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					                 Advantage Pet Insurance
Background
Pet Insurance was first introduced in 1980 (Kingman Animal Hospital, UK) and came to Canada
in 1989 by PetPlan (Securican). Although initially slow to grow in the North American market,
pet insurance has become a fast growing category as Canadians and Americans spend increasing
amounts of money on their pets. The increasingly high cost of veterinary services is one reason
why some pet owners are beginning to consider pet insurance as a pet care option.

More than half of Canadian households own a cat or dog; only 11% of pets are currently insured.
For the majority of pet "parents", their pets have become members of the family:
     7 out of 10 think that pets have the same rights to health and happiness as humans,
     45% believe that animals have the same emotions we do,
     over half say “I love you” to their pets,
     over half celebrate their pets birthday, and
     26% purchase safety features (e.g. car seats) for their pet while traveling

The average Canadian spends over $650/yr on each dog, and $350/yr on cats. This does NOT
include litter, grooming, etc. With 4.5MM cats and 3.5MM dogs in Canada, that translates to an
estimated $8 billion a year! (See Exhibit A) Whereas, an industry survey in 1980 showed most
pet owners tapped out when a vet bill reached $275, today that number is closer to $1,500
(phillyburbs.com). And, more than half of pet owners’ surveyed claim they would go into debt in
order to treat a pet suffering from a chronic disease.

Most owners rely on their veterinarian’s advice:
    70% take their pet to the vet at least once a year,
    64% control pet weight
    67% of pet owners talked to their vet about nutrition
    7 in 10 pet owners are concerned about dental health and
    18% brush their pet's teeth.
    10 percent of pets are reported to suffer from a chronic health condition, and/or have
       behavioural problems in the past year.

Where Advantage Pet Insurance Stands in the Market
Currently, Advantage has 145,000 in force pet insurance policies and market in traditional
sources: vet offices, supermarkets, unaddressed co-op distributions, pet publications, and selected
retail and pet stores, and DM. Advantage offers insurance for dogs and cats, however is currently
not feasible to cover other pets at this time due to varying costs. There are levels of packages that
range in price to meet all clients’ needs.

Research and Current Market Situation
Most pet owners don't consider pet insurance top priority, however this attitude is changing,
especially amongst more affluent pet owners who consider their pets to be part of their family and
it is estimated that 2-3% of pet owners will acquire pet insurance in the coming year.

Advantage Pet Insurance currently insures 1.8% of Canadian cats and dogs, capturing 16.4 %
share of the pet insurance market. Advantage Pet Insurance, insures 1.8% of pets 0.5% of pets
overall are insured in Canada and seeks an increased share of this growing market by increasing
sales by almost 19,000 policies.
The humanization of pets is an ever growing trend in today's market and owners are continuing to
create human lifestyles for their pets. An estimated 31% of urban pet owners are categorized as
humanists and:
     Treat pet like child not like a pet, regarded as family members, and are often considered
        as equivalent to children in the level of attention and care they gain from pet owners.
     Big spenders in the industry ($292 in vet costs not including chronic or behavioural)
     Spend more on food ($372 per year).
     41% would spend $1000 or more and 85% would go into debt for their pets health care
     Take pride in their pets and appreciate when others notice their pets.
     A heightened awareness of the special health needs associated with pets at different
        developmental stages.
     A tendency to pamper their pets with toys and treats, which are not necessary from a
        nutritional standpoint.

The humanization of pets has led to the development of:
    Cosmetics for pets.
    New products such as: bath wipes scented shampoos and aromatherapy candles.
    Natural and organic substances, and aesthetic enhancements.
    Products of all types offering a wider range of styles designed to be more convenient and
       match different home décors (prleap.com).
    Pet insurance, pet clothing, pet energy bars, and even things like a cat-oriented cafe and
       pet yoga classes.

The advance in medical care and options for pets illustrates another way humans are continuing to
humanize their pets:
    About 77% of dogs and 52% of cats have been medicated in the past year, according to
       APPMA, an increase of about 20% from 1996 (businessweek.com)
    Plastic surgeons offer rhinoplasty, eye lifts, and other cosmetic procedures to help tone
       down certain doggy features, from droopy eyes to piggish noses(businessweek.com)
    Neuticles, a patented testicular implant that sells for up to $919 a pair. The idea, says
       inventor Gregg A. Miller, is to "let people restore their pets to anatomical preciseness"
       after neutering, thereby allowing them to retain their natural look and self-esteem
       (businessweek.com)
    Braces (businessweek.com).
    Animal grief counselors to help families cope with the demise of beloved pets.
    Not only is state-of-the-art technology such as magnetic resonance imaging, with costs
       that range around $1,500 a scan, now available in small-town labs, but consumers'
       expectations of medical care have been transformed. They want the same best-in-class
       care for their pets that they want for themselves (businessweek.com).
    Cataracts- $1756.80 (petcare.com)
    Uro-genital problems- $304.20 (petcare.com)
    $3,700 to help cure liver failure in their cat(businessweek.com)*

On average an owner may expect to pay between $250 and $500 for a pet with a chronic
condition-over and above what would be required for a healthy pet.




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Most common claims are: (pet place.com)

Dog                             Both                             Cat
Tumors/growth                   Urinary tract infection          Kidney disease
Skin infection/hot spots        Stomach inflammation             Diabetes
Osteoarthritis                  Hypothyroidism                   Inflamed colon
Inflamed intestinal tract       Ear infection                    Conjunctivitis
Soft tissue trauma              Skin irritations

Competitive Overview
There are 3 key competitors of pet insurance in Canada, Pet Plan, Pet Care and Vet Insurance.
Most pets in Canada are not insured which means that the competitive market will soar once all
the companies do offer similar coverage for pets. There is however many companies coming
into the market at this time such as PC Financial and CAA. The market is simply waiting for pet
insurance to make its mark. Many companies offer the same coverage for pets; however Pet Plan
delivers more than the competition by offering unlimited coverage as well as routine needs
coverage. See exhibit A for detailed overview.

Target Audience
Primary Target
The primary target audiences for Advantage Pet Insurance are: Pet Humanists and Pet Pleasers.

Pet Humanists are pet owners who feel their pets are people. They feel their pets have emotions
and experience things the way humans do:
     31% of urban pet owners are humanists
     They are mostly single females under the age of 35
     Highest percentage located in Ontario and B.C.
     They treat their pet like child not like a pet.
     Big spenders in the industry ($292 in vet costs not including chronic or behavioural).
     Spend more than any other pet owners on food ($372 per year)
     Take pride in their pets and appreciate when others notice their pets.
     41% would spend $1000 or more and 85% would go into debt for their pet’s health care.

Pet Pleasers are simply pet owners who are Pet Humanist wannabes with a lower income.
     25% of urban pet owners are pet pleasers.
     Typically female with a lower income.
     Are located in all regions but are found slightly more in Ontario and B.C.
     73% have at least one dog, higher average of pure bred.
     Will not spend as much on pet food per year ($351).
     Vet spending in the last year is $225.
     Convenience is key

Secondary Target
The secondary target audiences for Advantage Pet Insurance are: Conscientious Pet Lovers and
Pet Traditionalists.

Conscientious Pet Lovers are pet owners who are reserved on showing affection and do not
share emotions with their pets.


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       24% of urban pet owners are conscientious pet lovers.
       Skewed to males 43 years of age who own their own homes.
       They tend to own small dogs and cats and are least likely to own multiple pets.
       Highly educated and high household income.
       Purchase only the necessity for their pets.
       Vet spending in the last year is $275.
       $343 on pet food in past 12 months.
       Like quality products.

Pet Traditionalists are pet owners who feel a pet is a wonderful companion but is simply that,
just a pet.
      20% of urban pet owners are pet traditionalists.
      Mostly men 43 years of age or older who have families.
      Household income is lower the average.
      More likely to have multiple pets (mixed breeds and outdoor).
      Their pets are pets.
      Vet spending in the last year is $174.
      $237 on pet food in last year.
      Much less involved with their pets on emotional level.

Tertiary Target
The tertiary target audiences for Advantage Pet Insurance are: Veterinarians as well as Pet Stores
    Vets, referral service
    Advantage Pet Insurance will be co-Branded with Science Diet, which is the healthy
        option in pet food for the consumer, (sampling, coupons)
    Pet Stores (i.e. PetSmart) Outside DR Mall Posters

Audience Objections and Advantage Pet Insurance Benefits
It is too expensive to buy pet insurance.
      Advantage Pet Insurance offers many levels of coverage to meet the needs of all
          consumers and what ever their income.

Pet insurance won’t cover my pet.
     Advantage Pet Insurance covers all cats and dogs and is working to cover other pets as
        soon as possible.

I don’t spend a lot on vet bills a month so I don’t need pet insurance.
     Advantage Pet Insurance covers annual care such as exams, dental cleaning, blood work
         and de-worming, all of which can be very expensive over time.

I don’t want insurance that expires when my pet reaches a certain age.
     Advantage Pet Insurance has life time care which covers vaccination, spay or neuter, de-
        claw and ID-chip which is all important during the first years of health for your pet
        making the insurance worth while.

There is never enough information available to me about pet insurance.
    Advantage Pet Insurance offers all the information the consumers need and want by
        phone, fax, email, and websites as well as through your vet.


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I love my pet but if something happens I can simply get a new one.
      Advantage Pet Insurance wants you to feel secure about your pet’s health, by providing
        protection and prevention of health problems. By covering costs to maintain your pets
        life as long as possible, you will feel mush closer to your pet and won’t want to simple
        replace them.

USP
      Keep it simple. Worry less about your pet while loving your pet.

Easy worry free ways to get information by: phone, internet and fax, through your vet.
Easy worry free ways to purchase by: phone, email, internet and fax, through your vet.
Easy worry free ways to make claims, 24/7, by: phone, email or fax, through your vet.
Easy hassle-free payment options:                     Multiple payment plans:
   Cheque                                               Weekly
   Credit card                                          Monthly
   Cash                                                 Quarterly
   Direct withdrawal (bank account/pay cheque)          Semi-annually
                                                         Annually

Business Objectives
During 2008, the overall business objectives for Advantage Pet Plan are to:
    Drive new pet insurance policy acquisition by 12.5% over the current level.
    Improve channels and their performance
    Direct marketing activities need to be added

With an estimated 2% response rate, to contact approximately 910,000 individuals and receive an
estimated 20,000 policy purchases to achieve the 12.5% increase. The objective will be met by
allocating the budget appropriately by using the most effective marketing channels and
advertising vehicles to reach the primary target audience.

Communication Objectives
         Increase product awareness by 5% among pet owners in the 1st 3 months of campaign.
         Increase product knowledge by 15% among pet owners in the 1st 6 months of campaign.
         Build acceptance of Advantage and lead consumers to increase purchase by 12.5% during
          the 1st year of the campaign.
         Persuade 3% of Ontario vets to support the Advantage Pet Insurance product during the
          1st year of the campaign.
         Persuade 5% of Ontario pet stores to support the Advantage Pet Insurance product during
          the 1st year of the campaign.

Key Messages
Consumers- Advantage Pet Insurance is the easiest insurance to purchase and claim under.

Vets and Pet Stores- Advantage Pet Insurance is the most reliable insurance company when it
comes to making claims and providing information for our clients.




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Marketing Strategy
Product – introduce a 24 hour claim service, #Pet information and sign-up service
Price – introduce new easy, worry free, payment options
Place – Test market in Ontario with direct marketing media
Promotion - Enhance website and services provided on the website, test media in Ontario, use of:

        Coupons                     Magnets                   Birthday Cards
        Samples                     #PET                      Addressed Mail
        Referral System             Mall posters              Unaddressed Co-op Distributions
        Pamphlets

Tactics and Implementations
   Purchasing mailing list from Life Style Sector Canada: Pets (Cornerstone Canada).
    10,000 Addresses at $95.00 per thousand with a provincial skew (Ontario) at $10.00 per
    thousand.
 To launch #PET and direct the consumers to the new website, mall posters will be used for 6
    months over the 2008 campaign.
 Addressed mail will be sent to 20,000 people in 8 waves of 2500 people over the year to
    obtain new clients.
 Unaddressed mail will be sent over the whole campaign targeted in urban areas in Ontario.
 Holiday gift cards will be sent throughout the year during major holidays to promote
    ourselves and Science Diet to our loyal consumers.
See exhibit B for overview details

Offers
Offers to pre existing clients
1. Initial Get a Friend (current and new policy owners) to encourage current policy holders to
   tell people about Advantage Pet Insurance. The initial offer starts in January of the 2008
   campaign and reminders will be sent throughout the year through the website as well as the
   holiday cards.

2. Entry into a contest for free products whenever a friend joins. The more friends the consumer
   gets to purchase a policy the more entries they receive.

3. Which ever policy the friend signs up for determines what prize category the initial consumer
   gets entered into. If the friend purchases the highest level of coverage then the initial
   consumer gets entered for the largest prize.

Offers to all Targets
4. A survey on the Websites homepage that determines the characteristics of each pet owner.
   This survey delivers offers once completed to each grouping as appropriate.
5. Consumers can call #PET on their cell phone to receive more information about Advantage
   Pet Insurance, and if they purchase at that time they receive a discount or if they wish to have
   information mailed to them, they will still receive a discount but immediate purchase has a
   more valuable discount.



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Offers to Primary Target (Pet Humanists/Pet Pleasers)
6. Pet birthday/holiday cards from company to pet (to maintain clients) when pet owner
   becomes a member with Advantage Pet Insurance, pet's information is logged (including pets
   birthday) so a birthday/holiday wish can be sent along with a sample of Science Diet pet food
   specifically for the pet's diet in mind (indoor cat, large dog, etc.) as well as a coupon for
   Science Diet. The holidays for this offer will be The Holiday Season (Christmas, Hanukah,
   Kwanza), New Years, Valentine's Day, St. Patrick's Day, Canada Day, Thanksgiving,
   Halloween, and Easter.
7. Maturing Policy (To gain new and maintain old clients) when the insurance policy is coming
   to a close because your pet has reached the mature age, a notice will be sent to inform the
   consumer. This notification allows for any final testing or treatments to be accomplished
   before the plan runs out because the pet’s health is most important to Advantage Pet
   Insurance.
Offers to Secondary Target (Conscientious Pet Lovers/Pet Traditionalists)
8. Co-op distributions (unaddressed) post cards with tear jerking stories about animals who
   survived because their owners had pet insurance. This allows owners to send away for more
   information or to call a toll free number
Offers to tertiary target (Pet Stores, Vets, Co-branding)
9. Pet stores and vet offices will be giving a referral payment of $25 for every individual that
   purchases pet insurance through the pet store or vet office.
10. Science Diet will be displayed on all Advantage Pet Insurance Advertising and Direct
    Marketing Pieces during the campaign.


Anticipated Results
Within the first 6 months of the campaign, there will be:
    A 5% increase in awareness and a 15% increase in product knowledge,
    Acceptance for the product
    Increase in purchase by 12.5% during the first year of the campaign period.

See exhibit C for overview detail.

Budget
   Primary Budget $750,000
   Budget Subsidized (co-branding with Science Diet) $350,000
   Total Budget $1,100,000

See exhibit D for a detailed breakdown of the budget.




Sources: Paws & Claws Survey 2001, CMA Case Study, PMB 2007




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