Market Sizing Analysis
Nicole Gyan
Rocio Haskell
Fernanda Leao
Amit Rana
Janani Sundararajan
Karen Williams
Hispanic Marke...
2
Agenda
• Overview
• Problem Statement
• NAICS and Other Government Sources
• Top-Down Approach
• Bottom-Up Approach
• Ta...
3
Overview
• 1954 – dentists formed dental service organizations in California, Oregon
and Washington
• 1966 – creation of...
4
Problem Statement
Determine the marketing budget Delta Dental
would require to capture 15% of the Hispanic
dental insura...
5
NAICS and Other Government Sources
Health insurance
coverage
(Florida)
Percentage
of Hispanics
Hispanic
contribution to
...
6
Top-Down Approach
Input Process Output
Hispanic population
in Florida
(General market)
Factor 1
(Population
in Florida
w...
Total Targeted Market for
Dental Insurance from Total
Hispanic community (76%of
Total Hispanic Population)
Number of emplo...
8
Bottom-Up Approach: Target Market
Final target market determinations are made up of the following four segments:
43.60%
...
Bottom-Up Approach: Model
Sources:
• http://www.bls.gov/lau/table14full10.pdf
• http://factfinder2.census.gov/
9
Total His...
% of Hispanic
employed
Insurance %
offered
Insurance %
accepted
Dental
Insurance %
accepted
Total
Targeted
Market for
Dent...
Bottom-Up Approach: Model
Sources:
• http://www.bls.gov/lau/table14full10.pdf
• http://www.census.gov/prod/2013pubs/p70-13...
12
Triangulation
Market Size (Top-down) Market Size (Bottom-up)
Market Size
(Government sources)
Triangulation (Estimated
...
13
PESTLE Analysis
POLITICAL
Lobbying for who gets to provide dental care, and at what price
• American Dental Association...
14
PESTLE Analysis
ECONOMIC
Industry hurt by recession, but growth anticipated
• U.S. employment to grow 1.8% over next 5 ...
15
PESTLE Analysis
SOCIAL
• Persistence of language and cultural barriers
• Increasing openness to community outreach effo...
16
PESTLE Analysis
TECHNOLOGICAL
• Lower cost insurance options as a result of widespread internet usage
• Mobility
• Tele...
17
PESTLE Analysis
LEGAL
Increasing levels of industry regulation
Federal level:
• Affordable Care Act
• HIPAA (Health Ins...
18
PESTLE Analysis
ENVIRONMENTAL
Slightly higher cost of doing business
• Increased concern regarding management of toxic ...
19
Porter Five Forces Analysis
THREAT OF NEW ENTRANTS
Mature market, low threat level for larger companies due to these fa...
20
Porter Five Forces Analysis
INTENSITY OF RIVALRY FROM EXISTING COMPETITORS
• Internal competition is medium and increas...
21
Porter Five Forces Analysis
PRESSURE FROM SUBSTITUTE PRODUCTS
• Discount Dental Plans via networks of dentists and dent...
22
Porter Five Forces Analysis
BARGAINING POWER OF BUYERS
Low because of these factors:
• Limited number of networks withi...
23
Porter Five Forces Analysis
BARGAINING POWER OF SUPPLIERS
• Larger established companies have more power than dental ca...
24
Conclusion
• Florida’s Hispanic community is a worthwhile target market segment for
dental insurance providers
• Delta ...
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Marketing analytics final

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  • 43.6% of Hispanic employees not offered insurance 34% of Hispanic employees do not accept health insurance 28% of Hispanic employees do not accept dental insurance 35% of Hispanic market under the age of 18 and above 65 who are unemployed
  • Split in two tables for better visibility
  • The ADA PAC is the biggest PAC you’ve never heard of.They constantly fight against federal and state regulations that would encroach upon the industry’s ability to set its own prices.Also fight against allowing less-qualified technicians into the field to pull cavities, etc. – also helps keep costs high and access low.Will it continue? Likely.
  • Coming out of recession, growth is slow but steadyGrowth in workforce directly increases demand for insuranceHigher disposable incomes allows people to buy more private plansThe more expensive total health expenditures become, the more people are purchasing insurance to keep from paying out-of-pocket costs.
  • DD was winner of Hispanic Leadership Award in President’s Distinguished Community Service category, in March 2013.
  • Pros: Affordable Care act will increase dental coverage. More children will be covered; low-income patients will have more coverageCons: new regulations are complicated and expensive. Costs will increase in implementing them.
  • - Dental toxic waste disposal currently managed voluntarily in U.S.; could eventually be regulated and cost passed on to consumers- Green building certification, decreased carbon footprint, and energy efficiency all increasingly necessary to show environmental sustainability; however, efficiency may help offset costs
  • Delta Dental (13.9% market share) VSAetna Inc. (7.7% market share) – diversified health care benefitsUnited Concordia Companies Inc. (3.8% market share) – specializes in dental care
  • Discount Dental Plans via networks of dentists & dental specialists – offered to employers & employees at small annual membership fee & discounted prices; no high premiums, no deductiblesDirect Reimbursement (DR) Plans - employer pays for dental care with company funds, minus involvement of insurance company or third-party administrator; patients choose their own dentist & pay small percentage of cost
  • People who recognize the value of dental insurance coverage are less likely to demand lower priceslarger companies could capitalize on this with affordably – priced premiums
  • Marketing analytics final

    1. 1. Market Sizing Analysis Nicole Gyan Rocio Haskell Fernanda Leao Amit Rana Janani Sundararajan Karen Williams Hispanic Market for Dental Insurance in Florida
    2. 2. 2 Agenda • Overview • Problem Statement • NAICS and Other Government Sources • Top-Down Approach • Bottom-Up Approach • Targeted Market • Triangulation • PESTLE Analysis • Porter Five Forces Analysis • Conclusion
    3. 3. 3 Overview • 1954 – dentists formed dental service organizations in California, Oregon and Washington • 1966 – creation of Delta Dental Plans Association to coordinate dental benefits programs for customers with employees in multiple states • Today Delta Dental is the largest and most experienced dental benefits carrier in the US – covers more than 59.5 million people • Coverage plans for individuals, families and seniors • Plans additionally available through DeltaCare USA, AARP, Costco, TRICARE and others
    4. 4. 4 Problem Statement Determine the marketing budget Delta Dental would require to capture 15% of the Hispanic dental insurance market in Florida
    5. 5. 5 NAICS and Other Government Sources Health insurance coverage (Florida) Percentage of Hispanics Hispanic contribution to health Average health insurance premium Objective market Average dental insurance cost Market size $21,900,000,000 23.20% $5,080,800,000.00 $2,000 2,540,400 $554 $1,407,381,600 • NAICS Codes - 524114 Sources: • http://www.flains.org/fact-book-othermenu-38/916-health-insurance/733-blue-cross-floridas-largest-health-insurer- humana-aetna-among-other-top-carriers.html • http://quickfacts.census.gov/qfd/states/12000.html • http://finance.yahoo.com/news/How-Much-Does-Health-iw-1773357078.html
    6. 6. 6 Top-Down Approach Input Process Output Hispanic population in Florida (General market) Factor 1 (Population in Florida with health insurance Factor 2 (People with health insurance who have dental insurance) People who have dental insurance People who do not have dental insurance Objective market Average dental insurance cost Market size 4,253,000 0.65 0.724 2001462 762988 2764450 $554 $1,531,505,300 • Delta Dental has 33% of the market captured Sources: • Pew Research Hispanic Center: Demographic Profile of Hispanics in Florida, 2010 • Pew Research Hispanic Center: Demographic Profile of Hispanics in Florida, 2010 • Center for Disease Control and Prevention. NCHS Data Brief: Dental Insurance for persons under 65 years with private health insurance 2008 • Dental in Depth, Delta Dental Publications, April 2009
    7. 7. Total Targeted Market for Dental Insurance from Total Hispanic community (76%of Total Hispanic Population) Number of employees with Dental Insurance 72% Number of employees who accept the Insurance 66% Number of employees Insurance offered 56% Number of Hispanic people under the Age of 18 and above 65 Number of Hispanic people employed in Florida Above the age of 18 Number of Unemployed Hispanic people 35% 41% 24% Total Hispanic Population in Florida 7 Bottom-Up Approach Assumption: • Uninsured Hispanics in Florida are not included in our analysis Market surveyed: • Business to consumer • Business to business
    8. 8. 8 Bottom-Up Approach: Target Market Final target market determinations are made up of the following four segments: 43.60% 34% 28% 35% Hispanic employees not offered insurance Hispanic employees who do not accept health insurance Hispanic employees who do accept dental insurance Hispanic market under the age of 18 and above 65 who are unemployed
    9. 9. Bottom-Up Approach: Model Sources: • http://www.bls.gov/lau/table14full10.pdf • http://factfinder2.census.gov/ 9 Total Hispanic population in Florida 4253000 Under 17 (26.3% of total Hispanic population) Above 65 with no income (8.7% of total Hispanic market) Unemployed uninsured market (not considered) Number employed (18 and above) Insurance % offered Offered (Nos.) Insurance % accepted Accepted/h ealth insurance (Nos.) Hispanic population in Florida 1118539 372806 1035655 1726000 56.40% 973464 66% 642486 Dental insurance % accepted Dental insuranc e accepted (Nos.) Insurance not offered by employer (43%) Number of employees who do not accept insurance (34%) Number of employees who do not accept dental insurance (28%) Target market (total employed market and under 17 and above 65 category) Total target market in dollar value Cost of one dental policy per year Hispanic population in Florida 72% 462590 752536 330978 179896 3217345 $1,782,409,130 $554
    10. 10. % of Hispanic employed Insurance % offered Insurance % accepted Dental Insurance % accepted Total Targeted Market for Dental Insurance from Total Hispanic Management and professional 19% 89% 77% 72% 10% Service 27% 61% 55% 72% 14% sales and office jobs 21% 78% 65% 72% 11% Natural resources, construction, and maintenance jobs 16% 67% 75% 72% 9% Production, transportation, and material-moving occupations 17% 77% 72% 72% 9% Population under the age of 17 and unemployed above the age of 65 35% 0% 0% 0% 46% Bottom-Up Approach: Occupational Breakdown 10
    11. 11. Bottom-Up Approach: Model Sources: • http://www.bls.gov/lau/table14full10.pdf • http://www.census.gov/prod/2013pubs/p70-134.pdf • http://www.nclr.org/images/uploads/pages/Florida%20State%20Profile.pdf Target market value - $1,782,409,130 11 Total Hispanic market 4,253,000 No. of Hispanic employed workers (Above the age of 18) 1,726,000 Cost of one dental policy per year Occupation Category % of Hispanic employed Number of employees Insurance % offered Offered (Nos.) Insurance not offered (%) Insurance not offered number Insurance % accepted Accepted/h ealth insurance (Nos.) Insurance not accepted (%) Insurance accepted (Nos.) Dental Insurance % accepted Dental insurance accepted (Nos.) Dental insurance not accepted Dental insurance accepted Total targeted Hispanic market $554 Management and professional 19% 327940 89% 293178 11% 34762 77% 225161 23% 68017 72% 162116 28% 63045 327940 $181,678,760 Service 27% 466020 61% 284738 39% 181282 55% 156606 45% 128132 72% 112756 28% 43850 466020 $258,175,080 Sales and office jobs 21% 362460 78% 281269 22% 81191 65% 181981 35% 99288 72% 131026 28% 50955 362460 $200,802,840 Natural resources, construction, and maintenance jobs 16% 276160 67% 185303 33% 90857 75% 138978 25% 46326 72% 100064 28% 38914 276160 $152,992,640 Production, transportation, and material-moving occupations 17% 293420 77% 224466 24% 68954 72% 161616 28% 62851 72% 116363 28% 45252 293420 $162,554,680 Population under the age of 17 and unemployed above the age of 65 35% 1491345 - - - - - - - - - - - - 1491345 $826,205,130 3217345 $1,782,409,130
    12. 12. 12 Triangulation Market Size (Top-down) Market Size (Bottom-up) Market Size (Government sources) Triangulation (Estimated market size) $ 1,531,505,300 $ 1,782,409,130 $ 1,407,381,600 $ 1,573,765,343 Size of 15% of market to be captured Marketing budget (5% of target) $ 236,064,802 $ 11,803,240 • Hence the budget justified to capture 15% of the market is $11,803,240
    13. 13. 13 PESTLE Analysis POLITICAL Lobbying for who gets to provide dental care, and at what price • American Dental Association PAC spends millions on bipartisan lobbying • Continued ability of industry to set own prices depends on lobbyists • Limits number of providers by lobbying against “dental therapists” • Likely to continue in future – savvy, well-funded, organized
    14. 14. 14 PESTLE Analysis ECONOMIC Industry hurt by recession, but growth anticipated • U.S. employment to grow 1.8% over next 5 years • Disposable incomes to rise at rate of 2% over next 5 years • Rapid price increases in healthcare prompting purchase of private coverage
    15. 15. 15 PESTLE Analysis SOCIAL • Persistence of language and cultural barriers • Increasing openness to community outreach efforts seeking to improve dental care knowledge • More online business activity, but preference for face-to-face interaction • Tendency to be brand loyal and share positive experiences with family and friends
    16. 16. 16 PESTLE Analysis TECHNOLOGICAL • Lower cost insurance options as a result of widespread internet usage • Mobility • Telematics • Social media • Distribution channel management
    17. 17. 17 PESTLE Analysis LEGAL Increasing levels of industry regulation Federal level: • Affordable Care Act • HIPAA (Health Insurance Portability & Accountability Act) State level: • Licensing of insurers • Privacy legislation
    18. 18. 18 PESTLE Analysis ENVIRONMENTAL Slightly higher cost of doing business • Increased concern regarding management of toxic dental waste • Increased importance of Corporate Sustainability programs
    19. 19. 19 Porter Five Forces Analysis THREAT OF NEW ENTRANTS Mature market, low threat level for larger companies due to these factors: • More resources to provide competitive pricing and more services • Bargaining power with healthcare providers and service networks • Established brand image Potential threat: • Companies offering cheaper alternatives to dental care insurance coverage to customers whose employers do not grant such benefits
    20. 20. 20 Porter Five Forces Analysis INTENSITY OF RIVALRY FROM EXISTING COMPETITORS • Internal competition is medium and increasing • Players compete on basis of policy pricing, level and quality of service and reputation 13.90% 7.70% 3.80% Delta Dental Aetna Inc. United Concordia Companies Inc. Market share of major dental insurance companies in the US, 2012
    21. 21. 21 Porter Five Forces Analysis PRESSURE FROM SUBSTITUTE PRODUCTS • Discount Dental Plans via networks of dentists and dental specialists – no deductibles, no annual limits, no high premiums • Direct Reimbursement (DR) Plans - no attachment to set network of dentists or dental specialists
    22. 22. 22 Porter Five Forces Analysis BARGAINING POWER OF BUYERS Low because of these factors: • Limited number of networks within which most dental insurance companies exist • Ongoing need for dental services • General lack of understanding of intricacies of insurance terms • Growing number of baby boomers with need for dental care
    23. 23. 23 Porter Five Forces Analysis BARGAINING POWER OF SUPPLIERS • Larger established companies have more power than dental care providers because of the following:  expansive network of dentists  more widely recognized brand  overhead efficiencies
    24. 24. 24 Conclusion • Florida’s Hispanic community is a worthwhile target market segment for dental insurance providers • Delta Dental remains a solid industry player in the US • Delta Dental is well-positioned to continue its business and marketing efforts within Florida’s Hispanic community • Delta Dental should pursue the Hispanic market in Florida with a budget of $11,803,240

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