stratosphere salon marketing plan - jessica greschner

COMM 468, Section 101

Colette Cheung 70875091 Jessica Greschner 27722107

Jasna Kamenjas 24980096 Daniel Kong 41960097

Hannah Martin 27435106

Stratosphere Salon

Agenda

Situational Analysis

Goals & Objectives

Core Strategy

Conclusion

Situation Analysis | Goals & Objectives | Core Strategy | Conclusion

Stratosphere GOING FORWARD

A+ract new customers

Improve frequency of visits from exis>ng customers

Increase rental chair occupancy

Increase product sales

Situational Analysis | Goals & Objectives | Core Strategy | Conclusion

•  Hair Industry in Canada is valued at $1.6B with an average growth of 2%

•  Salon sales make up 22.9% of the hair care industry

•  Industry is mature, saturated and highly competitive

•  Little seasonality in sales, but mild increase in December

2-in-1 Products

5%

Colourants 21%

Conditioners 13%

Hair Loss 0% Perms/

Relaxants 0%

Salon Industry

23%

Shampoos 24%

Styling Agents

14%

Hair Industry in Canada (2012)

Industry Analysis H a i r I n d u s t r y i n C a n a d a


SUPPLIER POWER: MEDIUM

•  Limited number of suppliers distribute to Stratosphere

•  High availability of substitute suppliers, but they do differ in quality and substance

•  Supplier is important to the salon •  Salon contributes to a small proportion of

supplier sales

THREAT OF NEW ENTRANT: HIGH

•  The market is already saturated •  There are no barriers to entry •  There are new buildings with retail space to

which competitors could locate •  Experienced stylists are huge asset- a salon

with good stylists can be a fierce competitor •  There are no economies of scale with

independent salons •  Consumer base is growing

COMPETITIVE RIVALRY: HIGH

•  Large number of salons •  Little evidence of differentiation among

competitors •  High switching costs for stylists •  Product can be viewed as a commodity

BUYER POWER: HIGH

•  Many consumers with no salon loyalty •  Differentiation from services, not basic hair cut •  No switching costs for consumers •  Consume purchase frequency is personal •  Final product is important to consumer

THREAT OF SUBSTITUTES: HIGH

•  At home hair care is growing due to affordability and access to products on the market

Industry Analysis C a t e g o r y / I n d u s t r y F a c t o r s - P o r t e r ’s 5 F o r c e s


THE MAC

RO ENVIRO

NEM

ENT

Demographic Forces

Economic Forces

Technological Forces

Poli>cal Forces

Cultural Forces

Industry Analysis E n v i r o n m e n t a l F a c t o r s


Industry Analysis Ke y S u c c e s s F a c t o r s ( I n t h e I n d u s t r y )

SUCCESS Ratio of

new vs lost customers

Prime location

Quality of service

Access to niche

markets Business expertise of operators

Excellent employees

Market leader


Company Analysis Ke y S u c c e s s F a c t o r s ( F o r S t r a t o s p h e r e ; P r e - S u r v e y )

Open long hours

High-caliber service

Stylists to fit any hair need

Specialty services

Excellent customer relationships


Company Analysis P e o p l e , P r i c e , P l a c e , P r o d u c t , P l a c e

•  Salon & esthetic services

•  Salon products

PRODUCT

• Website & Social Media

•  Coupons

•  Fashion shows

PROMOTION

•  Granville Street •  Foot traffic

•  Colors: black & white

PLACE

•  Prices comparable to high-end salons

•  Junior Stylists charge 30-50% less

PRICE

•  12 Chair Renters, 1 Commission Stylists, 2 Apprentices

•  Receptionist

PEOPLE


Company Analysis S a l e s A n a l y s i s

TOTAL SALES SERVICE RETAIL

Regular Requests 85.00% 74.00% 11.00%

New Requests 8.20% 6.70% 1.50%

Walk-Ins 1.50% 1.10% 0.50%

Staff 1.70% 0.10% 1.60%

Retail Only 3.90% 0.00% 3.90%

TOTAL SALES 100% 81.90% 18.10%


Primary Data Collection Ke y F i n d i n g s F r o m C u s t o m e r S u r v e y s & S t y l i s t I n t e r v i e w s


CHAIR RENTERS

POPULATION SIZE 7

METHOD OF DATA COLLECTION One-‐on-‐one interviews

# OF FEMALE 2 (29%)

# OF MALE 5 (71%)

Company Analysis D a t a C o l l e c t i o n – S t y l i s t I n t e r v i e w s


Company Analysis S t y l i s t I n t e r v i e w s – Ke y Ta k e a w a y s

TOP 3 QUALITIES OF STRATOSPHERE People. Good Dynamic. Location

VIBE OF STRATOSPHERE Family. Creative. Chill. Energetic. Cool.


Company Analysis F o c u s G r o u p Ta k e a w a y s

REAS

ON

S FO

R W

ORK

ING

AT S

TRAT

OSP

HER

E

WILLINGNESS TO ENGAGE IN SOCIAL MEDIA

Not Willing Very Willing


EXISTING CUSTOMERS POTENTIAL CUSTOMERS

POPULATION SIZE 50 50

METHOD OF DATA COLLECTION Emailed online survey In person paper survey

% FEMALE 73% 83%

% MALE 27% 17%

Customer Analysis D a t a C o l l e c t i o n – E x i s t i n g & P o t e n t i a l C u s t o m e r S u r v e y s


Customer Analysis I d e n t i fi e d S e g m e n t s

Young Trendsetters

Davie Street Guys

Business Professionals

Mama Bears West Side Moms


Customer Analysis: Existing Clients

Friendly 23%

Good Quality Service 18%

Trendy 15%

Fun 11%

Energetic 7%

STRATOSPHERE BRAND ASSOCIATIONS


Most Important Salon Features


POTENTIAL CLIENTS

1.  Quality of service 2.  Experience of hairstylist

3.  Good value for money 4.  Cleanliness

5.  Salon Atmosphere

6.  Personal relationship with hairstylist

7.  Convenience of location

EXISTING CLIENTS

1.  Quality of service 2.  Personal relationship with

hairstylist 3.  Experience of hairstylist

4.  Cleanliness

5.  Salon Atmosphere 6.  Convenience of location

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Satisfaction Level vs. Importance Factors in a Hair Salon

Insight for Attracting New Clients


Exis>ng Customers

Poten>al Customers

KEY TAKEAWAY: Stratosphere is

doing very well in

areas potential

customers deem

important!

Customer Analysis C o m m u n i c a t i n g w i t h C u s t o m e r s


* Responses reflect those of existing customers

Email (53%)

Pinterest (20%)

Instagram (53%)

Twitter (47%)

Facebook (87%)

PREFFERED COMMUNICATION CHANNELS

Hair Tips (93%)

Makeup Tips (53%)

Beauty/ Skin (60%)

Fashion (53%)

TOPI

CS O

F IN

TERE

ST

Customer Analysis Re v e n u e S o u r c e s


78%

31%

0%

20%

40%

60%

80%

100%

Services Products

Share of Pocket – ExisDng Customers

KEY TAKEAWAY: Stratosphere accounts for most of their customers salon services, but less of their

product purchases

Customer Analysis C o r e C u s t o m e r s

2%

19%

33%

8%

23%

8% 4% 2%

0%

10%

20%

30%

40%

AVERAGE INCOME OF CUSTOMERS

>50 24%

35-49 43%

25-34 29%

19-24 4%

AGE OF CUSTOMERS GENDER OF CUSTOMERS

73% 27%

SIZE

App. 13,800 requests / year, # of customers

unknown

IMPORTANCE

90% of customers

consider good hair important

REFERALS

41% of customers

were referred by a friend

PRODUCT

68% of customers buy product from Stratosphere

FREQUENCY

46% of customers visit the salon every

5-8 weeks


Competitive Analysis D a t a C o l l e c t i o n – O b s e r v a t i o n & S e c o n d a r y Re s e a r c h

Address Vancouver, BC


POPULATION SIZE 12 (7 identified as key competitors)

METHOD Observa>on

LOCATION Downtown Vancouver

KEY COMPETITORS

Zennkai

Holts Salon & Spa

Lounge Hair Studio

Moods Hair Salon Pony Hair Salon

Pink Lime Salon & Spa

Straight and Curl Hair Salon

Competitive Analysis Ke y C o m p e t i t o r s & S t r a t e g i e s


Competitive Analysis C o m p e t i t i v e B e n c h m a r k / M a t r i x

2 4 3 5 5 5 1 2


S T R E N G T H S W E A K N E S S E S

O P P O R T U N I T I E S T H R E A T S

S W O T


Goal & Objectives I m p r o v i n g t h e S t r a t o s p h e r e M a r k e t i n g M i x


Goals & Objectives O f t h e M a r k e t i n g P l a n

EXISTING CLIENTS

•  Increase monthly service revenue from existing customer base by 15% in comparison to monthly sales of the last fiscal year.

NEW CLIENTS

•  Increase number of first-time customers by 15% compared to number of new customers of the same month in the last fiscal year.

RETAIN

•  Ensure retention rate of first-time customers matches industry standard of 33% by the same month in the next fiscal year

CHAIR RENTAL

•  Increase chair rental occupancy by 2-3 compared to chair rental rates 6 months prior.

PRODUCT SALES

•  Increase monthly product sales by 10% compared to in the same month in the last fiscal year.


Core Strategy O b j e c t i v e s à S t r a t e g i e s à Ta c t i c s


Core Strategy P o s i t i o n i n g

POSITIONING STATEMENT

For the style-conscious customer who places great emphasis on

their hair, and needs a great stylist to cut, color and style for any

occasion. Unlike Holt, Pony or Mood’s, Stratosphere gives you the

high-end hair services in a comfortable environment without the

attitude.


Core Strategy Ta r g e t i n g & S e g m e n t a t i o n


Urban Powerhouse • Live and work in the area • Looking for quality, dependable service

Mama Bear • Demand looking their best • High household incomes

Davie Street Guys • Invest in Their Appearance • Live in close proximity to Stratosphere

Young Trendse+ers • Low income, but HIGH willingness to pay • Early adopters of the latest trends

Core Strategy O b j e c t i v e 1

INCREASE MONTHLY SERVICE REVENUE FROM EXISTING CUSTOMER BASE BY 15% IN COMPARISON TO MONTHLY SALES OF THE LAST FISCAL YEAR

STRATEGY 1

Encourage greater frequency in which

customers go to Stratosphere

TACTICS

VIP / Loyalty card

Email newsletter

Offer quick services


$400 For 100

$150 per Year

No Add. Cost


INCREASE # OF FIRST-TIME CUSTOMERS BY 15% COMPARED TO # OF NEW CUSTOMERS OF THE SAME MONTH IN THE LAST FISCAL YEAR

STRATEGY 1

Increase brand awareness of Stratosphere to the

general public

TACTICS

Curb appeal- Sign & Window Display

Expand digital presence (Instagram breakout campaign, Yelp reviews,

reach out to bloggers)

Make a presence in the media with hair specialist column

Stimulate referrals by providing incentives (discounts)


$375

$0

$TBD

$10 Per referral


INCREASE # OF FIRST-TIME CUSTOMERS BY 15% COMPARED TO # OF NEW CUSTOMERS OF THE SAME MONTH IN THE LAST FISCAL YEAR

STRATEGY 2

Create stronger community ties with

nearby businesses and client

TACTICS

Place postcard ads and 1st-time visit coupons at nearby businesses

Place 1st-time visit coupons in the mailboxes of new apartments


$100 For 100

$100 For 100


ENSURE THE RETENTION OF FIRST-TIME CUSTOMERS MATCHES THE INDUSTRY STANDARD OF 33% IN COMPARISON TO THE SAME MONTH IN

THE NEXT FISCAL YEAR

STRATEGY 1

Wow first-time customers with an unexpected,

unforgettable experience

(in addition to standard service- coat, beverage, etc)

TACTICS

Welcome kit (sample products, contact card, etc.)

Send thank-you email after appt. & reminder for next appointment

Ask to schedule next appt. when customer leaves


$7 Per Kit

$12.50 Per Month

No Add. Cost


INCREASE THE NUMBER OF CHAIR RENTERS BY 2 OR 3 COMPARED TO CHAIR RENTAL OCCUPANCY 6 MONTHS PRIOR

STRATEGY 1

Increase brand awareness of Stratosphere in the

professional hair industry

TACTICS

Ads in professional hair magazines

Increase presence in media (hair specialist column-such as VanCity Buzz)


$500 (~) Per Ad.

$TBD


STRATEGY 2

Justify the above average price of Stratosphere chair

renting

TACTICS

Ensure junior stylists/receptionists clean & assist senior stylists

Provide educational workshops targeted towards senior stylists

INCREASE THE NUMBER OF CHAIR RENTERS BY 2 OR 3 COMPARED TO CHAIR RENTAL OCCUPANCY 6 MONTHS PRIOR


No Add. Cost

No Add. Cost


INCREASE MONTHLY PRODUCT SALES BY 10% COMAPRED TO THE SAME MONTH IN THE PREVIOUS FISCAL YEAR

STRATEGY 1

Drive awareness and penetration of hair

products

TACTICS

Attach samples to full-sized popular products

In store promotion (small tent signs) at styling chairs (provided by

distributor)

Each month a stylist pick their favorite product and it is marked

Adam’s Pick


TBD

$150

$15


STRATEGY 1

Drive awareness and penetration of hair

products

TACTICS

Ask stylists to tell customers the products they are using (samples)

Ensure Stratosphere is listed on distributors websites

Promote product brands on tent sign and in window display

INCREASE MONTHLY PRODUCT SALES BY 10% COMAPARED TO THE SAME MONTH IN THE PREVIOUS FISCAL YEAR


No Add. Cost

No Add. Cost

Cost Covered in OB. 1


STRATEGY 2

Increase sales through impulse buys

TACTICS

Place small, low priced products next to cashier (travel sized items)



$50


STRATEGY 3

Educate customers on how to use products

TACTICS

Have retail displays with signs on how to best use the product

Outline benefits of salon over drug store products on small signs

Have customers participate in styling of hair

How To..



$100

$100

No Add. Cost

Implementation T h r e e P h a s e P r o c e s s

Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec.

PHAS

E 1

Increase # of First Time Customers

Sidewalk Sign and Window Display

Social Media

Hair Specialist Column

Discounts to S:mulate Referrals

Post Card Ads and 1st Visit Coupons

1st Time Visitor Coupons

Retaining New Customers

Welcome Kits

Thank-‐you email

Schedule Next Visit

Increase # Chair Renters

Ads in Magazines

Increase Presence in Media

Jr. Stylists/ Recep:onists Assist Sr. Stylists

Educa:onal Workshops for Sr. Stylists

PHAS

E 2

é Rev. from Exis>ng Customers

VIP / Loyalty Card

Email NewsleNer *

Offer Quick Services

PHAS

E 3

Increase Product Sales

Tell Customers About Products they are Using

Ensure Listed on Distributor Websites

Product brands on Window/Sidewalk Display **

Place Small Low-‐Cost Items Next to Till

Retail Displays with “How To” Descrip:ons

Small Signs -‐ Salon vs Drug Store Products

Have Customers Par:cipate in Styling of Hair * SoXware Implemented in Thank-‐you email ** Implemented in Phase 1


Conclusion Increase service

revenue of existing

customers

Increase number of first

time customers

Ensure retention rates

of new customers

Increase chair renting

occupancy

Increase product sales

S T R A T E G I E S

T A T I C S C


Hairdressers are a wonderful breed. You

work one-on-one with another human

being and the object is to make them feel

so much better and to look at themselves

with a twinkle in their eye.

- Vidal Sassoon


Appendix Slides S u p p l e m e n t o f P r i m a r y Re s e a r c h


Appendix 1 C u s t o m e r A n a l y s i s - P s y c h o g r a p h i c Tr a i t

0%

10%

20%

30%

40%

50%

60%

70%

Very Unimportant Somewhat Unimportant

Neutral Somewhat Important

Very Important

Importance of Having Great Hair Everyday

Current Customers

Potential Customers


Appendix 2 C o m p e t i t i v e B e n c h m a r k / M a t r i x

2 4 3 5 5 5 1 2


Appendix 3 O b j e c t i v e 1

Increase monthly service revenue from existing customer base by 15% in comparison to monthly sales of the last fiscal year.

Monthly Service Revenue

Existing Client Base %

Monthly Service Revenue from Existing Client Base

$52,000 X 74% = $38,480

Current Target Goal Revenue

$38,480 X 115% = $44,252



Increase number of first-time customers by 15% in comparison to number of new customers of the last fiscal year.

Current New Customers / Year Goal for New Customers / year % Increase

1,111 1,300 1,300 / 1,111 = 1.1701

Goal = ~15%



Increase monthly product sales by 10% compared to the same month the last fiscal year

Avg Monthly Product Sales X 110% Monthly Increase of

$9,175 $10,092.5 ~ $900


stratosphere salon marketing plan - jessica greschner

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