What is needs based segmentation in market research?
Needs based segmentation is based on the concept that every market can be divided into homogenous segments based on customer needs. This type of analysis is used to develop products with a high market demand rather than selling products without understanding the market potential and customer needs.
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Conducting a market needs based segmentation involves three phases, and every phase must be complimented with accurate research insights.
Phase 1: Leveraging market insights to determine customer needs and requirements
Phase 2: Identifying and grouping customers into segments based on needs
Phase 3: Aligning offerings with customer groups
While both phases focus on analyzing customer needs, it requires businesses to study markets using advanced research methodologies. Once the data is collected, data mapping and analysis must be employed to discover and classify consumers based on their conditions.
Increasingly tech-savvy consumers, growing needs, aging populations, and the rise of hyper-personalization are not just any pharma trends that come and go. These trends are here to stay and are expected to increase the demand for personalized treatments and therapies. Add to this dramatically increased competition in the protein therapeutics markets, which has created a need for market needs based segmentation before drug development.
A leading UK-based protein therapeutics manufacturer with five compounds under development in a particular therapy area approached us with a similar research requirement. The client wanted to conduct an in-depth market needs based segmentation to identify, segment, and align customer needs with their pharmaceutical portfolio.
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Our Approach to Needs Based Market Segmentation
To help the client, we adopted a comprehensive needs based segmentation approach. The critical step was to align the pharma portfolio with consumer groups in an effort to meet consumers’ needs and demands.
Market segmentation studies in pharma are generally quantitative and look at identifying health condition-based segments. The market needs based segmentation research discussed here is segment-based market research that offers a more targeted solution. It provides a holistic market understanding based on which drug development decisions can be made.
This needs based segmentation approach focused on identifying patients’ needs across different regions. Identifying and categorizing customers into needs-based segments empowered the client with a detailed understanding of what product portfolio opportunities exist in the market and helped them analyze the suitable methods to conduct drug trials.
Our needs based segmentation approach also helped build an understanding of different customers based on several demographic and psychographic factors. This shed light on the need for early intervention in the drug development process and helped understand how it facilitates buy-in across drug development teams.
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The needs-based segmentation approach enabled the client to uncover market positioning and pharma portfolio alignment possibilities relating to customer needs that had not been previously considered relevant to the therapy area. The market segmentation insights also helped them focus on high potential areas determined by factors uncovered in the research process, such as unmet customer needs, dissatisfaction with existing treatments, and assessment of competitors’ offerings in each therapy area. The market research insights also uncovered new opportunities in new areas previously overlooked by the protein therapeutics manufacturer, enabling them to:
- Drive market growth by 18%
- Address unmet customer needs
- Offer targeted services
Market needs based segmentation is becoming a crucial aspect of market research in the pharmaceutical industry. Drug developers, manufacturers, CMDOs, and other pharma players acknowledge the value of market needs based segmentation for decision-making concerning new drug development, drug launch, the inclusion of best-practices, and pricing. As a result, protein therapeutics manufacturers now prefer conducting a needs based segmentation at an earlier stage of market segmentation to enhance market understanding and build a robust foundation for effective decision-making and drug development.