenance: The company installs the equipment and ensures ongoing maintenance. This includes regular servicing of the diagnostic machines to keep them in optimal working condition.
Reagent Purchase & Reporting: Clients either purchase reagents from PT. Sinergy or submit test counts for billing. This ensures a continuous revenue stream for the company.

The Impact of COVID-19 on PT. Sinergy Diagnostic

Surge in POCT Demand

The COVID-19 pandemic led to an unprecedented surge in the demand for Point of Care Testing (POCT). PT. Sinergy Diagnostic witnessed a dramatic shift in its sales trends. Before the pandemic, its Electrolyte & Bloodgas Analysis (EBA) products consistently generated higher revenue. However, in 2020, as the pandemic took hold, the need for rapid diagnostic testing for COVID-19 led to a spike in POCT sales. In 2021, POCT sales peaked at Rp1.218 billion. This was a stark contrast to the pre-pandemic period when EBA was the revenue driver.

Decline in POCT Post-Pandemic

As the world gradually adapted to living with the virus and vaccination rates increased, the demand for POCT, especially for COVID-19 testing, plummeted. In 2022, POCT sales at PT. Sinergy Diagnostic dropped to Rp 602 million. This sharp decline posed a significant challenge to the company's revenue stability, forcing it to reevaluate its business strategy.

Market Analysis Post-Pandemic

Market Segmentation

PT. Sinergy Diagnostic has identified distinct market segments:

Type A Hospitals: These are large urban hospitals with advanced healthcare needs. They often have high-volume testing requirements and demand the latest diagnostic technologies. For instance, they may require high-throughput molecular diagnostic equipment for research-based clinical trials.
Type B-C Hospitals: Medium to large institutions that offer a wide range of healthcare services. They are more cost-conscious compared to Type A hospitals but still require reliable and accurate diagnostic equipment. A Type B-C hospital might invest in mid-range immunodiagnostic equipment.
Type D Hospitals/Puskesmas: Smaller rural facilities with basic healthcare requirements. Cost-effectiveness and ease of use are their primary concerns. They may opt for simple, portable diagnostic devices for routine check-ups.
Private Laboratories: Specialized diagnostic centers that focus on specific types of tests, such as genetic testing or cancer biomarker detection. Precision and reliability are of utmost importance to them.

Targeting

The company has strategically chosen to focus on Type B-C hospitals, smaller public facilities, and private laboratories. By avoiding direct competition with manufacturers for Type A hospitals, which often purchase directly from the source, PT. Sinergy can better serve the needs of its targeted segments. For example, it can offer customized packages that include equipment, reagents, and training to private laboratories.

Positioning

PT. Sinergy positions itself as a reliable partner that understands the unique needs of each segment. It emphasizes its ability to provide quality products, technical support, and cost-effective solutions tailored to the specific requirements of its clients.

Customer Insights

A study involving 15 key respondents from different healthcare institutions revealed some critical customer insights:

Reliability is Paramount: Across all facility types, the reliability of diagnostic equipment was ranked as the top priority. A malfunctioning device can lead to inaccurate test results, which can have serious implications for patient care. For example, in a private laboratory conducting cancer screening tests, a reliable machine is essential for accurate diagnosis.
Technology Preferences Vary: Larger hospitals and private labs are more interested in advanced features such as high-sensitivity detection and multiplex testing capabilities. In contrast, Puskesmas prefer devices that are easy to operate, even for healthcare workers with limited technical training.
Service Expectations Differ: Type B-C hospitals value the quality of maintenance services, as any downtime can disrupt patient care. Puskesmas, on the other hand, prioritizes quick response times in case of equipment failure. Private laboratories expect consistent support to ensure uninterrupted testing operations.
Purchasing Drivers: In larger facilities, internal needs assessment and data-driven decision-making play a major role in purchasing decisions. Smaller institutions are more influenced by external recommendations. All segments, however, prefer to evaluate suppliers based on objective data rather than just peer referrals.

Strategic Adaptation: The 7Ps Marketing Mix

Product Strategy

Diversifying Beyond POCT

While POCT remains part of its product portfolio, PT. Sinergy Diagnostic is actively diversifying its product offerings. It is strengthening its EBA product line and expanding into other areas. The current product portfolio includes:

Balio Ex Series: A high-throughput benchtop equipment for electrolyte analysis. This is suitable for hospitals and laboratories with a large volume of blood electrolyte tests.
iChroma II: A portable device for hormone and infectious disease testing. Its portability makes it ideal for use in remote or resource-limited settings.
DXGen 616: A portable analyzer for HbA1C, CRP, and urine albumin. It offers a convenient solution for routine diabetes and inflammation monitoring.
Abbott i-STAT: A handheld device for blood gases and metabolites. It provides quick results, which is crucial in emergency situations.

Pricing Strategy

The company adopts a value-based pricing approach. It considers the perceived value of its products in the healthcare setting, its competitive positioning, the financial capabilities of different customer segments, and the potential for long-term partnerships. For example, for cost-sensitive Type D hospitals/Puskesmas, it may offer more affordable pricing packages that include both equipment and reagents.

Place (Distribution) Strategy

PT. Sinergy Diagnostic focuses on ensuring wide distribution across West Java. In urban areas, it targets private laboratories and Type B-C hospitals through direct sales and partnerships with local distributors. In rural areas, it collaborates with local healthcare authorities to reach Puskesmas and smaller facilities. Efficient logistics are in place to ensure the timely delivery of products, especially reagents, which are often time-sensitive.

Promotion Strategy

The company's promotional efforts are centered around educating healthcare providers about the importance of accurate diagnostics in improving patient outcomes. It showcases its technical expertise and support capabilities through webinars, product demonstrations, and case studies. Success stories from existing partnerships are also shared to build trust and credibility. For example, it may highlight how a private laboratory increased its diagnostic accuracy and patient satisfaction after using PT. Sinergy's products.

People (Human Resources) Strategy

In the IVD industry, where technical knowledge and customer service are crucial, PT. Sinergy invests heavily in its people. Staff are provided with regular technical training to keep up with the latest diagnostic technologies. Customer service representatives are trained to be responsive and empathetic, understanding the critical nature of healthcare operations. Specialized teams are also in place to handle different customer segments, ensuring that the unique needs of each are met.

Process Strategy

The company has refined its operational processes to ensure seamless service. Installation of equipment is now more efficient, with on-site training provided to healthcare staff. Proactive maintenance schedules are in place, and quality control protocols are strictly adhered to. A responsive customer feedback mechanism has been established, allowing the company to quickly address any issues or concerns raised by clients.

Physical Evidence Strategy

To build trust with its customers, PT. Sinergy Diagnostic uses physical evidence. Its modern office and service facilities are designed to showcase its professionalism. Certifications and compliance with quality standards are prominently displayed. Case studies and success metrics are made available to clients, and equipment demonstrations are often held at its facilities to give potential customers a hands-on experience.

Future Outlook for PT. Sinergy Diagnostic

Diversification and Expansion

The company plans to further diversify its product portfolio beyond its current offerings. This includes exploring new diagnostic technologies such as next-generation sequencing-based diagnostic tools for genetic diseases. It also aims to expand its KSO partnerships, particularly with emerging private laboratories and rural healthcare facilities that are looking to upgrade their diagnostic capabilities.

Technology Adoption

PT. Sinergy Diagnostic is committed to adopting advanced diagnostic technologies that can address long-term healthcare needs. This may involve investing in artificial intelligence-powered diagnostic software that can analyze complex test data more accurately and efficiently.

Data-Driven Decision Making

The company will continue to leverage customer insights to develop targeted solutions. By analyzing data on customer preferences, purchasing behavior, and feedback, it can tailor its product offerings, pricing, and marketing strategies to better meet the needs of its diverse customer base.

Service Excellence

Enhancing maintenance and support capabilities will remain a top priority. This includes training a larger team of technical support staff, improving response times, and offering more comprehensive after-sales services. By providing exceptional service, PT. Sinergy can differentiate itself from competitors and build long-term loyalty among its customers.

Conclusion

The post-COVID-19 era has presented both challenges and opportunities for PT. Sinergy Diagnostic. The company's ability to adapt its business model, product offerings, and marketing strategies in response to the changing market dynamics is a testament to its resilience. By focusing on diversification, customer-centricity, and service excellence, PT. Sinergy is well-positioned to thrive in the evolving IVD distribution landscape. Its journey serves as a valuable case study for other IVD distributors looking to navigate the post-pandemic healthcare market. As the Indonesian healthcare sector continues to grow, with an expanding population and increasing healthcare awareness, PT. Sinergy Diagnostic has the potential to play an even more significant role in providing high-quality diagnostic solutions.

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Reference

Mulya, Mirza Khoerun Furqon, and Atik Aprianingsih. "Proposed Marketing Strategy of Healthcare IVD Distributor Post Covid 19 Pandemic (Case Study of PT. Sinergy Diagnostic)."

This article is for research use only. Do not use in any diagnostic or therapeutic application.