Market Size Assessment
For Wireless Insulin Delivery Pump Define a relevant market and determine the market size serve as the foundation to most companies when introducing new products or services. This paper presents some simple techniques and describes the process of determining the potential market size in Canada for a new medical device, called Bolus Wizard- a wireless insulin delivery pump.
Bolus Wizard-Wireless Insulin Delivery Pump An insulin dosage calculator, known as the Bolus Wizard, performs the "diabetes math" for patients.It calculates the proper amount of insulin needed to normalize a patient's blood sugar level, based upon information entered by the user. Once the calculator suggests a dosage, the user presses a few buttons to accept the pump's recommendation to begin insulin delivery.
Diabetes patients using the new wireless system will no longer have to mentally calculate the amount of insulin they need. In this new system, the Paradigm link blood glucose monitor uses wireless technology to automatically transmit a blood sugar reading to the Paradigm 512 insulin pump.The product was approved by FDA in the U. S by 2004.
The market definition Bolus Wizard intends to sell in Canada and a secondary research method is used to define the target market and audiences of this product. For instant, resources provided by Health Canada, Canadian Diabetes Association, and Medical and Healthcare Marketplace Guide are used to determine overall diabetes profile and related medical treatment devices in Canada. Search through Industry Canada with NAICS code is also used to determine the industry profiles and analyze competitor companies (Please see Appendix 1 for a list of secondary resources...
). Based on this basic research, most of the insulin today in Canada is available in injectable form through syringes, pump and pens.
However, the inaccuracy and the inconveniences of most of these devices are driving pharmaceutical companies to discover other models of insulin delivery.Bolus Wizard with its unique wireless technology will not only fill in the gap in the current insulin delivery market, but also fulfill the needs for current Canadian diabetes patients with benefits of accuracy, efficiency, portability and convenience in insulin delivery. Since the product has high price range in terms of technology application and production, selling through third party distributors such as doctors’ recommendation tend to be the best way to get it on market. The product will target on Atlantic Canada as the first entry market for three reasons.
- First, according to the Public Health Agency of Canada, Atlantic region has the highest diabetes population among Canada and appears to be increasing more rapidly in recent years.
- Second, there are fewer competitors in the region that carry insulin delivery medical device.
- Third, hospitals, clinics and nonprofit organizations within the region are highly motivated to assisting diabetes patients.
These factors will provide Bolus Wizard with opportunity in terms of sales volume, increase brand awareness and easy to contract with third party distributors.
Determining the market size
Before making a significant investment in pursuing the Bolus Wizard to the market, it is necessary to determining the size of the potential market and the market share of this business could achieve. The method helps to estimating market size is base
on decomposing the larger "market size" problem into smaller problems, and building the results of these smaller problems into the market size. It is focused on the size of the market in terms of number of customers, rather the dollars.
This approach is indicated as following equation:
Market size maximum number of buyers in Atlantic Canada who has diabetes x quantity purchased by an average buyer in the market per year x price of an average unit
- First of all, both E-Stats on Statistic Canada and Public Health Agency of Canada provide accurate statistics about diabetes population by age group and territory.
They are two of the many sources that help to determining the total diabetes population in Atlantic Canada. These data also help to define the maximum buyers in the Region.To further break down the market, search through Industry Canada with NAICAS code would be another excellent source, because it helps to determining total number of hospitals and clinics in Atlantic Region, in turn helps to define the possible sales volume and maximum buyer since the product intents to sell through the doctor’s recommendation. Search through Halifax Nova Scotia hospitals and Clinics listings would be an additional example if to break down the market more specifically.
- Secondly, search through company directories by sector from Industry Canada and Atlantic Canada Online will help to define the competitors’ profile in the region.
Then browsing these companies’ website would help to indicate their product price and sales volume per year.
Their information helps to estimate the number of buyers and consumption power of Bolus Wizard per year. Total numbers of competitor is a good indication of size, because the sales revenue supports these company and the buyers support the demand for insulin medical device.
- Thirdly, search through regional diabetes association will also helps to indicate the size of the market in details, because these associations provide many confidential whitepapers and reports among local diabetic medical treatment and medical device industry.
For example, one of whitepaper from Canadian Diabetes Association called ‘Preventing Diabetes in Atlantic Canada’ especially indicates the medication used for current diabetes population and medical device in terms of units of sales in Atlantic Region.
- Finally, put information together provided from above sources and use the equation to define the market size for the Wireless Insulin Delivery Pump.
It is also important to estimate the market share when define the market size. In this case, we use bottom-up method.
For example, assume there would be 200 doctors would distribute Bolus Wizard in Atlantic Canada; every doctor contacts 35 diabetes patients per day, the hospital or clinic opens to serve diabetes patients 300 days per year, however 5% of these days will close due to other reasons.Then the market share of Bolus Wizard in the market would be 200 x 35 x 300.05=105,000 sales per year.
Through this kind assumption, we can do sensitivity analysis-change the numbers and see how much of a change would have in the final result. Appendix I: source for secondary research Data and information resource for the industry and the market
Health Canada: http://www. hc-sc. gc. ca/hl-vs/iyh-vsv/med/insul-eng.php
Canadian Diabetes Association: http://www. diabetes. ca/
Medical and Healthcare Marketplace Guide:
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