VCA ANIMAL HOSPITAL GROUP PROJE

BUAN 6337.503

PRESENTED BY GROUP 3:

VASHISTH SORATHIA
GOPALAKRISHNAN
RAMCHANDRAN
AMIT SHIRSAT
ANIMESH SINHA
 AGENDA
1. EXECUTIVE SUMMARY

2. BUSINESS OBJECTIVE

3. DATA OVERVIEW

4. SEGMENT OVERVIEW

5. SEGMENT ANALYSIS

6. MARKET ACTION- ABILITY

7. FINANCIAL IMPLICATIONS
EXECUTIVE SUMMARY
VCA is the largest family of animal care providers nationwide,
operating over 800 hospitals in 43 U.S. states and 5 Canadian
provinces and providing diagnostic services to more than 17,000
independent hospitals.

We can get you:

3.7% Revenue Growth for Repeat Customers

0.77% Revenue Growth for New Customers
BUSINESS OBJECTIVE
1. Drive hospital revenue
1. Segment hospitals & get to know them
2. Modeling to draw out significant drivers
3. Design cluster-wise marketing strategy

2. New and repeat customers

1. Study price elasticity across clusters
2. Recommend strategies

3. Test Plan & Financial Implications

 DATA OVERVIEW
Data Regarding 413 Hospitals.

Most Significant Variables:

 SEGMENTATION

Rottweiler Pomeranian Golden Retriever Chihuahua Husky

Lowest Lowest HH net Second Highest HH Highest Pet Lowest Market share
Competition worth net worth expenditure Highest Revenue
Low Reputation Customers are Customers are Highest CMT Highest Marketing
Lowest mostly single mostly married with conversion rate Spend
Discounts Negative growth Kids Highest Price for new Highest Reputation
and repeat customers
Highest Market rate Lowest price for Highest Competition
Customers are mostly
share Highest new and Repeat Highest # first
married with kids
Competition Customers Highest HH net worth discounts, first
Lowest CMT No growth revenue first visits
conversion rate High Pet Highest # of
Lowest Pet expenditure competitors
expenditure Lowest Reputation
 Market share vs. revenue growth

Cluster#
Market Share(%)
Revenue Growth(%)
 Market share vs. revenue %
100%
10%
90%
34.13% Husky
16%
80%

70% Chihuaha
19%
60%
20.43%
50% Golden
Retriever
22%
40% 14.88%
Pomeranian
30%
15.46%
20% Rottweiler
32%
10%
15.09%
0%
Market share% Revenue %
 16 %
Rottweiler n 32 %
Consumes 16% of the Total Marketing Expenditure.
Growth is 1.16%.
Least Discount offered
Lowest Competition
Bad Reputation
INSIGHTS:

Highly dependent on Price: WHY NOT LOWER THE PRICE AND

TEST?
Discount: INCREASE DISCOUNT BY 5% => INCREASE REPEAT
REVENUE BY 2%.
Highly Dependent on Customer Management => SPEND MORE
ON MARKETING
Low Competition could mean easy Business => SPEND MORE
ON MARKETING

EFFECT OF PRICING:

A Decrease in Price by 7%, results in an Increase in Revenue by

 15 %
Pomeranian n 23 %
Consumes 15% of the Total Marketing Expenditure.
Lowest Pet Expenditure
Losing 0.92% YoY Revenue
Lowest Household Net worth.
Urban
INSIGHTS:

Repeat Customers are fairly insensitive to Price: INCREASE IN

PRICE BY 10% RESULTS IN NET REVENUE INCREASE BY 1%
Make your Brand known. ADVERTISE!
Youve got high competition. Fight Hard! ADVERTISE!
Improve sales staff and service quality: SPEND MORE ON
TRAINING.
 15 %
Golden Retriever n 19 %
Rich Bunch of Folks with Kids
If only they had Good Reputation
Lowest Prices charged
Consumes 1/5th of the Total Marketing Expenditure
Dont mind spending on their Pets
Growth rate is 0.07% (NO GROWTH!!!)

INSIGHTS:

New Customers are sensitive to price- 11% decrease increases

Revenue by 2.2%!
Repeat Customers are not assensitive to pricing but may not
favor any hiccups
Best growth rate with increasing average Discounts

EFFECT OF PRICING:

11% Price Decrease => 2.3% Revenue Increase

 20 %
chihuahua n 16 %
Values Pets more than Humans
Richest Bunch, Married with Kids
Consumes 14% of the Total Marketing Expenditure.
Growth rate is good at 1.69%

INSIGHTS:

Increase in Price results in Increase in Revenue (INCREASE THE

PRICE!!!)
Good job with Marketing
Leverage Marcomm plan to Other Segments

EFFECT OF PRICING:

An Increase in Price by 5%, results in an Increase in Revenue by

0.4%.
 34 %
husky n 10 %
The Most Crucial Segment by $
High on Spends
Highest Growth Rate at 3.28%
Not Extremely Dependent on Customer Management
Highest Discounts. Highest Competition.

INSIGHTS:

Inelastic to Price
Leverage Quality Policies to other Segments for Better
Reputation
Discounts are the highest. Test by reducing Discounts/Spend to
improve Net Profit.

EFFECT OF PRICING:

New - An Increase in Price by 7%, results in an Increase in

Revenue by 0.8%
Repeat Maximum Revenue Increase is achieved at 9% by
Reducing Price by 22%
 MARKET ACTION-ABILITY
Veterinary Metrics from 2005 to 2010** shows
1. Work on Building Strong Relationships with your Customers
that practices utilizing the optimal reminder
1. Improve Print and Email Reminders Strategy format and employing best practices in Marcom
generated on average 27% of total practice
2. Create Personalized Client/Pet Education Portals revenues

2. Create Stronger Social Media Presence

3. Educate through Info Sessions

3. Send out Questionnaire Emails to potential Prospects asking about

their Knowledge and Style of Pet Care
4. Revert with Better/Standard FYI Care Practices

4. Develop Client Referral Programs

FINANCIAL IMPLICATIONS - Pricing
 FINANCIAL IMPLICATIONS:
increase Discounts by 5% VS. REVENUE GROWTH
RevenueGrowth%by IncreasingAvgDiscountsby 5%
Repeat Customers New Customers

3.16%

2.63%
2.32%
2.07%
1.90%
1.58% 1.57% 1.50% 1.50%
1.23%

Rottweiler Pomeranian Golden Retriever Chihuaha Husky

FINANCIAL IMPLICATIONS
Increasing Discounts by 5%
 TEST PLAN
Remodify Marketing Email Contents and Formats for Rottweiler & Husky and
Test how they convert to Visits/Response/Revenue in the next 3 Months

Extend Working Hours for Golder Retriever for 1 month and Test #Visits MoM

Hire Quality CRM Staff for Pomeranian and Study the Improvement
Conversion Rate

Re-allocate 10% of Marketing Spend in Husky for Incentives & Goodies and
conduct a Post-Service Survey for Reputation Check. Focus spending on
Chihuahua instead.

Implement Pricing & Discounting Strategies for one Quarter in 15% of

Hospitals in Each Segment
THANK YOU