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Invisalign Case Study Essay

Customer:

The patient holds the beginning and end of the channel flow in the Invisalign process, looking for a service for malocclusion treatment from their orthodontist. Customers of Invisalign have the edge by having nearly invisible aligners, removable while eating, and hygiene of the aligners while eating and cleaning.

Orthodontist:

Orthodontists are the main source for the customer whether to suggest invisalign to them or not. If suitable, the orthodontist will go for photographs, X-rays, impressions of dental arches, a wax bite and an Invisalign prescription for the patient. This information is then sent to the next channel member in Santa Clara for processing. 3-D simulations were developed in Pakistan. The orthodontist will make adjustments and corrections to the proposal after getting from Pakistan.

A program called “ClinCheck” is used to view the 3-D simulation, of the proposed treatment plan. Any changes made are sent back to Pakistan for correction. The orthodontist also works with the customer to maximize insurance coverage along with a payment plan to cover the cost of the treatment. Major motive why Invisalign are preferred over traditional braces include reduced labor and chair time, minimal training and potential to increase patient base.

Invisalign:

The Santa Clara headquarters serves as focal point between all channel members. Once Invisalign receives the patient’s information from the orthodontist, employees analyzes the data and constructs plaster and computer models of the current dentition. After completion, this model is forwarded to Pakistan for further analysis. Santa Clara is also responsible for approving the simulated treatment proposal created in Pakistan along with constructing a series of molds of the patient’s teeth for each of the 2 weeks before sending them to Mexico. Financially, Invisalign is responsible for providing monetary incentives to orthodontists that refer their business. This includes establishing pricing and discounts to provide the service to the end customer. Software Development (Pakistan):

The patient’s treatment plan is designed in Pakistan, which includes simulated tooth movements for each of the two weeks for the entire treatment process. Once approved by Invisalign and the orthodontist, these molds are then sent to the next channel in Mexico for production. Manufacturing (Mexico):

Aligners are created from the molds received. They are trimmed, cleaned, polished and inspected before they are shipped directly to the orthodontist, which then forwards to the end customer.

Traditional Braces
Traditional braces flow channel comprises of:
* Customer
* Dentist
* Orthodontist
Customer:

Similar to Invisalign, the patient starts and ends the channel flow in the traditional braces process. The patient may either inquire or be referred by their dentist to seek malocclusion treatment. The cost of traditional braces tends to be cheaper than Invisalign.

Dentist:

The patient visits their general dentist and if malocclusion is diagnosed, a referral is made to an orthodontist.

Orthodontist:

In the initial visit with the orthodontist, X-rays, photographs and dental moldings are collected from the patient. A treatment plan is created and in the next visit, brackets are cemented to each tooth and linked with an arch wire. The patient returns monthly for retightening and adjustments. At the end of treatment, the brackets are removed and replaced with plastic retainers. Some of the reasons why orthodontists choose traditional braces over Invisalign are credibility, cost and low level of patient compliance.

2. Invisalign Advertising Channel

There are different functions performed by advertising channel. There are three different channels used by Invisalign for promotion, these are:

1. The sales force
2. Call centers
3. Media ads

These channels are designed to increase the awareness in the customers regarding Invisalign and also to reach the customers through different ways. The target customers are the dentists, orthodontists and patients. These services are the part of marketing strategy of Invisalign to capture more and more customers through direct contact and through referrals. The sales force setup was used to target the orthodontists, who are the key focal point for the patients. Besides introducing Invisalign, sales force also used to train the orthodontists on case selection, pricing and how to use the Invisalign website and ClinCheck software. These types of trainings with orthodontists created a sense of security and care of Invisalign for its customers. Also it would help the orthodontists to get equip with the tools needed to recommend Invisalign to their patients.

We can say that Invisalign uses push strategy to generate the sales. The second source was call centers. It is for those customers who are more curious in knowing about the Invisalign, these customers can call at toll free number, 1-800-INVISIBLLE. Customers will get the desired information regarding invisalign by calling this number. The third medium used was media ads. This includes direct mails, journals advertising and trade shows. In these activities customers are convinced to use Invisalign. As dentists are the main source of referrals to orthodontists, these ads also provide awareness to the dentists regarding any new development in invisalign, so that they could recommend it to their customers. We can say that Invisalign uses Pull strategy here to attract customers.

Question # 3: Are there any gaps in the channel? Are channel members performing functions that invisalign intends them to do? If not, why not? Demand-Side Gaps:

Capturing the Existing Market:

The market of potential malocclusion customers is about 200 million individuals. Only 2 million actually elect orthodontic treatment (1 % of potential market); half of those customers (1 million) do not even go for the treatment, this is the first “gap” in the channel. This is due to the very nature of the product, since the orthodontist treatment requires dentition to be constantly observing the patient and to make corrections in advance.

One of the important members of the process is the orthodontists. This member stands between the customer and Invisalign’s product, it is the responsibility of the orthodontist to recommend Invisalign to more and more customers but it found to push the product less enthusiastically than desired by Align. There might be conflict of objective here among the two members. Nominally, 25 percent of the nation’s orthodontists have not been trained on the new system. This detracts from the spatial convenience of the marketing channel.

Capturing the potential market:

Besides the 1 million qualifying patients in the existing market, the promise of the invisalign product is to expand into the population of non-children that have IV-treatable malocclusion (80 percent of people above the age 15), but do not seek orthodontic treatment. “Orthodontists (should) be eager to expand their patient base,” said Zia Chishti. Indeed, only a relatively small proportion of this potential population seeks treatment because of the drawbacks associated with conventional treatment, but Align’s process overcomes many of these shortcomings (as described in case study). This gap might be attributed to the orthodontists (described above) and the media advertisement, which is focused on raising awareness, and describes advantages over the conventional method (instead of brand benefits).

Supply-Side Gaps:

Delivery Incentives:

A possible gap in the delivery of the offering may stem from the basic economic incentive for orthodontists. Profit margins were about the same for both Invisalign and Traditional Braces ($3,600 vs. $3,500 gross, or 88% vs. 66%, respectively). So short of the orthodontists possessing very high brand loyalty or customers specifically requesting the Invisalign treatment, the promotion to customers breaks down here.

In addition, the ClinCheck simulation takes 3-4 weeks to complete. This seems like a very long time. Invisalign may find a way to incentivize Pakistan to turn around the simulations faster to cut down on production time. Likewise, incentives for the sales force were designed for the objective of brand awareness (bonuses based on non-sales activities). The company is now looking for boosted sales, so it may its current plan may be affecting sales.

Production Process Time:

Invisalign has essentially inserted itself right in the middle of the traditional malocclusion treatment process. As, the procedures of invisalign is entirely customized (fitted) to each patient. These two facts combined create a longer supply chain this is why the entire supply chain works slowly as the order and product get routed through the various intermediaries. The Invisalign process includes three centers (Santa Clara, Pakistan and Juarez, Mexico). The entire process took up to six weeks, compared to an immediate treatment with traditional braces. As we know that Customers increasingly prefer faster delivery channels.

Question # 4: Are channel power sources affecting Invisalign’s success? If so, how? Answer: yes, the channel power sources do affect the Invisalign’s success. Being the part of product flow and promotion channel, the channel members have the power to affect the Invisalign’s success.

Orthodontists:

The greatest power source affecting Invisalign’s success is the orthodontist. He stands in-between Align and the patient, and has the power of his expertise. The two customer segments (health conscious and beauty conscious) value their orthodontist’s opinion. Indeed, conversion seems to disappears at the stage were orthodontists are engaged: over 3,500 referrals to orthos every week from IV, but only 100 customers sign up (8,000 calls, 80% referred to ortho, 55 to 65 percent follow up, 3 percent convert to sales). His expert power validates IV’s treatment to customers even though his impetus may lie in something non-expertise, such as his economic incentive (profit margin) or reception to change.

Dentists

Invisalign’s “exclusive” distribution to orthodontists prompted one general-practice dentist to file a legal complaint against Align, alleging anti-trust laws were violated. Aside from this legitimate power, dentists exercise a type of referent power. Since dentists are to refer qualifying customers to orthodontists, their choice could end up helping or hurting conversion rates for IV, depending on the referred orthodontist’s brand loyalty to IV.

Invisalign

Invisalign’s sales force uses a tiering structure which rewards orthodontists who are very proficient in the Invisalign process. IV commits more resources and potential business (through their call center and website) to these valued doctors. In this way, IV can extend extra benefits for performing in a manner consistent with its own objectives.

Patients

Patient compliance affects IV’s success because of the high degree of participation required for a success treatment (aligners were removeable at the patients discretion). Some orthodontists did not like being associated with a treatment that could fail from no doing of their own. Therefore, patients show a sort of anti-referent power–doctors did not want to be “associated” with them.

Question # 5: What would you do to complete conversion?

Our team proposes the IV offering is closer to the growth stage in the product life cycle than it is to the introduction stage. Marketing channels should change as the product moves along in its cycle. Our umbrella suggestion is to have dentists administer the IV treatment process. Specifics are outlined here. * Intensive distribution. There are 14 times more general dentists than orthodontists. IV should move from selective distribution to intensive. The increased number of retailers (dentists and orthodontists) makes it easier and more likely for patients to receive treatment (enhance spatial convenience). The increased distribution should drive prices down as retailers compete for customers; dentists may be willing to accept lower margins than the orthodontists.

* Better align incentives. “Being able to stimulate channel members to top performance starts with understanding their needs and wants” (pg 423, marketing textbook). Dentists are incentivized by volume of patients and perform non-specialized tasks that require less treatment, all opposite of the orthodontists. This matches brilliantly with the IV offering. In fact, some of the characteristics seen as unattractive from the orthodontists would be viewed as benefits for dentists. * Heterogeneous customers. The offering can be adjusted to match the needs/wants of the various segments of customers. This idea comes from the readings on CRM programs.

Each patient segment (prior use, beauty and health conscious) has different preferences and a varied propensity to buy, as would the retailers (dentists and orthodontists). The other side to this is IV can “fire” bad orthodontists, which is another way of saying reward/coercive power can be exercised more exactly. * Brand benefits. Because brand awareness is achieved (80 percent), advertisement should shift focus from aesthetic advantages over the traditional system (the a $40 million media campaign) to brand benefits. The existing approach approach targets the existing market. We want to capture some of the potential market–the big table!


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