As publishers of market research information, we are analyzing companies on a regular basis and have seen certain patterns in what successful, and unsuccessful companies do. Here are a few common errors we’ve seen over and over during the years.
· Misidentifying the Customer – Healthcare products operated in a market environment that can make it less than obvious as to who the customer is. Consumers may use the product, but the providers are the ones ordering their use. Payers may be the ones pulling the strings. Administrators or facility procurement managers may have the say on equipment, tests, forumlaries. To understand market dynamics, one must correctly identify who is making the buying decision.
· Assuming Statistics that Don’t Exist – The most elegant market model or sophisticated scenario analysis will only output data that is as good as the inputs. Be sure that the variables you want to plug into your model are data that can be reliably obtained. Like lines diverging from an angle, models built on estimates built on guesses can leave you pretty far from the truth. And all the time it took to work out the model may prove to have been wasted.
· Overestimating Adoption Rates – Even the most efficacious technology, the most well validated theory, can take a remarkably long time to penetrate healthcare markets where everything from entrenched attitudes among physicians to risk-averse organizations can be a force for market inertia. In our line of work, some companies were quick to predict more rapid adoption of molecular diagnostics, or EMR software systems, than has actually occurred. Forecasting scenarios must take into account the very conservative nature of the medical community. (Does anyone know what causes stomach ulcers yet – isn’t it stress?)
Some of these ideas are applied to the IVD market in a title we published a few years ago titled What's Working in IVD