BioInformatics LLC Corporate Capabilities

BioInformatics, LLC • www.gene2drug.com • ©2013 • Page 1
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 Count
Biochemical assays 91 48 232 371
Cell-based assays 124 83 327 534
Hybrid assays 89 39 157 285
Other 2 1 7 10
None of the above 0 0 22 22
Total Respondents 124 83 399 606
Unqualified
Respondents*
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%
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
Unqualified
Respondents*
Total
Respondents
Count Count Count Count
Biochemical assays 91 48 232 371
Cell-based assays 124 83 327 534
Hybrid assays 89 39 157 285
Other 2 1 7 10
None of the above 0 0 22 22
Unqualified
Respondents*
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%
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
LaunchImplementationFeasibilityIdeas
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-Throughput
Screening (HTS)
Stem Cells
Bisulfite
Conversion
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
FeaturesIllumina/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
DerivedImportance
Satisfaction MoreLess
LessMore

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)
EstimatedPurchaseQuantityper100Labs
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
g.thompson@gene2drug.com
703.778.3080 x22
Mary Follin
Marketing and Sales
m.follin@gene2drug.com
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.

BioInformatics LLC Corporate Capabilities

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BioInformatics LLC Corporate Capabilities