NexN Market Research By Kaan Caglar

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

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
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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.

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(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.

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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.

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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

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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.

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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.

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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-

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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

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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.

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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.

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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.

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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.

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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

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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

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

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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

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

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

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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

Stress reliever Adjustable audio feedback levels Size
Heart coherence training tool Coherence coach CD Incompatible with sports
Spiritual breathing techniques Ear clips incapable display

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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.

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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.

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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

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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.

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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.

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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)

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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

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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

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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.

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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.

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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.

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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.

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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

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