Company: Oticon, Inc.
Contact: Gordon Wilson, VP of Marketing
Location: Somerset, NJ
Industry: Manufacturing (B2C)
Annual revenue: $960,000,000
Number of employees: 350

Quick Read:

The hearing aid industry for years has suffered from an image problem. Potential buyers were reluctant to buy hearing aids because the devices were perceived as ugly and only for elderly people. As a result, just 23% of those who needed hearing aids actually bought them. Denmark-based Oticon, like other manufacturers, faced a lack of market penetration.

In 2004, the company undertook extensive market research aimed at people with hearing loss who had opted not to buy a hearing aid. The research tried to identify the attributes of an ideal hearing aid and under what circumstances people would buy one. Oticon set out to use the latest technology to build a hearing aid that would address many of the concerns highlighted by the market research.

Two years later the company introduced the new device, which had a different look and fit from prior generations of hearing aids. The related marketing materials used younger-looking models wearing the small hearing in colorful designs. The new approach has paid off. In 18 months on the market, the new Delta hearing aid has helped Oticon nearly double the industry average in terms of the proportion of first-time hearing-aid buyers.

The Challenge:

Prior to 2006, Oticon's US sales—like those of its rivals—were stagnant, and its market penetration hadn't budged in years. The average age of the first-time buyer for all manufacturers was 69.

But hearing loss affects a large population of varying ages, and Oticon knew that it was leaving potential sales on the table because many suffering from hearing loss didn't want an unattractive hearing aid in their ear. However, it wasn't until the company conducted high-level market research that Oticon realized exactly what it was up against in terms of attitudes about hearing aids.

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