Hearing Aid Marketing Opportunities United States Hearing Aid Market (U.S.A Hearing Aid Market)...

Hearing Aid Marketing Hearing Aid Marketing OpportunitiesOpportunities

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 LLC1390 Kathryn Lane1390 Kathryn Lane

Lake Forest IL 60045Lake Forest IL 60045847-295-6946847-295-6946

[email protected]

Updated June 2008Updated June 2008Updated December 2007 Updated December 2007

Summer 2006Summer 2006

Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comwww.hearingcentral.com

mailto:[email protected]

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Current And Future Current And Future

Market TrendsMarket Trends


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.

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketCurrent Hearing Aid Usage (2006)Current Hearing Aid Usage (2006)


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 AidBinaural Hearing Aids (2/user) Single Hearing Aid (1/user)

Wearers(7,875,000)

# Units Worn(13,387,500)

Binaural

Single

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Reasons for Slow AdoptionReasons for Slow Adoption

““Mom and Pop” distribution system Mom 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 (will change as more people age and need a hearing aid)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 entry Barriers to entry Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 Source: 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 Projected Hard-Of-Hearing PersonsProjected Hard-Of-Hearing Persons

31.531.9

32.332.7

33.133.6

3434.5

35

35.8

29

30

31

32

33

34

35

36

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total Market (Millions Users)


U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketProjected Hard-Of-Hearing PersonsProjected Hard-Of-Hearing Persons


Comments on Prior GraphComments on Prior Graph

There will be a steady increase There will be a steady increase in hard-of-hearing persons in hard-of-hearing persons

Boomers with prior loud listening habits Boomers with prior loud listening habits and subsequent hearing loss will and subsequent hearing loss will accelerate this market by 2010 accelerate 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

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketProjected New Projected New Hearing Aids SoldHearing Aids SoldWith No Channel Changes (Only With 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

Total Need (Millions Units) Max Capacity of Current Channels


Assumes Current Adoption Rate holds at about 25%

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketProjected New Projected New Hearing Aids SoldHearing Aids Sold


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


U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketProjected Total Demand for Hearing Aid Projected 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

Total Hard of Hearing Persons Total Hearing Aids Needed


In MillionsIn Millions

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketProjected Total Demand for Hearing Aid Projected Total Demand for Hearing Aid

UnitsUnitsCONCLUSIONS

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


U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Pricing Trends Through Current Pricing Trends Through Current

Channels 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)


U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Pricing Trends Through Current Pricing Trends Through Current

Channels Channels w/ No Mass Market Entriesw/ No Mass Market Entries


Comments on Prior GraphComments on Prior Graph If the current 12,000+/- Audiologists and If the current 12,000+/- Audiologists and

Dispensers remain as the only channels Dispensers remain as the only channels for consumers to purchase hearing aids:for consumers to purchase hearing aids:

1.1. Demand will rise as more people Demand will rise as more people become hard-of-hearingbecome hard-of-hearing

2.2. Prices will rise due to the monopolistic Prices will rise due to the monopolistic nature of the distribution channelnature of the distribution channel

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 Source: 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 Expected Channel ChangesExpected Channel Changes

2006 - 20152006 - 2015FROM: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


U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Projected Distribution Channel Projected Distribution Channel

ChangesChanges20062006

AudiologistsAudiologists 62% 62% H.A. Stores/Dispens. 19%H.A. Stores/Dispens. 19% MDs/VA/ENTsMDs/VA/ENTs 13%13%

Total Total 94%94%

MASS MARKETSMASS MARKETS Mail Order 3.5%Mail Order 3.5% Internet 2.5%Internet 2.5% Super Stores Super Stores >1% >1% Drug StoresDrug Stores >1%>1%

Total Total 6%6%

2015 (Est.)**2015 (Est.)** AudiologistsAudiologists 15% 15% H.A. Dispensers 3%H.A. Dispensers 3% MDs/VA/ENTsMDs/VA/ENTs 15%15%

Total Total 33%33%

MASS MARKETSMASS MARKETS Mail OrderMail Order 9% 9% Internet Internet 12% 12% Super Stores 12%Super Stores 12% Drug StoresDrug Stores 32%32%

Total Total 67%67%


U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Projected Distribution Channel Projected Distribution Channel

ChangesChanges

**Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 **Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comwww.hearingcentral.com

Comments on Prior SlideComments 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

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market AverageAverage Retail Pricing Trends Retail 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


U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Mass Market Channels Retail Pricing Mass Market Channels Retail Pricing

TrendsTrends


Comments on Prior Comments 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

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Projected Distributor Profit Margin Projected Distributor Profit Margin

DeteriorationDeteriorationDue 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


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


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

U.S.A Hearing Aid Market U.S.A Hearing Aid Market Projected Projected UserUser Hearing Aid Adoption Hearing Aid Adoption

RatesRates

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 Impaired

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 Phdand 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

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Projected Projected UserUser Hearing Aid Adoption Hearing Aid Adoption

RatesRates

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


More outlets Lower hearing aid prices

= Greater availability+ More choices

Result: More people who need hearing aids will

make a purchase decision

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Projected Projected UNITUNIT Forecast Forecast 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 60045 Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comwww.hearingcentral.com

Market Share of Dispensers is reduced over time

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Projected Projected UNITUNIT Forecast Forecast w/ Mass Market Channelsw/ Mass Market Channels


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

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketDollar 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 60045 Source: Hearing Central LLC., 1390 Kathryn lane, Lake Forest IL 60045 www.hearingcentral.comwww.hearingcentral.com

23,240,000 unitsX$125

U.S.A Hearing Aid MarketU.S.A Hearing Aid Market Dollar Value of Mass Market ChannelsDollar Value of Mass Market Channels



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

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/ENT They don’t need to visit a dispenser or MD/ENT No Medicare or Medicaid reimbursement (except No Medicare or Medicaid reimbursement (except

VA)VA) Hearing Aid RequirementsHearing Aid Requirements

Need sufficient display “shelf space” (website or Need sufficient display “shelf space” (website or store)store)

Must be high quality (perceived value for the Must be high quality (perceived value for the money)money)

Must be relatively inexpensive i.e. must hit price Must be relatively inexpensive i.e. must hit price pointspoints

$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 No custom molds i.e. no visit required to audiologistaudiologist

Self regulation – Easy to adjust (volume control)Self regulation – Easy to adjust (volume control) Self Maintain - Easy to cleanSelf Maintain - Easy to clean


Mass Market Entry OptionsMass Market Entry OptionsOption 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 if Customer must make appointment if audiologist is busy (impulse buy is dampened) audiologist is busy (impulse buy is dampened) Customer Customer mustmust meet with a professional meet 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 or Depending on price, margins can be reasonable or relatively low relatively low


U.S.A Hearing Aid MarketU.S.A Hearing Aid Market

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketMass Market Entry OptionsMass Market Entry Options

Phase IPhase I: Start selling on corporate : Start selling on corporate websitewebsite Lower startup costsLower startup costs Suppliers can fulfill ordersSuppliers can fulfill orders

No inventory carrying costsNo inventory carrying costs Requires Supply Chain Requires Supply Chain integrationintegration

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 Go nation-wide after kinks worked outout


Option 2: Sell Directly Thru Web & StoreOption 2: Sell Directly Thru Web & Store

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketMass Market Mass Market

Web/Store Product StrategiesWeb/Store Product Strategies Start selling just 2 models Start 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 (Over the Ear) Ear) w/ the new “open ear” technology w/ the new “open ear” technology

AdvantagesAdvantages No mold i.e. no audiologist fitting No mold i.e. no audiologist fitting requiredrequired 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


U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketWeb/Store Product StrategiesWeb/Store Product Strategies

December 2007 UpdateDecember 2007 Update Costco is now selling hearing aids in their stores Costco is now selling hearing aids in their stores

using audiologists:using audiologists: Name brand CICs, ITEs and OTEs. Price points Name brand CICs, ITEs and OTEs. Price points are $1500 - $2,000 each – about a 30% are $1500 - $2,000 each – about a 30% discount from regular audiologistsdiscount from regular audiologists

Walmart is now selling hearing aids through Walmart is now selling hearing aids through their website:their website:““Sport Ears” (ITE) ostensibly for the hunter Sport Ears” (ITE) ostensibly for the hunter market ($380)**Update Feb. 2008 – These are market ($380)**Update Feb. 2008 – These are no longer on the Walmart websiteno longer on the Walmart website Walker (BTE) “Game Ear” ostensibly for the Walker (BTE) “Game Ear” ostensibly for the gamer market ($199)gamer market ($199)

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketWeb/Store Product Strategies (1 of Web/Store Product Strategies (1 of

3)3)December 2007 Update – Big December 2007 Update – Big

BoxesBoxes TargetTarget is selling on the hearing aid periphery is selling on the hearing aid periphery thru their websitethru their website “ “Listen up” – ear pieces and pocket Listen up” – ear pieces and pocket amplifier for TV/theater listening ($14.95) amplifier for TV/theater listening ($14.95) “ “TV Ears” – for listening to TV ($69.99 - TV Ears” – for listening to TV ($69.99 - $99.99)$99.99)

CostcoCostco is selling “TV assistants” on the is 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)


3)3)June 2008 Update –The March June 2008 Update –The March

ContinuesContinues TargetTarget now is selling hearing aids thru their now is selling hearing aids thru their websitewebsite “ “Nexear” – Selling for $429.99Nexear” – Selling for $429.99

Drugstore.com is selling hearing aids Drugstore.com is selling hearing aids thru their websitethru their 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$389.99 and $489.99


3)3)June 2008 Update – Drug Store ChainsJune 2008 Update – Drug Store Chains BJ’s – No ActionBJ’s – No Action Walgreen – No Action Walgreen – No Action CVS – No action CVS – 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 not NOTE: Just because there is no action at this date, it does not mean these channels are not seriously looking at the hearing mean these channels are not seriously looking at the hearing aid market. Some or all of these Drug Store Chains are already aid market. Some or all of these Drug Store Chains are already opening medical clinics in certain stores. If this trend becomes opening medical clinics in certain stores. If this trend becomes prevalent, there is no reason why these clinics could not also prevalent, there is no reason why these clinics could not also offer optometry and audiology products and services.offer optometry and audiology products and services.


3)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 Grocery stores get 8-10 times the foot traffic of most drug stores.most drug stores.

Many grocery chains now have a small Many grocery chains now have a small pharmacy in an area of their store, usually a pharmacy in an area of their store, usually a contractor arrangement with a local hospital or contractor arrangement with a local hospital or pharmacy chain. pharmacy chain. As with the Drug Store Chains, there is no reason As with the Drug Store Chains, there is no reason why these in-Grocery Store drug dispensing centers why these in-Grocery Store drug dispensing centers could not also offer clinical services and optometry and could not also offer clinical services and optometry and audiology products at a future date.audiology products at a future date.((We will have more details on this channel in future updatesWe will have more details on this channel in future updates))

Marketing IssuesMarketing Issues



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 dispenser Some 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 Anyone who wants to purchase a hearing aid may

do so without visiting a doctor but the customer do so without visiting a doctor but the customer “must be given the opportunity to sign a waiver”“must be given the opportunity to sign a waiver”

All states incorporate these FDA regulations into All states incorporate these FDA regulations into their statutestheir statutes

ALWAYSALWAYS have customer sign the waiver and keep have customer sign the waiver and keep on file for State or FDA inspection on file for State or FDA inspection (website click-thru’s are OK)


http://www.hearingcentral.com/waiver.asp

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 (Dispensers are 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


***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 IMPORTANT: To meet State regulations customer should should

always be given the opportunity to set up a time to always be given the opportunity to set up a time to see a dispenser at the time of first interest or at the see a dispenser at the time of first interest or at the time of sale. time of sale. Make sure FDAMake sure FDA handout and waiver is handout and waiver is signed by customer and kept on filesigned by customer and kept on file

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketRegulatory StrategyRegulatory Strategy


For Chain Drug stores – Get the NACDS to petition/ For Chain Drug stores – Get the NACDS to petition/ lobby the FDA to make certain hearing aid models lobby the FDA to make certain hearing aid models reclassified as OTC (reclassified as OTC (OOver ver TThe he CCounter i.e no ounter i.e no professional intermediary)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 instead Certain ITE models have soft tips instead of a canal mold of a canal mold

Once the FDA gives their blessings, the States Once the FDA gives their blessings, the States will defer to the FDA within 18 mos. and follow will defer to the FDA within 18 mos. and follow suitsuit

The potential market size of $5 Billion would The potential market size of $5 Billion would justify justify the lobbying investmentthe lobbying investment

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketStore StrategyStore Strategy


U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketStore Intro StrategyStore Intro Strategy

Choose one StateChoose one State Rollout to stores in all large metro Rollout to stores in all large metro

areas within designated state areas 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 months


http://images.google.com/imgres?imgurl=http://oit.nd.edu/helpdesk/images/question.gif&imgrefurl=http://oit.nd.edu/helpdesk/&h=232&w=141&sz=6&tbnid=j3r-IXh2eeVzyM:&tbnh=103&tbnw=62&hl=en&start=2&prev=/images%3Fq%3Dquestion%26svnum%3D10%26hl%3Den%26lr%3D%26safe%3Doff%26sa%3DG


Suggested Store PlacementSuggested Store Placement Keep inventory behind Keep inventory behind

pharma / vision counter pharma / vision counter 1 of each model on a 1 of each model on a

secure display and 2 of secure 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/ vision cap 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 2 TV on POP display with a 2

minute VCR/CD tape loopminute VCR/CD tape loop PC w/ hearing test for self PC w/ hearing test for self

hearing testhearing test

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketSummarySummary


The hearing aid market is too big to ignoreThe hearing aid market is too big to ignore

Current distribution channels (audiologists Current distribution channels (audiologists and dispensers) cannot meet current and and dispensers) cannot meet current and future market needsfuture market needs

Reclassification of some hearing aids Reclassification of some hearing aids as OTC (as OTC (OOver ver TThe he CCounter) by the FDA ounter) by the FDA will open up this market will open up this market

U.S.A Hearing Aid MarketU.S.A Hearing Aid MarketAuthor InformationAuthor Information


For comments and feedback For comments and feedback onon

this presentation, please this presentation, please contact:contact:

Phil Wyatt CEOPhil Wyatt CEOHearing Central LLC GroupHearing Central LLC Group

1390 Kathryn Lane1390 Kathryn LaneLake Forest IL 60045Lake Forest IL 60045

[email protected]@hearingcentral.com

The Hearing Central Group LLC manufactures and distributes The Hearing Central Group LLC manufactures and distributes

hearing aids for resale to mass marketers such as drug store hearing aids for resale to mass marketers such as drug store chains and other high volume discount big box stores. The chains and other high volume discount big box stores. The group also market their hearing aids through their own group also market their hearing aids through their own websites directly to consumers (websites directly to consumers (www.hearingcentral.com and and www.hearingaidscentral.com).).

http://www.hearingcentral.com/

http://www.hearingaidscentral.com/

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