By Ana Gonzalez (MS4)
Medical device biodesign is an expensive and competitive process. The success of a novel product’s commercialization is dependent on numerous factors, however, having a compelling market for the need a product addresses is a necessary one. Innovators must come to terms with the reality that not all needs are addressed equally as they depend on a viable, supportive market with room to adopt a new, profitable medical device. Therefore, performing a market analysis is a crucial, early multi-step process that should begin after identifying a potential need but before generating product ideas. The outcome of this analysis is a refined need statement (need statement explained in the prior article, Observation and Problem Identification). This article will explain the three key steps on how to perform a market analysis for medical devices to aid you in deciding which needs are worthy to pursue for medical device innovation.
Market analysis begins with a broad market landscaping of the total market for this potential need by considering all of the relevant stakeholders. The goal in this first step is to obtain an overall understanding of the size of this market area, pre-existing solutions addressing this need, general competition, and areas with room for improvement. This step should answer the following questions – is this need being addressed by existing products or policies? If so, what are the available solutions or products that do this? If there are multiple solutions, how similar are they in addressing this need? Do any gaps exist between these solutions where a new medical device could add value? From a customer’s perspective, how important is it to close this gap? How competitive is this market area? If there are no current existing solutions to this need, how important or influential is this need from a customer’s perspective? What is the size of the total market for this need? The market size for each available solution? Is the market growing or shrinking and where in the market is this growth or decay occurring predominantly?
The second step involves the process of market segmentation where one divides customers, payers, and providers identified through the broad market landscape into subgroups that share similar viewpoints regarding this need. This step is important because most of the time a new solution (device, product, technique) addressing a need does not fulfill the requirements of all patients, payers, or providers who belong to this market needs area. For example, a new device used to improve the endoscopic treatment of liver cancer through radioembolization may not apply for all patients with liver cancer. Instead, it applies to a subset of these patients who have surgically unresectable liver cancer due to metastasis or tumor location and do not have any contraindications for radioembolization (severe renal insufficiency or uncorrectable coagulopathy). We could also separate patients by geography, demographics, socioeconomic status, attitudes toward the health care system and towards new technology.
The third and final step for performing a market analysis is identifying your target market. As an innovator, your goal is to select a market that benefits the most from the need you are addressing. The market that gains the most value from your solution, particularly for its customers, investors, and innovators. Innovators should initially prioritize selecting a market whose customers gain the most value, as this will determine the subsequent value gained by investors and innovators. Ask yourself the following questions – is the need your solution addresses important for the customer? How do these potential customers respond to your proposed solution? Enthusiasm is a good sign. Additionally, you must consider the investors of your target market and the monetary value they can gain from your solution. To ensure your market has the ability to fund your potential medical device, select a market that is valued to be three-to-four times the cost of developing your innovation. Additionally, ask yourself if your solution will continue to be competitive and desired once it reaches the target market in question. Lastly, your solution should be directed towards a market with innovators that gain the most from its value. Innovators are the providers of intellectual capital and labor, and are crucial to successful product innovation and application. Consider the length of time required to develop your solution, the opportunity cost, and how future innovators will determine their own success or failure by contributing to your potential innovation.
In the process of medical device and tool innovation, understanding the current and projected market surrounding your product’s field of interest is crucial to develop a product that will succeed within it. You, as an inventor, may create a product that addresses a need in the healthcare community, however, if there is no market for the intended product, the product will not succeed in commercialization. Generating product ideas through a needs-based approach alone does not guarantee victory, as you need a viable market that will successfully adopt and use your potential product. Through broad market landscaping, market segmentation, and selection of a target market, you can guarantee a successful product that adds value to your market by providing a solution to its customers needs.