Marketing is one of the most important aspects of a business. According to Peter Drucker “There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customers so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. ” (Peter Drucker, Marketing Management, Philip Kotler).
In this report, we have planned to market the service ‘Hair care’ by opening an Hair Salon in Silver spring, USA. We have analyzed different marketing strategies and designed a marketing plan for the same. SLP 01 1. NAME, LOCATION & NATURE NAME: “Looks” Location: Silver spring, Montgomery County, Maryland, USA Nature: ‘LOOKS’ will be one stop solution that will allow the entire family to have their hair needs satisfied in one convenient location. It will serve men, women, and children and it will accept appointments as well as walk-ins.
‘LOOKS’ will also sell premium hair care products. It will focus on serving the entire family in one quick, convenient visit. It will excel due to its attention on their clients, so as to build a long term relationship. Through unheralded customer attention, ‘LOOKS’ will slowly but surely gain market share as it services the entire family, creating long-term relationships. Being on one of the best location of Silver Spring, it will attract a lot of traffic. 2. SELF-ANALYSIS The US salon market accounts for approximately 60 billion dollars.
Looking stylish, trendy and beautiful is one of the major concerns of the people in US today and providing this, forms the strength of “Looks”. As the mission of “Looks” aligns with this need of the market and as it has comparatively higher competency in the world of fashion it is a strong player. 3. CUSTOMER ANALYSIS The population of Silver Spring is 78,488, with a growth of 2. 5%. The population of Silver Spring consists of 48% males and 52% females. The immediate geographic target of LOOKS is Silver Spring and its neighboring communities of total 250,000 of population.
Approximately 12 miles geographic radius is in need of the offered services. The total targeted population 100,000. Baby boomers, Gen-Xers and baby boomlet and the young generation are the groups that are targeted by ‘LOOKS’. 4. ANALYSIS OF PRIMARY COMPETITORS The location chosen offers very less competition or no competition. Though there are two major competitors which LOOKS has to compete with. Ebony Barber’s Unisex ;amp; Fenton Barber Shop are the two major competitors of LOOKS. As Silver Spring is one of the biggest hub for business it may likely to be hurt by emerging competition.
LOOKS will have to face Monopolistic competition, as its competitor is able to differentiate their offerings. 5. MARKET RESEARCH The demographic segregation of Silver Spring is displayed in the graph displayed below: Age Group| %| Under 18 yrs| 23%| 18 – 24 yrs| 9. 3%| 25 – 44 yrs| 37%| 45 – 64 yrs| 21. 2%| Above 65 yrs| 9. 6%| Silver Spring is a ‘Salad Bowl’ society with ethnic group maintaining their ethnic differences, neighborhoods and culture. The Silver Spring population comprises of different racial people which are 46. 61% white, 28. 07% African American, 0. 44% Native American, 8.22% Asian, 0. 06% Pacific Islander, 11. 55% from other races and 5. 04% from two or more races 22. 22% people of the total population are of Hispanic or Latino race.
‘Looks’ will concentrate on the needs and wants of all races as each group has a specific want that need to be satisfied. The Household pattern in Silver Spring is ‘diverse’ as maximum people in Silver Spring are adult live together, single parent family and single live out. 6. MARKETING ENVIRONMENT a. Political and legal factors This environment comprises of laws, government agencies and pressure groups.
Business Legislation protects companies from unfair competition, customers from unfair business practices, and interest of the society. Consumer Protection is one of the most important aspect that had to be followed by the business legislation in Silver Spring, maintaining the product quality and disclosing the facts about the product is very important. Anti-competitive agreements among competitors are restrained in Silver Spring. Agreements such as price fixing and customer and market allocation agreements are prohibited in Silver Spring.
Economic factors Economic environment helps in determining the strength and size of the market. LOOKS need to analyze the economic environment as the available purchasing power in an economy depends on current income, prices, savings, debt and credit availability in the economy. So its important to analyze the major trends in income and consumer spending patterns. Income Distribution The total number of household in Silver Spring is 30,374. Average household income of the area is $51,653 and the average income of the family is $60,631.
The per capita income of Silver Spring is $26,357. 9. 3%(7300 people) of the population are below poverty line. The cost of living in Silver Spring is 40. 12% higher than the US average and the unemployment rate is 5. 10%. The recent job growth trend is negative. c. Social factors Silver Spring people are looking for services and products that provide them ‘Self realization’. Customers have become more value driven in choosing their products or services. Silver Spring organizes several ethnic festivals, musical and entertainment events. One of the most famous film festival i.e.
Silver docs Documentary film festival is held every year in the month of June. Silver Spring also organizes Silver Spring Jazz festival which is one of the biggest musical festival which attracts more than 20,000 people. This festival is held on the second Saturday in the month of September. It also hosts American Film Institute Silver Theatre and culture, which showcases American as well as different foreign movies. Silver Spring is one of the major area of Montgomery County, the revitalization of Silver Spring has beckoned diversity of people wide variety of ideas.
Thus, Silver Spring had a wide variety of culture. SLP02 7. COMPETITIVE ADVANTAGE ANALYSIS SWOT Analysis : Strengths : * Location, centrally located * Well-trained employees with excellent styling, hair care skills * Customer focused business practice * Wide range of services * Low cost * A powerful strategy supported by competitively valuable skills and experience in key areas * A strong financial condition; ample financial resources to grow the business * Product innovation skills * Wide geographic coverage Weakness :
LOOKS will cater to a diverse variety of people of different culture and races i. e. whites, African American, Native Americans, Asians and people of other communities and culture. The Social class which LOOKS will target will be Middle class, upper middle class, Lower upper and upper uppers. Psychographic Segmentation: ‘Lifestyle’ and ‘Style statement’ are one of the priorities of people of Silver Spring. LOOKS will target the audience who are straights, swingers and long hairs having different personality traits.
LOOKS will personify the personality of its target audience, by giving a style to their living. 9. SERVICE DESCRIPTION Silver Spring organises lots of cultural festivals, film festivals, and musical events. So LOOKS will cater the need of style needed by the target audience during these occasions. LOOKS will provide a quality service so as to keep the customers satisfied. With the trained and specialized staff it will also be able to speedy service to the client. As people look for quality, convenience and speed.
LOOKS will focus in making hard core loyals, through its customer service, quality and style. 10. BUSINESS MISSION LOOKS is committed to provide the best services to its customers, it will provide its customers best professional services in the field of Hair care and styling. With the changing environment, the company will acquire new trends and will upgrade its services to provide best services to its customers. 11. GENERAL OBJECTIVES or GOALS Financial: 1. To reach the breakeven point within two years of the business operations 2. Growth of 10% profits from the base year.
Nonfinancial: 1. Expand the operations of business by including new hair care programs within five years. 2. To become one of the best hair care salon in Silver Spring 3. Attracting the customers from the areas near silver Spring 4. Providing best services all round the year. 5. Provide professional services in affordable price. SLP03 12. DISTRIBUTION, LOCATION ;amp; TIMING The primary base of any beauty hair salon is to provide basic hair cut and other hair styling. LOOKS will be one stop solution for all the hair care needs. LOOKS provides hair styling for the entire family.
The services of LOOKS will include Haircuts, Formal Styling of hairs, Casual hair styles, coloring, highlighting, perms, deep conditioning treatment, hair care treatment, hair spas, relaxers, massage, hair extension. Service is offered on a walk in basis or by appointment. LOOKS will emphasize a customer-centric service where the customer’s needs are always the priority. Highlighting is one of the essential services that is demanded by the customers in silver Spring. Coifed hair is one of the famous dress code that is followed by many women at their workplace.
Customers not only just look for getting their hairs highlighted, but also prefer the services as cut with waving and smoothing. The main focus of customers in today’s time is quality of service that is provided at the hair salon, they aspire quality services as work place appearance code is one the important aspects of people in Silver Spring. Colouring and highlighting of hairs helps is transforming or changing the look and appearance of the person. Hair straightening and smoothening is also one of the major services that is demanded by the customers. LOOKS will also follow the new trends of hair styling just as blowout styling.
LOOKS will also provide therapies and spa treatment which will help in recovering the damage hairs, hair loss and thinning hair treatments. 13. VARIATIONS IN TARGET MARKET LOOKS will tailor its services so that it caters the needs and wants of local customer group as well as immediate neighbours of Silver Spring. People in Silver Spring are of different races and culture so the customers will have diffused preferences, the consumer preferences will be diverse. LOOKS will operate in Silver Spring and its surroundings and will cater all the local variations. It is a suburban area.
With the connectivity with two major cities, Washington D. C and Biltmore, it will also target the people residing near Silver Spring. SLP04 14. INFORMATION NEEDS Information on segmentation and competition are essential. Marketing Segmentation is an effort which helps in increasing company’s precision marketing. LOOKS will practice Segment Marketing as it will help in creating large potential market, as LOOKS will provide its services at low cost, it will be able to attract customers and the low costing can help gaining higher margins in future as LOOKS will cater a large market.
The main aim of LOOKS will be to create and retain customers, keeping in mind the tastes and preferences of the customers. LOOKS can also create a few fine toned services and can price them accordingly for a high class segment. 15. PERSONAL SELLING LOOKS will adopt Full Market coverage strategy, it will serve all customer groups with all the products they might need. The services and marketing will be designed in such a way that it will appeal the broadest number of buyers. It will aim to endow its services with a superior image in people’s mind.
It will try and win price sensitive market by keeping low cost to the services provided. 16. TRAINING * Gap between management perception and service quality specification: This gap occurs when management correctly perceives the requirement of the client but it is not able to provide that service because of the specified performance chart. There are several guideline that a company has to follow. LOOKS will use the products of latest technology so as to serve its clients with the services and style needed.
Gap between service quality specification and service delivery: This gap occurs when the personnel is not trained properly and is incapable to meet the standards. LOOKS will focus on training its stylists from few of the top styling professionals, so that LOOKS is able to deliver the specified service required by the client. * Gap between perceived service and expected service: This gap occurs when the customers misperceives the services that is to be provided by the company. LOOKS will minimize the gap between the perceived service and the expected service. It will cater to the expected needs of the clients of LOOKS.
LOOKS will give importance to reliability, responsiveness, assurance, and empathy so as provide the determined service quality. 17. INCENTIVES * Gap between customer expectation and management perception: This gap occurs when the management is not able to perceive correctly the requirement and wants of the customer. LOOKS will consult the clients to know their expected needs and wants. The stylists will be trained in the way, that they work in accordance with the expectation of the clients so as to reduce the gap between customer satisfaction and management perception.
Gap between service delivery and external communications: This gap occurs when customer satisfaction are affected by statements made by company personnel. LOOKS will focus on meeting the requirement of the clients, the clients who are decisive about the style or the service needed by them will be consulted by our consulting professional who will specially focus on understanding the requirement of the client. 18. EVALUATION OF SELLING PERFORMANCE LOOKS is a customer centred organization. LOOKS has to differentiate its services from its competitors to emerge as the best Beauty Hair Salon in Silver Spring.
LOOKS will provide high Performance Quality to its customers. It will provide its customers the style and services as per their specifications. LOOKS will focus on customer satisfaction; the services that will be provided by LOOKS will enable the customer to feel good. LOOKS will provide the adequate and demanded quality to its customers by consulting the customers, the stylist will provide the services as needed by the customer. LOOKS will earn a strong competitive advantage through Personnel Differentiation. LOOKS will train the employees by the best stylists to cater to its customers.
The physical space of LOOKS will be another powerful image generator. 19. COMMUNICATION OBJECTIVES LOOKS will help women in balancing their lifestyle, taking care of their hairs. It will be a treat for women who have time. It will be one of the places where men and women can get pampered by the hair treatment, spas and other hair styling and hair care services. LOOKS position itself as “one-size-that -fits-all”, and “A mirror to your Image” 20. COMMUNICATIONS STRATEGY The main objective of LOOKS is to build trust in women, once LOOKS is able to gain the trust then they tend to be loyal.
Objectives of LOOKS: * Visual excitement environment * Fashion authority * Above average quality and value for money * Customer dedication * Providing unrevealed value to our customers in the quality of services provided by LOOKS * A commitment to putting customer first at all times. LOOKS will focus on building awareness, attracting traffic or ‘eyeballs’, turning first-time buyers into loyal repeat customers as it is the Holy Grail of marketing strategies. It will provide new innovative colors as well as style to their clients.
As the customers in this industry have diffused preferences, the preferences of the clients will be considered and worked accordingly. The salon will focus on satisfying both Employees as well as customers because if the employees are happy they will keep the customers happy. A Fun to work environment will be adopted to add a spark in the working environment. 21. MEDIA LOOKS will follow the cheapest mode of advertising . i. e word of mouth as it will focus on customer satisfaction. Other modes of promotion will also be followed like advertising through banners and hoardings.
LOOKS will position itself as ‘Mirror to your image’. * Newspaper : One page advertisement will be displayed in the leading news papers of Silver spring as Silver spring Gazette, and Mondotimes. It will help in targeting a greater audience as it covers large geographic area. * Front store Display: As these displays are visible by the pass by, it will help in attracting customers. * Banners: these displays will also help it attracting huge customer base. * Radio :Radio is also one of the most effective mode of promotion, In Silver spring there are huge number of radio stations that operate.
It will also help in attracting huge customers as radio also targets huge geographical area. AM station like WACA, (1540 AM), W7OP (1500 AM), FM stations like WWDC (101. 1 FM), WCSP (90. 1 FM) * Pamphlets: To increase more awareness, printed pamphlets can be distributed near schools, shopping places, amusement parks. * Specialty advertising: In this LOOKS will advertise by few useful, low cost items bearing the company’s name and address, on few of the items advertising message will also be displayed. This will include ball pens, calendars, memo pads.
Maintaining ongoing contact is essential for building relationships. It is the extension of engaging and focuses on keeping a customer. The objective is to increase the customer base, and retaining customers and engaging them on an ongoing basis results in increased product service opportunities and provides the opportunity to learn more about the customer, and forge closer relationships. 23. SALES PROMOTIONS LOOKS has to build effective communication strategy so as to capture maximum market.
LOOKS has to work to develop an insight in people. LOOKS will be positioned in the mind of people as “one stop solution for hair care and styling”, one-size-that -fits-all”, and “A mirror to your Image”. LOOKS has to follow “learn-feel-do” model for determining its communication objective as the target audience has high involvement with a service provided to have differentiation. 24. ADVERTISING AND PROMOTIONS EFFECTIVENESS Competition and Buying patterns of people of Silver Spring LOOKS competitors include: 1. Traditional Barbers: 2.
Franchised “Quick Salons 3. Independent Salons Ebony Barber’s Unisex ;amp; Fenton Barber Shop are the main competitors of LOOKS. The buying patterns of men and women are quite different. Men are more sensitive towards pricing and convenience. Women are concerned and conscious with their styles and trends that are being followed. Monitoring needs to be carried out effectively, and that the feedback gained is useful and appropriate, it is also imperative that feedback is considered in any future decision-making SLP05 25. OVERALL COSTS
The average price that we will charge for the styling of hairs will be approximately $100. The fixed cost will be approximately $100,000 per year including the equipments and the variable cost will be approximately $25 which will mainly include the electricity expenses, employee cost and other miscellaneous cost. Calculating the break even point: BEP = [FC ? (P – UVC)] BEPQuantity = [$100,000 ? ($100 – $25)] = 1333 customers BEPRevenue = 1333 customers ? $100 = $133300 The above figures are tentative and subject to change with the market conditions and demand.
LOOKS will follow super value strategy, it will provide high quality of service in low price, so as to attract maximum customers. LOOKS initial focus is to attract maximum customers. It will follow Market penetration pricing, this will allow LOOKS to win the largest market share. New and quality product range of the hair care products will also be kept at the salon as many people prefer these for home use as well and it will turn out to be one of the channels for sale for high premium brand products. 27. TEMPORARY PRICE PROMOTIONS
A new style of services will be provide to the client, all their requirements will be considered so as to provide them with the best result, the salon will give a total new look to the client keeping in mind the texture and the nature of his hair using best products and giving best services. The salon will follow distinctive strategy for positioning. The price will be on a lower end, as main motive of LOOKS is to give customers the value for the product and their satisfaction, as Customer value and customer satisfaction are very important for any company or a brand to sustain in the market and capture the market share.
LOOKS will be focusing on price-quality effect . i. e. providing high degree of quality product. 28. PROFITS LOOKS will also keep premium hair care products for sale as they are one of the important revenue generator, they help in providing 5% to 40% of revenue. These professional quality supplies will include shampoos, conditioners, hair colors, reconstructions, brushes, combs, and other styling aids. 29. LEARNING Attract The critical first step of the customer experience is to attract customers to LOOKS. After attracting, it then need to engage customers to obtain their interest and participation.
Engage The key factors at this stage are Convenience combined with interesting and innovative services. Learn Building up a knowledge database on each customer – is an important aspect that needs to be done at LOOKS as it can create value for the customer and help build the brand-customer relationship. Relate By leveraging the multidimensional data gathered from ongoing interactions with individual customers, LOOKS can create value by providing a personalized experience. Customization and good Customer Care help to erect switching barriers and encourages customers to return and repeat the cycle.
LOOKS has to focus on generating high customer loyalty by delivering high customer value by designing superior value proposition backed by superior value delivery system. LOOKS success depends on the way it creates and deliver the value which is superior than its competitors, which is develops following capabilities : * Understanding customer value * Creating customer value * Delivering customer value * Capturing customer value * Sustaining customer value LOOKS will focus in making their customers their ‘True Friends’ i. e. it will bbuilding relationships with the right customers Conclusion:
The marketing strategy will seek to first create customer awareness regarding the services offered, then develop the customer base, and finally work toward building customer loyalty and referrals. The message that LOOKS will seek to communicate is that the entire family can be served quickly, professionally, with superior customer service at reasonable rates. The message will be communicated through various methods. The first is in-store and storefront displays. This will be a convenient method to attract people that walk past LOOKS’s store front. The other method of communication is advertisements in two local newspapers.