«Marketing Plan. Heavenly Beauty and Spa Inc.» - Free Essay Paper
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SWOT Analysis for Heavenly Beauty and Spa
Salons and spas in the United States develop at a very high rate, and a business has to be competitive to remain in this market. Such competitiveness depends both on internal and external marketing factors as outlined by a SWOT analysis (Silva, 2013). Below is a SWOT analysis that captures the strengths and weaknesses of Heavenly Beauty and Spa together with the opportunities and threats facing the company.
a) Excellent salon and spa outlets’ location in well-travelled malls. Heavenly beauty and Spa beauty parlors are strategically located throughout the state. Most of these outlets in towns are situated in areas populated by upper middle class people.
b) Highly trained hair stylists and therapists. Male and female hair stylists are conversant with a broad style repertoire ensuring maximum satisfaction of different customers. Professional therapists offer massages and other therapies. Labor is highly specialized to avoid delays and other inconveniences
c) A wide range of services offered. Unlike many salons and barbers that provide specific services, Heavenly Beauty and Spa offers its clients a variety of services. In addition, services offered in the Spa sections extend from the usual massages to the specialized ones, for instance, heated stone massage, hydration therapies, aromatherapies, and deep tissue treatments.
d) Competitive prices. Prices at all the beauty parlors are customer friendly and are set considering the clients’ income and other factors like age, for instance.
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e) Wonderful working environments. The atmosphere at salons and spa is excellent for both the clients and the employees.
f) Being a newly established company, Heavenly Beauty and Spa lacks brand equity, which many of its established competitors have acquired since they are in business for a long time.
g) Large costs associated with a managing salons and spas. The provision of wide range of services incurs at a relatively high cost on the business. Hydrotherapy equipment, for example, is extremely expensive to purchase and maintain.
h) Many people, especially in the middle class, perceive spas as unnecessary luxuries and do not consider the services in their budgets. Others only visit spas during special occasions, which results in a small client base.
i) Employment of highly qualified professionals incurs high costs on the business and limit profitability to quite a significant level.
a) Steady growth of the industry and market expansion. According to the international Spa association, total revenue from salons and spa grew from $13.4 billion in 2011 to $14 billion in 2012. Total employment also increases by 1.2% in the year 2013 as compared to the previous year (ISPA, 2013)
b) Heavenly Beauty and Spa is slowly attaining the ability to lower marginal fixed costs, following the increase in customer base.
c) There is a registered increase in sales opportunities, following the extension of working hours in the evening and during the weekends.
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a) Stiff competition from chains that are already established.
b) Dissatisfaction by customers with regard to the amount of used beauty and massage products or with treatments. Allegation by customers concerning rude behavior by employees also threatens to shrink the customer base.
c) Threat of lawsuits from customers that accidentally experience reactions from particular chemicals or others who suffer injuries or burns at the outlets.
Heavenly Beauty and Spa obtains most of it hair products, salon and spa supplies from external manufactures. However, it also manufactures its products such as soap. The key aspects is that the Heavenly Beauty and Spa intends to start producing and distributing its products. The products will be made hand-made by the employed staff under the supervision of the sales manager. The business intends to purchase the heavy-duty machines that will be used in the manufacturing of the products such as soap. The distribution services will be handled over to an outside vendor who will be hired by the human resource office. The vendor will be served with the distribution of the products to customers at their homes as well as to stores. Tendering and procurements activities are managed by the head of office located in the United States, which is the nerve of Heavenly Beauty and Spa. On the other hand, the request for delivery of the companies manufactured products will be conducted either in the office or through telephone calls. Products for both Salons and Spas are purchased from specific manufacturers in bulk and stored in a warehouse in the main office premises. Deliveries to the main office are done by tendered suppliers. Every general manager at each outlet sends an order with the particular requirements to the head office. The distribution manager processes and authorizes the distribution of products to each salon and spa according to the specifications of their orders. Hired vehicles are used to distribute the products to their specific locations.
Heavenly Beauty is in the process of establishing a Demand Signal Management system (DSM). This improved technology helps the manufacturer to gather information on the daily sales and therefore have a good picture of the demand trend in the salons and spas (Haag & Maeve, 2004). Using this information the suppliers are able to make informed supplies that will enable the business solve the problem of overstocking and under stocking.
The pricing strategy for Heavenly Beauty and Spa is customer oriented and takes into account factors such as affordability and customer’s income while remaining sensitive to quality of services offered. Prices for services are neither higher than what competitors charge nor are substantially low to avoid the business operating at a loss. Besides quality, pricing at Heavenly Beauty and Spa is affected by other factors that are either external or internal.
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a) The cost of products purchased from the manufacturers directly affects what the customers are to be charged. When goods are purchased at a relatively lower price, the business is able to charge lower fee and provide discounts; the inverse is true.
b) The cost of supplying products to all the outlets.
c) Prevailing level of prices by competitors.
d) Customer attraction.