Pool Doctor
Essay by Arege Bilgasem • July 26, 2015 • Case Study • 4,647 Words (19 Pages) • 1,390 Views
Executive Summary
The Pool Doctor, based in Winnipeg, was started by Jeff Golfman and Alan Secter, which started out by selling ionization water purification systems, but the idea was dropped after it failed to meet the partners’ expectations. The business switched to maintaining pools, and providing a clean swimming pool.
After the 1989 season, the 1990 season was approaching fast and Mr. Golfman was meeting with the bank manager he dealt with for his business, in order to discuss the business and possible funding and requirements for the business to meet. Revenues had substantially increases year-over-year with a 319% increase. The revenue increase was contributed to higher chemical sales, and the pool servicing. One number that should not be ignored is the total expenses that have increased 539% year-over-year due to higher wages, bonuses, and unnecessary costs.
The marketing plan proved to be a success with the attendance of the Customer Appreciation Show put on by Aristocrat Pools. This is the same company that supplies the chemicals to the Pool Doctor, and as it will be read, the Pool Doctor should stick with Aristocrat because they offer valuable knowledge on products, and service, even though they have a poor reputation in the industry.
As well, the competition in the pool industry shows that there is one significant competitor to the Pool Doctor, and this is The Pool Pros. The person who started the business is a former employee of the Pool Doctor, but has not been able to take away the business from Pool Doctor. It is assumed that the clients gained are the same ones that this employee cleaned. The independents and the pool stores are very different from each other because the pool stores are focused on the sales, and installation of pools where as independents are more focused on the maintenance, summarization, winterization, and pool repairs.
In the PEST analysis, a point that is kept in mind is that the more profit that is generated the more money that will have to be paid in taxes. Furthermore, the implication of the chlorine-free pool device would hurt the business and should not be implemented because there will be money lost if the Pool Doctor implemented it.
To conclude, the price of the service should remain the same and that the marketing should be directed towards the existing pool owner because they are the ones with the money to afford the maintenance whereas the new pool owner does not have the cash to spend on such an expense after spending money to install the pool.
Problems
The Pool Doctor, established in 1988, Jeff Golfman and Alan Secter started a pool servicing business, which grew to an 18.4% market share. At the end of 1989, Mr. Golfman was faced with meeting with his bank the first week of January to discuss the strategic plan for 1990, which included how he should market his business, and whether to stay with the current chemical supplier, as well, how to meet his profit objective for the summer of 1990.
Objectives
For Mr. Golfman, on the corporate level:
- Expected the Pool Doctor to generate sales of $100,000 and an overall profit of $22,000, which would be achieved by establishing a customer base of 80 customers and ensuring little or no turnover
- Reducing:
- Bad debt and repair expenses
- Eliminating inventory write-offs
- Changing strategy from growth to maintaining and extending the value of each customer by providing a wider range of services
- Could reduce overhead expenses by about $11,000
Personal level:
- Gain valuable business experience
- Work during summers and travel during winters
- Avoid monotony and stagnation
- Set own work hours (work at own pace)
- Live balanced lifestyle.
In addition:
- Prepared to sell business if the price was right.
Analysis
New pool owners | Existing pool owners | |
Who are they? | Bought a house with a pool and never owned a pool prior, or a newly constructed pool | Existing home owners, have had a pool longer than new homeowners |
What | ||
When would they clean the pool? | Maintained on a 6 day schedule, with 5 cleanings on each of Monday Wednesday, and Friday, and another 5 on Tuesday, Thursday, and Saturday (assuming a total of ten pools were assigned, and there are 60-80 pools for the 1990 season). | |
Where are they located? | Winnipeg | |
Why do they care for their pool the way they do? | -Pool stores did not service the pools they sold, leaving it to the owner -Do not want to spend additional money after installation -Unlikely to realize that caring for a pool was a full time job, and were prepared to carry it out themselves | -Increased dual income families and more women going into the workforce, homeowners needed extra help around the house. |
How do they care for their pool? | Do it themselves | Contract it out |
Implications
New pool owners | Existing pool owners | |
Product | The new pool owners aren’t quite as experienced in regards to pool maintenance, so they are able to get a feel for themselves on the know how on how to clean a pool themselves. | The service of cleaning pools is important to the existing pool owners as more family members are joining the workforce, leaving them to have little to no time to do pool maintenance, and so, with experience of owning the pool, they are able to hire the professionals. |
Price | As new pool owners, they are very concerned about the price because they have already spent thousands on the new installation, and do not want to spend more. In the event the prices do drop, the new pool owners who may be at the 1 year mark of owning their pool, will consider hiring someone to clean the pool because they are frustrated with the constant upkeep. | The existing pool owners already know what the cost is to get the pool cleaned and serviced, and are using services such as the Pool Doctor to clean it. 26% of these pool owners find that the prices are too high, and would like to see this as improvement. |
Place | Ultimately, this is taking place at their home, and for businesses, it’s taking place within their business. The Pool Doctor can be contacted by phone, and at which time they will visit the location of the pool to make further recommendations as to pool maintenance (future servicing). | |
Promo | With regards to the direct mail advertising, the response rate could have been low because these are the people who are committed to doing the job themselves. As well, they could have just gotten the pool installed, | The use of the fliers can be applied to this category in that the owner is already a pool owner, and has been referred by various means one includes being referred by a friend. With the low response rate for the direct mail advertising. This low response could be due to people who already have a pool cleaner. |
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