In today’s medical device and diagnostics industry, one of the challenges in new product development is to estimate the size of the addressable markets or market segments. Although secondary data are readily available at the national level, particularly in the US, it is still very difficult to make an informed decision on investing in an innovative concept when the solution is intended to serve user segments that are better characterized by behaviors than high level demographics. To add to the uncertainty and complexity, practices across hospitals or even across departments within a hospital can vary significantly. Often times, the decision to pursue innovation is based on subjective interpretations of inadequate data, potentially resulting in biased outcomes. We used a bottom-up market build approach to leverage insights to inform evidence-based innovation decisions.

1. 1
Using market build to inform global
product innovation decisions
Ani Chatterjee
Becton Dickinson
Alex Zhu
SKIM

2. Who is BD?
2
FORTUNE 500 company
Locations in more than 50 countries
Nearly 30,000 associates worldwide
Serves healthcare institutions, life science researchers,
clinical laboratories and the general public
Sells a broad range of medical supplies and services,
devices, laboratory equipment and diagnostic products
500
50
30k

3. BD Locations
3
Industrialized Markets
Emerging Markets
Latin America - 1952
• ~5,200 Associates
• 8 Countries, 5 Plants
U.S.A. - 1897
• ~12,000 Associates
• 29 Plants
•
Canada - 1951
• ~550 Associates
• 1 Plant
Asia Pacific - 1971
• ~4,600 Associates
• 16 Countries, 5 Plants
India - 1995
• ~550 Associates
China - 1994
• ~2,200 Associates
Europe - 1952
• ~6,000 Associates
• 21 Countries, 10 Plants
•
Japan - 1971
• ~600 Assxociates
• 1 Plant
EMA - 1994
•~ 250 Associates
• 10 Countries
*note: last updated April 2013

4. Critical Care Molecular and ProteomicsUrine Collection
BD PAS: Leaders in Specimen Collection
4
BD Microtainer®
Contact-Activated Lancet
BD Vacutainer® Push Button
Blood Collection Set
BD Vacutainer® Blood collection tubes
Urinalysis
Products
BD Microtainer® Blood
Collection Tubes
Microbiology
Products
PAXgene® Blood RNA System
BD Vacutainer® Laboratory Consulting Services
ABG Products
Venous collection Capillary Collection

5. Customer centricity drives innovation
5
• VOC
• Outcome-Driven Innovation
Needs
Assessment
Identify the most promising
innovation opportunities
Ethnography
• Observation Research
• Interviews
Identify the customer behaviors
you want to change
Market sizing
• Segmentation
• Size and Growth
Characterize the commercial
landscape for the innovation
Benefits study
Concept
Research
• Choice Models
• Market Simulation
Prioritize customer requirements
to justify innovation opportunity
• Concept Ideation
• Design and Usability
Research
Develop concepts that
address customer needs

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Frame the Market Quantify the Market Prioritize Opportunities
 Examine the market through
several lenses, e.g.,
– Regions / countries
– Settings of care
– Context of blood collection
 Lenses chosen to align with
value propositions of
innovation concept
 Cut quantitative data to fill in
details for each “cell”
– Size
– Growth
– Profitability
 Both current and projected
market
 Develop a preliminary
assessment of market
opportunities
– Based on key quantitative
data and BD ability to
address with concept
 Prioritize opportunities and
align with development
strategy (concept
downselection)
Market build

7. Key behaviors often hidden beneath sales data reporting
7
Who is using it?
Where are they
using it?
What are they
doing with it?
And WHY?
Account
ED
ICU
OR

8. 8
Informing Global Innovation
Decisions Of A Blood Draw Device
Case study
• Acute care settings: ED, OR, ICU
• Region: US, EU5
• Target audience: Nurses, PAs, RTs

9. As a key step in innovation process, we needed to evaluate
the commercial opportunity
9
• VOC
• Outcome-Driven Innovation
Needs
Assessment
Identify the most promising
innovation opportunities
Ethnography
• Observation Research
• Interviews
Identify the customer behaviors
you want to change
Market sizing
• Segmentation
• Size and Growth
Characterize the commercial
landscape for the innovation
Benefits study
Concept
Research
• Choice Models
• Market Simulation
Prioritize customer requirements
to justify innovation opportunity
• Concept Ideation
• Design and Usability
Research
Develop concepts that
address customer needs

10. But we had a few challenges in characterizing the
commercial landscape
10
• Practices across hospitals or
even across departments within a
hospital vary significantly
• Value proposition of the concept
is highly dependent on the draw-
scenario use case
• Sales reporting often gives an
incomplete picture

11. How many blood draws
does a new device
potentially serve?
11

12. Conceptually it is similar to create a Super Bowl fan map
12

13. Map out how users draw blood for a specific scenario and
size each cell in this behavior matrix
13
Department (ED, ICU, OR, PICU/NICU)
Arterial
Single-
draw
Tube
LineStick
Multi-
draw
Syringe
Blood gas
syringe
Venous Capillary
Country (US+EU5)
Device used
Sample type
Draw
Scenario
Access type
Clinical
setting
Region

14. Layering over with innovation concepts’ ability to serve
14
Department (ED, ICU, OR, PICU/NICU)
Arterial
Single-
draw
Tube
LineStick
Multi-
draw
Syringe
Blood gas
syringe
Venous Capillary
Country (US+EU5)
Device used
Sample type
Draw
Scenario
Access type
Clinical
setting
Region

15. Essentially we need to build the market from bottom-up
15
# of ED visits
% of visits drawing
blood for a specific
scenario
# of
draws/visit
# of EDs
% of EDs drawing
blood for a
specific scenario
# of draws for EDs
conducting a specific
scenario
Top-Down Bottom-Up
volume
volume

16. Market build framework
16
• Number of
departments (ED,
OR, ICU and etc.)
• Multiple national
reputable sources
(e.g. American
Association for the
Surgery of Trauma)
• Percentage of
departments using a
specific type of blood
draw
• Avg. annual number
of a specific type of
blood draws per
setting
• Proportion of draws
by segment (sample
type, access type,
scenario and device)
• Triangulation is the
key
• Mean vs. median
• Sensitivity analysis
(25th/75th percentile,
error bar)
• Sales data
• Cross-check with
reputable published
data (e.g. AHA, CDC)
Primary data Secondary data Risk mitigation

17. Survey instrument design
17
Sample a large gen
pop of acute care AHPs
Main Survey
• Hospital level information
• Whether their department utilizes a specific draw
• De-duplicate with identifier such as zip code
• Department level information (over-quota)
• Patient load
• % of patients requiring a specific blood draw
• Daily # of such blood draws per patient
• Days of admission
• AHPs conducting a higher number of such blood
draws
• Individual practice level information
Screening
Extended screener
Screening
National#ofdrawsUserBehavior

18. 18
Informing concept selection using market build
Concept 1 Concept 2 Concept 3
Scenario 1
Stick
syringe
tube
Line
syringe
Scenario 2
Stick
syringe
tube
Line
syringe
tube
= perfectly
integrates
= additional
steps
required
= does not
work
69%
40% 20% 16%
29% 37% 47%
57% 63%% of market a
concept serves

19. Considerations of conducting a market build
19
Create the
methodological
roadmap
Differentiate
“must-know”
from “nice-to-
know”
Get the input
right

20. Impact for the business
20
• Inform department and country prioritization for next steps in
market research
• Gain a better understanding of customer behaviors and
better position the concept
• Support ongoing R&D investment decisions
• Quantify behaviors to change in order to drive health
outcomes (HEOR modeling)

21. Success Factors and
Takeaways
21

22. Success factors
22
• Define the minimal level of clarity for decision-making at outset
• Structure the approach systematically
• Constantly align with marketing, R&D and strategy
• Triangulation is the key for senior management support

23. Takeaways
23
• A market build provides a more realistic view of opportunity
especially when market segments are better characterized by
users’ behaviors than demographics
• A market build is very useful to inform innovation decisions
throughout the research & development process

24. Contact us
Ani Chatterjee
Manager Strategic Innovation, BD
Aniruddha_Chatterjee@bd.com
Alex Xiaogung Zhu
Manager, SKIM
a.zhu@skimgroup.com