• by Bruce Carlson
  • March 15 2018

Why Kalorama Does Not Publish 100s of Studies Each Year

There so are many market research companies and publishers out there.  How to separate them?  Well, you may want to look at how much they publish.  One outlet that is well-known published over 280 titles so far this year, and we know of a company that published 800 reports in February alone!  Our question is - how?  How is it impossible that such studies represent any investigation or knowledge of the industry?   

It is likely that these reports are using re-sourced secondary data.   These firms publish in all sorts of categories, failing to maintain an expertise in any one.  They will publish studies on automobiles, then turn to energy markets, food markets, then tackling pharmaceutical bioprocessing.  We would applaud their flexibility if we didn't know how much work it is to specialize in and cover healthcare markets.   

What is the Peril of Using "Report Factory" Research?

Sometimes it shows.  These are key problems that using report factory research will cause:

  • Blending life science and clinical revenues -   This will tend to enlarge IVD markets.  
  • Blending service and equipment revenues -   Most of our studies cover equipment.  But some companies who are in that field also have service divisions.  Separating that revenue out is important to know the equipment market opportunity.  Not doing that will lead to bloated market figures.  
  • Mistakes about what companies are in the market -  The first step of any report process is to define what companies are in the market.  If that step is rushed, the numbers are finished.  Including companies that are not in the market or double-counting parts makers and outsourcing firms in the same calculations as the OEMs.  
  • Missing clinical practice trends - are doctors really adopting new tests quickly?  Are hospitals buying new devices?  How many devices are used in a hospital visit?  Not getting these facts right will lead to mythical numbers.  
  • Mixing up manufacturing, distributor and retail revenues - not making a concise decision about sticking to one type of revenue can lead to errors.
  • Overestimating growth - Report sellers have an incentive to make markets grow faster, and indeed some customers like to see high growth rates, and a high-growth rate looks good in a press release for a report.  But historical results in healthcare usually should argue for conservatism.  Outside of a few areas, healthcare products usually experience slower adoption rates.  The novelty of new products does not mean payors and customers pay for it immediately.  
  • Guessing on market share.    While a market size and future market size can be estimated, market share must be definitely known or should not be published. That's Kalorama's rule - we don't always include and only do when we know it.  Since most companies do not publish revenues, simply dividing revenue among players is not sufficient.  Companies know their own revenues and can easily detect when their piece of the "pie" is wrong.  And this is doubly bad because...
  • Distorting information used by financial firms and VC outfits.  Market research reports are read by financial firms and incorrect market share, growth, revenues and opportunity size can incorrectly color their opinion.  
  • Creating illogical market segments to boost the size of the report.  Markets can be broken up in many ways, but some segmentation, such as those that break up medical devices based on the materials used or tests based on reagents and instruments invite double-counting, irrelevance and mistakes.  Segments that are based on materials or parts suggest a manufacturing and not a clinical focus.  Reagents in many IVD markets are included in instrument sales, so a definite breakout may represent a misunderstanding of the market.  
  • Re-using information between studies   When a firm creates hundreds of reports each year, it goes without saying that they can be using data from one study to create a segment in another.  What appears to be scores of reports may in reality be one, adjusted and repacked into another.  
  • Using reports as a "fig leaf" to sell consulting or conferences.   What appears to be a report, can merely be quickly computed market study, missing information so that 'customization' can be sold or invitation to a conference can be 

We know this because we know what it takes to make studies.  Kalorama studies of complex healthcare markets take a minimum of 2 months to complete, and 250-400 hours of work.  The work includes detailed reading of annual reports, investor conference transcripts, trade publications, medical journals, government and NPO data, interviews with industry experts. You have to consult many, many sources to get the full picture.  Although interviews are used for some sense of the market, it's important not to take interviews as gospel.  Everyone has their viewpoint, and goals they wish to accomplish.  Interview data can help reveal trends or lead to better refining of secondary-source searching, but reports based soley on interviews will tend to inflate markets - especially if sales managers and business development executives are overrepresented in the survey.      

The most important thing is that everything Kalorama reports on is completed by an analyst that knows the market, that in most cases has written on the market before, and can separate real developments from hype.  Our analysts average 7 years.  Each report is run though the clinical practice assessment to be sure that the market forces we are describing match with what physicians, nurses, laboratory staff, hospital management are actually doing in clinical practice.   

Kalorama Information's Way - Less Studies, But Studies Done Right

This year we plan 45 studies.  We might, if a few things work out, get up to 50 studies.  And that's it.  Next year we'll do more topics, but the number of studies will be near the same.  We'll update the fast-breaking topics and look into new topics as well.  We'll pick the need to know topics like Molecular Point of Care and Gene Editing.  And core IVD and biotech like What's Trending in Monoclonal Antibodies, Next Generation Sequencing Markets and Clinical Chemistry.