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Sizing Market Opportunity in Brazil Casestudy

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Sizing Market Opportunity in Brazil Casestudy

With offices in North America and Europe, The MarkeTech Group provides a unique combination of extensive marketing research methodology expertise, deep medical technology domain knowledge and value-added strategic marketing consulting to medical technology companies who seek high quality marketing research studies and professional marketing strategy consulting.

The MarkeTech Group's team of marketing research and strategy experts take pride in integrating their leading voice of customer (VOC) research expertise and strategic consulting into their clients' marketing and R&D departments to help successfully launch and maintain profitable products in healthcare.

The MarkeTech Group, LLC
502 Mace Blvd, Suite 15
Davis, CA 95618
Tele: (+1) 530-792-8400
Fax: (+1) 530-792-8447

Visit us on the web at:
http://www.themarketechgroup.com/?utm_source=SlideShare&utm_medium=Social+Media&utm_campaign=Sizing+Market+Opportunity+Case+Study

With offices in North America and Europe, The MarkeTech Group provides a unique combination of extensive marketing research methodology expertise, deep medical technology domain knowledge and value-added strategic marketing consulting to medical technology companies who seek high quality marketing research studies and professional marketing strategy consulting.

The MarkeTech Group's team of marketing research and strategy experts take pride in integrating their leading voice of customer (VOC) research expertise and strategic consulting into their clients' marketing and R&D departments to help successfully launch and maintain profitable products in healthcare.

The MarkeTech Group, LLC
502 Mace Blvd, Suite 15
Davis, CA 95618
Tele: (+1) 530-792-8400
Fax: (+1) 530-792-8447

Visit us on the web at:
http://www.themarketechgroup.com/?utm_source=SlideShare&utm_medium=Social+Media&utm_campaign=Sizing+Market+Opportunity+Case+Study

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Sizing Market Opportunity in Brazil Casestudy

  1. 1. CASE STUDY SIZING THE MARKET OPPORTUNITYIN BRAZIL METHODOLOGIES USED: 1. Qualitative Interviews 2. Quantitative Surveys 3. Market Sizing
  2. 2. The following case study and data is from a actual CLIENT project, however the data has been de-identified to avoid sharing any sensitive or confidential client information and is intended for general information only.
  3. 3. First….let’s meet the CLIENT
  4. 4. CLIENT NEEDED TO MAKE A CORPORATE STRATEGIC DECISION ABOUT ENTERING THE BRAZILIAN MARKET A large manufacturer of….. 1 2 CLIENT WAS DEBATING ACQUIRING A LEADING BRAZILIAN MANUFACTURER TO GAIN A FOOTHOLD IN THE MARKET OR ENTERING THE MARKET DIRECTLY BEDSIDE PRODUCTS AND CONSUMABLES
  5. 5. The CLIENT wanted to know…..
  6. 6. Research Objectives CENTRAL RESEARCH QUESTION: Is there a big enough and favorable market opportunity for our bedside product and its consumables in Brazil and should we enter the market directly with existing products or acquire a local leading competitor?
  7. 7. Research Objectives CENTRAL RESEARCH QUESTION: Is there a big enough and favorable market opportunity for our bedside product and its consumables in Brazil and should we enter the market directly with existing products or acquire a local leading competitor? What is the size of the market opportunity for bedside products and consumables by hospital segment and by hospital bed-size? 1.
  8. 8. Research Objectives CENTRAL RESEARCH QUESTION: Is there a big enough and favorable market opportunity for our bedside product and its consumables in Brazil and should we enter the market directly with existing products or acquire a local leading competitor? What is the market size and installed base of different manufacturers and brands? What is the size of the market opportunity for bedside products and consumables by hospital segment and by hospital bed-size? 1. 2.
  9. 9. Research Objectives CENTRAL RESEARCH QUESTION: Is there a big enough and favorable market opportunity for our bedside product and its consumables in Brazil and should we enter the market directly with existing products or acquire a local leading competitor? What are the customer perceptions and strengths/weaknesses of the leading manufacturers? What is the market size and installed base of different manufacturers and brands? What is the size of the market opportunity for bedside products and consumables by hospital segment and by hospital bed-size? 1. 2. 3.
  10. 10. PHASE Qualitative Analysis
  11. 11. 7 IN-DEPTH INTERVIEWS Chief Nursing Officers Directors of Pharmacy Mix of Private and Public Hospitals GOALS Determine factors that drive installed base of bedside product and utilization of consumables Identify key purchasing drivers Assess awareness of leading manufacturers PHASE Qualitative Analysis 1 2 3
  12. 12. BASED ON INTERVIEWS WE DETERMINED THE FOLLOWING FACTORS WOULD NEED TO BE USED TO “QUANTIFY” THE SIZE OF THE PRODUCT MARKET IN BRAZIL: • Avg. Patient Length of Stay • # of Consumables Used Per Patient Stay • Hospital Bed Occupancy Rate • # of Hospital Beds In-Depth Interviews Key Findings 1 Determine factors that drive installed base of bedside product and utilization of consumables 1 GOALS
  13. 13. IDENTIFIED big DIFFERENCE in purchasing methods BETWEEN public and private HOSPITALS for bedside product and consumables. In-Depth Interviews Key Findings 2 1. Public sector focused on cost and “open” bidding 2. Private sector focused on product quality and purchasing the “right” product Identify key purchasing drivers GOALS 2
  14. 14. In-Depth Interviews Key Findings 3 Assess awareness of leading manufacturers GOALS 3
  15. 15. In-Depth Interviews Key Findings 3 2BRAZILIAN MANUFACTURERS Assess awareness of leading manufacturers GOALS 3
  16. 16. In-Depth Interviews Key Findings 3 2BRAZILIAN MANUFACTURERS 3 INTERNATIONAL MANUFACTURERS Assess awareness of leading manufacturers GOALS 3
  17. 17. PHASE Quantitative Analysis
  18. 18. PHASE Quantitative Analysis 115 SURVEYS Chief Nursing Officers Directors of Pharmacy GOALS Quantify installed base of bedside products and annual consumption of consumables in Brazil Forecast installed base growth Calculate installed base market share for the 5 leading brands 1 2 3
  19. 19. The survey was designed as a bottom up analysis that segmented survey respondents by hospital bed-size and by public vs. private which enabled us to extrapolate survey results to the entire Brazilian hospital market.
  20. 20. Surveys Key Findings 1 92% of hospitals in Brazil have fewer than 300 beds. However 53% of bedside products are installed in the 8% of all hospitals with more than 300 beds.
  21. 21. The TOTAL BRAZILIAN MARKET for the bedside products and consumables was calculated to be $276M annually driven primarily by the utilization of consumables and expected to GROW at a 12% CAGR over the next 3 YEARS. Surveys Key Findings 2 Bedside Products Consumables Consumables = 90% of the entire market 90% 10%
  22. 22. The hospital INSTALLED BASE is DOMINATED by 3 primary BRANDS including the LOCAL MANUFACTURER being considered for acquisition by our client who had 24% market share by installed base. 0% 5% 10% 15% 20% 25% 30% 35% Int'l Manufacturer #1 Local Manufacturer #1 Local Manufacturer #2 Int'l Manufacturer #2 Int'l Manufacturer #3 Installed Base by Brand Int'l Manufacturer #1 Local Manufacturer #1 Local Manufacturer #2 Int'l Manufacturer #2 Int'l Manufacturer #3 33% 24% 24% 3% 3% Surveys Key Findings 3
  23. 23. PHASE Qualitative Analysis GOALS 1 30 IN-DEPTH INTERVIEWS With Survey Respondents Better understand survey responses regarding: • Product Costs • Future Growth Drivers • Brand Perceptions Installed Base Drivers
  24. 24. The primary PURCHASING decision FACTORS IDENTIFIED by respondents for PUBLIC HOSPITALS was… 1. PRICE (bedside products & consumables) 2. ON CONSIGNMENT PURCHASING TERMS PHASE Key Findings 1
  25. 25. ….while the PURCHASING decision FACTORS for PRIVATE HOSPITALS were IDENTIFIED as… 1. EASE OF USE 2. PATIENT SAFETY & RELIABILITY PHASE Key Findings 1
  26. 26. In addition, INTERNATIONAL MANUFACTURER #1 (33% market share) and LOCAL MANUFACTURER #1 (24% market share) are PERCEIVED as the HIGHEST QUALITY and most EXPENSIVE, while… International Manufacturer #1 ₊ Perceived as the market leader ₊ Will continue to lead in coming years ₊ Low maintenance needed ₊ High quality bedside products & consumables ₊ Most recognized brand and most expensive ₊ Strong advertising ₊ Easy to use & program ₊ Excellent service, training & support ₋ More expensive bedside products and consumables ₊ Offers the lowest price consumables ₊ Meets users needs ₊ Strong brand recognition ₋ Some perceived quality problems ₋ False security & safety problems ₋ Bedside product is very large in size (bulky) ₋ Consumables break easily 33% Installed Base Local Manufacturer #1 24% Installed Base PHASE Key Findings 2
  27. 27. … the LOCAL MANUFACTURER #2, being considered for acquisition is PERCEIVED as a LOW-COST provider with INFERIOR PRODUCT QUALITY… Local Manufacturer #2 ₊ Strong install base ₊ Excellent brand recognition ₊ Ability to win pricing bids with lower pricing ₊ Appear to have sufficient sales representative coverage in the market 24% Installed Base ₋ Their bedside product users may be more likely to use other branded consumables ₋ Many perceive product quality as inferior (faulty alarms, bulky, not easy to use) ₊ Fast growing bedside product market provides opportunity to greatly increase revenues ₊ Increase use of their consumable sets with own bedside products through consignment contract ₋ Increased price erosion from competitors ₋ End user attrition due to dissatisfaction of product quality ₋ Less frequent use of their consumables S W O T Their lower prices appear to be an important driver of their market share, however their biggest risk is the potential of users using other brands of consumable sets & attrition from dis-satisfied users. PHASE Key Findings 2 Being Considered for Acquisition by Client
  28. 28. PUBLIC and PRIVATE markets both offer attractive and fast growing OPPORTUNITIES, however significant DIFFERENCES exist… There are no significant identifiable differences in purchasing behavior within either market’s sub-segments or by geographic region. PUBLIC Hospital Market PRIVATE Hospital Market A smaller market, but a market that may be willing to pay for higher quality products & a potentially faster growing market segment due to growth in private insurance . A significantly larger market with more hospital beds & capital from the government, but more likely with lower margins & more competitive pricing bids. PRIVATE Hospital Market PUBLIC Hospital Market PHASE Key Findings 3
  29. 29. FINDINGS and RECOMMENDATIONS
  30. 30. FINDINGS and RECOMMENDATIONS 1 2 3 LOCAL MANUFACTURER #2 who is being considered for acquisition is 1 of 3 dominant PLAYERS in a fast growing Brazilian MARKET, however, their LOW PRICING STRATEGY & INFERIOR PRODUCT QUALITY could potentially prove to be a long-term WEAKNESS The >250M bedside products market is driven by the sales of consumable sets through bedside product consignment contracts & expected to grow at a 12% CAGR over the next 3 years: • Local Manufacturer #2 needs to increase its consignment business to compete and grow its revenue from consumable sets. Growth opportunity for Local Manufacturer #2 being considered for acquisition should not be limited to public segment where it competes on price: • Growth is fueled by the addition of new beds, new government mandates and private insurance growth. • Public hospitals represent 74% of the overall annual revenue opportunity, the private market seems less price sensitive and may grow at a faster rate than public. Local Manufacturer #2 will need to improve its product and service to successfully compete with International Manufacturer #1, who is perceived as the highest quality market leader.
  31. 31. We recommended that the Client ACQUIRE Local Manufacturer #2 based on its favorable distribution reach and current market share, but to integrate its own product portfolio under the local manufacturer’s brand in Brazil to strengthen the quality of products. FINAL RECOMMENDATIONS 1 2 3 Strong brand recognition & installed base (24%) Expected growth in the less price sensitive private market Perceived product quality weaknesses could be enhanced under local manufacturer’s brand name by integrating own products into acquisition candidate’s portfolio
  32. 32. USA 502 Mace Blvd, Suite 15 Davis, CA 95618 PH: + 1 530-792-8400 FX: + 1 530-792-8447 www.themarketechgroup.com Europe / France 3 rue Emile Péhant 44000 Nantes PH: +33 (0)2 72 01 00 80 FX: +33 (0)2 40 48 29 40

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