The Sensible Hearing Aid of the Future
Mike O’Leary
Brittany Gilman
Bennett Lawrence
Gregg Levante
Nick “Bob” Hamel
Brandon Cote
Today in the United States alone, an average of 1 in every 10
Americans have trouble hearing, almost 30 Million people. Everyday, we
as individuals have hundreds of opportunities to damage our hearing
permanently, resulting in long term hearing loss. While the average age of
living increases, hearing aids are a needed product that will be demanded
for many years to come.(1)
Our mission as a corporation is to ensure that you continue to live life
comfortably and care-free. By offering the best hearing aid devices on
today’s market while offering great value and customer assistance, we
guarantee your satisfaction.
A hearing aid is a commonly used device, aiding the sector of society
that is deemed hearing impaired. These simple devices work as
follows:
(6)
Since their creation, hearing aids have grown in technology
substantially. Today, hundreds of types and features are offered to the
public.(3)
What is Invisi-Ear?
Invisi-Ear has a simple yet effective design, made from special materials
that prove durable and personal, as we can personally cater to your needs.
- Strong, long lasting
plastic outer shell
constructed from
polycarbonate plastic
- Smallest, most
discrete hearing aid
on the market
- Various models
available based on
hearing ability
- Comfortable,
personalized molding
to customers ear
- Rechargeable,
long lasting batteries
versus disposable
- Shells made from
recycled plastic, and
are easily recycled
when disposed of
NAICS Code:
334510
- The current size of the hearing aid market is
presumed to be about 2.8 billion, and growing with
each day.(2)
- By the turn of the next decade (2010), the market growth rate is expected to
be around 79% annually. This shows that our market is going through a
healthy growth phase.(2)
As Invisi-Ear’s target group of individuals, these will be the various groups
that our firm attempts to mainly push our marketing towards:
Age: 55 or older
This is Invisi-Ear’s only targeted group in society, as more than half of this
population suffer from hearing loss. Although this may seem broad, we look
to market towards anyone and everyone in this age bracket.
(4)
Our Competition is honorable and very knowledgeable in the field of hearing
aid devices and customer care.
These companies/corporations include but are not necessarily
limited to:
- Medtronic Inc.
- St. Jude Medical Inc.
- CareStream Health
- Miracle Ear Inc.
- Gambro Health Providers(2)
Invisi-Ear holds the competitive edge in the fact that we not only does it have
the most discrete and comfortable, but uses rechargeable batteries to
save the costumer money in the longrun.
In order to do any necessary testing of Invisi-Ear, our firm has
set-up a plan with 3 different nursing homes and/or assisted living
communities in the state of Florida, an area heavily populated with
retired senior citizens over the age of 55.(2)
Our Plan:
- Test a group of 150 people in each nursing home
- If the subject likes the product, offer rebate upon purchase
- Record data and determine factors for improvement
$
$
(Approx.)
Real Estate:
$400,000
Machinery:
$20,000
Furniture/Office Supplies:
$2,000
TOTAL: $622,000
Salaries:
$150,000
$
We plan to take out
commercial loans to start
our business. Each
member will take out a loan
for $110,000 which will give
us a total of $660,000. The
left over money will pay
any bills in order to run the
business.
Advertising:
$50,000
$
1.) www.Miracle-ear.com
2.) www.Hearingreview.com
3.) www.Hearingaids101.com
4.) www.census.gov
5.) www.Nasdaq.com
6.) http://www.ndcs.org
Team 2
The Sensible Hearing Aid of the Future
Mike O’Leary
Brittany Gilman
Bennett Lawrence
Gregg Levante
Nick “Bob” Hamel
Brandon Cote
Presentation
2
Athens, Georgia
Because portions of Florida are known for there elderly
population, our initial thought was to base Invisi-Ear within
its state’s boundaries. However after further research, our
group decided Athens Georgia would be a better base point.
Reasoning:
- Close to Florida
- One of the bigger cities in Georgia
- Leaves distribution options open
- Other areas such as pediatrics are
available for marketing
Hearing Aids are among the few products that are specially made by order. In
other words, they’re custom. Due to their custom make at time of demand, this
means:
1.) No warehousing, only storage for parts
(which happen to be extremely small)
2.) Customer orders come from audiologist
offices and hospitals in some cases via e-mail
3.) Invisi-Ear special made ear-molds set-up
for overnight business shipping.
Channel Type:
“C2”
Marketing Channel
For the reason stated in the last slide (our product is custom
made), Invisi-Ear will use channel type “C2” due to the fact we do
not mass-produce. Furthermore, these products will be shipped
to offices and hospitals at time of purchase, not a consumer’s
residence.
Selective Market Coverage
Invisi-Ear is a medical product that is not found at your local drug store.
Invisi-Ear is a valuable piece of medical technology that may only be
prescribed by a physician or other medical specialist, hence making it a
perfect candidate for selective market coverage.
Hearing Aid companies most always use the U.S. Mailing System,
or another private mailing company such as FedEx or DHL.
Therefore this is also what we at Invisi-Ear plan to do.
This is also because we do not mass produce; As stated earlier we
build upon receiving orders. It simply does not make sense to own
our own fleet of transportation vehicles when our product ships to so
many different places in potentially low volumes.
Potential Problem:
We at Invisi-Ear only see potential problems and/or conflicts
between channel members of this business process due to
time. No one likes to wait for something they’ve paid for and
need.
Solution:
By keeping staff on from early mornings to late nights, we do
our very best with constructing these devices and shipping
them out to hospitals and offices as fast as possible.
The Sensible Hearing Aid of the Future
Mike O’Leary
Brittany Gilman
Bennett Lawrence
Gregg Levante
Nick “Bob” Hamel
Brandon Cote
Presentation
3
2007
Step A: Estimated Units Sold
A
Step B: Variable Costs (per unit)
F
Result
Calculations
100,000 units
ATC
per unit
(estimation)
1 – Mark-up
Labor:$1145.00
$50.00
B Materials: $450.00
Step C: Total Cost of Goods Sold
Step D:
Estimated Operating Costs
Step E: Average Total Cost Per
Unit
Worker Benefits: $5.00
C
G
D
Step F: Selling Price
Step G: Gross/Net Profit Rate
Gross Profit Rate:
$45.5 Million
60%
$300,000
Net Profit Rate:
E
36%
$458.00
50 + 450 + 5 = 455
458
Total Variable
1 - 0.6 Cost =
$455.00
Gross Profit
Units Sold
Sales
x COGS
100,000
x $455.00
69 Million
114.5 Million
Admin. = $250,000
Lease =
$25,000
Insurance = $25,000
$300,000
Net Profit
COGS +Sales
Operating Exp.
Units Sold
40,920,000
$45.5114.5
Million
+ $300,000
Million
100,000
- Setting a price to make a target profit -
Breakeven Point in Units:
Total Fixed Costs
$300,000
Unit Contribution Margin
($1145 – $455)
435
Breakeven Point in Dollars:
Breakeven point x Unit Sales Price
435 x $1145
$498,075.00
Invisi-ear
Projected Income Statement
10% Growth each year
Sales
Cost of goods sold:
Labor
Materials
Benefits
Total cost of goods sold
2007
2008
2009
2010
2011
$ 114,500,000.00 $ 125,950,000.00 $ 138,545,000.00 $ 152,399,500.00 $ 167,639,450.00
$5,000,000.00
$40,000,000.00
$500,000.00
$45,500,000.00
$ 5,500,000.00 $ 6,050,000.00
$ 44,000,000.00 $ 48,400,000.00
$
550,000.00 $
605,000.00
$ 50,050,000.00 $ 55,055,000.00
$ 6,655,000.00 $ 7,320,500.00
$ 53,240,000.00 $ 58,564,000.00
$
665,500.00 $
732,050.00
$ 60,560,500.00 $ 66,616,550.00
Gross Profit
Operating Expenses:
Administration
Lease/Rental Cost
Insurance
Total Operating expenses
Net Income before taxes
Taxes
Tax amount
Net income after taxes
$ 69,000,000.00 $ 75,900,000.00 $ 83,490,000.00 $ 91,839,000.00 $ 101,022,900.00
$
250,000.00
$
25,000.00
$
25,000.00
$
300,000.00
$ 68,700,000.00
40%
$ 27,480,000.00
$ 41,220,000.00
$
275,000.00
$
25,000.00
$
27,500.00
$
327,500.00
$ 75,572,500.00
40%
$30,229,000.00
$45,343,500.00
$
302,500.00
$
25,000.00
$
30,250.00
$
357,750.00
$ 83,132,250.00
40%
$33,252,900.00
$49,879,350.00
$
332,750.00
$
25,000.00
$
33,275.00
$
391,025.00
$ 91,447,975.00
40%
$36,579,190.00
$54,868,785.00
$
366,025.00
$
25,000.00
$
36,602.00
$
427,627.00
$ 100,595,273.00
40%
$40,238,109.20
$60,357,163.80
Gross Profit Rate
Net Profit
Net Profit Rate
60%
$ 40,920,000.00
36%
60%
$45,016,000.00
36%
60%
$49,521,600.00
36%
60%
$54,477,760.00
36%
60%
$59,929,536.80
36%
$
$
Pricing Strategy: Cost Plus Pricing
Our only pricing strategy will be basic Cost Plus Pricing. No other
pricing strategy really fits our product’s special medical nature.
Channel Member Mark-ups:
Our prediction is that the offices that use our product for patients will
charge somewhere in the range of a 25% mark-up on our product in
order to produce profit of their own. Moreover, they will also be
responsible for shipping charges, as we use postal transportation to ship.
Product Price:
$1145.00
$1145 + (25%)
Consumer Price:
$1341.25
Business Ethics:
$
Because our product is already priced substantially lower than
our competition, we do not run into any ethical issues when
pricing Invisi-Ear. Also, hearing aids are often covered by health
insurance companies.
$
The Sensible Hearing Aid of the Future
Mike O’Leary
Brittany Gilman
Bennett Lawrence
Gregg Levante
Nick “Bob” Hamel
Brandon Cote
Presentation 4
Invisi-Ear’s 2 main goals in it’s strive to develop its public relations include:
1. Creating Brand Awareness
2. Building goodwill between our
company and the consumer
In order to assist in creating brand as well as public awareness, Invisi-Ear will
use a combination of press releases as well as promoting free hearing checks to
potential customers.
Our firm’s message will be to make the public aware of Invisi-Ear’s simplistic,
convenient, and low-cost product. Our P.R. aspiration is to promote trust and
honesty, delivering a product nothing short of perfection to the consumer.
Feedback:
It is imperative that our
firm receive feedback from
even potential consumers
and/or customers. By
establishing several
different methods of
collecting this information,
our firm can better develop
or even redirect itself,
making any necessary
changes. Without some
kind of feedback from the
public, Invisi-Ear could not
better itself in serving the
consumer.
Then, after the consumer uses the
product, they will evaluate its
After receiving
performance
and the
howproduct
satisfied they
physician,
the office
arefrom
withyour
Invisi-Ear
through
standard
will be instructed
the
business
reply mail.toIngive
order
to
patient
quick, basic
entice
theacustomer
to take part in
questionnaire
part of the
this,
we will offeras
anaextended
final fitting
warranty
program currently still under
procedure/appointment.
consideration
in exchange.
Advertising Budget:
Invisi-Ear plans to use an estimate of 5% of its profit for advertising, although
we have made that a permanent decision, meaning it is subject to change.
Net Profit:
$40,920,000.00
$40,920,000.00 (5%)
$2,046,000.00
Media:
A Press
In
order Release
to incorporate
will also
thebe
media
arranged
and press
with the
intopress
the introduction
in order to get
of Invisi-Ear,
the word
we will
out
about
air Invisi-Ear’s
commercials
state-of-the-art
from 8am – 5pm
product
on various
for the channels
large population
generally
that
viewed
by the any
reads
elderly
formpopulation.
of newspapers.
This information is easily obtainable from television
stations, however our choices are not yet clear. However, as stated earlier our
budget
is large
and adjustable.
Accordingly,
Invisi-Ear
will also supply audiologist and physician’s offices with
pamphlets on our product. This will allow potential consumers to take important
The generalwith
theme
of these
will be tothey
inform
the
our
information
them,
while commercials
providing everything
need
topublic
know that
about
hearing
aids are comfortable, will not leave you embarrassed to wear them,
Invisi-Ear.
and the difference they can make in one’s life.
Advertising Type:
One of the only methods, or types, of advertising that will seem to work
with the nature of our medical based product is comparative advertising. By
comparing our strengths to our competitors weaknesses, our firm will prosper
from its honesty and the image of a solid, trustworthy product.
Evaluation:
By adding certain questions into the questionnaires that Invisi-Ear will
supply to the consumer and the physicians offices, our firm will ask specifically
how the consumer heard of Invisi-Ear. This feedback will allow our firm to decide
what is and is not working for advertising our product.
The Sensible Hearing Aid of the Future
Mike O’Leary
Brittany Gilman
Bennett Lawrence
Gregg Levante
Nick “Bob” Hamel
Brandon Cote
Presentatio 5
n
- Overview -
Objective:
The main objective of Invisi-Ear’s sales is to stimulate a trial with potential
consumers. By providing vital and important information to the consumer
through our various forms of advertising, we hope to attract these individuals to
set-up appointments with their respected doctors for more information and
fitting.
Consumer Promotional Tools
Price Reduction:
Invisi-Ear plans to reduce our price during and
just after the holiday months. Most person to
person interaction/communication occurs at
this time of the year due to more frequent
social gathering. Also, we will run an ad
campaign urging potential consumers to try a
hearing aid as a New Years resolution.
Coupon Specialties:
You’ll Never
Miss
Mr. & Mrs. John Doe
123 Fake Street
Athens, GA 02445
A
Single
Moment….
For More Information, call
Invisi-Ear @ 1-800-HEAR
Schedule a meeting
with your physician or
audiologist today…if not
for you, then for the
benefit of your loved ones.
An Invisi-Ear Hearing
Aid can improve not only
your standard of living, but
also your loved one’s
knowing you’ll never miss
a single moment.
Invisi-Ear also prepares to send postcards
with a 5% discount coupon on our product to
different parts of the nation different times of
the year. When presented, the physicians
office will be directed to send us this postcard
complete with a serial number and barcode in
order to provide us with feedback on the
effectiveness of this strategy.
Facing Consumer Doubt:
Due to our new and upcoming nature as a business firm, it will undoubtedly be
difficult toProblem:
gain loyalty as well as overcome several key factors
every well
Solution:
rounded business must. These include:
 Respect and Trust from the
consumer and/or customer
 Provide consumers with an
excellent product and great service
 Proving our product to be
superior in quality
 Through advertising and trial, show
its durability and service it comes with
 Aspects of our product that our
competition lacks
 Demonstrate size, charging
capabilities, etc.
 A low, competitive price to
compliment our fine product
 Invisi-Ear is priced far below it’s
competition, communicated through
our advertising and participating
offices
Urgency Closing:
Due to the nature of our product and the sales promotions we offer, it
simply makes the most sense to use urgency closing. By using this sales
method, our consumers are forced to purchase during a certain time period or
lose a considerable discount on Invisi-Ear. Hopefully, this will cause a greater
demand for our product during that time period.
To avoid any and all post purchase cognitive dissonance, Invisi-Ear as a
company has developed several strategies:
1.) Send annual reminders for followups and hearing checks
2.) Send “Seasons Greetings” cards to
be sincere while including all people
3.) Provide our customers with a
Warranty as mentioned earlier
In order to successfully spread our product across the country, our sales team
will be structured in a territorial sales force manner. Our goal is create awareness,
not to be exclusive. Therefore, our salespeople will attempt to push our product to
as many audiologist and physicians offices as possible.
Salary, Compensation, and Commission
Our salespeople have critical jobs that are vital to the expansion of
Invisi-Ear. The following options will be given to them for wages:
Sole Commission – only receive
commission
Salary w/ Commission – receive
wage and smaller commission
10% of original deal
$22.00 per hour
8% on every unit sold from that
office
2% on every unit sold from any
office sold to