Spa - New Trends In 2010 - Research Paper Example

Spa - New Trends In 2010 Chapter I: Introduction 3 Company 3 Product/Service 3 Goals for Business 3 Chapter II: Environmental Analysis 5 Industry Analysis 5 PESTLE Analysis 5 1.Political 5 2.Economic 6 3.Social-Culture 6 4.Technological 6 5.Legal 6 6.Environmental 6 Competitors Analysis 8 Chapter III: Internal Analysis 200 10 Strengths 10 Weaknesses 10 Opportunities 10 Threats 10 Chapter IV: Market Segmentation and Target Market 11 Market Segmentation 11 Target market 11 Chapter V: Promotional Strategy 12 Value Proposition 12 Competitive Advantage 12 Marketing Strategy 12 Annual Budget 13 14 Promotional Mix: 15 Product 15 Price 15 Place 16 Promotion 16 Distribution Strategy 16 Chapter VI: Price comparison 17 Chapter VII: Conclusion 19 Bibliography 20 Chapter I: Introduction Company To provide Spa facilities in the US, a company ‘Vigor’ will be launched. Vigor will be a premier Spa and it will be established between Burbank and Glendale, California. The aim of opening Vigor is not only to offer a platform where women may relax but it will also introduce the innovative products that will reduce the symptoms of aging. The company will be established for every women dreaming for an excellent Spa service. The company will be a Partnership among three partners who will have equal proportion of ownership. Product/Service Women always want to look young and fresh therefore; the products and services that will be offered in Vigor will give the choice to customers. Various body and mind healing services will be provided. Moreover, spending two hours at Vigor will allow women to enhance their social network. Fitness gym Nature Walks Retreat mediation space Hydrotherapy bath Private consultation room Spa rooms Soothing Music therapy Personal lockers Steam and sauna Soothing herbal treatment Shower rooms Spa retail Nail treatment Skin massage and treatment Full and half body massage Goals for Business The goal of Vigor is to establish a dynamic relationship between a healthy atmosphere and personal fulfillment by enhancing its values, to make clients relax, invigorate and revitalize. Our goal is to educate our clients and to aware them about the Spa experience and its benefits. Vigor aims to become the most popular Spa in California offering quality services and entertaining atmosphere to customers. Another goal of Vigor is to achieve least 10,000 memberships in the first year and attracting at least 15,000 non-members. Vigor aims to achieve breakeven profit at the end of first year. Company also aims to offer significant sales revenues at the end of second year. Chapter II: Environmental Analysis Industry Analysis International SPA Association in their latest report has highlighted new trends in SPA such as excellent customer services, Spa sampling menus, Spa partners, increasing social media role in Spa and beauty rest at Spas (Collins). However, most of the Spas lack in appeal and are considered boring for the adults. The number of Spa users in US is increasing because men have also become conscious to regularly take these services. US Spa market is appealing and growing as it has proved from the recent industry statistics published by ISPA (Table). ISA has also shown that the average growth rate of Spa industry during the last five years is 17 percent (Hospitality Net). Source: ISPA PESTLE Analysis 1. Political Political factors do not highly influence Spa business in the US because it has nothing to do with trade restrictions. Government of US supports Spa industry because most of the workers of Spa are part time workers. 2. Economic Spas services are luxury services and higher inflation rates negatively impact Spas because consumer affordability decreases. Increasing income level of people and their living standards have increased the demand of Spa services. 3. Social-Culture Recession has not significantly affected the need of people to feel and look good however, various evidences have been presented showing that people are cutting back on such commercial facilities and switching to home alternatives (Mintel Group). Increasing number of working women has increased the demand of Spa services. 4. Technological Need of high technology in Spa facilities could increase entry barriers in this industry however, various Spas have entered into the industry without investing in such technologies. Personal health and wellness products available in the market have provided home alternatives to consumers, thereby, negatively affecting Spas. 5. Legal To protect consumers health and safety, health and Spas facilities are facing plenty and strict policies. Hiring qualified and skilled staff in surgical procedures is legally important for Spas. Compliance to legal requirements such as staff salaries, tax deductions and insurance etc also affect health and Spa facilities. 6. Environmental Spas and health facilities encourage the use of organic and natural products and appear and environmental friendly centers. Various dangerous chemical products such as chlorine are released in the pools and Spas should corporate social responsibility when using them. Competitors Analysis Product Price Place Promotions Ra Organic Spa1 -Acupuncture -Massage -Skin care -Body wraps -Scrub bar -Ra baths -Waxing -Online shop -Gift packages -Acupuncture (body tune up $85, diagnosis & treatment $105, acu massage $150/75 min, acu lift facial $145/60 min) -Massage (Shiatsu therapy $115/60 min) -Skin care ($90/60 min) -Body wraps (pear and apple body wrap $155/90 min) -Scrub bar (Green tea & crushed rice $90/60 min) -Ra baths ($40) -Waxing ($15-$95) - 119 N San Fernando Blvd Burbank, CA 91502 -Word of mouth -Outlet physical evidence -Online advertising -Printed ads Burbank Spa & Garden2 -Massage -Finnish sauna -Spa facials -Nail care -Body treatments -Waxing -Gift certificates --Massage (deep tissue massage $95/60 min, hot stone massage $105/55 min, pregnancy massage $105/55 min, shiatsu massage $95/55 min, Swedish massage $85/55 min) -Finnish sauna ($20-$35 based on timings) -Spa packages ($248-$476) -Spa facials ($65-$225) -Nail care ($5-$20) -Body treatments ($50-$100) -Waxing ($15-$85) - 2115 W Magnolia Blvd Burbank, CA 91506 Burbank -Online advertising -Printed Ads -Physical evidence -Word of mouth Chapter III: Internal Analysis 200 Strengths Quality services One-stop-shop services such as nails, skin, body treatments etc Weaknesses To attract skilled and experienced staff, we have to offer more attractive pays and benefits to staff Opportunities In future we expect to expand our Spa facilities in US market To open day care centers for women visiting Vigor Threats Risk of double dip recession will future reduce the demand of luxury products and services Chapter IV: Market Segmentation and Target Market Market Segmentation Vigor will open its first Spa facility in California which appears to be an attractive market for the company. We segment our market based on demographics including age and income level. Market Segmentation Age/Income Below $25000 $26000-$40000 $40000 and above Up to 22 23-45 46 and above Target market Our target market will be the women above 22 years of age and earning above $25,000. We will mainly target these customer segments (highlighted in the table), and most of them will be female working women or professionals and retirees. The woman taking our services should be 23 years or above however, our Spa gym facility will not hold this restriction. Chapter V: Promotional Strategy Value Proposition Our value proposition is that we will offer excellent quality Spa and Health services in an entertaining atmosphere. Competitive Advantage Unlike our competitors, our staff and consultant will offer one-to-one services to our clients with a special focus towards their regular grooming. By offering friends and family offers we will provide our clients a platform where they come and relax with their loved ones. Marketing Strategy Our marketing strategy will focus on three areas: 1. To develop a unique image of our products and services through advertising and building strong relationships 2. Our value added offers are quality services, entertainment and grooming 3. Our products and services, communication, outlet and employees will be the four major ways to attract customers Annual Budget Start-up Funding Estimated stating Fund $100,000 Estimated stating Assets funds $500,000 Total Funding Required $600,000     Assets   Non-cash Assets $500,000 Cash $100,000 Total Assets $600,000 Liabilities and Capital   Liabilities   Borrowing $0 Long-term Liabilities $0 Accounts Payable $0 Other Current Liabilities $0 Total Liabilities $0 Capital   Planned Investment   Investor 1 $200,000 Investor 2 $200,000 Investor 3 $200,000 Additional Investment Requirement $0 Total Planned Investment $600,000 Promotional Mix: Product Our core products and services will include body treatment, Spa packages, nail treatment and skin treatment. To offer an entertaining climate we will also offer restaurant and theatre services in our outlet. Price We aim to offer quality services to our customers, therefore, we will not underrate our services however, as we need to penetrate in the market therefore, our prices will be competitive and somewhat similar to our competitors. Our staff salaries will be significantly higher than our competitors, in the start we aim to achieve breakeven profit. We will make the skills of our employees our sales strategy. Place An outlet of Vigor will be established between Burbank and Glendale Ca. In this way we can target the customers of both Burbank and Glendale. The outlet will be bought near a commercial area to increase potential customers. Promotion Our promotions will be divided into two phases. The first phase will start at least two months before the launch of Spa and the second phase will be the consistent long term promotions of our services. Before launching the company, we will adopt aggressive marketing strategy because our aim is to attract the customers from entire California. Online marketing will be done by creating a website which will give all information to the customers. Moreover, we will also ensure our active presence on the social websites like Twitter and Facebook. Through data mining we will collect the data and analyze the characteristics of our online visitors. Advertising will be done in local newspaper, local radio and television. Within a radius of ten miles, mails will be sent to the potential customers. Moreover, we will also distribute our brochures in medical facilities and beauty salons to develop alliances. Distribution Strategy We will develop our outlet by renting out a suitable place in the commercial area. Since we are only going to establish one outlet to check out the response rate of our customers, therefore, all of our services will be provided in the same outlet. Chapter VI: Price comparison Price comparison of two competitors of Vigor shows that Ra Organic has set its prices higher than Burbank Spa & Garden. Although Ra Organic Spa massage packages are less in variety still, company is charging more prices than Spa & Garden. Massage Waxing Ra Organic Spa -Shiatsu massage for $115/60 min -Acu massage for $150/75min -All waxing packages are between $15-$95 Burbank Spa & Garden -Deep tissue massage $95/60 min -Hot stone massage $105/55 min -Pregnancy massage $105/55 min -Shiatsu massage $95/55 min Swedish massage $85/55 min -All waxing packages are between $15-$85 At the initial stage, we will offer prices similar to Ra Organic Spa however, in future, we may increase our prices. Following is our estimated cost for Shiatsu massage and waxing. Shiatsu massage3 Prices Therapist Select Shiatsu massaging cushion with heat $199.99 Therapist Select Shiatsu portable massaging cushion $69.99 Pedicure Salon Footbath $49.99 Motor massage mat $39.99 Shiatsu pillow $39.99 Shiatsu foot massager $39.99 Back massager with heat $29.99 Extendable percussion massager $29.99 Neck & Shoulder Shiatsu massager $29.99 HydraGel massager $29.99 Massaging slippers $19.99 Total $579.89 Waxing Products Pro wax honey $15 Wax cream $15 Wax $10 Total $40 Chapter VII: Conclusion Vigor is going to be a premium Spa between Burbank and Glendale. There are various few good Spas in this region therefore; company will not face very tough competition. Industry analysis shows that traditional Spas are being considered boring and outdated by consumers therefore; opening a Spa with more innovative and entertaining services will surely establish strong position. PESTLE analysis shows that investing in this business is feasible for company however, to avail opportunities and to reduce threats, company has to adopt a proactive approach and significant strengths. By developing a strong marketing strategy and promotional mix, we aim to compete successful with a few strong competitors in this market. Bibliography Burbank Spa & Garden . Home . 2010. 23 September 2010 . Collins, Caroll. Spa: New Trends In 2010. 24 July 2010. 22 September 2010 . Homedics . Shaitsu products . 2010. 23 September 2010 . Hospitality Net. ISPA Releases 2009 U.S. Spa Industry Statistics. 2009. 23 September 2010 . Mintel Group . Salons and Spas - UK - November 2009. November 2009. 22 September 2010 . Ra Organic Spa. Treatments . 2010. 23 September 2010 . Read More