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Hearing aidopportunities
1. Hearing Aid Marketing OpportunitiesHearing Aid Marketing Opportunities
United States Hearing Aid MarketUnited States Hearing Aid Market
(U.S.A Hearing Aid Market)(U.S.A Hearing Aid Market)
Hearing Central LLCHearing Central LLC
1390 Kathryn Lane1390 Kathryn Lane
Lake Forest IL 60045Lake Forest IL 60045
847-295-6946847-295-6946
phil@hearingcentral.comphil@hearingcentral.com
Updated June 2008Updated June 2008
Updated December 2007Updated December 2007
Summer 2006Summer 2006
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
2. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Current And FutureCurrent And Future
Market TrendsMarket Trends
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
3. 7,875,000
23,625,000
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2006
People w / hearing aids People w / out hearing aids
U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Current Hearing Loss PopulationCurrent Hearing Loss Population
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
Total Hearing Loss Population = 31,500,000
Current hearing aid adoption rates - 25%
i.e. 75% of hearing impaired who could
wear a hearing aid do not.
4. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Current Hearing Aid Usage (2006)Current Hearing Aid Usage (2006)
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
Includes All Hearing Aid Types (BTE, ITE,
ITC)
5,512,500
2,362,500
11,025,000
2,362,500
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
People Wearing 2 Hearing Aids People Wearing 1 Hearing Aid
Binaural Hearing Aids (2/ user) Single Hearing Aid (1/ user)
Wearers
(7,875,000)
# Units Worn
(13,387,500)
Binaural
Single
5. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Reasons for Slow AdoptionReasons for Slow Adoption
““Mom and Pop” distribution systemMom and Pop” distribution system
(9000+/- Audiologists, 3000+/- Dispensers)(9000+/- Audiologists, 3000+/- Dispensers)
Stigma of wearing a hearing aidStigma of wearing a hearing aid
(will change as more people age and need a hearing aid)(will change as more people age and need a hearing aid)
High Cost ($1500 - $3000 ea.)High Cost ($1500 - $3000 ea.)
Most are not covered by private insuranceMost are not covered by private insurance
No Medicare/ Medicaid Coverage (VA does)No Medicare/ Medicaid Coverage (VA does)
Barriers to entryBarriers to entry
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
6. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Hard-Of-Hearing PersonsProjected Hard-Of-Hearing Persons
31.5
31.9
32.3
32.7
33.1
33.6
34
34.5
35
35.8
29
30
31
32
33
34
35
36
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tot al Market ( Millions Users)
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
7. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Hard-Of-Hearing PersonsProjected Hard-Of-Hearing Persons
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
Comments on Prior GraphComments on Prior Graph
There will be a steady increaseThere will be a steady increase
in hard-of-hearing personsin hard-of-hearing persons
Boomers with prior loud listening habitsBoomers with prior loud listening habits
and subsequent hearing loss willand subsequent hearing loss will
accelerate this market by 2010accelerate this market by 2010
Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comHearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
8. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected NewProjected New Hearing Aids SoldHearing Aids Sold
With No Channel Changes (OnlyWith No Channel Changes (Only
Dispensers)Dispensers)
53.55
12.32
54.23
13.02
54.44
13.73
55.59
13.9
56.27
14.07
57.12
14.28
57.8
14.45
58.65
14.66
59.5
14.88
60.86
15.22
0
10
20
30
40
50
60
70
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tot al Need ( Millions Unit s) Max Capacit y of Current Channels
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
Assumes Current Adoption Rate holds at about 25%
9. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected NewProjected New Hearing Aids SoldHearing Aids Sold
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
Dispenser channel is not expected to grow –
more people are retiring than entering the
profession
No growth in dispensers causes adoption
rates to hold at 25% of hard-of-hearing
population
CONCLUSIONS
Future hearing aid demand will definitely
not be met by current distribution channels
Comments on Prior GraphComments on Prior Graph
10. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Total Demand for Hearing AidProjected Total Demand for Hearing Aid UnitsUnits
31.5
53.55
31.9
54.23
32.3
54.44
32.7
55.59
33.1
56.27
33.6
57.12
34
57.8
34.5
58.65
35
59.5
35.8
60.86
0
10
20
30
40
50
60
70
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Tot al Hard of Hearing Persons Tot al Hearing Aids Needed
Source: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Semi-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
In MillionsIn Millions
11. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Total Demand for Hearing AidProjected Total Demand for Hearing Aid UnitsUnits
CONCLUSIONS
Market potential of over 60 Million units
by 2015
New distribution channels must be
created to meet demand
Market is ripe for disintermediation &
high volume entrants
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
12. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Pricing Trends Through Current ChannelsPricing Trends Through Current Channels
w/ No Mass Market Entriesw/ No Mass Market Entries
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2006 2007 2008 2009 2010 2011 2013 2014 2015
Average Retail Cost (BTE, ITC, ITE)
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
13. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Pricing Trends Through Current ChannelsPricing Trends Through Current Channels
w/ No Mass Market Entriesw/ No Mass Market Entries
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
Comments on Prior GraphComments on Prior Graph
If the current 12,000+/- Audiologists andIf the current 12,000+/- Audiologists and
Dispensers remain as the only channelsDispensers remain as the only channels
for consumers to purchase hearing aids:for consumers to purchase hearing aids:
1.1. Demand will rise as more peopleDemand will rise as more people
become hard-of-hearingbecome hard-of-hearing
2.2. Prices will rise due to the monopolisticPrices will rise due to the monopolistic
nature of the distribution channelnature of the distribution channel
14. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
The Future : 2006 - 2015The Future : 2006 - 2015
Upheaval!Upheaval!
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
15. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Expected Channel ChangesExpected Channel Changes
2006 - 20152006 - 2015
FROM:FROM:
AudiologistsAudiologists
Hearing Aid storesHearing Aid stores
TO:TO:
Mass Markets i.e.Mass Markets i.e.
Drug StoresDrug Stores
Big Box StoresBig Box Stores
InternetInternet
Mail OrderMail Order
Toll-KeepersToll-Keepers Open MarketsOpen Markets
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
16. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Distribution Channel ChangesProjected Distribution Channel Changes
20062006
AudiologistsAudiologists 62%62%
H.A. Stores/Dispens. 19%H.A. Stores/Dispens. 19%
MDs/VA/ENTsMDs/VA/ENTs 13%13%
TotalTotal 94%94%
MASS MARKETSMASS MARKETS
Mail OrderMail Order
3.5%3.5%
InternetInternet
2.5%2.5%
Super StoresSuper Stores >1%>1%
Drug StoresDrug Stores >1%>1%
TotalTotal 6%6%
2015 (Est.)**2015 (Est.)**
AudiologistsAudiologists 15%15%
H.A. DispensersH.A. Dispensers
3%3%
MDs/VA/ENTsMDs/VA/ENTs 15%15%
TotalTotal
33%33%
MASS MARKETSMASS MARKETS
Mail OrderMail Order
9%9%
InternetInternet 12%12%
Super StoresSuper Stores
12%12%
Drug StoresDrug Stores 32%32%
TotalTotalSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
17. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Distribution Channel ChangesProjected Distribution Channel Changes
**Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com**Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
Comments on Prior Slideomments on Prior Slide
In the US hearing aid markets, there will be a
dramatic shift from dispensers to mass marketers
US hearing aid market will expand from 25% to
67% of the hard-of-hearing
Traditional channels will lose market share to
mass market channels
Traditional channels will make money on custom
molded hearing aids and hearing tests
18. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
AverageAverage Retail Pricing TrendsRetail Pricing Trends
Through Mass Market Channels AloneThrough Mass Market Channels Alone
$750
$700
$650
$600
$500
$400
$300
$200
$150
$125
$0
$100
$200
$300
$400
$500
$600
$700
$800
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Average Retail Cost
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
19. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Mass Market Channels Retail Pricing TrendsMass Market Channels Retail Pricing Trends
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
Comments on PriorComments on Prior
SlideSlide Mass Market channels will drive down hearing aid
prices due to:
Multiple competitors
Supplier manufacturing economies
Large ad budgets
Price erosion will accelerate beginning in 2010
RESULTS: Audiologists and dispensers will move
to higher end custom hearing aids and to
customers who want personal service
20. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Distributor Profit MarginProjected Distributor Profit Margin
DeteriorationDeterioration
Due to Mass Market CompetitionDue to Mass Market Competition
50%
48%
45%
43%
40%
38%
35%
33%
30%
28%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Margin Deterioration
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
21. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Projected Profit Margin DeteriorationProjected Profit Margin Deterioration
Due to Mass Market CompetitionDue to Mass Market Competition
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
Comments on Prior GraphComments on Prior Graph
Mass Market competition will force down prices
and margins will deteriorate accordingly
Margins will bottom out at around 25%
by 2015
Comments: This relentless price and margin
deterioration could accelerate. If so, the projected
timeline could be compressed to 2010 or 2012,
depending on the aggressiveness of the mass
marketers
22. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
ProjectedProjected UserUser Hearing Aid Adoption RatesHearing Aid Adoption Rates
7.88
0.08
31.5
3.22
13.67
35.8
0
5
10
15
20
25
30
35
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Current Channels Mass Market Channels Total Hearing I mpaired
Source: Better Hearing Institute Marke Trak VII™ Annual Hearing Aid Market Survey/ Sergei Kotchkin PhdSource: Better Hearing Institute Marke Trak VII™ Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
and Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comand Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
In Millions of usersIn Millions of users
23. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
ProjectedProjected UserUser Hearing Aid Adoption RatesHearing Aid Adoption Rates
Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comHearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.com
Comments on Prior GraphComments on Prior Graph
More outlets
Lower hearing aid prices
= Greater availability
+ More choices
Result:
More people who need hearing aids will make a
purchase decision
24. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
ProjectedProjected UNITUNIT ForecastForecast
w/ Mass Market Channelsw/ Mass Market Channels
8.6
0
5.5
23.24
0
3
6
9
12
15
18
21
24
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Current Channels Mass Market Channels
In Millions of unitsIn Millions of units
**Assumes 70% of users will purchase 2 hearing aids**Assumes 70% of users will purchase 2 hearing aids
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
Market Share of Dispensers is reduced over time
25. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
ProjectedProjected UNITUNIT ForecastForecast
w/ Mass Market Channelsw/ Mass Market Channels
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
Comments on Prior GraphComments on Prior Graph
Current trends will continue where 70% of
purchasers choose 2 hearing aids (binaural)
67% market penetration rate by 2015 translates to
over 23 million hearing aids
Market will split into:
OTC (low cost/low maintenance) hearing aids
sold through mass marketers/Internet/mail order
Custom /programmable hearing aids (high cost)
sold through traditional channels
26. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Dollar Value of Mass Market ChannelsDollar Value of Mass Market Channels
(67% of Total Market in 2015)(67% of Total Market in 2015)
$67
$342
$749
$1,191
$1,624
$1,991
$2,185
$2,515
$2,744
$2,905
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Value of Mass Market Channels
In Millions of DollarsIn Millions of Dollars
**Assumes 70% of users will purchase 2 hearing aids**Assumes 70% of users will purchase 2 hearing aids
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
23,240,000 units
X$125
27. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Dollar Value of Mass Market ChannelsDollar Value of Mass Market Channels
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
Comments on Prior GraphComments on Prior Graph
In the next 10 years, the growth rate in hearing aid
sales will accelerate
Mass marketers and other efficient channels
(Internet and mail order) can expect to participate
in a 5 Billion dollar market by 2015
28. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Requirements for EntryRequirements for Entry
Customer EducationCustomer Education
They don’t need a prescriptionThey don’t need a prescription
They don’t need to visit a dispenser or MD/ENTThey don’t need to visit a dispenser or MD/ENT
No Medicare or Medicaid reimbursement (except VA)No Medicare or Medicaid reimbursement (except VA)
Hearing Aid RequirementsHearing Aid Requirements
Need sufficient display “shelf space” (website or store)Need sufficient display “shelf space” (website or store)
Must be high quality (perceived value for the money)Must be high quality (perceived value for the money)
Must be relatively inexpensive i.e. must hit price pointsMust be relatively inexpensive i.e. must hit price points
$299 - $899 in 2007$299 - $899 in 2007
$99? - $499? in 2015$99? - $499? in 2015
No custom molds i.e. no visit required to audiologistNo custom molds i.e. no visit required to audiologist
Self regulation – Easy to adjust (volume control)Self regulation – Easy to adjust (volume control)
Self Maintain - Easy to cleanSelf Maintain - Easy to clean
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
29. Mass Market Entry OptionsMass Market Entry Options
Option 1: Put Audiologists in StoresOption 1: Put Audiologists in Stores
Lease space or hire audiologistsLease space or hire audiologists
AdvantagesAdvantages
Professional can dispense & answer questionsProfessional can dispense & answer questions
Complies with most State regulationsComplies with most State regulations
DisadvantagesDisadvantages
Customer must make appointment ifCustomer must make appointment if
audiologist is busy (impulse buy is dampened)audiologist is busy (impulse buy is dampened)
CustomerCustomer mustmust meet with a professionalmeet with a professional
i.e. Audiologist must “dispense”i.e. Audiologist must “dispense”
Hearing aids can probably be sold for under $1,000Hearing aids can probably be sold for under $1,000
Depending on price, margins can be reasonable orDepending on price, margins can be reasonable or
relatively lowrelatively low
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
30. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Mass Market Entry OptionsMass Market Entry Options
Phase IPhase I: Start selling on corporate website: Start selling on corporate website
Lower startup costsLower startup costs
Suppliers can fulfill ordersSuppliers can fulfill orders
No inventory carrying costsNo inventory carrying costs
Requires Supply Chain integrationRequires Supply Chain integration
Can see how hearing aids sellCan see how hearing aids sell
Phase IIPhase II: Start selling Direct in stores: Start selling Direct in stores
Pilot test in a city/ regionPilot test in a city/ region
Go nation-wide after kinks worked outGo nation-wide after kinks worked out
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
Option 2: Sell Directly Thru Web & StoreOption 2: Sell Directly Thru Web & Store
31. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Mass MarketMass Market
Web/Store Product StrategiesWeb/Store Product Strategies
Start selling just 2 modelsStart selling just 2 models (will meet most(will meet most
consumer requirements)consumer requirements)
Sell one OTE digital modelSell one OTE digital model (Over the Ear)(Over the Ear)
w/ the new “open ear” technologyw/ the new “open ear” technology
AdvantagesAdvantages
No mold i.e. no audiologist fitting requiredNo mold i.e. no audiologist fitting required
Self fittingSelf fitting
Lightweight and invisibleLightweight and invisible
Sell one ITE digital modelSell one ITE digital model (In The Ear)(In The Ear)
Find one that doesn’t require a moldFind one that doesn’t require a mold
Find one that will fit in either earFind one that will fit in either ear
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
32. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Web/Store Product StrategiesWeb/Store Product Strategies
December 2007 UpdateDecember 2007 Update
Costco is now selling hearing aids in their stores usingCostco is now selling hearing aids in their stores using
audiologists:audiologists:
Name brand CICs, ITEs and OTEs. Price points areName brand CICs, ITEs and OTEs. Price points are
$1500 - $2,000 each – about a 30% discount from$1500 - $2,000 each – about a 30% discount from
regular audiologistsregular audiologists
Walmart is now selling hearing aids through theirWalmart is now selling hearing aids through their
website:website:
““Sport Ears” (ITE) ostensibly for the hunter marketSport Ears” (ITE) ostensibly for the hunter market
($380)**Update Feb. 2008 – These are no longer on($380)**Update Feb. 2008 – These are no longer on
the Walmart websitethe Walmart website
Walker (BTE) “Game Ear” ostensibly for the gamerWalker (BTE) “Game Ear” ostensibly for the gamer
market ($199)market ($199)
33. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Web/Store Product Strategies (1 of 3)Web/Store Product Strategies (1 of 3)
December 2007 Update – BigDecember 2007 Update – Big
BoxesBoxes TargetTarget is selling on the hearing aid periphery thruis selling on the hearing aid periphery thru
their websitetheir website
““Listen up” – ear pieces and pocket amplifier forListen up” – ear pieces and pocket amplifier for
TV/theater listening ($14.95)TV/theater listening ($14.95)
““TV Ears” – for listening to TV ($69.99 - $99.99)TV Ears” – for listening to TV ($69.99 - $99.99)
CostcoCostco is selling “TV assistants” on theis selling “TV assistants” on the
hearing aid periphery thru their websitehearing aid periphery thru their website
““TV Ears” – ($59.99 - $89.99)TV Ears” – ($59.99 - $89.99)
34. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Web/Store Product Strategies (1 of 3)Web/Store Product Strategies (1 of 3)
June 2008 Update –The MarchJune 2008 Update –The March
ContinuesContinues TargetTarget now is selling hearing aids thru their websitenow is selling hearing aids thru their website
““Nexear” – Selling for $429.99Nexear” – Selling for $429.99
Drugstore.com is selling hearing aids thruDrugstore.com is selling hearing aids thru
their websitetheir website
NexEar – selling for $499.99NexEar – selling for $499.99
Discount Drug Mart stores are selling NexEarDiscount Drug Mart stores are selling NexEar ––
no other infono other info
CVS website is selling 2 models of NexEarCVS website is selling 2 models of NexEar ––
$389.99 and $489.99
35. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Web/Store Product Strategies (2 of 3)Web/Store Product Strategies (2 of 3)
June 2008 Update – Drug Store ChainsJune 2008 Update – Drug Store Chains
BJ’s – No ActionBJ’s – No Action
Walgreen – No ActionWalgreen – No Action
CVS – No actionCVS – No action
Rite Aid – No ActionRite Aid – No Action
Longs Drugs – No ActionLongs Drugs – No Action
Jean Coutu – No ActionJean Coutu – No Action
NOTE: Just because there is no action at this date, it does notNOTE: Just because there is no action at this date, it does not
mean these channels are not seriously looking at the hearing aidmean these channels are not seriously looking at the hearing aid
market. Some or all of these Drug Store Chains are already openingmarket. Some or all of these Drug Store Chains are already opening
medical clinics in certain stores. If this trend becomes prevalent,medical clinics in certain stores. If this trend becomes prevalent,
there is no reason why these clinics could not also offer optometrythere is no reason why these clinics could not also offer optometry
and audiology products and services.and audiology products and services.
36. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Web/Store Product Strategies (3 of 3)Web/Store Product Strategies (3 of 3)
June 2008 Update- Grocery ChainsJune 2008 Update- Grocery Chains
(A possible future 800 lb. gorilla)(A possible future 800 lb. gorilla)
Grocery stores get 8-10 times the foot traffic of mostGrocery stores get 8-10 times the foot traffic of most
drug stores.drug stores.
Many grocery chains now have a small pharmacy inMany grocery chains now have a small pharmacy in
an area of their store, usually a contractoran area of their store, usually a contractor
arrangement with a local hospital or pharmacy chain.arrangement with a local hospital or pharmacy chain.
As with the Drug Store Chains, there is no reason why theseAs with the Drug Store Chains, there is no reason why these
in-Grocery Store drug dispensing centers could not also offerin-Grocery Store drug dispensing centers could not also offer
clinical services and optometry and audiology products at aclinical services and optometry and audiology products at a
future date.future date.
((We will have more details on this channel in future updatesWe will have more details on this channel in future updates))
37. Marketing IssuesMarketing Issues
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
38. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Barriers to EntryBarriers to Entry
Regulations Differ from State to StateRegulations Differ from State to State
Some State require a licensed dispenserSome State require a licensed dispenser
Some states have reciprocal dispenser recognitionSome states have reciprocal dispenser recognition
(Licensed dispenser can be in another state)(Licensed dispenser can be in another state)
Some States do not require a licensed dispenserSome States do not require a licensed dispenser
FDA RegulationsFDA Regulations
Anyone who wants to purchase a hearing aid may do soAnyone who wants to purchase a hearing aid may do so
without visiting a doctor but the customer “must be givenwithout visiting a doctor but the customer “must be given
the opportunity to sign a waiver”the opportunity to sign a waiver”
All states incorporate these FDA regulations into theirAll states incorporate these FDA regulations into their
statutesstatutes
ALWAYSALWAYS have customer sign the waiver and keep onhave customer sign the waiver and keep on
file for State or FDA inspectionfile for State or FDA inspection (website click-(website click-thru’sthru’s
are OK)are OK)
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
39. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Overcoming Legal BarriersOvercoming Legal Barriers
Hire/Train dispensers in each StateHire/Train dispensers in each State (Dispensers are(Dispensers are
NOTNOT required full-time in each store!) ***required full-time in each store!) ***
Initially 1 or 2 licensed dispensers per StateInitially 1 or 2 licensed dispensers per State
They visit a store every week or twoThey visit a store every week or two
Visit times are posted for customersVisit times are posted for customers
Customer can set up a time for consultationCustomer can set up a time for consultation
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
***As long as a dispenser is available at reasonable dates and times at a store,***As long as a dispenser is available at reasonable dates and times at a store,
it appears that this arrangement will meet most State requirements.it appears that this arrangement will meet most State requirements.
(Have your legal counsel review this strategy for compliance)(Have your legal counsel review this strategy for compliance)
IMPORTANT: To meet State regulations customer shouldIMPORTANT: To meet State regulations customer should
always be given the opportunity to set up a time to see aalways be given the opportunity to set up a time to see a
dispenser at the time of first interest or at the time of sale.dispenser at the time of first interest or at the time of sale.
Make sure FDAMake sure FDA handout and waiver is signed by customerhandout and waiver is signed by customer
and kept on fileand kept on file
40. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Regulatory StrategyRegulatory Strategy
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
For Chain Drug stores – Get the NACDS to petition/ lobbyFor Chain Drug stores – Get the NACDS to petition/ lobby
the FDA to make certain hearing aid models reclassified asthe FDA to make certain hearing aid models reclassified as
OTC (OTC (OOverver TThehe CCounter i.e no professional intermediary)ounter i.e no professional intermediary)
Arguments to useArguments to use
New hearing aids do not require canal moldsNew hearing aids do not require canal molds
New “Open Ear” OTEs have no occlusionNew “Open Ear” OTEs have no occlusion
Certain ITE models have soft tips insteadCertain ITE models have soft tips instead
of a canal moldof a canal mold
Once the FDA gives their blessings, the StatesOnce the FDA gives their blessings, the States
will defer to the FDA within 18 mos. and follow suitwill defer to the FDA within 18 mos. and follow suit
The potential market size of $5 Billion would justifyThe potential market size of $5 Billion would justify
the lobbying investmentthe lobbying investment
41. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Store StrategyStore Strategy
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
42. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Store Intro StrategyStore Intro Strategy
Choose one StateChoose one State
Rollout to stores in all large metroRollout to stores in all large metro
areas within designated stateareas within designated state
within 3 monthswithin 3 months
EvaluateEvaluate
Modify the strategyModify the strategy
Rollout to rest of state within 3 more monthsRollout to rest of state within 3 more months
Re-EvaluateRe-Evaluate
Re-Modify the strategyRe-Modify the strategy
Go nationwide after 6 monthsGo nationwide after 6 monthsSource: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
43. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Suggested Store PlacementSuggested Store Placement
Keep inventory behindKeep inventory behind
pharma / vision counterpharma / vision counter
1 of each model on a1 of each model on a
secure display and 2 ofsecure display and 2 of
each model in inventoryeach model in inventory
Have POP display at end-Have POP display at end-
cap or in Pharma/ visioncap or in Pharma/ vision
waiting area (4-6 sq.ft. ?)waiting area (4-6 sq.ft. ?)
Nice to have:Nice to have:
TV on POP display with a 2TV on POP display with a 2
minute VCR/CD tape loopminute VCR/CD tape loop
PC w/ hearing test for selfPC w/ hearing test for self
hearing testhearing test
44. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
SummarySummary
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
The hearing aid market is too big to ignoreThe hearing aid market is too big to ignore
Current distribution channels (audiologistsCurrent distribution channels (audiologists
and dispensers) cannot meet current andand dispensers) cannot meet current and
future market needsfuture market needs
Reclassification of some hearing aidsReclassification of some hearing aids
as OTC (as OTC (OOverver TThehe CCounter) by the FDAounter) by the FDA
will open up this marketwill open up this market
45. U.S.A Hearing Aid MarketU.S.A Hearing Aid Market
Author InformationAuthor Information
Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045
www.hearingcentral.comwww.hearingcentral.com
For comments and feedback onFor comments and feedback on
this presentation, please contact:this presentation, please contact:
Phil Wyatt CEOPhil Wyatt CEO
Hearing Central LLC GroupHearing Central LLC Group
1390 Kathryn Lane1390 Kathryn Lane
Lake Forest IL 60045Lake Forest IL 60045
847-295-6946847-295-6946
phil@hearingcentral.comphil@hearingcentral.com
The Hearing Central Group LLC manufactures and distributes hearing aidsThe Hearing Central Group LLC manufactures and distributes hearing aids
for resale to mass marketers such as drug store chains and other highfor resale to mass marketers such as drug store chains and other high
volume discount big box stores. The group also market their hearingvolume discount big box stores. The group also market their hearing
aids through their own websites directly to consumers (aids through their own websites directly to consumers (
www.hearingcentral.comwww.hearingcentral.com andand www.hearingaidscentral.comwww.hearingaidscentral.com).).
Notes de l'éditeur
No Growth
Restricted access
(2006) 10% percent of US population (31,500,000) suffer from some form of hearing loss that would be helped by a hearing aid(2006) – Currently only 25% of that 10% population or about 7,875,000 people wear hearing aids CONCLUSIONS: TODAY (2006) About 28,350,000 potential customers with a total need for about 48,195,000 hearing aids are not being served
(2006) – Currently 25% or about 7,875,000 people wear hearing aids
(70% of these wearers – 5,512,500 wear 2 hearing aids for a total of 11,025,000 units worn)(30% of these wearers – 2,362,500 wear 1 hearing aid for a total of 2,362,000 worn)
Source: Better Hearing Institute Marke Trak VII™ Sem-Annual Hearing Aid Market Survey/ Sergei Kotchkin Phd
Audiologists & Hearing Aid Stores combined aka “Dispensers”
USA - Only 12,000+ Hearing Aid Dispensers TOTAL (9000 Audiologists and 3,000 professionals at stores)
Avg. unit volume per dispenser is 16 units/mo. (Total for all dispensers is a little over 2,000,000 units/yr.)
Professional Dispensers retiring faster than new entrants
Current professional are not meeting today’s demand
No Growth in Dispenser entering the field
Penetration/adoption rates hold at about 25%
REPEAT: Market will be almost 36,000,000 Potential users by 2015
Future demand will definitely not be met by current distribution channels
i.e. New Distribution Channels must be created to meet demand
CONCLUSIONS
Market is ripe for disintermediation & high volume entrants
No Growth in Dispenser entering the field
Penetration/adoption rates hold at about 25%
REPEAT: Market will be almost 36,000,000 Potential users by 2015
Future demand will definitely not be met by current distribution channels
i.e. New Distribution Channels must be created to meet demand
CONCLUSIONS
Market is ripe for disintermediation & high volume entrants
No Growth in Dispensers
Penetration/adoption rates hold at about 25%
REPEAT: Market will be over 60 Million units by 2015
Future demand will definitely not be met by current distribution channels
i.e. New Distribution Channels must be created to meet demand
CONCLUSIONS
Market is ripe for disintermediation & high volume entrants
No Growth in Dispensers
Penetration/adoption rates hold at about 25%
REPEAT: Market will be over 60 Million units by 2015
Future demand will definitely not be met by current distribution channels
i.e. New Distribution Channels must be created to meet demand
CONCLUSIONS
Market is ripe for disintermediation & high volume entrants
Assumes 70% of users will opt for 2 hearing aids
Market will be almost 36,000,000 Potential users and 60+ million units by 2015
Assumes 70% of users will opt for 2 hearing aids
Market will be almost 36,000,000 Potential users and 60+ million units by 2015
Monopoly
Restricted distribution
No Competition
Prices rise over time
Monopoly
Restricted distribution
No Competition
Prices rise over time
Dramatic upheaval in this sector
Shift to mass markets
Lower prices encourage higher adoption rates
Dramatic upheaval in this sector
Shift to mass markets
Lower prices encourage higher adoption rates
Dramatic shift from dispensers to mass marketers
By 2015 Drug Stores could have a 40% market Share
Walgreen Co. could get a substantial piece of this market
Dramatic shift from dispensers to mass marketers
By 2015 Drug Stores could have a 40% market Share
Walgreen Co. could get a substantial piece of this market
Mass marketers will drive down prices
Mass marketers will drive down prices
Increased competition will decrease margins
Increased competition will decrease margins
More Mass Marketing outlets will cause adoption rate to rise from 25% to 57% by 2015
i.e. new mass marketer entries causing:
LOWER PRICES
CONVENIENCE
Will cause at least 38% of the hearing impaired to purchase at least one hearing aid by 2015
More Mass Marketing outlets will cause adoption rate to rise from 25% to 57% by 2015
i.e. new mass marketer entries causing:
LOWER PRICES
CONVENIENCE
Will cause at least 38% of the hearing impaired to purchase at least one hearing aid by 2015
More outlets will cause adoption rate to rise from 25% to about 57% by 2015
This translates into about 23,240,000 units being sold by 2015
Lower prices and mass marketers will drive out inefficient dispensers
More outlets will cause adoption rate to rise from 25% to about 57% by 2015
This translates into about 23,240,000 units being sold by 2015
Lower prices and mass marketers will drive out inefficient dispensers
More outlets will cause adoption rate to rise from 25% to about 57% by 2015
Lower prices and mass marketers will drive out inefficient dispensers
More outlets will cause adoption rate to rise from 25% to about 57% by 2015
Lower prices and mass marketers will drive out inefficient dispensers