Indian School of Business

ISB088

July 11, 2017

Piyush Kumar | Sonia Mehrotra | Geetika Shah

Be Well Hospitals — Branding a Mid-Tier Service in a Two-

Tier Market
In March, 2016, Dr. C. J. Vetrievel, Managing Director and co-founder of Be Well Hospitals, a multi-
speciality secondary healthcare chain of hospitals, sat in his office in Chennai, India, mulling over a
spreadsheet on his laptop. The sheet detailed Be Well’s branding plans for the financial year (FY) 2016-
17, aimed at creating awareness about its healthcare services. Vetrievel, a surgeon by profession and
fondly referred to as Vetri, believed that it was possible to deliver good quality healthcare at an
affordable cost in semi-urban and rural India by establishing financially viable hospitals outside of urban
centers. In its four and half years of operation, Be Well had set up eight hospitals across the districts,
suburbs and industrial towns of the state of Tamil Nadu 1 with a combined capacity of more than 280
beds, and had successfully treated close to 500,000 patients. As early as five months after its inception,
in 2011, SONG Investment Advisors 2 had invested in Be Well hospitals. SONG, which became Aspada
Investment Company in 2013, provided early stage risk capital to entrepreneurs building innovative
business models that had the ability to solve the “essential services” problems in the healthcare and
education sectors.

Vetri and his friend C. Lakshmanan conceptualized Be Well as a chain of rapidly scalable, affordable,
24-hour multi-specialty hospitals that would address the primary and secondary healthcare needs of
semi-urban and rural India. Their service delivery model operated on the expectation that each hospital
could become self-sustainable within a few months of operation. With his past experience as a medical
practitioner, Vetri understood the enormity and severity of healthcare problems in semi-urban and rural
India as well as the importance of affordable care. He believed that in order to make any significant
impact, the Be Well enterprise had to scale at a rate several times faster than it had done so far.

Vetri felt that it would be relatively easy to convince investors of the merits of their expansion plans
for the next few years, specifically, to establish 50 Be Well hospitals that could cater to the needs of a
million semi-urban and rural patients a year across several states in India.

1
Tamil Nadu, a southeastern Indian state, had earned a good reputation in the country as a healthcare paradise. See:
Tamil Nadu — A healthcare paradise. (2010, July). Express Healthcare. Retrieved from
http://archivehealthcare.financialexpress.com/201007/healthcareintamilnadu01.shtml on March 17, 2016.
2
Chanchani, M. (2012, January 20). Song investment backs Be Well Hospital, SV Agro Processing. VCCircle website.
Retrieved from http://www.vccircle.com/news/food-agri/2012/01/20/song-investment-backs-be-well-hospital-sv-agro-
processing on March 27, 2016.
Professor Piyush Kumar, Sonia Mehrotra and Geetika Shah prepared this case solely as a basis for class discussion. This case
is not intended to serve as an endorsement, a source of primary data, or an illustration of effective or ineffective management.
This case was developed under the aegis of the Centre for Learning and Management Practice, ISB.

Copyright @ 2017 Indian School of Business. The publication may not be digitised, photocopied, or otherwise reproduced, posted
or transmitted, without the permission of the Indian School of Business.

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 ISB088

However, the critical challenge was to convince patients to utilize Be Well’s high-quality healthcare
services, which were locally accessible and available at an affordable cost, instead of rushing to more
expensive super-speciality hospitals in urban centers. An internal analysis had pointed out that 60% of
the local population in the vicinity of a Be Well hospital still preferred to go to the nearest super-speciality
hospital in a nearby city. According to Vetri:

“This was more a function of public perception that a 500-bed super-speciality hospital
could offer quality care and manage emergencies better than a 60-bed hospital. We want
to change this notion. To that extent, branding ourselves is a big challenge for us. We
need to figure out how to really present ourselves to our customer base.”

The branding challenge had several dimensions. The Be Well management team believed that it
had to somehow educate customers about the quality of care available at its hospitals. However, it was
unclear about what dimensions of the brand to focus on and promote. It also had to decide whether to
continue focusing on local branding of each of its hospitals or execute a larger, state-level branding
exercise to have the necessary impact.

HEALTHCARE IN INDIA

India was home to 1.21 billion people, 3 73% of whom resided in towns and villages. With 26.4% 4 of
its urban population living below the poverty line, vast income disparities, lack of basic infrastructure
and a high incidence of disease, India faced major healthcare challenges. The high rate of infectious
diseases competed with the growing burden of chronic illnesses. For example, more than a million
deaths a year were attributed to smoking and nearly 65 million Indians suffered from diabetes. The
situation was further aggravated by the concentration of medical professionals in urban areas. Patients
in rural areas were poorly served, and had to travel for long hours to distant locations to avail of medical
services.

In addition to a weak infrastructure, the Indian healthcare system suffered from other weaknesses.
Total expenditure on health in 2012 was 3.8% of the gross domestic product (GDP). Of this, government
expenditure on health amounted to less than 1% of the GDP, which compared poorly with other
emerging nations.5 The government’s failure to deliver quality care had led to the expansion of the
private sector, which accounted for 93% of all hospitals. 6 However, the private sector was largely
confined to the state capitals or Tier I cities7 and focused predominantly on tertiary care. As a result,
there was a lot of unmet demand in the primary and secondary care segments (see Exhibit 1).

The overall healthcare sector had systemic shortcomings and was unregulated, fragmented and
unevenly distributed. At one end of the spectrum were “quacks” who practiced with little knowledge or
formal training, while at the other end were world-class hospitals that catered to both Indian and foreign
patients who could afford to pay. In between these extremes were small, private, for-profit clinics and
hospitals. While some private service providers offered quality services at an affordable price, costs in
general tended to be unreasonably high. A majority of patients, especially in rural areas, received
treatment either from unqualified practitioners or from the nearest government hospitals. While the
treatment offered at government hospitals was free, it suffered because of poor quality equipment,
unhygienic conditions and the perennial absence of appointed doctors and hospital staff.

3
Census 2011, Ministry of Home Affairs, Government of India.
4
Planning Commission, Government of India. (2014, June). Report of the expert group to review the methodology for
measurement of poverty, p. 5.
5
World Health Organization. (2015). World health statistics 2015. Part II: Global health indicators. Retrieved from
http://www.who.int/gho/publications/world_health_statistics/EN_WHS2015_Part2.pdf?ua=1.
6
Shiva Kumar, A. K. (2014, May 13). Fixing India's healthcare system. Live Mint. Retrieved from
http://www.livemint.com/Opinion/pl58bANi9zaF0AR2MkUYuN/Fixing-Indias-healthcare-system.html on March 31, 2016.
7
In India, cities are classified into tiers based on population. A Tier I city has a population of 100,000 and above and a
Tier II city has a population of 50,000-99,999.
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Vetri and Lakshmanan wanted Be Well hospitals to address this gap in the healthcare sector and
provide access to high-quality primary and secondary healthcare services at an affordable price to the
semi-urban and rural population.

BE WELL HOSPITALS

Vetri, a 1992 medical graduate from Stanley Medical College, Tamil Nadu, trained and practiced as
an orthopedic surgeon for over a decade at medical institutions in several countries including the United
Kingdom, Ireland, Australia, Switzerland, the Maldives, Germany and India. In 2001, he shifted gears
and moved into a new role as Head of Operations at Apollo Hospitals Limited in Chennai, the capital of
Tamil Nadu. At that time, Apollo Hospitals was one of the leading and most sought after healthcare
providers in the country. By 2005, Vetri had been promoted to Chief Operating Officer (COO) of the
Projects Division at Apollo Hospitals. During his tenure as the COO, he witnessed patients and their
relatives from many Indian states travel long distances to avail of Apollo’s medical services. Apollo’s
strong brand and the absence of multi-speciality hospitals in smaller towns were driving this demand.
Vetri said:

“I could see an opportunity; it was then that I came up with this idea of setting up a multi-
speciality hospital in the Indian hinterland to address this unmet demand. It was an
opportunity not only to do good but to also build a financially sustainable business.”

By 2009, Vetri was convinced of his idea and had decided to quit Apollo to start out on his own. But
after he left Apollo, he accepted the role of Director at Deepam Hospitals – a chain of six hospitals
operating in the secondary healthcare space. He was invited by Deepam’s management to help them
with their expansion plans. During his one-year tenure at Deepam, Vetri was instrumental in increasing
revenues by 150%. While he had futuristic plans for Deepam’s expansion, he quit the chain because
of ideological differences with the management. Around the same time, he met C. Lakshmanan, an old
friend and colleague from Apollo. Lakshmanan, a chartered accountant, had two decades of rich
experience in senior positions in healthcare finance. Vetri’s idea of a chain of multi-speciality hospitals
for the semi-urban and rural population of the county struck a chord with Lakshmanan, and the duo
debuted their first hospital in July 2011 along the East Coast Road in the union territory of Puducherry,
on the coast of Tamil Nadu. Their hospital logo, with the tagline, “Closer to you. More affordable too”,
was suggestive of trustworthy hospital services accessible to all (see Exhibit 2(a)). The seed capital for
their first hospital was about INR 0.5 million and came from the promoters’ personal savings. The
hospital building was rented on a 12-year lease from a doctor who used to run a diabetic care practice
at the facility. The building was refurbished to give it the look and feel of a multi-speciality hospital.

Recalling the early days, Vetri said, “Our initial core focus was to project ourselves in the local area
as a 24- hour multispecialty provider that had come into this new territory. We conducted a lot of camps
to promote this idea.”

Every Sunday, they organized a promotional health camp to make the local people aware of Be
Well’s presence in the area. These camps, typically conducted in the hospital premises, gave the public
a chance to see Be Well’s facilities and get information about the services offered.

In its first month of operation, the facility served 230 outpatients and only 18 inpatients. However,
the management believed that its persistence in organizing health camps and the good quality of its
services gradually started paying off, and by December 2011, the number of monthly outpatients had
increased to 650 and inpatients to 46. Within the first five months of operations, Be Well was also able
to solicit funding of about USD 1 million from SONG Investment Advisors, which provided the much
needed capital for a quick expansion. In April 2012, Be Well opened its second hospital in Tuticorin,
followed by a third hospital in Pudukottai in November 2012. The following year, Be Well opened
hospitals in Sivakasi and Erode, followed by three more in Chennai in 2014 (see Exhibit 2b).

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Competitor Landscape and Healthcare Challenges

In December 2015, the overall Indian healthcare market was worth USD 100 billion and was
expected to grow at a compounded annual growth rate (CAGR) of 22.9% to touch USD 280 billion by
2020 (see Exhibit 3). Hospitals, nursing homes, diagnostic centers and pharmaceuticals constituted
65% of this overall market.8 Apollo Hospitals, a pioneer in private healthcare in India based out of Tamil
Nadu, was considered to be the forerunner in integrated healthcare and had a robust presence across
the healthcare spectrum. Apollo was in an aggressive expansion mode and was known for its brand in
the Indian healthcare market.
In addition, the secondary healthcare market was estimated to reach USD 39 billion 9 by 2020.10
Though this market was largely unorganized and dominated by private clinics and nursing homes, many
organized players such as Life Spring Hospitals, Glocal Healthcare and Vaatsalya Hospitals had
recently entered this market.

Funding was one of the biggest bottlenecks for expansion in the healthcare sector. Healthcare
projects tended to be capital intensive and had long gestation and pay-back periods, especially in
smaller towns and rural areas. Be Well had been fortunate in this respect and had the backing of Aspada
Investments (formerly SONG) for its expansion plans.

Reports suggested that the Indian healthcare sector was known as one of the least transparent and
worst regulated sectors in the country. In small towns particularly, it was believed that there was an
unholy nexus among local practitioners, diagnostic laboratories and pharmacists. Patients often trusted
their local doctors because of their longstanding relationships with them. However, unknown to them,
many of these doctors received commissions of up to 20-30% of the bill for referrals to city hospitals,
diagnostic laboratories and pharmacists.11 In this regard, Be Well, with its infrastructure, was capable
of providing complete treatment at its hospital without the need for further referrals. However, this level
of transparency had to be clearly communicated to the local population in order to foster trust in its
services.

In general, accessibility, affordability and availability of quality services tended to provide a

competitive edge to enterprises within the Indian healthcare sector. Be Well’s management believed
that its business model had all three elements, and felt that it would be a challenge for new entrants to
replicate it.

Hospital Operations

Be Well hospitals catered to basic medical specializations such as emergency and critical care,
gynecology, nephrology, orthopedics, ENT (ear, nose and throat), pediatrics and urology, which were
complemented by general medicine and general surgery. The hospitals also provided limited services
in cardiology, neurology and oncology, where they confined their scope to basic diagnosis and medical
management and did not undertake any major cardiothoracic surgeries. In addition to a surgical suite,
a basic diagnostic laboratory and a fully-equipped intensive care unit, each Be Well hospital had a
company-owned pharmacy attached to it. It also provided 24x7 emergency and trauma management
services.

A typical Be Well hospital had one medical superintendent, four doctors on duty, a team of 35 nursing
staff led by a nursing superintendent, and a crew of 40 comprising of technicians, paramedics and

8
India in Business, Ministry of External Affairs, Government of India. (2016). Industry and sectors: Health. Retrieved from
http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/373/2 on April 8, 2016.
9
Conversion rate on April 4, 2016: 1 USD = INR 66.52
10
Rao, M. (2012, January). Forecasts for Indian healthcare. Express Healthcare. Retrieved from
http://archivehealthcare.financialexpress.com/201201/market24.shtml on April 8, 2016.
11
Krishnan, V. (2015, February 26). Report highlights malpractice in Indian healthcare sector. Live Mint. Retrieved from
http://www.livemint.com/Politics/ryfCYbvT6wZfrape4Nq1AJ/Report-highlights-malpractice-in-Indian-healthcare-
sector.html in April 2016.

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support staff. The hospitals also had specialist doctors empanelled as consultants for outpatient
services and surgeries. The external consultants billed patients independently for the surgeries
performed, and Be Well charged only for patient care, diagnostics and medicines.

Be Well hospitals were typically located in either a district, an industrial town or a suburb of a city.
Each facility was between 15,000 and 20,000 square feet and had a capacity of 30 to 60 beds. Instead
of investing in real estate, the management took over under-performing hospitals or commercial spaces
on lease for 10-12 years. The monthly rentals depended on the location and ranged between INR 45,
20 and 15 per square feet for city suburbs, districts and industrial towns, respectively.

The company followed a “no frills” approach to its operations in order to improve affordability.
Hospital equipment was limited to the essentials, such as X-ray machines, ultrasound machines and
ventilators. Their fully-owned or on-lease ambulance service was limited to a circumference of 20-25
kilometers. Inpatients could choose from a general ward, a semi-private room and a private room. A
general ward bed cost between INR 1,100 per night (in a city suburb) to INR 650 per night (in an
industrial town). Outpatient consultation fees also varied between INR 50 to INR 150 per consultation
depending on the location of the hospital. These prices were 20-30% that of an average urban hospital.
Medicines, however, were sold at market price and the pharmacy was fully stocked. The firm tried to
minimize operational expenses by not offering additional facilities such as a cafeteria for relatives or
caregivers, except at Pudukottai and Poonamallee in Chennai. The cafeterias at these two locations
were outsourced to a vendor and were run at a subsidized cost. Further, because it was typical for
patients to receive home-cooked meals from their relatives and visitors, Be Well did not provide catering
services for inpatients. Procurement for products such as consumables and stationery was centralized
at the headquarters, and each location was provided supplies on a monthly basis based on the received
indents. Be Well estimated that centralized procurement helped reduce costs by about 10-15% by
increasing its bargaining power with suppliers.

At a steady state, with a capacity utilization of 80%, a typical Be Well hospital earned monthly
revenues of approximately INR 5.2 million. Around 24% of its revenues was spent on compensation for
consultants and doctors, and another 18% on staff salaries. It spent 8% on rent, 13% on pharmacy
expenses, 4% on consumables and 4% on utilities and maintenance. After meeting all these expenses,
the average margin was about 27% (see Exhibit 4).

The Be Well Team and its Customers

Recruitment at Be Well was centralized and the interviews for all the positions were conducted at
the corporate office. Successful candidates were given appointments at their respective regional
hospitals. Resident medical officers — the duty doctors in charge of running hospital operations — were
fairly easy to recruit. Most MBBS graduates with three or four years of experience qualified for this
position. Local MBBS graduates readily accepted these positions, viewing them as an opportunity to
gain experience in a hospital before pursuing a postgraduate specialization. The critical challenge was
recruiting qualified hospital medical superintendents who were willing to work at Be Well’s semi-urban
locations. To address this challenge, management had adopted a three-pronged strategy whereby it
offered a superior designation, higher salary and greater responsibility than what these doctors would
have been given at an urban hospital. Be Well’s medical superintendents were given considerable
clinical autonomy for all decisions impacting hospital operations in order to instil a sense of ownership
and keep the entrepreneurial spirit alive. Management emphasized consensus around strategic
decisions that impacted the chain and made conscious efforts to incorporate the concerns and
aspirations of the individual doctors.

Specialist doctors at the hospitals were locally empanelled as consultants and took care of outpatient
consulting and surgeries. The availability of specialists was a critical factor for Be Well in deciding
where to locate a new hospital. While outlining the collaborative relationship with consultants, Vetri
said:

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“The availability of consultants is a must when we choose a site because we hope that
they will bring their own set of patients. There are two reasons why they bring their patients
to Be Well. One, they want to show their loyalty to us and build a relationship. And two, if
they have a case that is complicated or requires a surgery, they prefer to bring the patient
to Be Well because of the 24-hour availability of care from qualified doctors and staff. To
that extent, we have a synergistic relationship with our consultants because our interests
are aligned.”

Be Well also centralized the recruitment of its nursing staff. Getting and retaining the right nursing
talent locally was a big challenge, yet the chain persisted in recruiting those with the right credentials.
Management provided a good working environment, learning/ training platforms to upgrade their skills,
residential hostels and salaries comparable to the prevailing market rates, yet the attrition rate among
nursing staff was around 30-40%. The reasons for this varied; some received attractive offers in urban
hospitals and others, particularly young female nursing recruits, moved to a different town after
marriage. At any hospital, about the 60-70% of the nursing staff were locals and the remainder were
out of town professionals who were given hostel accommodation by Be Well. This provision helped the
management cater to the 24x7 nursing staff requirement at the hospital at any given point of time (see
Exhibit 5).

Though a majority of Be Well customers were uninsured, there was a small percentage of customers
who had private health insurance. The number of these customers varied across locations. For
example, the percentage of private health insurance customers at Puducherry, Pudukottai and Chennai
were 10%, 4% and 40%, respectively.

The management was not in favor of acquiring customers empanelled under the ESI or CGHS
schemes.12 The service tariffs under these schemes were extremely low (e.g. INR 60 for a specialist
consultation). It was impossible to adopt these tariffs and provide quality healthcare at the same time.
This left Be Well with only individual patients and private insurance cardholders as customers; thus, it
was important that they had a favorable perception of Be Well as a multi-speciality hospital.

Building the Be Well Brand – Developing Local Relationships

In the initial four and half years of operations, management had seen a trend in terms of capacity
utilization at Be Well hospitals. Vetri said:

“At any new hospital, there is slow growth in year 1, with about 30-40 % capacity utilization;
in year 2, we touch 40-45%, followed by 50% capacity utilization in year 3. From there on,
there is an incremental growth of 2-3% every year.”

Management felt that low awareness about the brand “Be Well” indirectly contributed to this slow
growth trend. At each Be Well hospital, there was a business development department with one or two
executives that engaged in various promotional activities to reach out to the local market. At the group
level, the business development department was headed by a chief operating officer who was
responsible for group level branding and building strategic connects with various apex bodies such as
the Indian Medical Association (IMA) to leverage collaborative partnerships for activities to be
conducted at the unit hospital level. At the unit level, each hospital comprised of a five-member business
development team, of which two were non-medical professionals dedicated to marketing efforts.

The business development team conducted different speciality outreach and onsite health camps
and check-up drives based on the doctors’ availability on a monthly basis. These were done at a

12
Employees State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers
under the ESI Act 1948. It is managed by Employees State Insurance Corporation. The Central Government Health
Scheme (CGHS) started under the Indian Ministry of Health and Family Welfare in 1954 and provided comprehensive
medical care facilities to central government employees, pensioners and their dependents residing in cities covered by
CGHS.

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consistent frequency of one or two camps per month. As part of their public awareness campaign, they
distributed flyers educating the public about the symptoms of seasonal diseases such as dengue and
chikungunya, both mosquito-borne viral infections. As their contribution to the medical fraternity, Be
Well hospitals partnered with the local IMA chapter to conduct bi-monthly talks by senior city doctors in
various specializations. In 2013, they were instrumental in bringing a satellite conference with Dr. Githa
Arjun, a renowned obstetrician, to Pudukottai. These interactive conferences and talks were much
appreciated by the local doctor fraternity as they gave them an opportunity to update their knowledge
of the latest research and best practices in their areas of specialization. The Be Well team also
organized activities around “National Safety Week” where they provided the local population with
guidelines and tips for general safety. Further, the non-medical professionals on the business
development team visited clinics and practicing doctors in their area on a regular basis, providing them
with first-hand information on the various facilities available at Be Well for future patient referrals.

Another unique practice adopted at the unit level was that each Be Well hospital conducted a
certified, free of cost basic life support program for local bus, taxi and autorickshaw drivers. This
program provided basic tips for saving lives in an emergency. Some of the tips included holding the
patient’s neck in a specific manner, applying pressure at the right body points to arrest bleeding, and
precautions to be taken while mobilizing a patient. The idea was to create general awareness and
empower locals to carry out basic life saving measures. This program was conducted at the unit level
by each Be Well hospital once in two months in batches of 30-40 candidates. Though business
development executives struggled to enrol candidates in the first batch of the program, it became easier
over time as word of mouth about the value of the program spread.

Apart from all these initiatives, the medical superintendent and duty doctors at each Be Well hospital
tried to treat patients and their relatives with the utmost care, which helped generate positive word-of-
mouth. Dr. Ganesh, Chief of Emergency Services and Critical Care, Pudukottai elaborated:

“I am a toxicology and emergency specialist and come across emergency cases of

poisoning. In these cases, apart from the medical treatment, it is the daily dose of positive
conversation with both the patient and their relatives that helps in fast recovery. Of course,
these conversations also indirectly contribute to building the patient’s confidence in Be
Well’s services. I ensure my duty doctors also follow such norms.”

MEDIA CHANNEL OPTIONS FOR HOSPITALS IN INDIA

Hospital marketing and brand building as a vehicle to drive growth was a relatively new phenomenon
in Indian hospitals. Earlier, with government hospitals overburdened with patients and very few private
players, the market had been mostly supply-driven. Private players did not feel the need to invest in or
make efforts to attract more patients. However, with the increase in the corporatization of hospital
groups and the promotion of medical tourism, there was an increase in the number of private hospitals,
leading to healthy competition that propelled hospitals to market their services. The traditional method
of “word of mouth” publicity was gradually being replaced by more strategic paid communications and
use of media channels such as mass communications (through billboards, advertorials, radio jingles,
television talk shows, advertising at movie theaters during intervals, advertising through cable television
networks and advertising in newspapers and magazines); personalized communication (through bulk
SMS and emails); public relations activities (through community development initiatives, accolades,
achievements, etc.), and use of free social media tools such as Facebook, Twitter, Instagram, etc., all
of which helped hospitals enhance their brand visibility and recall among consumers (see Exhibit 6).

The media spend varied across the various modes of communication used. For instance, an
advertisement in a local newspaper regarding an upcoming hospital camp/ program cost between INR
8,000-10,000 per advertisement. A 15-second radio advertisement on an FM channel cost INR 80,000
in Puducherry and INR 15 million in Chennai for a month. Local cable television talk shows were a
frequently used mode of advertising by many private hospitals and cost INR 10,000 for a 30-minute talk
show. Advertising on regional television was expensive, falling in the range of INR 200,000-300,000
for a 10-second time slot. Advertorials provided good mass publicity at a price of INR 250,000-300,000
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for a full page. Print advertisements (as compared to video advertisements in local theaters) were more
popular and cost around INR 2,000 per advertisement per week (six days). Video advertisements had
to go through a mandatory film censor board approvals process; many players found this to be a
cumbersome process and thus refrained from using this medium.13

Be Well Marketing and Promotion Strategy

Be Well had experimented with various modes of advertising and believed cable television talk
shows, radio jingles on FM channels and billboards to be the most impactful and economical, given
their advertising budgets. Vetri said:

“We did engage in advertorials with our Be Well advertorial appearing on one full page of
a leading Tamil newspaper every first Saturday of the month during the months of
December 2015, January 2016 and February 2016. It was an expensive affair with each
advertorial costing us INR 250 thousand per month. We did not see as much value in
advertorials and thus stopped using them.”

Reporters from Kumudam, a regional fortnightly magazine, had at times approached Be Well’s
doctors for interviews on certain clinical conditions. This helped in generating indirect publicity for their
hospitals as well. In the recent past, Be Well had also started building its Facebook page, which had
led to some inquiries about the Puducherry hospital. These inquiries were typically from overseas
residents who had elderly parents living on their own in Puducherry.

Vetri and his team understood the importance of brand building and had plans to consistently invest
in advertising. Accordingly, they had devised a work plan detailing the allocation of the advertising
budget for each of their hospitals based on its location and revenue generation capacity (see Exhibit
7).

WAY FORWARD

Be Well, with its multi-speciality facilities and infrastructure, had emerged as an organized player in
the emergency and high-end secondary healthcare services segment. It had plans to expand to other
Indian States beyond Tamil Nadu. Its target was to open 50 hospitals in the next few years. Its mission
to provide quality services in a compassionate manner to underserved locations of the country was
backed by a viable business model. Yet, even after four years of operation, it had not been very
successful in building a strong brand.

Vetri articulated his branding and advertising dilemma as follows:

“During team meetings, we seem to agree that large-scale, media-based branding is likely
to give us the desired impact. However, for a chain like ours, with just eight functional
hospitals in Tamil Nadu, we wonder whether we would be better off by addressing local
needs using local print media. We are also contemplating using advertisements in movie
theaters that are still very popular in small towns such as Pudukottai, Sivakasi and
Tuticorin. While we frequently ask these questions, we have still not found the answers.”

An equally important issue was to decide upon the messaging strategy for building the Be Well
brand. Vetri and Lakshmanan knew that effective brand building would be the key to increasing capacity
utilization at the existing hospitals, which would not only improve profitability but also accelerate Be
Well’s expansion into multiple locations.

13
Data provided by Dr. Vetri in an interview with the case authors on July 23, 2016.
8 | Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market

This document is authorized for use only in Prof. Omkumar Krishnan's Services Marketing, at IIM Kozhikode - EPGP Kozhikode Campus from Aug 2022 to Jan 2023.
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EXHIBIT 1
DEMAND SUPPLY MISMATCH IN INDIA’S HEALTHCARE SYSTEM

TERTIARY
CARE:
CONDITIONS
REQUIRING CARE
FROM SPECIALIST

URBAN: 90% CONCENTRATION

OF CORPORATE HEALTHCARE

SECONDARY CARE: HEALTHCARE CONDITION THAT

REQUIRES CONSTANT MEDICAL ATTENTION INCLUDING
SHORT PERIOD OF HOSPITALIZATION

SEMI-URBAN AREAS: HIGHLY FRAGMENTED AND UNORGANIZED,

FOCUSED MAINLY ON SECONDARY CARE

PRIMARY CARE- BASIC HEALTHCARE BASIC HEALTHCARE FACILITIES FOR COMMON & MINOR
AILMENTS; WHERE PREVENTION IS MOST EFFECTIVE
RURAL POPULATION-80%; NEAR ABSENCE OF PRIMARY OR SECONDARY CARE

Source: Created by authors from secondary sources; Retrieved from http://www.aurumequity.com/sectors/healthcare-

and-pharmaceuticals/.

Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market | 9

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 ISB088

EXHIBIT 2(a)
BE WELL LOGO

Concept and Colour:

Concept: Colour:
Red Cross — Hospital Red – Hospital
Helping Hand — Service Saffron – Service
Secure People — Trust Green – Trust
Happy People — Humanity Turquoise- Uniqueness in service to humanity

Source: Compiled by the authors based on company documents.

EXHIBIT 2(b)
BE WELL HOSPITAL DATA ACROSS SOUTH INDIA

Hospital Puducherry Tuticorin Pudukottai Sivakasi Erode T. Nagar, Kilpauk, Poonamalle,

Chennai Chennai Chennai
Launched in July April November June October
2011 2012 2012 2013 2013
Duty doctors 5 3 5 2 4 2 3 8

Consultants 50 4 30 3 15 90 50 55

Total 62 19 69 8 43 38 20 82
employees
Beds 36 15 35 21 31 23 19 45

Source: Compiled by the authors based on company documents.

10 | Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market

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 ISB088

EXHIBIT 3
HEALTHCARE SECTOR GROWTH TREND (USD BILLION)

300 280

250

200
CAGR 16.5% 160
150

100 USD Billion

100 81.3
68.4 72.8
59.7
45 51.7
50

0
2008 2009 2010 2011 2012 2014 2015 2017F 2020F

Notes: F-forecast; CAGR: Compounded Annual Growth Rate

Source: Recreated by the authors from data at http://www.ibef.org/industry/healthcare-india.aspx,

accessed on June 2016.

EXHIBIT 4
BE WELL’S FINANCIAL PERFORMANCE

2011-12 2012-13 2013-14 2014-15 2015-16

Outreach (number of patients) :
Inpatients 4,394 25,108 39,367 49,655 98,717
Outpatients 474 1,998 3,634 3,496 5,529
Revenue (INR million) 10.26 46.35 106.98 109.22 183.97
Operating Expenses (INR million) 15.06 61.06 139.77 159.76 222.19
Profits (INR million) (4.80) (14.71) (32.79) (50.54) (38.22)

Source: Compiled by the authors based on company documents.

Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market | 11

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 ISB088

EXHIBIT 5
BE WELL ORGANIZATION CHART

Source: Compiled by the authors based on company documents.

12 | Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market

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EXHIBIT 6: PRINT ADVERTISEMENT TYPES

Advertorials Be Well Advertorial

Be Well Advertorial in
the daily newspaper
“The Hindu Tamil”

Billboard Advertisements

Facebook Pages Be Well Facebook Page

Source: Compiled by the authors from the respective Facebook sites and print advertisements in national dailies.

Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market | 13

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EXHIBIT 7
BE WELL ADVERTSING BUDGET ALLOCATION ACROSS MEDIA CHANNELS

Branding & Advertising Spend (% of monthly run rate) 5%

Local Events & Publicity (% of total spend) 50%

Media Advertising (% of total spend) 40%

Digital Advertising (% of total spend) 10%

Location Target Monthly Local Events Media Digital
Monthly Advertising & Publicity Advertising Marketing
Revenue Run Spend (INR million) (INR million) Allocation
Rate (INR million) (INR million)
(INR million)

Puducherry 6.00 0.30 0.15 0.12 0.03

Tuticorin 2.00 0.10 0.05 0.04 0.01

Pudukotai 5.00 0.25 0.13 0.10 0.03

Sivakasi 1.50 0.08 0.04 0.03 0.01

Chennai - 1 5.00 0.25 0.13 0.10 0.03

Erode 1.50 0.08 0.04 0.03 0.01

Poonamalli 6.00 0.30 0.15 0.12 0.03

Chennai - MN 3.00 0.15 0.08 0.06 0.02

TOTAL 30.00 1.50 0.75 0.60 0.15

Source: Compiled by the authors from company documents.

14 | Be Well Hospitals — Branding a Mid-Tier Service in a Two-Tier Market

This document is authorized for use only in Prof. Omkumar Krishnan's Services Marketing, at IIM Kozhikode - EPGP Kozhikode Campus from Aug 2022 to Jan 2023.