“A Cut Above” Hairdressing Business: Marketing Advice

External environment

External environment consists of Competitors, customers, marketing intermediaries, suppliers and public and the ‘A cut above’ will all be operating in a large external environment of forces and megatrends that gives direction of the opportunities and pose, threats to the company. This are uncontrollable which the new venture must monitor and respond to. There are six major forces namely, demographic, social – cultural, political /legal, technological, physical and economic. Most people will be coming to ‘A cut above’ from London. Customers from South east London will be getting their hair cut at ‘A cut above’. Our customers are located all over South east London town. The young and old will be coming for hair cut, physical fitness, massage and pedicure and manicure. The services consumed by specific ethnic communities and the lifestyle they lewd will be greatly considered. Some religious beliefs like the seventh days who do not work on some days will be taken care of (Keller, K. L., 2002). Some of the external factors include;

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Political factors:-The control of prices will adversely affect the running of our venture. High, prices should not be charged that will discourage our customers from coming to hair cut. Before the company starts to operate in south east London, they must first update themselves regarding the rules and regulations they will be operating in. These regulations will range from taxation, competition regulations, licensing regulation. (Allard, M., 2005).

Economic – Interest and Exchange have impact on consumer spending and could affect their profitability of the venture. There are many economic indicators which determine the environment of the business. This include;- effects of affluence, depression, inflation, shortages of product in the market, effects of research expenditure, research costs, buying power index, consumer ability and willingness, price elasticity, and cost of distribution affects the business (Thomson, C. and Rampton, L. ,2006).

Social factors:- A consumer is influenced by the society he lives in, if a person is of a particular religion, nation, tribe or population grouping he will adopt the culture of that grouping, and the culture of a grouping is as a result of the influence of the language of the people, beliefs, knowledge, values, habits, and laws of those people. This means this affects the consumer in question in terms of his lifestyle to the extend of what he consumes. It is important for managers of various companies to look into the influence of culture before introducing a product into the market (Keller, K. L., 2002).

Technological factors: – the business shall be offering simple workouts like body massage, skin treatment, weight management and hair cut. The new venture shall ensure that a regular improvement on the quality of services offered is maintained. The company shall buy all the required equipments to be able to offer advanced hair care services (Allard, M., 2005). The introduction of computers and other machines as made marketing and production of a product to be easier (Keller, K. L., 2002).

Market segmentation

In marketing of goods and services market segmentation is a useful tool that helps divide the market into different subsets. This in turn allows the service provider to identify one or more segments for focus of the marketing effort to derive maximum benefit for the business. Demographic characteristics, disease categories, and geographic location are three bases for market segmentation for a service provider. Psychographic (lifestyle) descriptors are perhaps a better basis for market segmentation. Dividing the market by key characteristics will also help identify the services required by the target segment and help enhancement of programs, visibility, and revenue. Management and marketing strategies based on a good evaluation of market segments helps create value for customers through product differentiation and creation of centers’ of excellence specializing in narrow fields of service vital for the financial success of the organization. The purpose of this report is to develop a specific market segment for this ‘A cut above’, through an understanding of its customers, and which will allow us to develop a strategic edge and product differentiation(Allard, M., 2005).

Most of the populations prefer a particular hair cut outlet and that they fall into four distinct segments; and these segments have distinct demographic profiles that are easily measurable.

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Lifestyle Analysis: The A cut above will be located in a downtown area of south east London, and its customers are mostly urban class. Psychographic profile of this area indicates that, as for all residents, this is a gateway society for fresh immigrants, especially from various parts of UK making this a racially mixed society. This makes the society quite youthful and socially active albeit within the ethnic community bounds. Distribution of income is fairly even and economic growth quite stable and following national patterns (Thomson, C. and Rampton, L. ,2006).

Demographics: Since this area consists of predominantly family oriented culture market segmentation based on socio-economic demographics such as gender, age, cultural, or ethnic background of the customers helps us identify female customers as the most significant segment. Women influence decisions in most families more than their male counterparts do. Within this, age forms the second parameter chosen to narrow down the segment to improve focus of hair cut service design and focus. As the young population of the area grows older, this segment has potential to grow substantially in future Keller, K. L. 2002).

Socio-Economic Stratification: The next step is to identify the specific socio-economic strata within the gender and age category defined above. The target customers to belong to the category who can afford to seek and demand the best services whether it is the quality provided. The lifestyle analysis above indicates that the location of the A cut above has a predominance of such persons. This segment must be included in the proposed market through provision of multilingual staff who understand their specific needs derived from cultural and religious considerations (Allard, M., 2005).

Geographic Considerations: Given the location of A cut above and the thin spread of the population in London in which the A cut above l will focus its marketing efforts is identified as the area within a radius of 10 miles, adjusting to the particular demographics of townships and colonies. This provides a target population in keeping with the size of the ‘A cut above’. Beyond this, geographical market segmentation has no significance because it is an existing hair cut and its location fixed. However, future expansion through establishment of outlet must factor for population demographics and growth patterns. Since the A cut above is an independent and stand-alone outlet without affiliation to any large business it becomes almost mandatory for it to specialize in a specific fields all the time providing hair cut(Allard, M., 2005).

Marketing communication

Advertising is a type of communication which typically endeavors to persuade possible customers to consume or to purchase a specific brand of service or product. Several advertisements are intended to produce increased consumption of those services and products through the reinforcement and creation of brand loyalty and brand image. For these reasons, advertisements, at times, implant their convincing message with truthful information. Every main medium is employed to deliver these messages, counting cinema, television, radio, magazines, newspapers, Internet, video games, and billboards. Advertising is frequently positioned by an advertising agency for a company or other organization. Advertisements are spotted on the sides of buses, walls of an airport path, seats of shopping carts, and heard in telephone hold communications. Advertisements are frequently placed wherever an audience can frequently or easily access audio, visual, and printed information. There are different types of advertising. Commercial advertising media include street furniture components, wall paintings, billboards, radio, cinema, printed flyers, rack cards, television ads, mobile telephone screens, web banners, among others. Covert advertising is if a product is entrenched in media and entertainment, like when the main character, in a film, uses an item of a definite brand. Another type is the TV commercial, which is considered as the most effectual mass-market advertising system, and majority of television commercials present jingle which listeners soon associate to the product. Infomercial, also branded as direct response television, or DRTV, commercials, display, describe, and frequently illustrate products with their features, and usually have testimonials from industry professionals and consumers. Increasingly, other media are now used for advertising, such as TiVo, the World Wide Web, E-mail, and word of mouth among others( Thomson, C. and Rampton, L., 2006).

Advertising provides to constrain competition in the marketplace through motivating consumer spending and eventually growing the quantity of money which businesses make. It does not require that business develop its service or products due to competition. It also alleviates an otherwise lively marketplace. Advertising provides financial support for the media and motivating an active and competitive economy. Advertising that promotes public welfare has also a positive social impact on the society. As consumers linger aware of products through different kinds of advertising, the companies are not as vulnerable to shifts or changes in the flow and ebb of business. Every business is also obliged to keep its prices in a sensible range. Additionally, it might be helpful to consumers, bearing in mind that distribution of information is essential when buyers are to make an alternative from a range of services and products. Advertising makes a want when there is no need. It arouses consumption and purchase. It produces product perceptions and images for the consumer. Depending on the type of product advertised and advertising message, consumers hope to please their needs for self-esteem and self-actualization, their need to fit in, and other representational meanings obtained via the experience of consumer costs. Advertising’s role is to unite meanings from product to consumer (Allard, M., 2005).

Pricing Strategy

The price objective is to secure affordability. The product is definitely high in value, but should be cost competitive. This is the key strategy considering that the target market will definitely maximize their budgets and save on costs considering the current economic recession. Therefore, although the products are artistic, and project a high-quality, premium image, the more prudent strategy is to harp on the product’s durability, reliability, and “value for money” positioning(Allard, M., 2005).

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The price of a given good should put in mind other factors that affect the market situation. Due to competition, discounts can be adopted so as to attract more customers and maintaining the already existing customers. Again, the price put to place does not necessarily be in terms of money but it can also be in exchange of things like duration, amount of commitment or efforts utilized among others (Kotler and Kevin, 2006).

The main pricing strategies are as follows:

  • Pursue an “value for money” low cost strategy to gain rapid sales and market share;
  • Provide discounts to volume purchases;
  • Offer flexible, payment terms especially for price sensitive buyers

Affordable and attractive price will be charged. Sophisticated services will definitely come with a price. Even though they are fighting with established companies they can succeed with the pricing strategy with highly competitive and sophisticated services. A competitive market environment will be influenced by various factors and price is not the only one influential factor. A premium price, if substantiated by a convincing technological supremacy and qualitative advantage a conventional marketing strategy of selling at a lower price is not required. The main point required to be mentioned here is the aggressiveness required in implementing the strategy at the initial stage, only to convince the market (Thomson, C. and Rampton, L., 2006).

Subsequently, ‘A cut above’ should implement the price monitoring procedures indicated in Table1:

Price Objective: Secure affordability by providing high value, low cost prices
Strategy 1: Pursue an “value for money” low cost strategy to gain rapid sales and market share;
Strategy 2:Provide discounts to volume purchases
Strategy 3:Offer flexible, payment terms especially for price sensitive buyers
Tactic 1: Study competitor’s prices Due Date: may 15, 2009 Responsible Party: Marketing Department
Tactic 2: Formulate and finalize prices Due Date: may 30, 2009 Responsible Party: Production, marketing, and finance departments
Tactic 3: Recalibrate Prices when needed Due Date:
Quarterly basis or at the end of July, October, and December of each year
Responsible Party:
Production, marketing, and finance departments
Monitoring Activity Due Date/Frequency Responsible Party
Monitor price changes and adjust if needed; Once a Month Top leadership; CEO, Vice President, and Division managers

The pricing tactics and action plans are as follows:

Tactic Due Date Responsible Party
Study competitors’ prices May 15, 2009 Marketing Department
Formulate and finalize prices May 30, 2009 Production, marketing, and finance departments
Recalibrate Prices when needed Quarterly basis or at the end of July, October, December and march of each year Production, marketing, and finance departments

Customer service

The service market share is also analyzed to determine the amount of services offered on the basis of services for charge. This is expressed as an industry total to show the market that will be served. The market that will be served is that market which the ‘A cut above’ will acquire and is interested in the service of the company (Ries, A. and Jack, T., 2000).

The preceding annual: plan control measures are largely financial and quantitative in character. They are important but not sufficient. Needed are qualitative measures that provide early warnings to management of in opening markets- share changes. ‘A cut above’ will set up systems to monitor the attitude of customers and other marketing system participants. By monitoring changing levels of customer preference and satisfaction before they affect sales, management can take earlier actions (Lovelock, J. 2006). The main customer attitude- tracking systems used by customers are:

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Complaint and suggestion systems: ‘A cut above’ will record, analyze, and respond to written and oral complaints that come from customers. The customers complains will tabulated, and management attempts to correct whatever is causing the most frequent types of complaints. ‘A cut above’ will try to maximize the opportunities for consumer complaining so that management can get a more complete picture of customer reactions to their services (Ries, A. and Jack, T., 2000).

Customer panels: ‘A cut above’ will run panels consisting of customers who will agreed to communicate their attitudes periodically through phone calls or mail questionnaires. These panels are more representative of the range of the customers’ attitude than customer complaint and suggestion systems(Ries, A. and Jack, T., 2000).

Customer surveys: ‘A cut above’ periodically send out questionnaires to a random sale of customers to evaluate the friendliness of the staff, the quality of the service, and so on. The customers answer these questions on a five point scale. The responses are summarized and go to both local managers and management levels. The manager monitors how the various components of their services are rated in the current period compared to the last period, to the average of all the sales, and to the standard. This system improves the staffs’ motivation to provide good customer service in the knowledge that their ratings will go to higher management (Lovelock, J. ,2006).

The company needs to change their customer service by changing their customer service survey to include being customers. These will help them understand why the customers prefer competitors and will assist in planning corrective measures that ensures their plans, policies, products, and services are as per the customers requirement. The corrective action that needs to be carried out should include pricing strategies, pressure on sales force, incorporating public relations in dealing with customers complains (Lovelock, J.,2006).

References

Allard, M. (2005): Theoretical Marketing Strategies: Readings, Cases and Exercises. 3rd ed. Harlow: Prentice Hall

Keller, K. L. (2002): Strategic Brand Management: 2nd Edition- Prentice Hall

Kotler, P. and Kevin, L. K. (2006): Marketing Management, 12th Edition: Pearson- Prentice Hall

Lovelock, J. (2006): Services Marketing, People, Technology, And Strategy: New York, Prentice Hall

Maund, L. (2007): An Introduction Marketing: Theory and Practice: Macmillan, Palgrave

Patterson, L. (2008): Marketing Metrics in Action- Creating a Performance-Driven Marketing Organization. Racom Communications

Ries, A. and Jack, T. (2000): Positioning- The Battle for Your Mind- 20th Anniversary Edition: McGraw-Hill

Thomson, C. and Rampton, L. (2006): Putting Your Customers First, Market Research. Melbourne press, New York.

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