NexN Market Research By Kaan Caglar

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A thorough analysis of U.S. health care industry, and analysis of possible competitors of a new Vital Sign Monitoring Device. Includes market trend analysis, primary research data.

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NexN Market Research By Kaan Caglar

  1. 1. NexN Solutions LLC. Market Research for NexN Blue Stream Vital Sign Monitoring System Bus 867 - Internship in Business Prof. Gulnur Tumbat Prepared by Kaan L. Caglar NexN Solutions LLC 569 LEYTE TERRACE, SUNNYVALE, CA 94089 T (408) 398 1388
  2. 2. NexN Solutions LLC Table of Contents Executive Summary 3 NexN Blue Pulse System 3 Blue Pulse 3 Local Host 4 Blue Stream System 4 Product offerings 4 Market Research for Blue Pulse System 5 A. Methodology 5 I. Situation Analysis: Secondary Research 6 Market Overview 6 U.S. population 6 Cause of death: Heart disease 6 Poverty and low income 7 Limitation of activity 7 Life expectancy 7 Health insurance 8 Healthcare expenses 8 Cell phone users 10 Bluetooth headset technology 11 II. Primary Research 12 Interviews 12 Blood Pressure 12 Heart rate 12 Body temperature 13 Oxygenation level 13 Surveys 13 B. SWOT Analysis 15 Blue System 15 Potential Competitors 16 C. Market Strategy 19 Segmentation 19 Positioning 20 Marketing Mix 20 Product 20 Price 21 Placement 21 Promotions 21 Recommendations 23 Bibliography 25 Appendixes 26 Market Research for NexN Blue Stream Vital Sign Monitoring System 2
  3. 3. NexN Solutions LLC Executive Summary This report presents a comprehensive market research conducted for NexN Blue Pulse System. NexN Blue Pulse System Blue Pulse System is targeting personal health and personal fitness consumers, as well as vital sign monitoring in the professional medical market. NexN is developing a web based, wireless monitor- ing system for seamless vital sign collection, record management, and transmission. It targets con- sumers who are concerned about their health and professional medical market working on vital sign monitoring. Specifically this system will continually monitor and record heart rate, oxygen satu- ration, blood pressure, and body temperature. Real time analysis of this data will allow personal users to monitor cardiac output, and psychologic stress levels, as well as to track overall fitness levels. Moreover, medical professionals will be able to leverage this streaming data collected over long-time periods to detect pathophysiologic events earlier than ever before, such as heart attacks, strokes and septic infections that may happen to their patients. The NexN’s BlueStream system consists of three functional segments (1) Wireless earpiece (BluePulse) that acts as both a Blue- tooth headset and medical monitoring device, (2) Local host (a cellular phone or wireless PC) that processes and transmits the data to web-servers for record keeping and data processing by ex- pert algorithms (3) Web interface that enables users and healthcare organizations to configure alarms thresholds, review short and long term reports of the vital signs as well as reports of car- diac output, stress and fitness level. Signal processing in the wireless headset enables local data processing such that in the case of threshold crossing ( i.e. heart rate above threshold, low oxygen level or increasing stress level) BluePulse can alert the user using the earpiece as the output inter- face or have the host device alert the remote contact using the cellular or the data network. (1) Blue Pulse (wireless ear piece) Wireless earpiece (BluePulse) that acts as both a Bluetooth headset and medical monitoring device. By the usage of the optical sensor technology, this device will be able to collect data regarding heart rate, blood oxygenation level, blood pressure, and body temperature. Market Research for NexN Blue Stream Vital Sign Monitoring System 3
  4. 4. NexN Solutions LLC (2) Local Host The Blue Pulse device will be bundled with software running either on a PDA or a PC with wireless capability letting the consumer avoid purchasing an additional device to transmit the data. (3) Blue Stream System The collected data from the optical sensor (Blue Pulse) is transmitted to the local host via bluetooth technology. The software records the information, then sends it to the NexN website, where NexN Software runs an algorithm. This data is analyzed by the software and send back to the consumer according to their preferences. ! Product Offerings NexN’s BlueStream system is revolutionary in that it makes the monitoring function ubiqui- tous and eliminates obtuse monitoring devices. It does so by integrating the functionality and form of a lightweight Bluetooth earpiece with almost weightless opto-electronic sen- sors for non-invasive monitoring and data capture. NexN’s Blue Pulse system combines monitoring function with the state of art Heart Rate Variability (HRV) analysis algorithms to provide scientific and quantitative results. The integrated Bluetooth headset will not only monitor the key vital signs outlined above, but will also increase utility by acting as a bio- feedback device with alarm thresholds and data trend analysis to alert the user in real-time of changes in health and fitness. In addition, the device allows loved ones and medical professionals to remotely monitor acute changes in physical condition and stress. Market Research for NexN Blue Stream Vital Sign Monitoring System 4
  5. 5. NexN Solutions LLC Market Research for Blue Pulse System NexN Vital Sign Monitoring device is in its development phase, hence, this research is being made to explore the best ways for this product to be released. Detailed objectives for the market research study is as follows: • Finding out the characteristics of today’s market in regards to the usage of bluetooth device, and to further analyze possible ways for NexN to enter the health care market. • Analyzing the secondary data regarding the health care market including the trends and segments to guide NexN LLC. in deciding the niche market, that would possibly bring the most revenue in sales of such health monitoring device. • Exploring the perceptions of consumers as well as healthcare specialists to further understand the market dynamics in potential fields. • Exploring the consumers, who might be benefiting from this product regarding their perception of a such healthcare device. • Identifying the target market for NexN VSMS, and the best ways to position this product attracting its target segment by recognizing the market trends and demands regarding the usage of such medical device in today’s heath industry. A. Methodology This research uses secondary data regarding the situation analysis of the health market including the trends and consumer demographics. Moreover, the primary research techniques including interviews (two health care specialists in related fields; two health care professionals in possible areas that the device could be launched; two potential consumers in the 65 and over age category), and a survey method resonating the U.S. consumer market demographics regarding the age groups are conducted. Then, the SWOT analysis will explore the pros and cons of the product. Later, the secondary data regarding the possible competitors of a health care monitoring device is analyzed. Finally, the study concludes with the recommended marketing strategy including marketing mix. Market Research for NexN Blue Stream Vital Sign Monitoring System 5
  6. 6. NexN Solutions LLC I. Situation Analysis: Secondary Research Market Overview U.S. population Today, U.S. population is 306 million. According to 2007 estimates, the age structure of the population is: 0−19 years: 27.4% (male 42,667,761; female 40,328,895), 20−64 years: 60.1% (male 89,881,041; female 90,813,578), 65 years and over: 12.6% (male 15,858,477; female 21,991,195). The population age 65 and over is increasing at a faster rate than the total population. From 1950 to 2006, the total resident population of the United States increased from 151 to 299 million persons, representing an average annual growth rate of 1.2%. During the same period, the population 65–74 years of age grew, on average, 1.5% per year, increasing from 8 to 19 million persons. The population 75 years of age and over grew the fastest (on average, 2.8% per year), increasing from 4 to 18 million persons. By 2029, all of the baby boomers (those born in the post World War II period 1946–1964) will be age 65 years and over. As a result, the population age 65–74 years will increase from 6% to 10% of the total population between 2006 and 2030. As the baby boomers age, the population 75 years of age and over will rise from 6% in 2006 to 9% of the population by 2030 and continue to grow to 12% in 2050. By 2040, the population age 75 years and over will exceed the population 65–74 years of age. Changes in the racial and ethnic composition of the population have important consequences for the United States’ health because many measures of disease and disability differ significantly by race and ethnicity. Cause of death: Heart disease In 2005, the age-adjusted death rate for heart disease, the leading cause of death, was 64% lower than the rate in 1950. In the 65 and over segment, 44% of the deaths were caused by heart dis- eases. In the 45-64 year old segment, heart diseases were also the leading cause of death with 35%. Moreover, in the 25-44 year old segment, heart diseases were the 3rd biggest cause for death having a 13%. Heart disease and stroke mortality are associated with risk factors such as high cholesterol, high blood pressure, smoking, and dietary factors. Other important factors include socioeconomic Market Research for NexN Blue Stream Vital Sign Monitoring System 6
  7. 7. NexN Solutions LLC status, obesity, and physical inactivity. Factors contributing to the decline in heart disease and stroke mortality include better control of risk factors, improved access to early detection, and bet- ter treatment and care, including new drugs and expanded uses for existing drugs. Poverty and low Income Children and adults in families with income below or near the federal poverty level have worse health than those with higher income (the average poverty threshold for a family of four was $20,614 in 2006). Although in some cases illness can lead to poverty, more often poverty causes poor health by its connection with inadequate nutrition, substandard housing, exposure to envi- ronmental hazards, unhealthy lifestyles, and decreased access to and use of health care services. In 2006, the overall percentage of the U.S. population living in poverty declined to 12.3%. This was the first decline in the poverty rate since 2000. The poverty rate decreased for all age groups from 2005 to 2006 with the largest decline among people 65 years of age and over. In 2006, the poverty rate among older adults was the lowest since 1959, the first year for which poverty estimates were available, with 9.4% or 3.4 million persons age 65 years and over living in poverty. In 2006, 27%–33% of Hispanic and black children were poor compared with 10%–12% of non- Hispanic white and Asian children. Similarly, among persons 65 years of age and over, almost one- fifth of Hispanic and one-quarter of black persons were poor, compared with 7% of non-Hispanic white persons and 12% of Asians. In 2004–2006, 27% of American Indian or Alaska Native per- sons lived in poverty (estimate based on 3 years of data). Limitation of activity Between 1997 and 1999, the percentage of non-institutionalized adults 65 years and over with limitation of activity decreased. Between 2000 and 2006, the percentage was relatively stable. In 2005–2006, the percentage of older adults with limitation of activity ranged from 25% of 65–74 year olds to 60% of adults 85 years old and over. Life expectancy In 2005, life expectancy at birth was 76 years for white males compared with 70 years for black males and 81 years for white females compared with 77 years for black females. Life expectancy at birth increased more for the black than for the white population between 1990 and 2005. During this period, the gap in life expectancy between white males and black males narrowed from 8 years to 6 years. During the same period, the gap in life expectancy between white females and black females decreased from 6 years to 4 years. Market Research for NexN Blue Stream Vital Sign Monitoring System 7
  8. 8. NexN Solutions LLC The gap in life expectancy between white and black people at age 65 is narrower than at birth. Between 1990 and 2005, the difference in life expectancy at age 65 between white males and black males remained stable at 2 years. In 2005, life expectancy at age 65 was 17 years for white males and 15 years for black males. The difference in life expectancy between white and black fe- males has also been stable in recent years; in 2005, at age 65, white females and black females could expect to live an additional 20 and 19 years, respectively. Life expectancy at birth and at 65 years of age, by race and sex: United States, 1970-2005 SOURCE: CDC/NCHS, National Vital Statistics System Health insurance Public programs such as Medicaid and the State Children’s Health Insurance Program (SCHIP) provide coverage for many low-income children and adults. Almost all adults age 65 and over are covered by the Medicare program, resulting in very few older adults without health insurance. Medicare enrollees may obtain additional private or public coverage to supplement their Medicare benefit package. Market Research for NexN Blue Stream Vital Sign Monitoring System 8
  9. 9. NexN Solutions LLC Health care expenses In 2006, the United States spent $2.1 trillion on health care, an average of $7,026 per person. Per- sonal health care expenditures, a component of national health expenditures that includes spend- ing for hospital care, physician services, prescription drugs, nursing home care, dental care, and other types of medical care, accounted for 84% of national health expenditures in 2006. Private health insurance paid for 36% of total personal health expenditures in 2006, the federal government 35%, state and local government 10%, and out-of-pocket payments 15%. The share of personal health care expenditures paid out-of-pocket decreased from 27% in 1980 to 15% in 2006. Personal health care expenditures by source of funds and type of expenditures: United States, 2006 SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group, National Health Expenditure Accounts. In 2004, per capita personal health care expenditures averaged $5,300 for each U.S. resident. There was, however, a wide range of expenditures by state from $4,000 for each Utah resident to $6,700 for each Massachusetts resident. The states with the highest spending per resident were concentrated in the New England region ($6,400 on average) and the Mideast region ($6,200). These two regions contained eight of the ten states and the District of Columbia with the highest per capita spending on health care. The states with the lowest levels of spending were concen- Market Research for NexN Blue Stream Vital Sign Monitoring System 9
  10. 10. NexN Solutions LLC trated in the Southwest, Rocky Mountains, and Far West regions of the country. Alaska was an exception to the low spending prevalent in the Far West region. Consequently, Medicaid expenditures vary widely by state. The pattern of lower expenditures in the Southwest, Rocky Mountains, and Far West regions of the United States is similar to that observed for health insurance coverage with lower rates of health insurance coverage in these regions. Peo- ple with no health insurance have lower health care expenditures than those who are covered by insurance adding to state spending differences. Per capita personal health care expenditures, by state of residence: United States, 2004 SOURCE: Centers for Medicare & Medicaid Services Cell phone users In the USA, 78% of the population aged 18 and over use or subscribe to wireless services. In the US (population just over 300 million), there were 246,540,781 cell phones as of May 15, 2007. Cell phone ownership of the American population is changing among ages. The ratio of over 65 age Market Research for NexN Blue Stream Vital Sign Monitoring System 10
  11. 11. NexN Solutions LLC group owning a cell phone is 44%, followed by 55-64 age group by 52%, the 45-54 age group’s ratio is 62%, 15-17 age group’s ratio is 64%, and the 12-14 age group’s is 41%. Bluetooth headset technology Global sales of wireless Bluetooth headsets for mobile phones rose 153 percent to 33 million units in 2005, representing a wholesale value of $1 billion, and are expected to grow 70 percent in 2006, according to a survey. In 2009, 120 million Bluetooth Headsets are predicted to ship worldwide. Sixty percent of new phones in North America are shipping with Bluetooth Technology. Market Research for NexN Blue Stream Vital Sign Monitoring System 11
  12. 12. NexN Solutions LLC II. Primary Research Primary research data was conducted by surveys and interviews to be able to recognize the market needs. Here, the detailed information regarding the results of primary research methods will be represented. Interviews Interviews with health care specialists, medicare industry professional, and potential consumers were conducted to further determine the SWOT analysis of the product. The functionalities of the prototype were introduced to the interviewees, then their views regarding possible features of the device were discussed. Appendix A. and Appendix B. include transcriptions of interviews with healthcare specialists. Blood pressure Arterial pressure is most commonly measured via a sphygmomanometer, which historically used the height of a column of mercury to reflect the circulating pressure, though aneroid and electronic devices do not use mercury. According to the health care professionals, using an optical sensor around ear area would make it hard to collect the crucial information needed. Therefore, the information would not be liable. However, if this could be possible, than the data would be used for the doctors to help their patients assess their risk for having a high blood pressure. Moreover, this data could be used for identifying hypertension, heart or kidney failure, and reducing the risk of a stroke. Heart rate Heart beat patterns and the rhythm would be easy to collect from almost anywhere on the body surface. This data would help the patient or the doctor to monitor the regular heart beat patterns of patients. Halter Monitor (a portable device used to measure the electrical activity of the heart over an extended period of time, allowing detection of intermittent arrhythmia and other electrical disturbances), already used by the cardiologists for ECG monitoring. The information collected by the NexN device would not be as detailed. Furthermore, potential consumers of a healthcare monitoring device (65 and over age group) didn’t show almost any interest for monitoring their health conditions rather than going to their healthcare specialist twice a year. However, they also admitted that the specialist’s recommendations play a crucial role regarding their interest for purchasing such device. Moreover, we recognized that they would be more interested in purchasing a monitoring device if it was suggested by their health care specialists. Market Research for NexN Blue Stream Vital Sign Monitoring System 12
  13. 13. NexN Solutions LLC Body temperature According to the health specialists, this information would not be reliable because the best places to get the body temperature are mouth, bladder, and the rectum. However, if it was possible to collect the data by using this device, than it would be benefit-able only in an inpatient setting, where the nurse would not need to collect the body temperature periodically. Therefore, the information could be transmitted by the NexN device continuously in a hospital setting decreasing the hours spent on monitoring each patient’s condition. Oxygenation level This is the most useful area for the product in health specialists’ and health care professionals’ opinion. There are variety of products in Pulmonology field (deals with diseases of the lung and the respiratory tract) aim to decrease the usage of oxygen, which is expensive and bulky. There are many oxygen conservers in the market, hence, most of them work with the same principle: turning on/off each time, according to the patient’s respiration. However, there is no such device that measures the patient’s blood oxygenation level, then provides an amount of oxygen, which meets the level needed by the patient. Surveys A survey study with 18 people from different demographics was conducted regarding the usage of bluetooth device, interests in monitoring heart health, blood pressure, stress level, etc. The demographics of the surveyees resonated the U.S. population in terms of the age distribution. Therefore, 3 consumers from 65 and over; 7 consumers from 45 to 65 category; and 8 consumers from the 18 to 45 age category were surveyed. The questions regarding the usage of a headset device, a cell phone, work-out patterns, and interest in monitoring health variables were asked. Appendix C. includes the questionnaire used for this survey. According to the survey study, outcomes are as follows: 18-45 age group The survey results show that, only 25% of the 18-45 age group uses a bluetooth headset device. Moreover, the times of their use of a headset fluctuates varying from half an hour to two hours per day. This age group tends to work out twice a week, mostly involving running. Moreover, this segment does not show interest in buying a health care monitoring device that works with their headset. Their age, not having health concerns or problems are the most visible reasons for this behavior. Also, as a result of their good health condition, they tend not to buy any product to monitor their health. Finally, almost every participant in this category showed interest in buying such product for their loved ones especially because of its emergency feature. Market Research for NexN Blue Stream Vital Sign Monitoring System 13
  14. 14. NexN Solutions LLC 45-65 age group According to the survey, 15% of this segment uses bluetooth headset device only for few times a week. This group mostly sees the bluetooth device as an uncomfortable gadget in their ear. Moreover, 30% of the group is concerned about the possible health risks of using a headset continuously. In addition, more than half of this segment exercises 3 times a week. There were different answers in the group regarding their perception of having a health monitoring device on their body. A small percentage of the group was interested in monitoring their health by a device; however, they stated that they would not use a headset for such service. More than a quarter of the group said they would wear such device if it was recommended by their doctor. 65 and over Only 30% of the age of 65 and over segment claimed that they use cell phones and headset devices. More than half of this segment also showed interest in a device that gives feedback about their health conditions. However, 65 and over category seemed conservative about their private health data being shared by a third party. One third of the surveyees suggested a bracelet device for monitoring the data at nighttime, since using a headset would not be comfortable when they are in bed. Overall, collected data shows that the price of the product is one of the most important element playing a crucial role affecting the buying decision of the consumers. However, the majority of the participants do not use a headset device for a long time period, hence, making it harder for such device to work efficiently. Most of the younger adults do not see any need to wear a health monitoring device. However, most of the surveyees showed interest in buying a device with an emergency alert function for their elderly relatives. Also, participants recommended few ideas that would be useful with a headset device: Reading out loud, weather report, national regional alert subscription (e.g. Hurricane). Overall, the results from the survey shows that consumers would not purchase this device for health reasons unless it was recommended by their personal health specialist. Market Research for NexN Blue Stream Vital Sign Monitoring System 14
  15. 15. NexN Solutions LLC B. SWOT Analysis Blue System SWOT analysis of the Blue System considers all three elements of the product, the bluetooth headset with optical sensor, the software running on a PDA/PC and collecting the data from the headset, and the algorithm running on the NexN server. Strenghts Weaknesses Opportunities Threats Patented optical Heart care industry is Patented Optical Sensor Heart rate fluctuates sensor technology can a growing sector. technology is unique to during the day. be sold to other Venture capitalists are NexN Blue Stream Therefore, it may companies (e.g. investing in new ideas. System confuse the consumer oxygen conserver) Competitive environ. Headset can not be Headset users, who There are bracelets, The only headset device used 24/7 (for are fitness enthusiasts anklets, wristwatches that collects vital signs instance: while can be the most in the market sleeping) successful niche collecting vital signs Blood pressure can Insurance companies Mostly, other products not be measured Remote monitoring of would demand this are focused on one accurately with the patients vital signs device, since it would aspect of monitoring. optical sensor outside of the hospital decrease the health NexN is giving mix according to expenses messages. specialists Continuously measuring The legislation The mobile phone Body Temperature can body temperature, heart changes (traffic fine) users & headset users not be measured from rate, oxygenation level, increase the headset in the 65 and over the ear area accurately blood pressure (4 in 1) use among drivers category is the lowest People tend to use Oxygenation level Stress Reliever Compatibility with sports headset devices for a measurement can be devices have a short time period used for pulmonology sophisticated software Market Research for NexN Blue Stream Vital Sign Monitoring System 15
  16. 16. NexN Solutions LLC Potential Competitors According to the area of specialty, the potential competitors from health care, heart care, fitness equipment industries are represented below. Exmocare BT2 wristwatch The BT2 is a Bluetooth vital signs wristwatch for 24/7 human diagnostics. The BT2 can simultaneously, non-invasively, continuously and accurately detect with infrared and tiny metallic sensors from a fully moving wrist: heart rate, heart rate variability, skin temperature, skin conductance and relative movement.The BT2 wristwatch comes with a simply plug-in battery charger and a large on/off/panic switch. The production BT2 wristwatch will feature 18 hour continuous battery life, Flash memory to store a full day of data, onboard digital signal processing, and an OLED display to show time/date, physiological alerts and battery life. The BT2 will connect to any Windows Mobile cell phone or online Windows PC for the purpose of sending emergency alerts. Price: Unknown Positioning Strengths Weaknesses Vital SIgn Monitoring Device PC and PDA compatible software Battery Physiological and emotional data Alerts Might give wrong alerts collector Lets a boss monitor his/her employees Capable of monitoring others Private data is shared with others Portable ECG Device Overall accuracy 95% against ECG Real ECG is a lot more complicated Adapts the patterns of the individual Built-in memory card that records data Invasion of privacy by the employer Charges with USB Bluetooth - Cordless Big sIze (easily noticeable) Omron heart rate monitors Omron Health Management Software which will help track your progress to better blood pressure health. This monitor detects advanced diagnostics including Morning Hypertension and irregular heartbeat. Monitoring these important factors with Omron's software allows you to share valuable information with your physician. Price: ~$60 Positioning Strengths Weaknesses Clinically proven accurate 60 memory recall SIze Home blood pressure monitoring Detects morning hypertension Only one function Intellisense Personalized inflation No third party data transmission Market Research for NexN Blue Stream Vital Sign Monitoring System 16
  17. 17. NexN Solutions LLC Oxygen conservers A representative from NEXAIR, an oxygen tank provider was interviewed on the phone regarding possible ways of using NexN device as an compatible with an oxygen conserver. Therefore, NexN would need to incorporate its patented optical sensor with a oxygen conserver device that controls when the oxygen tank releases oxygen. Lightweight, self-contained ambulatory oxygen systems that provide oxygen patients with maximum mobility at minimum weight and size. Price: ~$300 Positioning Strengths Weaknesses Oxymatic electronic every breath Cannot measure the oxygen level of Light weight conserver the patient Offers 1-6 lpm flow equivalency Provides oxygen to the patient only Does not automatically adjust the level settijngs to service broader range of when he/she is breathing of oxygen needed patients Allows a standard use of cannula 2 year warranty No data recording Personal health care equipment Compatible with some of the cardio machines. Consumers’ pace, distance, time, and calories burned are recorded as they go. When they are done, they see a summary of their workout on the cardio equipment. Then, the information is saved on their iPod. Moreover, the user can connect his/her iPod to the home computer to see the history of his/her workout at nikeplus.com. Price: ~$30 Positioning Strengths Weaknesses Women’s fitness gear Compatibility with iPod Non-Interoperability with other devices Small and accurate Plays music at the same time Pedometer battery is not replaceable so the users buys a new one Excellent hardware Easy to carry Only available for iPod nano Market Research for NexN Blue Stream Vital Sign Monitoring System 17
  18. 18. NexN Solutions LLC HeartMath emWave personal stress reliever emWave Personal Stress Reliever provides a portable and convenient way to reduce stress, balance emotions and increase performance. This scientifically validated, handheld stress reliever uses colorful LED displays, audio feedback and a powerful stress relief technique to help you significantly reduce your stress and increase your feelings of well- being. This product basically helps the user control the his/her breathing and find coherence with the heart beat. Price: ~$190 Positioning Strengths Weaknesses Stress reliever Adjustable audio feedback levels Size Heart coherence training tool Coherence coach CD Incompatible with sports Spiritual breathing techniques Ear clips incapable display Market Research for NexN Blue Stream Vital Sign Monitoring System 18
  19. 19. NexN Solutions LLC C. Marketing Strategy Segmentation Our findings show that, there are six different segments that would most benefit from the product. Below, is the detailed information regarding these segments and their interests. Sports & fitness enthusiasts Fitness enthusiasts who wants to monitor their improvement throughout their workout can benefit from the use of this device. The information could be kept in the consumers’ cell phone where they can have a history of their workout patterns, peak heart conditions, etc. Therefore, this device can position itself as interoperable device in the market. This would be a competitive advantage against iPod Nano’s Nike+iPod kit. Patients with health problems Patients who have had heart or other problems in the past can use this device to inform their personal health care professionals about their heart conditions. In addition, the results of the survey show that consumers most likely show interest in buying such device for their loved ones instead of using it themselves. Moreover, the feedback gained from the use of this device can guide users, who had health problems in the past towards being more conscious about their health conditions. Patients with pulmonary diseases: Patients with lung or respiratory tract diseases, who have to be connected to an oxygen tank always have constraints such as walking, driving, going out, etc. resulted from carrying around a bulky tank. The combination of NexN optical sensor and a oxygen conserver device could save a lot more oxygen than available devices in the market. Therefore, insurance companies would be interested in such device, since it will help them save money. Health conscious consumers Consumers who are in the need for monitoring their health condition would be interested in such device that collects multiple types of vital signs at once and transmits it to a cell phone or a PC. The collected data would give them reports about their health conditions regarding 4 different aspects of the vital signs collected. Elderly Consumers who don’t live with their old family members can buy this product for them and follow up with their health conditions, even if they are not living together. The software can be set to a mode, which alerts the others when the heart rate, blood pressure, etc. drops below a certain threshold. Market Research for NexN Blue Stream Vital Sign Monitoring System 19
  20. 20. NexN Solutions LLC Insurance companies If this device can decrease the health expenses of the consumers or patients, then the insurance companies would be interested in purchasing these products for their clients. For instance, the oxygen is really expensive, and if this device can be attached to the oxygen tank decreasing the amount if oxygen used by the patient, who is covered with an health insurance, then the insurance company would save money. Therefore, they would be interested in buying this device for every hospital. In addition, the insurance companies would let doctors prescribe this device to patients under their coverage. Positioning According to the findings of our market research, three segments would use the bluetooth device most. These segments are fitness & sports enthusiasts, patients with pulmonary diseases, and the consumers who are in the need for an emergency gadget that informs them about their loved ones’ health conditions. As a result of this study, we recognize these three segments that would bring the most revenue to NexN. Moreover, we realized that the emergency alert feature is one of the most appealing ideas to the consumers. Marketing Mix Product The NexN Blue System offerings could be combined by 4-tier monthly subscription services: BlueStream: Requires BluePulse headset and web account. Customer can log their heart pulse in the server and enable others to see the heart rate through weblinks than can be embedded to web personal websites such as myspace.com etc. BlueMon: Requires the BluePulse headset and monitors heart-rate, temperature and oxygen level. Logs the data to the web server and provide analysis. BlueCon: Next level of BlueMon. User can set thresholds and contacts such that in the event of thresholds are exceeded, system will alert contacts using email and text message or Skype like interfaces. BlueGroup: Directed to healthcare organizations to monitor their customer’s vital signs before or after hospital visits. Enables organization to access long-term data and progress reports. BluePulse: Hardware only option. Requires only the BluePulse headset and enables users to monitor heart beats in their cellphone and send their heart-beats to the person(s) on the other side of the phone conversation using conventional voice connection. Market Research for NexN Blue Stream Vital Sign Monitoring System 20
  21. 21. NexN Solutions LLC Price Since, the NexN VSMS is in its development phase, and the manufacturing cost of the prototype won’t be helpful for the future pricing of this product. Hence, this study will consider the potential competitors in different fields, and calculate the average price of the differentiated products. If, NexN enters the market as a oxygenation conserver, which is placed at hospitals reducing the oxygen usage of each patient with pulmonary diseases, then considering the enhanced savings for the consumers by the usage of continuous oxygenation level measurement, this study recommends a price range little bit above the regular oxygen conservers: ~$350-400 As a fitness & healthcare tool, NexN Device should not be over the average price of regular headset devices. However, since NexN is also a fitness tool like Nike+iPod kit, then the price could be around $90-100 considering the multi-functionality of the device (The average headset price in the market is $75). In addition, the monthly subscriptions of different product offerings should be around $10 to $50. Placement (Distribution) As a personal fitness and health monitor, we recommend NexN market the product through chan- nel partners as well as direct sales. Pursuing a two-pronged channel partner strategy would be benefit-able: (i) Take advantage of the developer and partner programs offered by AT&T (Cingular), Verizon Wireless and Sprint. Integrating or linking NexN’s services into the wireless provider’s offer- ing will enable them to access to large customer base. (ii) Market the hardware and subscription services through companies such as Sharper Image and Brookstone. However, the product could be marketed through personal health care specialists. If the results of the usage of the product decreases the health care expenses for the consumers, then the insur- ance companies would be in favor of approving the prescription of this device. Moreover, 65 and over age category would most likely to listen their personal health care specialists’ recommenda- tions regarding the benefits of the product. Therefore, NexN should market the device through pharmaceutical sales representatives. Promotions To be able to increase brand awareness and sales, NexN should partner with fitness product manufacturers and provide differentiated services similar to Nike+iPod fitness kit. These manufacturers can be treadmill producers that provide these fitness tools to fitness centers. In addition, NexN should use social networking websites such as facebook, where they can integrate their software to the social network applications. This way, members of the community, mostly Market Research for NexN Blue Stream Vital Sign Monitoring System 21
  22. 22. NexN Solutions LLC young adults, can send each other invitations for NexN application, which will increase the brand awareness of the product. Google Adwords, Facebook Ads, Myspace ads can help increasing the brand recognition in the web, hence, these promotion methods are visible mostly to age groups, which are mostly younger population. NexN can also reach older age groups, who are mostly highly educated and health conscious through media networks. National Public Radio (NPR), is mostly listened by this segment of the population, where NexN can promote its products and services regarding monitoring the health conditions of the loved ones. NPR’s trustworthy image would also increase the trustworthiness of the NexN brand. Market Research for NexN Blue Stream Vital Sign Monitoring System 22
  23. 23. NexN Solutions LLC Recommendations Elderly in the U.S., which is defined as 13% of the entire population accumulates to 35 million ac- cording to the statistics. This segment is most concerned portion of the nation regarding heart care. Moreover, 65 and over age group is the segment, which has the highest ratio in terms of hav- ing health insurance. In our opinion, heart care products and services have a high potential to make large revenues from this niche. Therefore, the products should be designed and marketed regarding the characteristics and the unfulfilled needs of this specific segment. However, the cell phone usage of consumers fluctuates according to each age category. The 65 and over age group, who are most likely to have heart diseases, rarely use bluetooth devices with their cell phones. Moreover, the cell phone usage of this segment is around 30% according to the secon- dary research. Additionally, we have realized that the usability of a headset product is limited according to our research. Consequently, most of the customers are not going to use the product at nighttime. Therefore, consumers who would be interested in purchasing devices regarding heart care, may find other devices more attractive in terms of their functionalities. We believe that, this is a competi- tive disadvantage against the differentiated potential competitor’s products such as bracelets, necklaces, watches, etc., which can be used 24/7. We believe that, it will be hard to market such product to the elderly people. A representative from NEXAIR, an oxygen tank provider, and a health care professional from Skeletal Kinetics, a medical device company, were interviewed over the phone regarding possible ways of using NexN device as an oxygen conserver. The representatives suggested that, it would be a new product in this field, if NexN can incorporate the optical sensor with regular oxygen con- servers. Moreover, this new product would be able to adjust the level of oxygen released from the tank for the patient, according to the oxygenation level of patient’s blood. Hence, this product could help the patient or the insurance company save lot of money. As a result, we recommend NexN do further research in this field. In addition, there were innovative ideas gained from the survey study. According to the ideas, NexN could further investigate in the technologies that could make “reading out loud”, “weather report”, “national regional alert subscription” possible features in the product offerings. Market Research for NexN Blue Stream Vital Sign Monitoring System 23
  24. 24. NexN Solutions LLC Furthermore, we would like to recommend NexN to consider further research in regards to the design phase of the product in these areas: • critical design elements (general length, width, thicknesses, list of parts in assembly, energy needs, power supply, battery size and output) • visual appeal for market segment (overall dimensions, proportions, material preferences of con- sumers, color preferences of consumers) • innovative concepts (uniqueness in the market) • critical technologies (rechargeable batteries, battery charger attachment, wireless internet connection, display screen, sensor for heart rate and heat flow, power button) • technologically feasible ideas (reading out loud, weather report, etc) • # of ways that product improves user experience (softer ear strap, softer overall material, user friendly software) • product function (heart rate, calories burned, time, metabolism, heat flow) • design details (display, button, adjustable hook, body, wireless connection) Market Research for NexN Blue Stream Vital Sign Monitoring System 24
  25. 25. NexN Solutions LLC Bibliography Day JC. National population projections. 2001. U.S. Census Bureau. Available from: http://www.census.gov/population/www/pop-profile/natproj.html Health, United States, 2008 U.S Department of Health and Human Services http://www.rossross.net/Site/Resources/CE/Wireless/Other/Top_Bluetooth_Headsets.htm http://www.exmocare.com https://www.pulmolab.com/respiratory/oxy_conservers/index.html?gclid=CK-gh-C7z5oCFRxNagodU2ra2w http://ucanhealth.com/compare.php?item1=JB0170-001&item2=18900 http://www.heartmath.com/personal-growth/emwave-psr.html http://www.fitsense.co.uk/ http://reviews.cnet.com/mp3-player-accessories/nike-ipod-sport-kit/4505-6519_7-31894266.html http://www.omronhealthcare.com/where_to_buy/186-blood-pressure-monitors http://www.specialtymedicalsupply.com//Easy-Pulse-5-Oxygen-Regulator-Conserving-Device.html http://ucanhealth.com/compare.php?item1=JB0170-001&item2=18900 Market Research for NexN Blue Stream Vital Sign Monitoring System 25
  26. 26. NexN Solutions LLC Appendixes Appendix A. Interview with Dr. Sridar Practicing Pulmonary Critical Care Specialist Kaan: This device will record the heart rate, body temperature, blood pressure, oxygen satura- tion level with the optic sensor. This optic device will send the information to a computer or a mo- bile phone, which has the software that runs an algorithm on it. Collects all the data and make this analysis possible for patience’s doctor, who is trying to monitor the patience’s health. As a doctor, would this information be valuable for you? This information will be collected for app. 10 hours a day. This data will be collected for months or years.. Is it valuable? Dr: Let me tell you where this information will be valuable. For the body temperature, I think that this information would not be reliable because the best places to get the body temperature are mouth, bladder, and the rectum. Therefore, I believe that this information is not going to be ac- curate. If this device is wearable, then oxygenation level would be the most useful for the major issue with the patient with chronic lung diseases. They have to have oxygen supplementation. Oxy- gen supplementation is expensive. It is very pricy and it is very bulky. So, you would want to have it when people need it. Now, the way we do it is: When the patient comes to the hospital, we meas- ure the oxygenation level. Then we prescribe the level of oxygen. It would be useful if the oxygena- tion data was transmitted to the oxygenation tank then you can release the oxygen only when it is needed. And keep it when it is not needed. Now, the method is setting the oxygen at a certain level and release it continuously. So, whether the patience using the oxygen or not, the tank re- leases the oxygen. Even if they don’t need the oxygen, they are getting it continuously. So, they get through the tank pretty quickly. At some point, this method costs lots of money. Your system could be attached to the oxygen tank. This way, the oxygen could only be released when the oxygen level of the blood drops below the threshold. This means the patient will use a lot less oxygen. Kaan: What is the method to arrange the level of oxygen today? When are the patients hooked up to these machines? Dr: If I have a patient with a lung disease, then I measure the oxygen level with pulse oximeter. You can stick it to their finger and it reads the oxygen level. If the patience does not need oxygen, the level is not low enough, then I will not be able to convince the insurance company to pay for the oxygen because it is so expensive. They will only agree if the oxygen level is too low. Once the level is low enough to prescribe the oxygen to the patience. Then, the level of oxygen that will be given to the patience stays the same according to the prescription. This is really costly and the amount of the oxygen used is usually really expensive. How much oxygen do I usually use? It is Market Research for NexN Blue Stream Vital Sign Monitoring System 26
  27. 27. NexN Solutions LLC from 1 lt./minute to 6 lt./minute. A little hollow plastic tube, which is stick to the nose of the pa- tience, and the patience is attached to the tank. The patient should be able to go for a walk, can go to the mall, drive his/her car when she/he is attached to the oxygen tank. Therefore, the amount of oxygen is not going to be enough when it is released at a high level all times. They will run out of oxygen somewhere half way between. Right now, I prescribe the patient between 1 lt./minute to 6 lt./minute of oxygen according to the measurement. If there was a device that measures the oxygen level periodically and adjusts the level of oxygen released according to what is needed, then lots of oxygen could be saved. K: Are there any devices in the market that collects the oxygenation level continuously and di- rects the oxygenation tank? Dr: No. There is no such device that does it continuously. K: Can you also look at this device from the insurance company perspective and tell me if they would be interested using such device? Dr: if its a stand alone device, then they wouldn’t. If you give it to the patients that don’t have problems. You can always find a stretch of time that the oxygen level is low. That means the number of the patients who needs oxygen will go up. The last thing that they would be interested in is to diagnose more patients with Hypoxemia, who are in the need of more oxygen. They have to pay for it. If this device is going to help them save money by stretching the oxygen usage to a longer time period, then they would definitely be interested in it. K: So, do you think we covered everything about the oxygenation level? Dr: Yes, I think so. K: You said collecting the body temperature from an area around ear would not be reliable. Dr: I think that would be useful as well. That would be useful in a inpatient setting the most. If this system was able to measure the temperature of the patient continuously, then the nurse would not have to come and measure it periodically. It would be a useful application in the hospital setting. It would not be useful to have it in a outpatient setting because of a patient is having a high body temperature, it is usually the case that there are other symptoms related to high body tempera- ture. K: How about the heart rate function? Dr: There are already devices that monitors the heart rate. It is called the halter monitor. That device collects the EKG data continuously, which is very useful for the K: The device will be worn for months because it is built into a head-set device. Do you think that would make it more benefit-able for doctors or patients? Dr: I don’t think that monitoring the heart data for a long time period is really useful. Heart rate data fluctuates to much. You walk on the stairs, it goes up, you see something exciting, it goes up. EKG monitoring is a lot more useful than only heart rate monitoring. Market Research for NexN Blue Stream Vital Sign Monitoring System 27
  28. 28. NexN Solutions LLC K: Do you think if this device would be useful as an emergency device in case the patients or the user’s heart stops beating? Dr: This is a very controversial question. If your heart stops, you are pretty much dead in 5 minutes. After the heart stops beating, normally the neurological outcome of it is that you are basi- cally a vegetable after that. If a circulatory collapse, a heart failure is detected, then doing a com- pression or shocking them with a shocking device right there would be useful. 911 is going to take 20 min. to get there. After 5 min, it is not going to be helpful. When the heart rate drops by 70%, and this device informs the emergency services, then it would be useful. K: Can you tell me more about symptoms of a heart attack? Dr: A medication that lowers the heart rate, if this system is cheaper than the halter monitor, then you can use its help to adjust the medication level. You are trying to market this product in the best way possible, I understand. For symptoms of dizziness, palpitation If you are looking at the people and heart rate medication. You want to adjust the level of medication, then this would be useful. K: How about the psychological stress levels. Dr: It is difficult to measure. They can be stresses out usually heart rate is going down. There can be many reasons for that. The reasons for heart rate increase can vary from physical and psychological reasons. It is really hard to figure out what the actual reason that increases the heart rate. Market Research for NexN Blue Stream Vital Sign Monitoring System 28
  29. 29. NexN Solutions LLC Appendix B. Interview with Dr. David Chou Psychologist Dr: It will be off your ear. The area of your ear is not going to give you a good temperature. But it will be able to understand the oxygenation level. You know those sensors with lights on them. They calculate the blood flow.. It can measure your pulse approximately. The rhythm, whether you have arrhythmia. Pulse: Beats per minute. I assume, it won’t be able to measure the blood pressure. Because blood stops when you squeeze the vain, then once you release it, it starts flowing again. The amount of force you put on the vain till it can stop the blood flowing shows you the pressure that blood has. This is the traditional and the only way to measure it as far as I know. IF this machine can measure the blood sugar, then it would be great opportunity for this company. You can send this data to the doctor of the patient. But this measurement needs to be done by getting a tiny bit of blood. Probably, this is out scope. About the oxygenation level, a emphysema patient might need to learn the oxygenation level. When you are sleeping, it can measure the level continously. That would be really useful in that sense. Pulse rate, rhythm, oxygenation,. K: Can you explain the rhythm? Dr: It won’t give you an EKG information of the each part of the heart. It will be more general. Only giving you the basic rhythm of the heart. I don’t think unless you have the EKG, you can get the stress information of the patient from just measuring the heart rate around the ear area. K; The company is thinking about putting the optic-sensor into a bluetooth headset device. They believe that this is the best area that information can be collected. By using a mobile phone, the information will be transmitted to a software running an algorithm on it. Dr: The halter device already does that. It is used for collecting the EKG.. Collecting the data for a long time period and then reporting to the doctor of the patient can be useful. I can see the necessity of that. However, the cardiologists would not be able to benefit from the data because when they need a data they have to collect a more detailed data like EKG. This data looks like a consumer type of data. I don’t really see it useful for a medical professional. K: Pros and cons of the device. Dr: the pro is to transfer the data wirelessly. When would this data be useful other than a lab environment. Usually when you go to a cardiologist, you need to have a problem. You would never do a test as a healthy person. This device is not going to give a detailed professional information to the doctor. Market Research for NexN Blue Stream Vital Sign Monitoring System 29
  30. 30. NexN Solutions LLC K: Do you think this data collection can help doctor’s forecast the future risks of a specific per- son by collecting the heart rate, oxygenation level,etc? Dr: Then, this device would be useful more in Pulmonology (diseases with lungs and respiratory tract) rather then cardiology. The reason why I’m saying this is because people can have arrhythmia all the time.. when they drink too much coffee, etc. They will skip a beat but they will be normal. So, the question is how this data is going to be specific enough? The changes could result from real problems or it can be just fluctuations of the heart rate. The way I see being this device helpful is: other fields like diabetes if this device could measure the blood sugar. K: How about the blood pressure? Dr: That would be useful. Especially if you can synch it to pulse.. In case of an arrhythmia your blood pressure will decrease eventually. You can also have an life alert machine, detecting the heart rate drops to a certain point or it goes too high, or oxygenation level changes. Then, you can call someone automatically with this de- vice. Old people are using this device can benefit from it. Dr: I don’t see marketing this device to a medical specialist is being too successful. However, the consumer can benefit from this device while using it regularly. Market Research for NexN Blue Stream Vital Sign Monitoring System 30
  31. 31. NexN Solutions LLC Appendix C. Survey Questions Questionnaire This survey is conducted for Kaan Caglar’s market re- search project in health care devices. The information you provide will not be used for any other purposes and will not be shared with third parties. Age: Gender: Income (can be a range): Monthly or yearly health care expense: 1.Do you use bluetooth headset devices with your mobile phone? If so, how many hours a day do you wear such device? 2. Do you work-out? If so, how many times a week, and what type of work-out? 3.Would you be interested in a bluetooth headset device that collects information regarding your heart rate, body temperature, blood pressure, blood oxygenation level, heart rate variability(HRV) & stress level, then sends this information to your mobile phone, which gives you feedback about your blood pressure, stress level, and keeps records of all other variables for your you and your health specialist? 4. If you don’t think you would wear a device like this. Can you explain your reasons? Would you wear a health moni- tor if it was not built-into your headset device? Can you give examples (e.g. wristband, anklet, necklace)? 5. Do you use Nike+iPod workout kit? Would you be interested in using a headset device instead, that would give you feedback about your progress while working-out? If not, why? 6. Would you be interested to buy this device for your loved ones? Would it be more attractive if there was a life alert application that calls emergency numbers in case of an emergency? Who would you buy it for (can you explain)? 7. What else could be added to the functions of this headset device? You can be creative and think about other types of applications that could run on your mobile phone as well. Thank you for your participation Market Research for NexN Blue Stream Vital Sign Monitoring System 31

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