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MarkeTrak VI: Hearing Aid Industry Market Tracking Survey 1984-2000

MarkeTrak VI: Hearing Aid Industry Market Tracking Survey 1984-2000. Sergei Kochkin, Ph.D. Knowles Electronics, Inc. February 27, 2002. Method. National family opinion panel 80,000 households Balanced to key census variables HIA survey in 1984 used NFO All MarkeTrak surveys

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MarkeTrak VI: Hearing Aid Industry Market Tracking Survey 1984-2000

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  1. MarkeTrak VI:Hearing Aid Industry Market Tracking Survey 1984-2000 Sergei Kochkin, Ph.D. Knowles Electronics, Inc. February 27, 2002

  2. Method • National family opinion panel • 80,000 households • Balanced to key census variables • HIA survey in 1984 used NFO • All MarkeTrak surveys • Screening Question – Phase I (November 2000) • “Does anyone in your household have a hearing difficulty in one or both ears without the use of a hearing aid?” • Physician screening for hearing loss during last physical within last six months. • Self, Spouse, Other, Child (Under age 18) • 15,800 hearing-impaired individuals • 72% response rate

  3. Method • Hearing Aid Owner Survey - Phase II • Detailed questionnaire 3,000 hearing aid owners based on Phase I response. • Response rate 87% • Topics: • Customer satisfaction (more than 50 areas) • Hearing aid usage (e.g. hours worn) • Use of ALDs • First time user influences • Brand selection • Factors impacting choice of audiologist/dispenser • Suggestions for improving hearing aids • Perceived quality of life changes • Use of computers in hearing healthcare

  4. Hearing Aid Market Penetration has Historically been low (1 in 5). Recent advances due to VA and Direct mail

  5. Hearing-impaired User & Non-user Population

  6. Hearing Loss Population by Age GroupOwners versus Non-owners (2000)

  7. Clinton Announcement Spurred “Baby Boomer” Potential Market Growth Huge Baby Boomer wave • Clinton news release 10/97. • M5 Survey taken 11/97. • Age 45-54 hearing loss growth =23% • $60k growth =35% • Some college growth = 30% • Growth continues. • But penetration among “Boomers” unchanged.

  8. Little Change in Market Penetration by Age Since 1989

  9. Physician Screening for Hearing Loss During Physical Exam HIA Targeting with Physicians HIA Targeting ceases

  10. Binaural Penetration Trend

  11. Hearing Instrument Fittings by Perceived Profession

  12. Hearing Instrument Fittings by Source of Distribution • Mail Order has grown 91% since 1997; 124,000 hearing aid users. • VA has grown 83% since 1997; 411,000 hearing aid users.

  13. Current Hearing Aid Owners by Source of Distribution Total Users = 6.35 million

  14. Factors Impacting Choice of Dispensing Practice (n=2,251)(Importance scores =4-5 on 5 point scale)

  15. Third-party Payment Trend

  16. Average Retail Price Paid by Consumer (includes free, direct mail hearing aids, & third-party discounts) +67% +61% +70% +53% Price increase % since 1994

  17. Age of Hearing Instrument Mean age of instruments: 1991 = 3.1 yrs 1994 = 3.7 yrs 1997 = 3.8 yrs 2000 = 3.8 yrs

  18. First Time User Rate Beltone’s Eddie Albert Ads FDA/FTC Issues

  19. Factors Influencing New First Time Users to Purchase • Factors less than 10% mentions: • Ad-magazine (3%) • HL Literature (2%) • Boss/co-worker (5%) • Newspaper (6%) • Direct mail (5%) • Ad - TV (2%) • Ad – radio (0%) • Telemarketing (0%)

  20. Physician Recommendation Trends • 1989 - HIA advertising to physician. • Current initiatives: • AAA Best Practice • BHI Referral program • Trends + , but not enough. • Family doctor – single most important influencer of hearing aid purchase.

  21. Factors Influencing New First Time Users to Purchase • Notable changes since last MarkeTrak: • Audiologist influence increased to 40.5% - up from 26% in 1997. • ENT influence increased to 22.1% - up from 10.8% in 1997. • “Free” hearing aid influence nearly doubled.

  22. Factors Considered Helpful or Reliable When Choosing Brand of Hearing Aid (n=2,273)(Helpfulness/reliability scores =4-5 on 5 point scale)

  23. Average Age of New Users

  24. New User Mean Household Income

  25. U.S. Customer Satisfaction TrendsNo significant differences (H.A. <5 years.)

  26. U.S. Customer Satisfaction TrendsNew Hearing Aids (< 1 year)

  27. Hearing Aids “In the Drawer”

  28. Hearing Aid Improvements Sought by Current Hearing Aid Owners (n=2,428)(Highly desirable scores =4-5 on 5 point scale)

  29. Hearing Aid Improvements Sought by Current Hearing Aid Owners (n=2,428)(Desirable scores =4-5 on 5 point scale)

  30. Non-owner Demography“The Opportunity”

  31. The Non-Owner OpportunitiesSelf-admitted Hearing LossGender (Millions)

  32. The Non-Owner Opportunities by Age Classification

  33. The Non-Owner Opportunities by Household Income

  34. The Non-Owner Opportunities by Level of Education

  35. The Non-Owner Opportunities by Employment Status

  36. The Non-Owner Opportunities by Metro-size

  37. The Hearing-Impaired Market by State:Self-admitted Hearing Loss • Top 10 states • California • Texas • New York • Florida • Pennsylvania • Illinois • Ohio • Michigan • Georgia • North Carolina

  38. Conclusions • Hearing-impaired population > to 28.6 million. • Major increases in “Baby Boomer” and 75+ age brackets. • Penetration increased to 22.2%: • Free and direct mail impact • Physician screenings declined to 14%. • Overall customer satisfaction unchanged. • New hearing aid satisfaction on decline • Hearing aids in the drawer improved to 11.7%. • Audiologist influence in dispensing continues to grow.

  39. Conclusions • New user rate has dropped to 31.6%. • Average age increase to 69 • Household income increase to $46.3k • Binaural rate is at an all time high of 84.5% for bilateral loss consumers. • Third-party payments continue to increase. • “Out-of-pocket” retail price to consumer increased 67% since 1994. • “Baby-boomer” age wave continues to grow with no indication that industry has tapped this segment.

  40. Conclusions • The top hearing aid improvements sought by current hearing aid owners: • Hearing in noise • Better sound quality • Less whistling & feedback • Lower price • More soft sounds • Least important improvements: • Leasing a hearing aid • Color of hearing aid • More fashionable hearing aids

  41. Conclusions • Top factors in choosing dispenser: • Professionalism • Convenient location • Convenient hours • Price • Top factors considered to be helpful and reliable when choosing a hearing aid brand: • Medical doctor recommendation • AARP recommendation • Manufacturer website • Hearing instrument specialist recommendation

  42. Key Findings from Knowles Market Development Studies

  43. The Decision To Purchase a Hearing Aid is Very Complex and Little Understood

  44. The Relationship Between Ad Expenditures & Hearing Aid Sales is Weak

  45. The Issue of Price & Value

  46. Customer Satisfaction with “Value” = Price/performanceHearing aids 1-5 years of age

  47. Satisfaction Highly Related to How Much $$ the Consumer Pays to Solve Their Problem Note: Handicap reduction measured by APHAB

  48. Hearing Aid Prices are Inelastic at Higher Prices & Highly Elastic at Low Prices Starter Hearing Aid Market

  49. Stigma & Price Are Not the Only Barriers to Market Growth

  50. The Issue of Stigma

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