bioinformatics llc corporate capabilities

BioInformatics, LLC • www.gene2drug.com • ©2013 •

Market Research & New Product Development

www.gene2drug.com


Agenda

•  About BioInformatics, LLC •  About Market Research •  The Research Process •  New Product Development


About BioInformatics, LLC §  Founded in 1994

§  Support clients across the life science industry—from research product suppliers to pharmaceutical companies

§  Use a variety of research techniques: • Surveys • Focus Groups • Expert Interviews

§  Conduct custom research, including: • Markets • Products • Marketing Communications • Sales Channels • Brand Health


About BioInformatics LLC

•  Conducting market research exclusively on scientific markets:

– Lab products – Analytical instrumentation – Biotechnology research

& bioprocessing – Drug discovery & development – Molecular diagnostics

manufacturing & material science

chemical, food & beverage

environmental testing

clinical diagnostics

pharmaceutical agriculture biotech

laboratory products

life sciences


About BioInformatics LLC

Project team includes scientists, statisticians and business analysts.

Instant access to a 73,000 member scientific online panel.

An Overview of Your Epigenetic Research

© 2009 BioInformatics, LLC www.gene2drug.com 3-17

* Totals are based on number of times an item was selected.* Percentages are based on number of respondents.

68%

57%

55%

47%

23%

20%

14%

10%

10%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Gene regulation

Disease mechanisms

Biomarkers

Basic biology of epigenetics

Therapeutic targets

Stem cells

Genomic imprinting

Transgenerational epigenetic

inheritance

Tissue repair/regeneration

X chromosome inactivation

Respondents 200

Gene regulation 135

Disease mechanisms 115

Biomarkers 110

Basic biology of epigenetics 94

Therapeutic targets 46

Stem cells 41

Genomic imprinting 27

Transgenerational epigenetic

inheritance 21

X chromosome inactivation 10

Question 9*

(check all that apply)

Conduct market research for all major suppliers in the industry.


Market Research


Purpose of Market Research

§  Market research is the process of gathering and interpreting data about customers and competitors within a target market.

§  Market research is carried out to:

•  Support decision making •  Reduce risk


Why Conduct Market Research in New Product Development?

§  The product must appeal to the customer (however widely defined)

§  Timely market research can help you mold the product to the consumer’s need/wants

§  Market research tends to point out successes and failures before products are launched “for real”

§  If you are going to fail — fail early


When NOT to Conduct Market Research

§  Research results not actionable

§  Closed mindset

§  Vague objectives

§  Cost outweighs benefits

§  Data documenting the obvious


Intelligence Focus

Business Environment

Market Trends

Competitors

Customers

Strategic

Tactical


Customer Intelligence

Customers Identity

Location

Needs

Motivations

Budget

Purchasing Authority

Technical Requirements

Segment

Suppliers

Perceptions

Satisfaction

Constraints


Customers

Competitor Intelligence

Competitors Identity

Financial Strength

Annual Sales

Customer Base

Strategies

Target Markets

Alliances

R&D Focus

Strengths

Weaknesses

Costs

Performance


Competitors

Customers

Market Intelligence

Market Trends Size

Structure

Segments

Barriers

Typical Margins

Growth Rates

Cost Structures

Distribution Channels

Product Diversity

Regions


Environmental Intelligence

Business Environment Political Events

Economic Conditions

Social Priorities

Ethical Considerations

Technological Advances

Market Trends

Competitors

Customers


“Off the Shelf” Reports

Pros Cons •  Offers a quick overview of a

market

•  Confirms what one already knows

•  Provides a starting point on a market, product, etc.

•  Dated information

•  Limited depth and breadth

•  Not customizable

Bottom Line •  Can provide valuable insights when the report is specific

enough to meet your needs •  When your budget is limited


Custom Reports

Pros Cons • Can offer powerful

insights in competitive strategies (i.e., product development, advertising, technical support) by measuring marketplace effects

• Highly customizable

•  Expensive (>$10,000) •  Time consuming (4 – 8

weeks) •  Balancing internal

stakeholders and prioritization

Bottom Line •  Useful when the cost of failure/inaction is high •  When off the shelf reports are not specific enough for your

needs


The Research Process


The Market Research Process

Defining the problem & the objectives

Developing the research plan

Collecting the information

Analyzing the information

Presenting the findings

1 2 3 4 5


Defining the Research Objectives

§  Establishing the project’s purpose through effective communication between the decision maker (you) and the researcher (me)

§  Goal: Decide on clear cut research objectives §  Accurate definition of a project’s purpose requires:

•  Identifying all relevant issues •  Deciding which of the issues are worth examining further •  Prioritization

§  Effective Communication is essential – communicating the various

stakeholder’s perspectives §  Higher level managers may want strategic information, you may

need tactical information. §  Especially important when the purpose of research is exploratory


Choose the Approach

Secondary Research/Desktop Research •  Data that are readily available from other

sources Primary Research

•  Data obtained directly from knowledgeable sources to fulfill a specific purpose


Sources of Secondary Information

•  Publications/journals

•  Meetings/congresses

•  Press releases

•  Patent filings

•  Business filing audits (e.g., revenues, units, prescriptions, sales force, product detailing, promotional spending, etc.)

•  Advocacy groups

•  Government agencies

•  Industry groups

•  Professional societies

•  Academic sites

•  Special interest groups

•  Medical sites


Value of Secondary Sources

Pros Cons •  Depth of information:

Enhance general understanding of industry

•  Breadth of information: Multiple sources

•  Price: Relatively low cost

•  Accuracy: Conflicting information

•  Timeliness: Data is usually 6 to 18 months old

•  Time consuming: Huge volume of data

Bottom Line •  Valuable when used in conjunction with other knowledge

to shape your understanding of a market •  When a cursory view is all that is needed •  Highly regulated markets.


Primary Sources

§  Academics

§  Clinicians

§  Science Journalists

§  Former Employees

§  Vendors

§  Consultants

§  Special Interest Groups

§  Industry Organizations

§  Wall Street Analysts


Value of Primary Sources

Pros Cons •  Generally cooperative

•  Specialized industry knowledge

•  Good source of statistics

•  Timely information

•  More relevant insights than secondary sources

•  Relatively low cost

•  Often difficult to control – use a third party

•  Cannot or will not provide specific data on target companies


Identifying the Sample Who or what type? Where should they be from?

How should they be chosen? How many?


Types of Primary Research

In-Depth Interviews §  Exploring complex issues with thought leaders or highly

qualified responses. Focus Groups

§  In-person – handling tests, instrument evaluation §  Online – Ad testing, provide stimulus §  Telephone

Online Surveys §  Great for collecting the opinions of a large number of

potential customers


In-Depth Interviews

!


Focus Groups Chief, Molecular Diagnostic & Epidemiology

Columbia University Medical Center

Academic Sequence Detection System

Core Facility Manager M.D. Anderson Cancer Center

Clinical iQ Real-Time PCR Detection System

Moderator Associate Scientist Altana Research Institute

Pharma Chromo4 Four-Color Real-Time System

•  Highly targeted •  Dynamic discussion •  Real-time results •  Great for showing

stimulus to potential customers (ads, concepts, websites, etc.)


Quantitative Survey – Collecting Data

Market Segment

Region

Application Area

Product Performance Attributes

Overall Product Satisfaction

Supplier Performance Attributes

Overall Supplier Satisfaction

Loyalty to Supplier

Expected Budget

Concept Receptivity

Preferred Supplier

Purchase History

North America Europe Unqualified Respondents*

Total Respondents

Count Count Count CountBiochemical assays 91 48 232 371Cell-based assays 124 83 327 534Hybrid assays 89 39 157 285Other 2 1 7 10None of the above 0 0 22 22Total Respondents 124 83 399 606


Total Respondents

% % % %Biochemical assays 73% 58% 58% 61%Cell-based assays 100% 100% 82% 88%Hybrid assays 72% 47% 39% 47%Other 2% 1% 2% 2%None of the above 0% 0% 6% 4%Total Respondents 124 83 399 606

1. Which of the following assay types do you use in your research/work? (check all that apply)

Geographic Region


Geographic Region

Inclusion Criteria

Screening


Quantitative Survey - Analysis North America Europe Unqualified

Respondents*Total

RespondentsCount Count Count Count

Biochemical assays 91 48 232 371Cell-based assays 124 83 327 534Hybrid assays 89 39 157 285Other 2 1 7 10None of the above 0 0 22 22Total Respondents 124 83 399 606


Total Respondents

% % % %Biochemical assays 73% 58% 58% 61%Cell-based assays 100% 100% 82% 88%Hybrid assays 72% 47% 39% 47%Other 2% 1% 2% 2%None of the above 0% 0% 6% 4%Total Respondents 124 83 399 606


Geographic Region


Geographic Region

Pricing Models Market Size Estimation Demand Projections Brand Analysis Trending Analysis


Types of Primary Market Research Analyses

§  Market Estimation

§  Market and Concept Testing

§  Pricing Studies

§  Customer Satisfaction Studies

§  Market Segmentation Research

§  Customer Decision Research

§  Brand Performance Evaluation


Market Estimation

§  Market Size: Measurement of the total volume and/or value of all sales in a market.

— §  Market Share: Proportion of the total market held

by a business, product or brand. —

§  Growth Rate: Annual increase in product sales or population within a given market.


Concept Testing

§  Concept Testing: This is the process of utilizing qualitative and quantitative methods to assess consumer response toward a product before introducing it into the market. It is also used to create communication designed to amend the attitude of consumers about existing products.


Pricing Studies

§  Price Elasticity Testing: Consumer sensitivity to changes in the price of a product is assessed.

— §  Demand Estimation: Estimation is made about a

product's demand by conducting research. —

§  Sales Forecasting: The level of sales is determined according to the demand for a given product. Based on this, a business' future sales prospects are estimated.


Customer Satisfaction and Loyalty Studies

§  Determine whether a company’s products or services meet the expectations of customers and creating brand loyalty.

§  Satisfaction can be measured through multiple customer touchpoints:

•  Quality of a particular product or service

•  Customer-business relationship

•  Price-performance ratio of a product or service

•  Customer expectations


Market Segmentation Research

§  Segmentation divides a market into groups (i.e., segments) of customers with similar needs or characteristics who are likely to exhibit similar purchasing trends.

§  Specific customer groups may require different products, services, or marketing approaches.

§  Types of segmentation: •  Geographical (region, country, etc.)

•  Market (academic, industrial, etc.)

•  Demographic bases (age, gender, etc.)

•  Psychographic bases (values, personality, etc.)

•  Behavior bases (usage, loyalty, etc.)

•  Needs based segmentation


Brand Performance Evaluation

•  Brand Positioning Research: Ascertain how a product stands in the market relative to a similar product by a competitor.

•  Brand Equity Research: Determine what factors motivate people to select one product over another.


New Product Development


Why Develop New Products?

§  New product development is critical to long-term success

§  Changing environment creates new demands and

needs §  A way of getting new and keeping old customers §  Effective way of obtaining a competitive advantage §  Source of growth

§  New market entry


Types of New Products

§  Improvements and Revisions of Existing Products (26%) §  Additions to Existing Product Lines (26%) §  New Product Lines/Functions/Applications (20%) §  Cost Reductions (11%) §  New-to-the-World Products (10%) §  Repositioning (7%)


Factors Common to Successful New Products

§  Early product definition

§  Offer a strong relative advantage

§  Have stronger top management support

§  Reflect better understanding of customer needs, and beat the competition to market

§  Are launched with larger budgets

§  Quality execution of marketing, technological and production activities

§  Exhibit higher performance-to-cost ratios and higher contribution margins


Challenges in New Product Development

§  Shortage of new product ideas §  Fragmented markets §  High development cost §  Shortage of Cash/Capital §  Faster development time §  Shorter product life cycle


Causes of New Product Failure

§  Design Failure

§  High development cost/price

§  Failure in market research findings:

•  Overestimated demand and size of market

•  Positioning problem

•  Ineffective communication/promotion

•  Unexpected reaction from competitors

•  Poor timing


The Stage-Gate Process

Launch Implementation Feasibility Ideas

GATE 1 Establish

Project

GATE 2 Commit Major

Resources

GATE 3 Approval for

Launch

Marketing strategy development Finalize Manufacturing

Business case development Concept testing

Idea generation Idea screening Concept development

Monitor launch Make adjustments Product extensions


Use Market Data to Reduce Risk

45

High

Low Project Time

Project Risk

Project Knowledge


Generate and Screen Ideas (Stage 1)

•  Generate ideas for new product development

•  Ensure your customers are part of the innovation process

•  Select the best ideas using market data


Research Options in Stage 1

Involve Customer Input into the Design Process

Customer Focus Group(s) On-site Customer Visits

Refine New Ideas with Thought Leader Interviews

In-Depth Interviews

Measure Receptivity to New Ideas Among Potential Customers

Short Online Survey

Determine Market Trends

Published Reports Focus Group(s)


Parallel Activities Fuel Feasibility (Stage 2)

R&D activities: doing experiments, scoping out the IP landscape, assessing the competition, setting specifications

Marketing/Product Management activities: building the business case, estimate market size, number of customers, pricing, competitive environment, VOC


Determine Product Feasibility

•  Build business case: estimate market size, number of potential customers, pricing, demand and revenue estimates

•  Understand product trade-offs, price implications and implications on demand based on product features

•  Use market data to refine your concept to ensure success


Market Test New Product Concept

Online Survey

Determine “Must-have” and “Preferred” feature sets of the new product concept.

Understand end-user barriers to adoption and workflow bottlenecks.

Features and Benefits to Customers

Focus Group(s)


Estimate Demand and Revenue for Concept Online Survey

Demand estimates, receptivity, likelihood to purchase, price elasticity can be generated very quickly and economically to determine market feasibility before R&D investment.

Determine Number of Potential Customers

Incidence data combined with secondary research

on the number of researchers


Determine the Number of Potential Customers

Real-Time PCR(qPCR)

Western Blotting

Cell/Tissue Culture

DNA Microarrays

Transfection

Cell-Based Assays

Mass Spectrometry

NGS

High-ThroughputScreening (HTS)

Stem Cells

BisulfiteConversion

BioInformatics maintains a proprietary incidence estimation of the % of researchers performing specific techniques in a given region. This data combined with population sizes determined through secondary data collection can be used to estimate the number of potential customers and market size.

% of life science researchers


Aligning Unmet Needs and Product Features

Illumina/Solexa Sequencing (n=68-132)

Brand name/company

Citations in peer-reviewed publications

Customer

Customer training

Financing

Level of technological innovation

Maintenance/service warranty

Promotions/discounts

Sales reps

Technical support

Der

ived

Impo

rtanc

e

Satisfaction More Less

Less

M

ore


Cross-Functional Teams Come Together in Development (Stage 3)

Technical Market

Financial

Operations


Activities that Occur in Development

•  Confirm end-user receptivity

•  Finalize product design: size, packaging and performance-specifications

•  Determine pricing

•  Develop (tactical) marketing plans and prepare for launch

•  Validate the business case

•  Transfer to operations: scale-up, production and quality control



Identify Beta-test Sites

Screening Survey to potential customers to recruit those most interested

Assess Pricing Strategy to Determine Appropriate Price Positioning

Structured Questionnaire

Utilize the van Westendorp pricing method and/or Juster Probability Scale to understand pricing.

Test Marketing Messages

End-User Market Survey

Assess end-user receptivity to concept names, message, logos and advertisements.

RateMyProduct Affordably and quickly assess market

receptivity, marketing communications, pricing and differentiation


Price Sensitivity Analysis

Van Westendorp Price Sensitivity Analysis provides the optimal price point for virtually any product. In addition, this powerful analysis uncovers the points at which customers will perceive your product as “too cheap”, “too expensive” or “price indifferent”.

Van Westerndorp Price Sensitivity Analysis


Unit Demand Estimation

0.0

5.0

10.0

15.0

20.0

25.0

30.0

$500,000

$450,000

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

LCMS Clinical Analyzer Price (USD)

Estim

ated

Pur

chas

e Q

uant

ity p

er 1

00 L

abs

North America (n=102)UK/Ireland/Netherlands (n=76)Germany/Austria/Switzerland (n=68)France/Belgium (n=41)Sweden/Finland/Norway/Denmark (n=25*)Spain/Italy (n=43)


Market Adoption Modeling


RateMyProduct™


RateMyProduct™

60


RateMyProduct™

$1,500

•  You quickly learn what’s working – and what’s not…

•  100 potential customers learn about your product

•  Can be used to test receptivity amongst different regions (US vs. EU)

•  Price testing (run two using different price points)

•  Evaluate receptivity amongst different customer groups

•  Determine the product features respondents are most excited about – tailor your marketing message


Product Launch (Stage 4)

•  Measure awareness

•  Fine-tune pricing

•  Calibrate sales strategy

•  Assess customer satisfaction

•  Monitor inventory


Post-Launch Research Options

Determine Awareness of New Product Introduction

End-User Market Survey

Assess end-user awareness to product name, message, logos and advertisements.

Focus Group(s)

Understand Customer Perceptions of Launched Product, Assess Follow-on Features

RateMyProduct Measure awareness over time and continue to

introduce new customers to your branded product using RateMyProduct


www.gene2drug.com

Greg Thompson Business Development [email protected] 703.778.3080 x22 Mary Follin Marketing and Sales [email protected] 703.778.3080 x13

BioInformatics LLC is the premier research and advisory firm serving the life science tools industry. By leveraging our online professional network of tens of thousands of biomedical researchers, we have supported more than 300 companies and provided insights that lead to better business decisions. Our expertise includes assessing the size and attractiveness of markets, optimizing product configurations and pricing, validating corporate acquisitions, measuring customers’ brand loyalty, and evaluating brand strength and positioning. Since 1994, BioInformatics LLC has been providing off-the-shelf reports, custom-designed studies and market analysis that enable companies to understand their market and competitors through the eyes of the most important information source of all—the people who buy their products.