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Disposable Hearing Aids and Market Orientation

Disposable Hearing Aids and Market Orientation
Mike Fisher, MBA
September 18, 2000

The introduction of disposable hearing aids to the hearing healthcare marketplace can be viewed with contempt, disdain, exhilaration, or ambivalence. Veteran audiologists may dismiss these devices as a fad with very short ''product life cycles.'' This may well be analogous to the recent ''dot-com'' hysteria replete with outrageous price to earnings ratios in 1999 and now, only a few months later, complete business failure in as many as 70% of these ''high flyers'' is possible, if not probable!

Some audiologists may have a contemptuous attitude toward disposable hearing devices. One could imagine an audiologist proclaiming, ''As a profession, we have worked tirelessly to develop the most sophisticated, digitally-based processing strategies and auditory prosthetics requiring our intellectual intervention to develop an appropriate prescription while providing the highest quality products and services, which our patients clearly deserve.''

A few audiologists may be exhilarated with the prospect of new, inexpensive technology. They might feel, though the industry has applied state-of-the-art microprocessing and miniaturization to amplification, customers/patients may actually prefer something which may be adequate, if not better, and at the same time less intrusive, less expensive [in the short term] and requires less professional intervention.

What is the correct approach? Which management techniques can be used to maximize business needs? One venerable concept is called ''Market Orientation''.

More than 40 years ago, Arthur Felton [Harvard Business Review] defined market orientation as, ''the corporate state of mind that insists on the integration and coordination of all the marketing functions which, in turn, are melded with all other corporate functions, for the basic purpose of producing maximum long-range corporate profits.''

Some 30 years ago, Carlton McNamara wrote in the Journal of Marketing that market orientation is ''a philosophy of business management, based upon a company-wide acceptance of the need for customer orientation, profit orientation, and recognition of the important role of marketing in communicating the needs of the market to the [corporation]''.

Felton's definition agrees with one of the most fundamental financial objectives -- to maximize the value of the firm. A key construct in McNamara's definition is acceptance of the need for customer orientation.

Customer focus is the key element of market orientation and involves asking customers/patients about their current and future needs and preferences. The audiologist must be aware of other market ''intelligence'' including familiarity with competition and regulation. A successful strategy not only reacts to changing market conditions but also anticipates the customers' responses to new technologies and services.

Audiologists should feel compelled to implement strategies at this time, in anticipation of the widespread, national introduction of disposable hearing aids. Waiting until the conclusion of an extensive marketing and promotion program by the manufacturer of disposable devices will leave many audiology practices non-viable. Markets for more expensive, custom devices will likely diminish and, though some traditional audiology practices will continue to flourish, many will become anachronistic, fragile, and will fail.

Defining customer wants and needs is not a simple matter. The audiologist may recognize the end users (patients) of their products and services, but may be significantly less informed about others who influence the choices of end users, such as mass media and large corporations with enough marketing money at their disposable to significantly impact the desires and ''needs'' of the consumer/patient/customer.

The above will potentially be the case with disposable hearing aids. A powerful advertising campaign could divert the desires and needs of consumers from expensive ''durable'' hearing devices to the disposable variety.

The impact of disposable hearing aids cannot be predicted with absolute accuracy. However, their introduction might provide the catalyst for prepared audiologists to:

  • Speak with their customers/patients about the various alternatives in the market even if the audiologist's practice does not offer all of those alternatives.

  • Pay close attention to the trade, local and national press. It can provide good information about the activities of competitors.

  • Use everyone in the organization to collect marketing ''intelligence''. Sometimes, a patient is more comfortable discussing financial issues with the receptionist, rather than the audiologist.

  • Respond to your market using ''market intelligence'' by

  • 1. Selecting your target markets.
    2. Offering new products and services or change existing ones in response to customer input.
    3. Anticipate future customer/patient' needs.
    4. Promote products and services that elicit a favorable action on the part of the consumer.

    Bernard Jaworski and Ajay Kohli recently wrote an article in the Journal of the Academy of Marketing Science. They determined that in order to drive the structure of a market a corporation might

    A- Eliminate players in a market (deconstruction approach);

    B- Build a new or modified set of players-and, hence, a new market structure (construction approach);

    C- Change the functions performed by players (functional-modification approach).

    The deconstruction approach entails re-engineering the industry value chain, often to eliminate low value-adding players-from the customer's perspective. The constructionist approach typically entails developing a different set of players to deliver and meet some customer need, while the functional-modification approach typically involves the forward or backward integration of the firm attempting to shape the market structure.

    Well-financed manufacturers of disposable hearing aids will intensively drive to modify the structure of existing markets. The results of their efforts could eliminate less efficient audiologists from the market, could redefine the products and services of remaining audiologists, and could redefine the channels of distribution for all hearing devices.

    Currently (September, 2000), audiologists are faced with a daunting set of prospects with the premiere of disposable hearing aids.

    Traditional hearing aid evaluation (HAE) practices, hearing aid trials and hearing aid checks used by many audiologists may be invalidated altogether, or their importance may be significantly decreased.

    No longer will the audiologist have the luxury of assembling what they consider to be a quality mix of services and products. The consumer/customer/patient may be blinded by, and indeed demanding of, the quick fix of a seemingly inexpensive price.

    Successfully competing in the contemporary market requires that businesses respond to what the customer determines is important. Perspectives of market positioning, branding, brand extensions, pricing, and professional service may all require quick and significant retooling.

    Market orientation encompasses the whole scope of a business' interactions, both internal and external.

    It is within the purview of each audiologist to seize and use these changes as an opportunity for enhancement of their practice and services. Disposables offer the opportunity for more patients/consumers to make an appointment or walk in the door, while also offering the expectation of better hearing for less cost per hearing aid prescription. We need to manage this opportunity efficiently and wisely.
    Signia Xperience - July 2024

    Mike Fisher, MBA

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