Case study: Remedy Physiotherapy.

I need help in drafting a marketing plan

Names of people and businesses are disguised. Some aspects of the local area and the physiotherapy industry are simplified for teaching purposes.

Case objectives

The objectives of this case are to:

1.Understand how to identify information that is relevant to a marketing plan

2.Practice how to correctly classify global / task environment factors and their marketing implications

3.Calculate basic numerical information relevant to a marketing plan

4.Construct a marketing plan using this prior preparation and analysis

As you read each section of this case you will find content that could be useful in more than one part of the marketing plan. In some cases you will find material that will re- inforce an earlier component of your plan.

[note: the titles in red are to indicate which part of the marketing plan the information relates to, this is just for the author's reference & to aid in the sequence of the narrative

- they will be taken out in due course]

An excel file accompanies this Case.

The Case is in 8 main sections. At the end of each section there are some analysis tasks for you to do. There is also a marketing plan template to use, to enter key inputs for each section of your plan.

Contents

1.Internal Analysis............................................................................................................... 3

Internal analysis Work Tasks............................................................................................... 7

Internal analysis: Marketing Plan construction................................................................ 12

2.Global Environment Analysis......................................................................................... 13

Global Environment Analysis: Marketing Plan construction........................................... 15

3.Market Environment Analysis........................................................................................ 16

Market Environment Analysis: work tasks........................................................................ 24

Market Environment analysis: Marketing plan construction.......................................... 28

4.SWOT29

SWOT: Marketing plan construction................................................................................. 29

5.Objectives & Assumptions................................................................................................ 30

Objectives: work tasks....................................................................................................... 30

Objectives: Marketing plan construction.......................................................................... 32

6.Marketing Strategy......................................................................................................... 33

Marketing plan Construction: Marketing Strategy........................................................... 33

7.Marketing Program & Budget........................................................................................ 34

Marketing Program & Budget: Marketing plan construction.......................................... 34

8.Controls and Metrics, Market Research....................................................................... 36

Marketing plan construction: Controls, Metrics, Research............................................. 36

The case is self-contained, you do not need to obtain wider information about the physiotherapy industry. Nor do you need to undertake further investigation into the town the case it set in. The clinic name is disguised.

Assume the plan is for the 12-month calendar year following whatever year it happens to be at present.

1.Internal Analysis

Introduction

Joshua and Sarah Brightstone are the proprietors of Remedy Physiotherapy, a small clinic situated in the town of Bournemouth in the English county of Hampshire. Both graduated from Southampton University with B Sc. (Physiotherapy) in 2018. After some travel, marriage and some fill-in work with several large clinics in 2018 and 2019, they moved to Bournemouth. A practitioner known to Joshua's family, Mr James Ashworth, was retiring, and had been staying open only to a small number of clients and passed the business on to Joshua and Sarah at no cost. They merely took over the rent for the premises and the (small) client base of people who had been to the clinic at least once in 2019. The clinic had always been known as Remedy Physiotherapy. The Brightstones had high hopes for the clinic, and thought it was reasonable to build the clientele in order to provide a good income source for them both, for the foreseeable future. They were considering re-naming the clinic to just "Brightstone", which they thought sounded inviting and indicated general health and wellbeing and was also catchy, rather than just using the word physiotherapy and the name of the town. Currently the clinic shows the original hand-painted sign in the front window, which simply said, "Remedy Physiotherapy Clinic".

The local scene

Bournemouth is a coastal resort town approximately 60 km from Southampton and about 170 km south-west of London. It has a population of 190,000; of those, around 170,000 are aged 10 or over. The Brightstones' clinic is one in a block of four retail shopfronts, with the others being a funeral director, a bridal salon and a solicitor. It is situated around three kilometres from the town centre, on a secondary road to the north of the city centre.

The Bournemouth economy is quite robust. It has many miles of sandy beaches and is a tourist drawcard. Some very large corporations have headquarters or offices in the town. Bournemouth also has a thriving 'digital economy' with numerous (over 100) small e- commerce businesses present in the town; many of which were actually one- or two- person outfits working from a home office. The town has a Chamber of Trade & Commerce which endeavours to support local businesses via engaging with the local Council and holding networking events. Many locals are members and participate in the Chamber's activities including the owners of small businesses ranging from retail shops, tradespeople, general practitioners, to some managers of the larger businesses present in the town. Bournemouth has a comparatively old population compared to the rest of Great Britain, and this feature makes it quite an attractive location for a physiotherapy clinic.

Finances

Rental for the clinic premises is 120 per week. A month after taking it over, the Brightstones' clinic was attracting few clients: only one or two per day. Almost all were existing clients who paid 37 for a repeat appointment; the fee for an initial consultation (which involved some background information gathering and assessment) was 47.

Repeat-consults tended to be for 40 minutes; initial ones were generally about 50 minutes. People who had not been to the clinic for 12 months or more paid another initial consultation fee because their condition would have likely changed in the time period between visits (and a 12-month or more lapse suggested a different problem the

second time). Historically, for every initial consultation, there were on average 2.5 additional follow-up appointments in the year.

In the past week, only seven appointments had been booked which was a bit disappointing to the pair. Interestingly, the age of the patients currently coming in was almost all 50 years plus. About three-quarters of them resided in a radius of about 4 km from the clinic; another quarter were from all over the town.

Joshua and Sarah took turns to be the 'receptionist' as the level of business was rather too low to employ a dedicated person. Once the clinic grew, they intended to hire a part- time person for around 20 hours per week. The clinic currently operated Tuesday to Friday to 5.00 pm and Saturday 9 am to midday. Expenses in running the clinic (apart from rent) were principally electricity, which cost about 20 per week, and various other expenses including the internet totalled 20 per week. The Brightstones took bookings via their mobile phones and the clinic website listed both numbers. The website was created by a friend of Joshua who had studied IT at University. The site looked quite good, but did not have the functionality to accept bookings online, and rather directed site visitors to the Brightstones' phone numbers.

Sarah believed that an appropriate level of income the pair could earn from the clinic over the next 12 months was 100,000. After deducting rent and expenses their gross income before tax would be 92,000.

The premises that the Brightstones' operated from was an old building but very neat and presentable.It featured a reception area and two consult rooms, as well as a spare room featuring a sink (which they would often sit in and have lunch or a coffee). There was also quite a spacious room of about 4x4 metres that was currently unused at the rear. It had a pleasant polished wood floor and a reasonable view of the outside. By a stroke of luck, there were male and female toilets at the back of the clinic also. Patients did appear to appreciate the option to attend the 'bathroom' before or after their consult.

Treatments

The Brightstones used a variety of treatments for typical patient problems: lower back and neck pain and stiffness. They also utilised joint mobility work, vertebrae manipulation, deep tissue massage, and ultrasound. Recently they had invested in a device to deliver Extracorporeal Radial Shockwave Therapy (ESWT). This new treatment was essentially a powerful pulse of sound to treat painful conditions such as tendonitis or plantar fasciitis.All treatments were charged at the same initial consult price or repeat consult price. They would often prescribe certain exercises (such as stretches, leg extensions to tone abdominal muscles, and so on) by showing the patient the exercise and drawing a stick figure on a piece of notebook paper for the patient to take home.

Sarah had done some testing to see if their clinic was prominent in internet search results. Typing in "physiotherapy Bournemouth" she found that the clinic did not currently feature in the top three or four results - which were ads; but rather appeared on the second page of clinic listings. She did notice In Touch tended to appear in the top couple of results. She had also seen that this business ran a small ad in the weekly Gazette newspaper, simply showing its name and the range of ailments it could treat.

Sarah mulled over this informal competitive intelligence as she checked her phone for messages or missed calls. Both she and Josh had two or three missed calls each evening, but they were both busy people, tired by the end of the day and needed a bit of

downtime after 7.00 pm. She felt if people really wanted to contact them, they would call back. They both sometimes thought it would be nice to get back into a bit of sport sometime soon or get more involved in the community. They used to play tennis, and attend a gym, but at present were a little preoccupied with their business planning for such things.

The Brightstones were an attractive couple. People who met them often said that Josh reminded them of a young Tom Hardy and Sarah resembled Kate Winslet. Moreover, they were personable, with pleasant manner which put acquaintances and clients at their ease. Friends often commented that they were certainly photogenic, exuding an air of warmth but also capability. Both interacted well with patients and were skilled professionals. Sarah had a particular interest and ability relating to injuries, whilst Joshua had an unusual capability dealing with longer-term debilitating problems such as arthritis and joint stiffness (for example in the neck vertebrae). Sarah had for a time after her graduation also run a Pilates class and had enjoyed doing it immensely, as had her clientele.

Both Josh and Sarah were curious, intellectual, and voracious readers. Both were currently investigating various aspects of running a successful small business and they were looking at the effect of logos, also known as brand identity or distinctive brand assets. They learned that incorporating a logo along with the name of the brand or business worked to make advertising more efficient. The way this worked was by making the brand name more memorable, by exposing people to multiple pieces of information (brand name and logo for example), compared to name alone. In other words, two bits of visual brand information worked better than one. The logo also became a visual memory 'hook' that made it a bit more likely that people remembered seeing previous communication for the brand. This was a good thing, as generally, research had shown that familiarity is reassuring to consumers. Sarah found this material fascinating, and she felt it would all be useful for their longer-term plans which were to open and manage several other clinics in the region over the next five years. Sarah felt that one day she would like to spend of her time being a manager, and might possibly even enrol to do an MBA in years to come. This learning she was undertaking about broader business issues was all good background for that long-term plan.

The pair had wondered about how much vehicle traffic went past the clinic. Joshua sat and counted the number of cars that drove past in a 15-minute period on a couple of mornings. He counted approximately 40 per-quarter hour on a weekday and 30 on a weekend. He was glad to sit for a bit and rest that morning, having done quite a solid session working on loosening the vertebrae in the upper spine of a client in order to help them gain a fuller range of movement and thereby recover good posture.

Sarah had an acquaintance, Dr. Brian Stern at Bournemouth University who worked in student 'intern' type-placements or short-contract employment tasks. Sarah had become interested in how many patients the other clinics in the town had, and how that information could be obtained. She called Brian and asked him if there was a student who could do some advice and work experience for the clinic. Brian suggested a very smart Finnish exchange student, Mariane Latvala. Mariane had just completed courses in marketing research and marketing analytics and was keen to apply her skills.

Josh had been wondering if the actual changeover period between Mr Ashworth retiring from the clinic had caused some sort of dramatic drop in patient numbers for the

Brightstones - or whether there had simply been a slow decline over time. He asked Mariane if there might be any useful information about this or other aspects of the business on Mr Ashworth's old computer. Mariane was surprised it even started up, it was so old - but she did find two years of patient visit information. The excel file information is supplied as an appendix. Mariane also found some notes and receipts for some advertising that Mr Ashworth had paid for in the 4 weeks of March 2018 and 2019. Apparently, he had paid for a small ad each week in the Gazette in those periods, at a cost of 200 each. She manually tapped in the patient visit numbers from when the Brightstones took over, in January 2020.

Bournemouth is home to two local newspapers, the Gazette and the Observer. Both are published weekly. While readership of paper-printed newspapers has dramatically declined in most Western countries, in towns such as Bournemouth readership was still around high, with the Gazette having around 20% of the adult population reading it in any given week and the same for the Observer. Readership was higher (at about 25%) among people aged 50+. Both newspapers also published online, with engagement approximately equivalent to their paper readerships. They offer advertising in both the paper and online versions. A small advert (1/8 page, or equivalent on-screen) in either paper cost approximately 200 (i.e. 200 would buy an ad in the paper newspaper or the online one).

Internal analysis Work Tasks

The Brightstones pay rent, electricity and other consumables each week. The case presents the average price for an initial and repeat appointment paid by each patient. Calculate how much revenue they are currently making per week given the current number of customers in the last week as reported in the case (with all customers currently being repeat customers) before expenses. And then how much of that money remains after expenses.

How to do it:

Take the number of customers the Remedy clinic had last week, and multiply that by the price of a repeat-consult. Deduct rent, electricity and the figure for 'various other expenses' mentioned.

1

Number of patients last week

2

Cost of repeat consult

3

Revenue from patients last week (row 1 x row 2)

4

Rent per week

5

Electricity cost per week

6

Consumables and internet per week

7

Left over after expenses (row 3 minus rows 4,5,6)

Tasks:

Internal audit

Is there evidence that patient numbers for the clinic dropped markedly between the time Mr Ashworth passed it onto the Brightstones; or was there just a decline over time? The Brightstones took over the clinic in early 2020.

How to do it.

Mariane, the marketing intern, extracted some data from the clinic's old computer. Open the excel file. First, create a line chart of patient visits. Label the x-axis with the name(s) of each month. Inspect the line - does it seem like a large drop at the end of the 104 weeks? Or are the patient numbers approximately similar to what Sarah and Josh are getting now.

Advertising audit

What is the cost per 'conversion' from google search for Remedy Physiotherapy? What this term means is, how much money does one have to spend to acquire a new customer (on average) from this medium?

How to do it.

Find these figures from the case:

The cost per click of a google search term for a physiotherapy clinic in Bournemouth. The conversion rate from clicking on a search term to actually purchasing. This figure is a percentage. A percentage of say, 2 percent would be expressed as 0.02 in the following calculation.

Enter these figures in the table below.

1

Cost per click of google search for keywords such as "Bournemouth" and

"physio"

2

Conversion rate from clicking (ie. % of non-client clickers who become a client)

3

Cost per conversion (Row 1 divided by Row 2)

4

Imputed reach cost per 1,000 (all those who see, including those who do / do

not click) - as per instructions below

To calculate row 3, divide the conversion rate (row 2) into the cost per click in Row 1. Hint: the answer should be somewhere between 1 and 51. If you want to work in pounds sterling use the figure 0.50 for row 1 which means of one pound sterling.

Consider, is customer acquisition 'profitable' via this medium, given the price of an initial consult? Does this profitability depend on the average number of repeat consults?

Answer below.

Lastly, calculate row 4, the imputed reach from paid search. What this means is, we work backwards from the number of people who see and click to work out the number who see and don't click. If Josh and Sarah pay .50 for a click, but only 1 in 100 click, then for their 0.50 they get 100 views. If you multiply that cost by 10, you get the cost per 1,000 views.

This figure is now able to be compared to the figures for news media or other activity that reaches potential buyers. Of course, impressions from search engine results that people do not click on are likely to be fairly fleeting; but the same can be said for news media ads.

Advertising audit

1.How many people will read one or the other local newspapers (print or online) in a given weekly period?

Assuming all the people who read the newspaper either print or online will see an ad in that paper, what is the cost per thousand for these local newspapers / online newspapers? Cost per thousand is a standard advertising industry measure for assessing media efficiency. Note what we are really calculating here is cost per 1,000 for an opportunity to see or 'OTS', because not everyone reads every page or every story.

How to do it.

First, go back and ascertain the total population of Bournemouth from early in the case. Enter it below.

Next, we are going to use a bit of information from the external environment part of the case, specifically the market audit. It is shown below.

Age

% of Bournemouth population _(addsto

less than 100% because under 10 omitted)

10 to 19

9

20 to 29

15

30 to 39

13

40 to 49

15

50 to 59

12

60 to 69

13

70 and over

13

Weighted avg.

-

From the total population figure, and the table above, calculate rows 1 and 2 below. Then enter the figures for row 3 and 4 from the case. Then calculate rows 5 and 6. Find the cost figure for row 7. Finally calculate the cost per 1,000 people for an ad in one of the papers, row 8 following the instructions.

1

Number of adults aged 20 to 49 in Bournemouth

2

Number of adults aged 50 and over in Bournemouth

3

Proportion of adults aged 20 to 49 in Bournemouth that read one of the weekly

newspapers (print or online) in a week - from the case

4

Proportion of adults aged 50 and over in Bournemouth that read one of the weekly newspapers (print or online) in a week - from the case

5

Number of adults aged 20 to 49 that read one of the weekly newspapers (print or

online) in a week

6

Number of adults aged 50 and over that read one of the weekly newspapers (print or online) in a week

7

Cost for 1/8 page ad in either print or online news

8

Cost per 1,000 OTS for 1/8 page ad (- first, divide the total adults that read the newspaper by 1,000. Then divide that figure into the cost of the ad). This figure should be between 5 and 10.

Task:

Is there any evidence that news media advertising in the past for the clinic has had a short term beneficial effect on patient visits?

How to do it.

There are many ways to do this, some of them could use quite complex statistical analysis. We do something fairly simple here. Open the accompanying excel file.

We calculate the average patient visits in the weeks that Mr Ashworth had bought advertising space; for 2018 and 2019. And we compare them to the weeks just before, and just after. While there is a downward trend in the data, it is not so severe that we cannot compare one month with an adjacent month. Calculate these:

2018

2019

Average of the two years

1

Average patient visits per week Feb (before advertising)

2

Average patient visits per week Mar

(during advertising)

3

Average patient visits per week Apr (just after advertising)

Is there an apparent short term effect of advertising on patient visits ?

Note, of course this is only ascertaining the possible short-term effects of advertising on patient visits (presumably initial visits).

Internal audit (premises)

Task: How many vehicles drive past the clinic on an average day and in a week?

How to do it.

Take the figures per quarter-hour and multiply the weekday and weekend figures by 4 to get hourly, then by 8 (conservative, assuming traffic flow for only 8 hours per day) for a daily figure. Add up the figures to get a one-week estimate, step out your calculations in the table below.

1

Vehicles driving past per quarter hour on a weekday

2

Vehicles driving past per quarter hour on a weekend-day

3

Vehicles per week day (Row 1 multiplied by 4, then by 8)

4

Vehicles per weekend-day (Row 2 multiplied by 4 assuming traffic flow occurs for fewer hours on weekend)

5

Vehicles per week = Row 3 result multiplied by 5, plus Row 4 result multiplied by 2

The answer in Row 5 is total vehicles passing by in a week. Arguably each vehicle has an opportunity to see the Brightstone's clinic; what we could call total exposures. However, total exposures is not the same as reach - reach means the total number of unique people exposed to a message. Because many of the vehicles passing by are the same people reach is considerably less than total exposures. Arguably, in this instance reach in a week might be 50% of total exposures. Of course, vehicles often have more than

one person in them so this could counterbalance the effect of exposure to the same people.

Internal analysis: Marketing Plan construction

Use the structure below to note down your main points.

Context statement

Two or three sentences summarising the nature of the business and its key challenges.

Analysis of the Business and its environment

Internal

analysis:

Resources and Capabilities audit

Product Audit

Business Relationships Audit

Channel Audit

Pricing Audit

Advertising / Communications audit

Key Issues (anything else that does not fit into these topics)

2.Global Environment Analysis

A feature of the UK and indeed the Bournemouth population, is that the average age of the population is slowly increasing over time, due to longer life-spans and a fairly low birth-rate over the past twenty years. And indeed, in the UK, as is the case across the world, age is related to illnesses, with the common ones being heart disease and cancer but also stroke and a host of physical ailments consequently occurring as a result of the debilitating effects of the illness itself. As well as age-related impairments such as reduced mobility, joint pain and so on. For some older people these impairments (as well as poorer eyesight for some) meant they no longer drove, and found public transport difficult to use also.

An apparent paradox in UK population health was that whilst levels of obesity are increasing, overall interest in health and fitness had increased over the past two decades. Moreover, older people (arbitrarily, people aged 50+) exhibited a heightened interest in maintaining their health and fitness, with higher incidence of participation in organised sports, jogging, countryside walking and attendance at gyms or fitness clubs.

Physiotherapy is available at no cost to patients through the National Health Service, but according to the Chartered Society of Physiotherapists, over the past two years the average waiting time for an NHS physiotherapist had grown from ten to thirteen weeks. Use of private physiotherapy was linked to household income, with wealthier households having a somewhat higher incidence of attending; and periods of economic expansion tended to be favourable for private health practitioners including physiotherapists. By contrast, in periods of economic downturn there tended to be a reduction in the proportion of the population with private health insurance (having private health insurance means that a proportion of the cost of treatments such as physiotherapy is paid for by the insurance company).

The near universal use of smartphones in the population, coupled with the fact that many people seemed almost addicted to their use, is leading to upper spine and neck problems. Apparently, the practice of looking at a small screen with the head craned forward greatly exacerbates the weight of one's head, leading to spinal stress and sore muscles. Even many teenagers in the 2020's have upper spinal curvature and a forward-leaning neck that would formerly be only associated with people aged over 65.

It is well known that the digital economy has been transformative. However, one downside of the digital economy, particularly for those working in it, such as e-commerce providers and especially small ones who spend their entire days almost glued to a computer screen, is the danger of inadequate ergonomics (poorly planned chair/desk/screen setups) causing RSI injuries (repetitive strain syndrome). A recent UK Government study found that RSI complaints were highest among process workers (i.e. people packing goods in a warehouse or processing foodstuffs in a factory) but were also very high, with around 10% of small and owner-operator digital-oriented business (such as digital ad agencies, SEO businesses, web designers, and so on) saying they incurred such problems in any given year.

Technological advances have certainly changed business and buyer behaviour in many ways. One interesting new piece of technology is software that plugs into a businesses' website and allows online bookings, showing available times and sending a confirmation

text or email to the person booking. Apparently, this software often also facilitates sending reminders about bookings, events, or other communication about which the business wishes to remind clients. There are at least a dozen brands of such software, priced at about 15 per month for a business with two employees who could log into the system.

Macro Political-legal

While searching for information, Joshua happened to come across the extensive documentation from the UK government rules for advertisements. One thing that caught his eye was what was referred to as 'Class 5' signs.

Class 5 gives consent for a wide variety of notices, signs and advertisements to draw attention to any commercial services, goods for sale, or any other services available at the premises where the advertisement is being displayed. 'Business premises' means any building in which a professional, commercial or industrial undertaking is being carried on, or any commercial services are being provided for the public. This term would include:

office buildings, banks and building societies, shops and shopping arcades, supermarkets and hypermarkets, theatres, cinemas and dance-halls, bingo halls and amusement arcades, vehicle showrooms and garages, privately owned factories and works, restaurants and cafes.

Class 5 is not intended to permit all forms of outdoor advertising on any business premises; it only permits advertisements for the goods or services available at the particular premises. This means advertisements which refer to:

the business or other activity at the premises;

the goods for sale or the services available; and/or

the name and qualifications of the firm or person providing the service in the premises. An advertisement permitted by Class 5 must not:

have any letters, figures, symbols or similar features in the design over 0.75 of a metre in height, or 0.3 of a metre in height if they are in any Area of Special Control of Advertisements;

have its highest part at more than 4.6 metres above ground-level, or 3.6 metres in any Area of Special Control of Advertisements; have its highest part above the level of the bottom of the first-floor window in the wall where the advertisement is;

be illuminated, unless the illumination is intended to indicate that medical or similar services or supplies are available at the premises; and

if the premises are in any Area of Special Control of Advertisements, exceed in area 10 per cent of the external face of the building, measured up to a height of 3.6 metres above ground-level.

Additionally, if the business premises is a shop, an advertisement may be displayed only on an external wall which has a shop window in it.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/11499/326679.pdf

Macro - socio cultural

Josh and Sarah luckily came through the covid pandemic unscathed. As was well known to everyone, the covid-19 crisis in 2020 not only caused widespread sickness and death and dramatic drops in economic activity around the world. One longer lasting consequence of the pandemic was a heightened sensitivity by people to the apparent cleanliness and health safety of premises and people. To a greater extent than before, consumers expected service providers to be very attentive to concerns such as cleaning of equipment, clean personal appearances of service personnel, and tidy premises (which they took as a cue for sanitisation).

Global Environment Analysis: Marketing Plan construction

Enter the key aspects of your global environment analysis below.

Component of Global Environment

Economic:

Economic trends and what they mean for the business ...

Socio-cultural

Socio-cultural trends and what they mean for the business ...

Technological

Technological trends and what they mean for the business ...

Environmental / natural resources

Environmental trends and what they mean for the business ...

Legal

Legal trends and what they mean for the business ...

Demographic

Demographic trends and what they mean for the business ...

3.Market Environment Analysis

Market audit

The Bournemouth population is somewhat more affluent than the broader UK. Indeed, economic growth and income in the Bournemouth area have grown by a reasonable 2% over the past two years, outstripping the rate of growth in the UK generally.

Bournemouth is also home to three chiropractic clinics, which some people tended to use as substitutes for physiotherapy when they had back or neck problems. Joshua had heard these were growing quite quickly, many people seemed to like the appeal of their vertebrae 'cracking' during a chiro appointment. A dozen medical practices are also in the town. The town also features a hospital that services the town itself and the surrounding county, with 300 beds.

Bournemouth boasts a wide variety of sporting clubs. There are three tennis clubs, and a cricket club with approximately 400 players. There are four bowls clubs (which, whilst being predominantly made up of hundreds of members aged 60+, did have dozens of younger players), two squash centres and two health & fitness clubs that offer weight training as well as the usual array of fitness machines. All were quite socially-oriented and pleased to lend support to local businesses where they could, more-so if the proprietors of those businesses were members or supporters of the club. A local community 'pinboard' seemed to be present in all of them, with local tradespeople among others taking the opportunity to pin cards or small notices about the services they offered. For example, when Sarah went to take a look at one of the health clubs she first noticed a local business called Yorkie's Plumbing offering pensioner discount, and a signwriting firm offering to create a professional-looking outdoor sign for approximately

200. While chatting to the proprietor she took the time to read the news, which was reporting economist's rather pessimistic views that the next couple of years of the national economy would be slow growth or even possibly a mild recession. The proprietor, on hearing Sarah mention her clinic, said, "Oh, is old Mr Ashworth not running that any more? - huh, I must tell the wife". While there she chatted a bit more to the club owner, who was also a keen amateur cricketer. He was looking forward to playing the following day, and mentioned that recent games had drawn quite good crowds of over 1,000 people. He jokingly mentioned to Sarah that the club was always looking for sponsors, and for as little as 200 per year her clinic could become one. Apparently sponsors received some exposure on the club's website, could place a sign on the oval fence, and of course were welcome to engage in the club's social activities such as BBQ's, quiz nights, awards presentations and so on.

A study conducted in 2019 examined the incidence rate of attending private physiotherapy in the UK population. Results are shown in the following table; along with related figures for Bournemouth. The average number of private physiotherapist appointments was 3.5 visits in the year.

Attending Private Physiotherapy

Age

% of national population _(addsto less than 100% because under 10 omitted)

% of Bournemouth population _(addsto less than 100% because under 10 omitted)

Incidence of visiting a physiotherapist in last 12 months (national %)

Incidence of visiting a physiotherapist in last 12 months: towns with population 100,000 -

200,000 (%)

10 to 19

10

9

3

3

20 to 29

15

16

4

4

30 to 39

13

13

6

6

40 to 49

15

15

7

7.5

50 to 59

12

12

8

8.5

60 to 69

11

13

9

10

70 and over

12

13

10

11

Weighted avg.

-

-

5

6

Price levels for private physiotherapy tended to rise at slightly above the overall rate of inflation. This was partly because of the nature of the industry - demand had steadily risen over the past ten years, and while there were many more practitioners than in the past, demand still to some extent outpaced supply. And there was little incentive for clinics to engage in price cutting.

A trend that was occurring in the industry was the use of ESWT, which stands for Extracorporeal Radial Shockwave Therapy (ESWT). Use of this treatment in the UK had grown quite sharply over the past five years, as patients as well as practitioners learned of its benefits. The therapy used a device (a good one costing around 1,000) that emitted a 'shockwave' of sound energy into the patient's body where there was an injury present. In general, a treatment involving ESWT was charged at an extra 5. Another trend was Pilates, a total body exercise which had been developed to help injured soldiers back in WW1. The general idea of Pilates is to build strength, but using the weight of the body rather than 'weights'. The regime is meant to also increase flexibility; possibly reduce back pain. Because it assists in strength and flexibility it is often used as an adjunct to physiotherapy. Pilates had grown in popularity to a great extent in the past twenty years. It is often done by a group of people (generally, females account for about 65% of participants), say five to ten people, in a studio or exercise room, using simple floor mats under the guidance of an instructor. Some providers also use equipment such as pulleys to assist with strength exercises. Instructors are usually a qualified physiotherapist or someone with a degree in exercise science. Participants usually pay around 5 per 45 minute session.

Interestingly, as part of her general perusal of facts and figures, Sarah learned that Bournemouth residents were unusually likely to be participants in what is called a 'research panel'. What this means is that a large information services provider (selling to the marketing industry) offers incentives such as direct payments or retailer loyalty points to do market research surveys periodically. There were apparently nearly 700 Bournemouth residents who were members of this panel. Interested marketing firms

could commission an entire survey which typically took 10 minutes for people to complete costing around 6 per person or buy 3 or 4 questions in what was called an 'omnibus' (the cost being shared across many businesses) survey for only around 200 if the panel provider was needing work.

As everyone knows, google search is a commonplace practice for pre-purchase information gathering. Aside from google search, there are other information sources about physiotherapy, such as www.csp.org.uk. One that Sarah soon noticed was an internet business directory, www.yell.com. It provided a 'first page' visibility for searched brands and also showed reviewer scores for clinics. It apparently charged approximately 50p per click and businesses can select the weekly budget they wish to spend, with no lower bound.

Meanwhile, Joshua was also trying to understand how to employ search engine marketing for the clinic. He found that the average cost per click for health and medical industry providers is approximately 1 per click in the google search network. However, that cost was an average, which get progressively cheaper for more specific terms -for a local geography such as Bournemouth the cost per click is approximately 0.50.

Moreover, the average click-through rate for ads or listings for businesses such as physiotherapy/podiatry/medical is approximately 2.0% - in other words, for every 100 internet users who search and see a particular result, around 2 will actually click on it (bearing in mind also that searchers see multiple businesses in their search results). The 'conversion rate' from clicks to purchasing or becoming a new customer is, he learned, in turn around 1 percent (0.01) for service business such as Joshua and Sarah's.

Industry sources suggested approximately 80% of new business to allied health practices included at least some internet search. But, as Sarah had read recently, familiarity increases the likelihood of clicking on a search ad or link, from an average of about 0.5% to brands that are unfamiliar to a consumer to 2% for brands that are quite familiar to a consumer. Also, presence in the top 5 or so 'easily visible' search returns yielded far higher click rates than being on the second page of search results. Of course, the extent to which a business appeared in the top 5 results was a function of its spending - more spending would mean a higher proportion of the time the business would feature in the top results.

Perusal of information from industry sources revealed that approximately 20% of new physiotherapy patients resulted from recommendations by another provider. In most cases, this recommendation included a specific provider for example a GP referring a patient to a specialist the GP was familiar with, or one specialist referring a patient to another (a physiotherapist making a recommendation to a patient they get treatment from a podiatrist for example). While obtaining recommendations from GPs (general practitioners, colloquially 'doctors') or other specialists was highly prized, it was very difficult to achieve. Allied health professionals, and particularly GPs dislike being pestered with 'marketing' - a large amount of effort is directed at them from pharmaceutical companies and they shield themselves from it using their administrative staff who deter would-be salespeople and requests from other businesses to engage.

Recommendation was something that came more from personal familiarity developed over time.

Customer Audit

The principal ailments of people attending physiotherapy are: lower back pain, neck soreness/stiffness, arthritic pain in the knee, ankle, shoulder or elbow. These are generally linked to age, and/or physical inactivity. However, approximately 20% of visits are sparked by physical activity, with problems such as lower back or knee pain from people suddenly taking up a new sport such as tennis, squash or jogging. Cricket was certainly one that prompted some back or shoulder problems from participants, especially among players aged over 30. And tennis seemed to spark tendonitis among a fair proportion of players, especially ones who had recently taken it up or returned to the sport.

Whilst the obvious benefit sought from physiotherapy treatment is relief from pain or discomfort, an important consideration for people is to reduce the uncertainty about when their ailment would subside so they 'could get back to normal'.

One interesting feature about buyer (or patient) behaviour in relation to physiotherapy is that the therapist will often prescribe certain exercises for the patient to do, in the weeks following the appointment. For example, someone with neck pain could have their muscles and vertebrae treated, as well as being given stretching exercises. However, the incidence of people actually doing these exercises is quite low, only around 30% of people do them more than once or twice. This low rate could be because the condition eases, or could be due to the patient simply forgetting, or being too busy to take the time to self-work on the condition over time. Interestingly, people who fail to do the follow-up exercise are also less likely to continue treatment from their physiotherapist. While it could be the case that not doing the exercises is a sign the ailment is not as severe and not requiring as much continued treatment, seasoned people in the industry claim that people who really should have done their exercises but didn't, also tended to lapse from treatment at a higher rate.

Approximately 30% of people have no real preference for the gender of their physiotherapist. Some people, around 20%, prefer either that their physiotherapist be the same gender as themselves (somewhat more common among women) or that physiotherapist that is the other gender to themselves (somewhat more common among men). While physiotherapy patients are just like everyone else, and don't wish to pay more than needed, they are not especially price-sensitive to a difference of a couple of pounds () from one possible provider to another in the cost of a treatment.

In large cities, there is a definite location effect with the majority of people forming a small consideration set of 2 or 3 clinics (often one, rarely more than 3) within about 5 km of their residence and choose one of them after what is often a fairly cursory search. In towns with under 200,000 people, there is still a locational effect but not as strong as for cities, as distance or travel time from home is less of an issue. That said, older people tend to want to travel smaller distances to appointments.

Pre-booking information search by new clients will often include a quick perusal of the web-site and a 'check out' of the practitioner - many people just want to ensure the person they will see (for the first time) is either a gender they prefer to treat them, and some subjective sense that the practitioner seems 'nice' as well as 'capable'. Video testimonials are apparently quite valued by intending clients. If they can see a person who was in a similar situation to their own explaining how their treatment helped, they feel much more confident in the purchase decision.

Consumer demand for physiotherapy was fairly constant all year round. Over the recent past, patients used website information about treatment times to select an evening appointment between Monday and Thursday to fit in with work and avoid prized Saturday morning time.

Internet search is commonly used by people who have not been to a physiotherapist for two years or more. People who have been more recently than that invariably return to one of the clinics they have used before (around 25% of physiotherapy users will use more than one clinic in the course of a year). The most common search term combination is simply "physiotherapist" or "physiotherapy" plus the desired location, be it a town or a suburb in a city. Most actual bookings for physiotherapy are made directly via an online booking system embedded in a clinic's website, but around 30% are made via phone.

An interesting fact is that patients of physiotherapists are quite loyal. Of the patients that consult a physiotherapist, over 90% will have subsequent appointments with the same practitioner, only 10% will seek an alternative. Over a longer period, however, patients tend to visit more than one clinic - the average patient will use 1.5 clinics over a two- year period. Those who need more physiotherapy tend to use more clinics, their average patronage is around 2.2 clinics over a two-year period.

Competitor Audit

At school Sarah had been quite good at maths and she had been digging into the question of how much money to spend on marketing for the clinic. She read about several different methods: one was the objective and task method, but she had difficulty translating this into a feasible spending figure because there was no available algorithm to compute the association between outcomes like 'awareness' or 'mental availability' let alone enquiries and sales, from spending or reach. That is, while she might be able to calculate how much reach the clinic could engender from spending say, 100, how much reach over what time frame does one need to get say, 10% awareness? This seemed a thorny problem. But what did catch her eye was the deceptively simple idea that a businesses' market share should equate approximately to its share of voice1, (in other words, the proportion of a business' spending on marketing activity as a proportion of the total marketing spend by all businesses in the market), but the general idea seemed sensible. Given that each of the clinics in Bournemouth had one location, and they were all roughly comparable in terms of location, this notion seemed to be a reasonable heuristic with which to work. Therefore, she thought excitedly, "if we can work out what market share we want to get in the town, and what the total marketing spending is in the town, this will tell us approximately how much we should spend to get that market share".

Sarah decided to first try to calculate the size of the market in Bournemouth in terms of total annual visits. For this she used information on the incidence of visiting a private physiotherapist in towns like Bournemouth.

She then went to the library and examined some back-issues of newspapers to look for clinic advertisements; also did this for the online versions of the papers. In addition, she found a terrific source on the internet that allowed one to calculate what adwords competitors use, and an approximation of their adwords budget. There were no indications of other media being used. After several mornings working on this, she calculated the total 'voice' or advertising spend in the town in a year by all physiotherapy clinics was 26,500. Moreover, Sarah thought out loud, "if our business could spend advertising money more efficiently than the other clinics, we could perhaps even do better than expected". A key part of efficiency was apparently to avoid hitting the same people multiple times with advertising (in any time period, like a week, month or quarter) if there are other potential buyers of the product category who have not yet been hit with advertising. Of course, she thought, there was no getting around some parts of advertising like their signage would necessarily be seen often by regular passers-by and be as-if invisible to people on the other side of the town.

1 This is a bit simplified, in practice larger brands can spend under the level of their market share (ie large brand's SOV = 0.9 x its market share) and smaller brands share of voice needs to be a bit higher than their market share, ie small brand's SOV = 1.1 x its market share.

Bournemouth has seven physiotherapy clinics in addition to the Brightstones'. They are:

Number of

physiotherapists in clinic

Number of

years in operation

Cost for

initial consult

Cost for

follow-up consult

Remedy

2

10

47

37

Back to Movement

3

7

47

37

In Touch Physio

5

6

48

38

Spinal Tap Physio

2

9

48

37

Reiwoldt Physiotherapy

1

5

47

37

My Choice Physiotherapy

2

6

46

36

Moderne Physio Clinic

2

5

47

36

Patricia Rissanen

1

6

49

38

The largest clinic in terms of staff and patient numbers was In Touch Physio. A friend of Sarah mentioned that on a typical weekday this clinic would have around 30 patients come through. In Touch also ran a Pilates class most mornings of the week. It was unclear if the Pilates class helped the Physio business, but it certainly added to the vibe around the premises in the mornings.

Josh and Sarah drove around the town one Saturday afternoon and took a look at all the other physiotherapy clinics. They were all quite presentable, with neat and tidy exteriors and reasonably prominent, modern signage. The pair also took a look at each of the competitor clinic's search results. They assembled them together:

# google reviews

Stars rating /5

Bournemouth

1

3.0

Back to Movement

37

4.9

In Touch Physio

49

5.0

Spinal Tap Physio

27

4.8

Reiwoldt Physiotherapy

7

4.7

My Choice Physiotherapy

26

4.7

Moderne Physio Clinic

24

4.6

Patricia Rissanen

9

4.5

Josh asked Mariane, the marketing student, to think of a way to estimate competitor's market shares. After some thought, she came up with an ingenious solution, albeit one that would take around 20 hours of fairly boring work. Mariane's idea was to simply observe how many customers entered and left each clinic over two 1-hour periods over three different days. While this information was based on only a sample of times and would give an imprecise estimate of total patient visits, it was better than nothing. The idea was to obtain the patient traffic numbers, then check or validate them against the number of physiotherapists at each clinic - the clinics with more staff should attract more patients. Mariane consulted with Sarah as to the times of day and week in which most clinics would be expected to be busy, to make these observations. Sarah said, great, go ahead!

Mariane summarised her patient visit observations in the following table.

Clinic visits

# patients

# patients in

# patients in 1

Average patients

in 1 hour,

1 hour, Tues

hour, Fri 9.00

per hr.

Monday

4.00 pm

am

9.00 am

Remedy

na

na

na

Back to Movement

4

5

3

4.0

In Touch Physio

7

6

6

6.0

Spinal Tap Physio

2

3

2

2.3

Reiwoldt Physiotherapy

1

2

2

1.7

My Choice Physiotherapy

2

3

3

2.7

Moderne Physio Clinic

3

2

3

2.7

Patricia Rissanen

1

1

2

1.3

While Sarah and Josh recognised it was somewhat optimistic to be able to extrapolate from three sets of one-hour observations, Mariane then calculated the likely annual number of visits to each competitor clinic based on a conservative seven-hour day for each clinic, and 5.5 opening days each week, for 52 weeks per year. Adding in the very small number of current Bournemouth Physiotherapy clinic clients at the present time (7 in the last week x 52 weeks per year) gave an estimate of the total annual private physiotherapy market in Bournemouth in terms of patient visits.

Josh had also come up with a task for Mariane. He asked her to look at the web sites of the other clinics to see if anything useful could be learned in terms of their appearance, functionality or features offered. She hadn't finished the task but had determined all used an online booking system and that Back to Movement mentioned on its web site that it offered ESWT. In Touch said it was getting one in a couple of months.

Mariane also mentioned that another possible method to ascertain client numbers for all the other clinics was to go to each one's web site and attempt to book a session for a following day and see how many appointment times were booked. Over a period of time this would likely reveal total bookings per day. Josh and Sarah were impressed with her thinking but felt this additional work could wait.

Mariane had also discerned that In Touch went a bit further than the other clinics in terms of offering treatment types with a specific 'name'. For example, it offered a specific post-surgery rehabilitation treatment and a sports massage treatment. The post- surgery treatment was charged at a premium price of 55 for initial consult and 40 for a repeat.

Market Environment Analysis: work tasks

Task

From the information in the case, work out how many residents (aged 10+) of Bournemouth will visit a physiotherapist at least once in a year. Then use other case information to calculate the total number of patient visits to physiotherapists in Bournemouth in a year.

How to do it:

The case mentions the total Bournemouth population, and has tables showing the percentages of the total population of Bournemouth according to age class. As well as the incidence of going to a physiotherapist, for all age classes from 10yrs and over.

Enter the total population figure in the table. Then calculate the number of residents in the town for each age class. For example, for age group 10 to 19 this is Bournemouth population multiplied by 9 percent.

Then calculate the proportion of each age class that will go to a physio in a year. This is the number of people in each age group multiplied by the incidence of visiting a physio. Convert that to total N who will visit, and sum them to make a total.

1

Total Bournemouth Population:

Enter population figure in here :

Age

% of Bournemouth population

Number of people in this age group

% Incidence of visiting a physiotherapist in last 12 months Bournemouth

N who will visit a physio in a year in Bournemouth

2

10 to 19

9

3.0

3

20 to 29

15

3.0

4

30 to 39

13

5.0

5

40 to 49

15

6.0

6

50 to 59

12

8.5

7

60 to 69

13

10.0

8

70 and over

13

11

9

Total

Then look at the people who attend physiotherapy: how many annual visits do they make on average? Multiply the total people attending, that you just calculated, by average number of visits. This will give you the market size in terms of total patient visits.

1

Total number of people visiting a physio in a year in Bournemouth

2

Average number of visits people make to a physiotherapist in a year

3

Total number of patient visits in a year (row 1 x row 2)

Task

If every initial consultation leads to 2.5 follow-ups, what is the percentage of all physiotherapy consultations that are initial and follow-up ?

How to do it:

Hint: what is 1 divided by (1+2.5)? That gives you the proportion that are initial consultations, the rest are follow-up appointments. Check your answer: The initial proportion multiplied by 2.5 should equal repeats.

Task

How big is the private physiotherapy market in Bournemouth in terms of revenue?

How to do it:

You previously calculated the total number of patient visits made in the market, in a 12-month period. And you also calculated the percentage of visits that are initial and repeat consults, and you know that the average price for an initial consult is 47.50 and a repeat is 37.50. Enter the required information into the table below.

Therefore, add up the total number of initial visits x average price, and total repeat visits multiplied by average price. Use the table below to set out your answers.

1

Total visits to physiotherapists in Bournemouth in 12 months

2

Percentage of total visits that are initial

3

Percentage of total visits that are repeat

4

Number of total visits that are initial (row 1 multiplied by row 2)

5

Number of total visits that are repeat (row 1 multiplied by row 3)

6

Price for initial consult (from the case)

7

Price for repeat consult (from the case)

8

Total revenue from initial consults (row 4 multiplied by row 6)

9

Total revenue from repeat consults (row 5 multiplied by row 7)

10

Total revenue for the market (sum of row 8+ row 9)

Task:

Is there any evidence that there is seasonality in patient visits? In other words, that at certain times of year patient visits are a bit higher ?

How to do it.

The data that came from the former proprietor can be used for this task. While it pertains to only the Bournemouth Physio clinic, if we notice a seasonal trend in its data it would be reasonable to think it occurs more generally. Open the accompanying excel file.

The patient visits data trends down over time, so we need to be careful not to confound the time of year with the downward trend. If patient numbers have trended down over time, then the end of any year will show fewer patients than the start of any year (so it will look like December attracts fewer patients than January, for example). So we need to de-trend the data! This sounds hard, but is quite straightforward.

Open the accompanying excel spreadsheet. * see course website*. There are columns for week (1 to 106, including two weeks of the Brightstones' occu