Download MarkeTrak V Hearing Aid Industry Market Tracking Survey

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
• 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
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
Hearing Aid Market Penetration has
Historically been low (1 in 5).
25
% Penetration
24
Recent advances due
to VA and Direct mail
23.8
22.9
23
22.6
22
22.2
21.3
21
20.4
20
19
18
1984
1989
1991
1994
1997
2000
Hearing-impaired User &
Non-user Population
Non-users
25
Non-owners
22.3
21.7
20.6
20
19
20
Millions
Users
15
10
5.1
4.9
5
0.8
1
0.7
5.6
4.7
4.6
0.9
0.7
0
1989
1991
1994
1997
2000
Hearing Loss Population by Age Group
Owners versus Non-owners (2000)
85+
Owners
Non-owners
75-84
65-74
55-64
45-54
35-44
18-34
<18
0
1
2
3
Millions
4
5
6
Clinton Announcement Spurred “Baby
Boomer” Potential Market Growth
Huge Baby
Boomer wave
6.5
1994
6
1997
2000
Millions
5.5
5
4.5
4
3.5
3
3544
4554
4564
6574
75+
• 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.
Little Change in Market
Penetration by Age Since 1989
60
55
Year
1989
50
1991
% Own hearing instruments
45
1994
1997
40
2000
35
30
25
20
15
10
5
0
<18
18-34
35-44
45-54
55-64
Year
65-74
75-84
85+
Physician Screening for Hearing Loss
During Physical Exam
Percent screened
25
20
15
HIA Targeting with Physicians
20.2
18.8
18
16.3
15.1
HIA Targeting ceases
16.6
16.6
14
10
5
0
May-89 Nov-89 May-90 Nov-90 Jan-92 Dec-94 Dec-97 Dec-00
Binaural Penetration Trend
90
80
Total Owners
70
Total Owners - Current
60
Bilateral loss Ss - Current
85
79
74
70
65
61
50
65
64
60
52
51
47
40
37
30
20
79
22
25
10
0
1984
1989
1991
1994
1997
2000
Hearing Instrument Fittings by
Perceived Profession
70
66.4
65
1984
1991
1994
1997
2000
60
% Fittings
50
40
28.8
30
22
20
10
4.8
6.9
4.1
2.1
0
Audiologist
Physician
H.I.S
Other
Hearing Instrument Fittings by
Source of Distribution
% purchases
0
10
20
30
40
Audiology office
Mail Order has
grown 91% since
1997; 124,000 hearing
aid users.
Hearing aid store
ENT office
VA
Home
Family Dr.
Other
Hospital
Department store
Clinic
Military
Mail
2000
1997
VA has grown 83%
since 1997; 411,000
hearing aid users.
Current Hearing Aid Owners by
Source of Distribution
Family Doctor's Office
0.3%
Military
1.0% Mail order
Hospital
2.0%
1.8%
Audiologist's Office
45.6%
Other
2.4% Department Store
2.4%
Clinic
2.8%
Home
3.6%
Total Users =
6.35 million
Ear Doctor's Office
8.6%
Hearing Aid Store
23.2%
Vet. Admin.
6.5%
Factors Impacting Choice of
Dispensing Practice (n=2,251)
(Importance scores =4-5 on 5 point scale)
Professional staff
77
Convenient location
64
Convenient hours
63
Price
63
Free hrg screening
59
Range of hearing aids
52
Physician referral
51
Live demonstration
50
Insurance coverage
46
Previous purchase
41
Friend recommended
31
0
10
20
30
40
50
60
% highly important
70
80
90
100
Third-party Payment Trend
35
30
% of sales
25
20
15
10
20.4
22.2
1984
1984
21.1
23
27.5
28.6
1997
2000
16.2
5
0
1989
1991
1994
Average Retail Price Paid by Consumer
Dollars
(includes free, direct mail hearing aids, &
third-party discounts)
1000
900
800
700
600
500
400
300
200
100
0
+67%
+61%
+70%
+53%
1989
1991
1994
1997
2000
Total
BTE
Price increase % since 1994
ITC
ITE
Age of Hearing Instrument
% of sales
Mean age of
instruments:
50
45
40
35
30
25
20
15
10
5
0
1991 = 3.1 yrs
1994 = 3.7 yrs
1997 = 3.8 yrs
2000 = 3.8 yrs
<2 yr
3-4 yrs
5-6 yrs
7-8 yrs
1991
1994
1997
2000
9+ yrs
First Time User Rate
Beltone’s
Eddie
Albert Ads
60
53.4
FDA/FTC
Percent of sales
50
40.5
40
Issues
39
31.6
29
30
20
10
0
1989
1991
1994
1997
2000
Factors Influencing New
First Time Users to Purchase
% New users
0
10
20
30
40
50
60
70
68.5
H.L. worse
45.2
Family
40.5
Audiologist
22.1
ENT
17.4
H.I.S.
HA Owner
12.1
Family Doctor
11.6
Free HA
11.6
80
• 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%)
Physician
Recommendation Trends
30
Family
ENT
% of new users
25
20
• 1989 - HIA advertising
to physician.
• Current initiatives:
– AAA Best Practice
– BHI Referral program
15
10
5
0
89
91
94
97
20
• Trends + , but not
enough.
• Family doctor – single
most important
influencer of hearing aid
purchase.
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.
Factors Considered Helpful or Reliable When
Choosing Brand of Hearing Aid (n=2,273)
(Helpfulness/reliability scores =4-5 on 5 point scale)
Medical doctor recommendation
AARP recommendation
Manufacturer websites
H.I.S. recommendation
Other hearing aid owner recommendation
Audiologist recommendation
Consumer reports
Scientific papers
Magazine articles
Books on hearing aids
Newpaper articles
HHP websites
Family members recommendation
TV ads
Manufacturer brochures
Internet chat sites
Newspaper ads
0
76
61
60
55
49
46
37
36
26
25
24
22
20
16
15
11
10
10 20 30 40 50 60 70 80 90 100
% helpful/reliable
Average Age of New Users
69
68.8
68.4
68.5
Average age
68
67.8
67.5
67
66.5
66
66.3
66
65.5
65
64.5
1989
1991
1994
1997
2000
New User Mean
Household Income
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
$46,300
$40,100
$35,300
$30,800
$30,500
1989
1991
1994
1997
2000
U.S. Customer Satisfaction Trends
No significant differences (H.A. <5 years.)
Positive
Negative
70
% Satisfaction
60
50
40
30
60.7
59.3
58.7
59.2
20
10
17.8
17.3
14.9
17.1
0
1991
1994
1997
2000
% Satisfaction
U.S. Customer Satisfaction Trends
New Hearing Aids (< 1 year)
80
70
60
50
40
30
20
10
0
Positive
Negative
71
66
12
1991
63
7
1994
62.9
10
1997
14.7
2000
Hearing Aids “In the Drawer”
17.9
% Hearing aids in drawer
18
16.2
16
14
13.5
12
12
11.7
10
8
6
4
2
0
1984
1991
1994
1997
2000
Hearing Aid Improvements Sought by Current
Hearing Aid Owners (n=2,428)
(Highly desirable scores =4-5 on 5 point scale)
Speech in noise
Better sound quality
Less whistle/buzzing
Lower price
More soft sounds
Longer lasting batteries
Work better on telephone
Loud sounds less painful
Speech in quiet
Better fit & comfort
Should have VC
Longer money back guarantee
Less costly to repair
95
88
85
84
83
82
82
81
81
79
77
74
73
0
10
20
30
40
50
60
70
% highly desirable
80
90 100
Hearing Aid Improvements Sought by
Current Hearing Aid Owners (n=2,428)
(Desirable scores =4-5 on 5 point scale)
Easier to regulate volume
Mask tinnitus
Easier to clean
Work better on cell phone
Better sound to music
Should not break down as much
Less visibility
Easier battery change
2-5 year payment plan
Should have remote
More fashionable
Color
Lease hearing aid
72
71
66
63
62
56
52
48
34
32
28
21
15
0
10 20 30 40 50 60 70 80 90 100
% highly desirable
Non-owner Demography
“The Opportunity”
The Non-Owner Opportunities
Self-admitted Hearing Loss
Gender (Millions)
8.9
13.4
Male
Female
The Non-Owner Opportunities by
Age Classification
55-64
18%
65-74
15%
75-84
9%
85+
1%
<18
5%
45-54
26%
35-44
16%
18-34
10%
The Non-Owner Opportunities by
Household Income
$50-$59
9%
$60+
30%
$40-$49
10%
<$10
8%
$30-$39
12%
$20-$29
15%
$10-$19
16%
The Non-Owner Opportunities by
Level of Education
College-some
9%
High School
28%
College
16%
Post-graduate
10%
Some Elem.
2%
Elementary
7%
HS-some
28%
The Non-Owner Opportunities by
Employment Status
Part time
10%
Full time
49%
Unemployed
12%
Retired
29%
The Non-Owner Opportunities by
Metro-size
500k-1.99 mil.
20%
50k-499k
16%
<50,000
26%
2 Million +
38%
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
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.
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.
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
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
Key Findings from Knowles
Market Development Studies
The Decision To Purchase a Hearing Aid is
Very Complex and Little Understood
Internal stigma
Influential
others
External stigma
Physician
attitudes
Product
perceptions
Stages of denial
Attitudes
towards HA
Specific impactors
Predisposition
Perceived loss of
communication
performance &
need
Physical
impairment
Communication
situations
Perceived age
Change & emotional reaction
Alternative
solutions
Social
comparisons
Behavior intent/
HA purchase
Attitude toward
Getting hearing
solutions
Price
General moderators
Socioeconomic
status
Health
Personality
Lifestyle &
activity level
Social
network
Psychological
health
The Relationship Between Ad Expenditures &
Hearing Aid Sales is Weak
Estimate (regression) that $25 million = 6% growth
1700
30
1500
1662
23.9
1580
20
10
14
9.8
11.6
9
21
1463
23.7
1555
1617
1473
1308
13.4
1100
1316
11.1
1200
1514
1300
1672
37.6
1400
1000
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Calendar year
Ad expense ($Mil)
Hearing aid sales
1600
40
Hearing aids
Ad Expense ($Mil)
The Issue of Price & Value
Customer Satisfaction with
“Value” = Price/performance
Hearing aids 1-5 years of age
60
54
53
49
50
Percent
Satisfied
54
Dissatisfied
40
30
21
20
17
16
17
1997
2000
10
0
1991
1994
Satisfaction Highly Related to How Much $$ the
Consumer Pays to Solve Their Problem
Percent Satisfaction
100
90
80
70
60
50
40
5
25
45
65
85
$ Spent for 1% Handicap Reduction
Note: Handicap reduction measured by APHAB
105
200+
Hearing Aid Prices are Inelastic at Higher
Prices & Highly Elastic at Low Prices
Starter Hearing
Aid Market
80
60
40
20
Lowest Available HA Price
1100
1000
900
800
700
600
500
400
300
-20
200
0
100
Market Growth (%)
100
Stigma & Price Are Not the Only
Barriers to Market Growth
5 year purchase intent (%)
Only 35% of non-owners would
tak e a "free" invisible hearing
instrument.
60
55 
50
45
40
35 
30
25
20
15
10
5
0
H.I. Owners
Nonowners










Increasing Invisible CIC Price ($)




The Issue of Stigma
Invisible Hearing Aids Have Greater
Consumer Acceptance
Cosmetics/stigma
Attractive
Not embarrassing
Old age image
Visible
Product features
Reliable
Comfortable
Nuisance
Sound quality
Natural sound
Safe
High-tech




















0
20
BTE
Empty ear

40
60
% positive image
80
100
Invisible Hearing Aids Have Greater
Consumer Acceptance
Economics

Affordable


Worth expense
BTE
Empty ear

 
Expense to maintain
Utility & value

Benefit

Value


Noisy situations



Quiet situations
Large group situations
0
10
20

30
40

% positive image

50
60
70
Performance & value (Means)
Invisible Hearing Aids Have Greater
Consumer Acceptance
4.95

4.85
4.75

4.65
 
4.55

4.45

4.35
4.25
3
3.5
4
4.5
5
Cosmetics & comfort (M eans)
5.5
6
Can Positive Role Models Help
Consumers Overcome Stigma?
• Only Two examples I am aware of in our industry:
– President Reagan – 1983 (associated with 20% growth)
– Eddie Albert in Beltone commercials – 1989
• Apparent Clinton effect in Fall of 1997
– Probable impact on admission of hearing loss by male
“baby-boomers”
– No impact on sales to date
What is The Viable Market for
Hearing Aids?
Percent Penetration
Market Penetration is Highly Related to
Recognition of Hearing Loss Handicap
90
80
70
60
50
40
30
20
10
0
1-4 5-9 10- 15- 20- 25- 30- 35- 40- 45- 50- 55- 60- 65- 70- 75- 80- 85- 90- 9514 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94 99
APHAB Unaided Score
Discriminant Function Probability of Non-owner
Resembling Current HA Owner Based on
Multiple Subjective Hearing Loss Measures.
40
Non-owners
HA owners
Percent of Market
35
30
25
Probabilities 1-39% =
71% of non-owner market
14% of the owner market.
20
15
10
5
0
1-9
10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99
Discriminant Function Probability
Four Methods of Measuring Viable US
Hearing Aid Market
• Based totally on hearing loss measures the
additional possible market growth is:




Gallaudet Scores (est. dB Loss Better ear) = 125%
Hearing Handicap Inventory (HHIE) = 154%
APHAB = 127%
Discriminant Function Modeling = 102%
• Clear that the current market could easily double
based totally on hearing handicap.
• And, even more based on situational need.
Why Buy Hearing Aids?
Attitudes Per Se are Important, But
Relationship to Hearing Aid Purchase Intent is
Perhaps More Important
• Sample of 2,753 non-owners
• Measured their attitudes on 76 issues.
• Measured their hearing aid purchase intent in the
next five years.
• Categorized them as a high or low purchase
intenders.
• Took ratio of high/low purchase intenders for each
attitude item.
• Ranked ratios
• First – present their attitudes in key categories.
– On following charts – view red (negative) as “barrier” to growth.
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor = Distribution
Trust audiologists
30 day trial available
Truth in advertising
HA sellers take advantage of you
HA sellers are customer welfare oriented
Trust HA dealers
Exposure to HA ads
Negative
Neutral
Positive
Trust doctors
0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percent of hearing-impaired non-owners
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor = Hearing Health Professional Influence
ENT
Family doctor
Audiologist
Dispenser
Negative
Neutral
Positive
0%
10%
20%
30%
40%
50%
60%
70%
Percent of hearing-impaired non-owners
80%
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Hearing Loss
HA help high frequency loss
Hear well most situations
Need surgery
HA help tinnitus
HA help nerve deafness
Loss severe enough
HA for unilateral loss
Negative
Neutral
Positive
Loss too mild
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Knowledge Level
Where to get hearing aids
Audiologist vs HIS
Knowledgeable about HA
Aware of invisible aids
Know where to go for testing
Some HA automatic
Negative
Neutral
Positive
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Lifestyle
More serious
priorities
Can afford HA
Would like to hear
soft sounds
Loss disruptive to
life
Negative
Neutral
Positive
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Hearing Aid Performance
Use in noisy situations
Make only certain sounds louder
Stop hearing loss decline
Background noise
Effective in most situations
Eliminate background noise
They work well
Tried HA - don't work
Work in multiple listening situations
Use in large crowds
Perform as promised
Negative
Neutral
Positive
Use on telephone
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Hearing Aid Characteristics
Durability of HA
Needs constant adjustments
Whistling & feedback
Hassle
Comfort
Differences in brand
Ease in handling
Natural sounding
Warranty reasonable
Seldom breakdown
Physical fit
Battery change
Negative
Neutral
Positive
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Social Influence
Spouse
Friends
Hearing aid owner
Children
Negative
Neutral
Positive
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Stigma & Cosmetics
Treated differently when HA worn
Make you look weak/feeble
Make you look disabled
Too proud to wear HA
Noticeable
Embarrassed to wear
Difficult to admit loss
People make fun of you
Make you look mentally slow
Negative
Neutral
Positive
Old age image
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Hearing-Impaired Non-owner
Attitudes Towards Hearing Aids
Factor =Value of Hearing Aids
Perceived benefit
Good value
Maintenance expense
Restore hearing to normal
Worth the expense
Use less expensive device
Worth what you pay
Too expensive
Negative
Neutral
Positive
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percent of hearing-impaired non-owners
90%
100%
Top 12 Correlates of Hearing Aid
Purchase Intent
ENT Recommendation
Loss severe enough
Family doctor recommendation
Perceived benefit
HA durability
Child's recommendation
Dispenser recommendation
Audiologist recommendation
Friend's recommendation
Spouse's recommendation
Loss disruptive to life
Hearing well in most situations
0
100
200
300
400
Purchase Intent Ratio (H/L)
500
600
Lowest Correlates of Hearing Aid
Purchase Intent
• Brand
• HA make only certain
sounds louder
• Too expensive
• HA sellers take advantage
of you
• Can afford hearing aids
• Need surgery
• Know where to go for
hearing tests
• Know where to buy
hearing aids
• Old image of hearing aids
• Use lower expense
product
• Customer orientation of
dispensers
• HA warranty
• Knowledge of hearing
aids