Market Sizing and Forecasting: Analyzing the Market Potential for Cold Chain Logistics in Six Target Markets

April 5, 2023

Whether you’re looking to enter a new market, plan a business expansion, or launch a new product, knowing the size and potential of your target market in terms of revenue, customer needs, and demand is critical. Market sizing and forecasting can impact different business processes by helping you gauge factors like sales volumes, the potential number of customers, and the total addressable market. If done right, market sizing and forecasting can also help you build robust marketing strategies to gain an edge in new market segments.

Engagement Summary

A leading freight and logistics services provider wished to assess the market potential for pharma cold chain logistics in six target markets. We leveraged market sizing and forecasting techniques to study the target market segments and gauge their potential in terms of revenue, total addressable market, sales volume, and customer needs. A detailed assessment of market size also shed light on peak market share and helped determine a range of revenue forecasts.

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Business Challenge

The uncertainty surrounding the market demand for products and services posed a major challenge for a leading freight and logistics company. Amid these fluctuations, the client witnessed a rise in demand for temperature-controlled transport of drugs due to several factors like a rise in the numbers of players entering the pharma market and demand for temperature-sensitive biopharmaceuticals and biosimilars.

At the same time, there was also an increase in demand from developing economies for advanced medications. But stricter regulations and an increased supply of temperature-sensitive products put higher demands on safe, temperature-controlled cold chain logistics systems. To tap into this opportunity, the freight and logistics company approached Infiniti Research. They wanted the leverage market sizing and forecasting to accurately analyze the market potential of six target markets.

Since the global freight and logistics services provider wanted to assess opportunities in the pharma cold chain logistics segment in six emerging markets, market sizing and forecasting were crucial to obtain these insights and understand the demand in specific segments.

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Cold Chain Logistics – Challenges and Market Needs

Pharma cold chain logistics has many handover points, each of which has inherent weaknesses that can potentially impact the quality and effectiveness of drugs during transport. Therefore, a good understanding of market risks, customer needs, and proper risk management form the crux of ensuring business success in the pharma cold chain logistics segment.

The challenges faced by the client included:

  • The complexity of market sizing and customer needs analysis
  • Lack of relevant market information
  • Segment definition incompatibilities between the company vs. the market’s understanding
  • Insufficient market knowledge about specific segments
  • Global complexity with many countries and varying market dynamics

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Solution Offered – Market Sizing & Forecasting

To help the client tackle their market sizing and forecasting challenges, we adopted a holistic research-backed methodology that comprised three phases. The client’s target markets were less fragmented, with the market-leading players holding over fifty percent of market shares. This made it feasible to rely on a bottom-up judgmental method emphasizing the bigger, well-established players.

Most of the client’s challenges were resolved in the initial phase by breaking down the problem into smaller components, leveraging market insights, and focusing on the initial stages to clarify the definitional differences. Upon completing the market size forecasts, the challenge shifted to establishing a global and local management process. To do so, we analyzed and tested the assumptions, data, and research methods with the company’s internal market experts. The second step revolved around developing and implementing a scenario-based forecast model backed with a market sizing strategy, which could be adjusted by correlated macroeconomic forecast variables that are updated regularly.

Business Outcome

With the help of a custom-built approach to market sizing and forecasting, the freight and logistics service provider gained crucial insights on all six target markets. The target market insights enabled the client to develop a robust business plan and identify the most relevant market segments. This helped them operate more efficiently and minimize risks across multiple geographical locations.

Evolving market dynamics and the uncertainty around the future demand for products and services have made it imperative for businesses to leverage market sizing and forecasting to break into a new market segment. But it is essential to understand that there is no standard approach, and few methods have limitations that can result in inaccurate forecasts with costly repercussions. Request a free proposal to find out how our custom-built solutions can support your business requirements.

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