Executive Summary
This marketing plan relates to Shunji Matsuo Hair Studio which operates in Singapore. The plan details the various strategies that the firm will incorporate in its effort to develop a level of competitiveness.
A comprehensive internal and external evaluation of the firm’s business environment is illustrated. This has been achieved by integrating various models which include the Porters five forces, the SWOT model, and the Pestle analysis.
The plan also evaluates the firm’s microenvironment by evaluating the competitive environment. A comprehensive customer analysis is also undertaken with specific reference to the firm’s customers and the services provided.
The plan also analyzes the pricing and promotional strategies that the firm has incorporated. Moreover, the plan details how the firm undertakes market research in an effort to develop a comprehensive understanding of the prevailing business environment.
To improve the firm’s competitiveness, the report evaluates a number of strategies that Shunji Matsuo’s management team should consider in its strategic management processes. This has been achieved by analysing the 7P of marketing mix.
Company’s corporate and marketing objectives
Shunji Matsuo Hair Studio is a private limited company that operates in the beauty and wellness industry. The firm is owned by Mr. Shunji Matsuo, a renowned Japanese hairstylist and is equipped with modern hair technology.
In an effort to maximise its sales revenue, the firm has adopted the concept of internationalisation. Some of the Asian countries that the firm has entered include Malaysia, Vietnam, Philippines and Singapore.
In Singapore, the firm has established a branch that is located at 391 Orchard Road, Ngee Ann City in Singapore1.
Ongoing objectives
The beauty industry in Singapore is characterised by intense competition. Despite this, Shunji Matsuo management team is focused towards maximising the firm’s level of profitability.
According to the marketing manager, the firm intends to achieve this by offering its customers unique salon services that are aligned with the customers’ personal and lifestyle tastes and preferences.
Furthermore, the firm intends to add value to customers’ life by enabling them attain their beauty potential.
To achieve this, the firm is committed towards providing its customers with beautiful hairstyles that bring out the customers personality. As a result, customers who patronise the salon attain value for their money.
Short term-term objectives
Shunji Matsuo intends to achieve a number of short-term objectives. First, the firm intends to increase its sales revenue with a margin of 40% within the next one year. This will enhance the firm’s ability to attain market leadership within the Singaporean beauty industry within 2 years.
Furthermore, it is the firm’s objective to increase its customer base by a margin of 45% within one and a half years. The firm intends to achieve this by ensuring that customers are provided with optimal services. In the short-term, the firm intends to establish 5 more outlets in Singapore.
The firm also intends to develop a strong a positive corporate reputation by operating in a social responsible manner.
One of the aspects that the salon will focus on is developing a strong relationship with its clientele. The firm will position itself as an arena for change by providing customers with an opportunity to interact and bond with each other.
Long-term objectives
According to the firm’s marketing manager, the Singaporean beauty industry has become very competitive. As a result, the firm intends to expand its operations into the international market. In its initial phase, the firm has targeted China as its desired investment destination.
Decision to invest in China was motivated by the high market potential as evidenced by the high population. China is one of the most populated countries in the world. The firm plans to successfully penetrate the market within the next 5 years.
Situational analysis
External environmental analysis
To effectively understand the macro environment in which it operates Shunji Matsuo’s management team should consider adopting the PESTEL model2.
Political environment
The prevailing political environment influences the success of firms in different economic sectors. Countries characterised by minimal cases of political risk are more attractive compared to those with high political risk. The political environment in Singapore has been relatively stable.
The country is ranked as one of the most stable economies within the ASEAN region. One of the reasons for the high level of political stability relates to the system of governance adopted. Over the years, Singapore has managed to incorporate an effective parliamentary democracy.
The country’s governance system is composed of the executive, the legislature and the judiciary. The executive include the president, the prime minister and the cabinet ministers.
On the other hand, the national legislation entails a unicameral parliament that is composed of a number of parliamentarians.
Some of the members of parliament are elected by the citizens while some are nominated by their political parties. The president is elected directly by the citizens and serves for a period of 6 years.
On the other hand, the judiciary is composed of the supreme and the subordinate courts. To ensure effective governance, the various organs of the government are independent of each other.
As a result of the political system adopted in the country, Singapore has been able to promote an effective business environment.
This presents a unique business environment for Shunji Matsuo to exploit. For example, the firm can be able to establish its operations in different parts of the country.
Additionally, the country’s political stability will also minimise the probability of the firm incurring losses associated with political factors such as riots.
Economic environment
Singapore has experienced challenging economic environment over the past decade. For example, in 2001, the country was adversely affected by the Asian economic crisis that originated from Thailand3. The country was also affected by the 2007/2008 global economic recession.
A study conducted by Trading Economics revealed that the country’s Gross Domestic Product (GDP) has increased to $ 51.8 billion from 1960 to 2011.
In 2011, the country recorded the highest GDP which amounted to $239.7 billion. The country’s economic growth has been on an upward trend over the past few years.
For example, during its 4th quarter in 2012, the country’s GDP increased with a margin of 3.3%. The chart below illustrates the trend in the country’s gross domestic product over the past few years.
The high rate of economic growth in Singapore has led to significant growth in the consumers’ purchasing power. One of the factors that have led to improvement in the consumers’ purchasing power relates to improvement in the level of employment.
Over the past three years, the country has managed to maintain a relatively low level of unemployment. The country’s level of unemployment between from 1986 to 2013 averages 2.52. The chart below illustrates the trend in the country’s rate of unemployment from 2008 to 2012.
The country’s economic growth is also evidenced by the trend in the consumers’ purchasing power parity. By the end of 2012, Singapore’s purchasing power parity averaged $ 326.7 billion.
This represents a significant increment from the previous level of $ 318.9 billion in 2011. The table below depicts the trend in the country’s purchasing power parity from 1999 to 2011.
Socio-cultural environment
The consumers purchasing behaviour is also influenced by various social-cultural factors. Therefore, it is essential for Shunji Matsuo’s management team to develop a comprehensive understanding of the prevailing social cultural environment.
One of the ways through which the firm can achieve this is by evaluating the country’s population structure4. Singapore is a cosmopolitan society. Approximately 76% of the country’s population are Chinese.
Over the past few years, Singapore has experienced a significant transformation in its population structure. One of the factors that have led to increment in the country’s population relates to improvement in health sector.
It is projected that the country’s population will increase to approximately 5.85 million citizens by 2017. Improvement in the country’s healthcare system has significantly increased the life expectancy amongst its citizens.
By 2013, the country’s life expectancy was estimated to be 80 years while the median age in 38 years.
Despite its social-cultural diversity, Singapore has a unique social structure that is characterised by strong materialism and competition amongst consumers. Consumerism is one of the aspects that most Singaporeans have incorporated in their lifestyle.
This has led to significant growth in the country’s beauty industry. Thus, there is a high probability of Shunji Matsuo maximising its sales revenue by marketing to a large number of customers.
However, to exploit the opportunities presented in the market opportunity, it is paramount for the firm’s management team to conduct a comprehensive consumer market research. This will enable the firm to develop services that are aligned with changes with the country’s population structure.
Technological environment
Singapore has an effective infrastructure that promotes business operation. This is evidenced by the well developed telecommunication and transport systems. In addition to the above changes, the beauty industry in Singapore has also been influenced by the high rate of technological innovation.
New technologies that enable firms within the industry to be effective in offering their services have been developed5. The technological innovations within the industry have also contributed towards improvement in the quality of services offered.
In an effort to enhance their competitiveness, most firms within the industry have integrated the concept of research and development.
Legal environment
The Singaporean government is committed towards promoting an optimal business environment. Consequently, the country has developed an effective legal system that is comprised of laws, values, culture and institutions that guide business operations.
For example, the country has formulated a comprehensive Company Act that guide the operation of private and public limited companies.
Moreover, the government has provided investors with an opportunity to establish various types of business structures such as partnerships and joint ventures.
The government has also liberalised the business environment in an effort to stimulate investment. To promote local and foreign investment, the government incorporated a 3 year tax exemption on firms that establish their operations in the country.
Industry analysis
Over the past two decades, services have become a key component in countries effort to attain high economic growth. Developing countries are some of the economies that are focusing on services as an engine for their economic growth6.
The services industry accounts for a significant proportion of most country’s Gross National Income (GNP). A survey conducted by the United States Central Intelligence Agency [US CIA] in 2011 revealed that the services industry has undergone significant transformation over the past decades.
The study showed that Hong Kong leads with approximately 92% of its GNP being as a result of the services industry. On the other hand, the sector accounted for 73% of Singapore’s GNP.
The beauty and wellness industry has undergone significant growth over the past few decades. A study conducted by Internal Revenue Authority of Singapore (IRAS) in 2010 revealed that 95% of Singaporeans spent approximately $25 on various beauty treatments.
The survey also showed that 53% of Singaporeans consumed between $25 and $49 of their income on various on beauty treatments. This trend is likely to continue into the future. Consequently, there is a high probability of firms in the industry maximising their sales revenue.
Porter’s five forces
Rivalry
The beauty industry in Singapore is characterised by a large number of firms. As a result, the intensity of competition and hence the degree of rivalry is relatively high. To cope with the high degree of rivalry, it is essential for Shunji Matsuo to incorporate effective competitive strategy.
Supplier power
Firms in different economic sectors are affected by the prevailing bargaining power amongst consumers. The main source of the supplier bargaining power within the salon industry relates to the quality of services offered by the employees.
Firms that have a strong workforce have a relatively high consumer bargaining power. As a result, they are able to set high price for their products and services. The large number of suppliers with regard to beauty products has led to a decline in the suppliers bargaining power.
Buyer bargaining power
Buyer bargaining power refers to the consumers’ ability to influence the price of a product or service7. If consumers have a high bargaining power, they are able to push the price of a product or service downward.
Additionally, high buyer bargaining power means that consumers can switch to other products or services at a minimal cost. The large number of industry players in the Singapore beauty industry has led to a substantial increment in the consumer’s bargaining power.
Moreover, the consumers’ ability to shift to other beauty products or services at a minimal cost has led to increment in their ability to influence prices.
Threat of substitute product
Singapore’s beauty industry has experienced significant growth over the past decade. This is evidenced by the large number of salons that have been established in different parts of Singapore.
The salons offer a wide range of services. As a result, consumers are faced with a wide range of beauty products and services to select from. Therefore, one can assert that the industry is characterised by a high threat of substitute.
Threat of new entrant
Currently, a large number of consumers in Singapore are appreciating the importance of personal grooming. As a result, demand for beauty products and services have increased significantly.
In an effort to exploit the market opportunity presented by the new market trend, a large number of investors are venturing into the industry. The large number of investor’s venturing the industry has led to increment in the degree of industry concentration.
Moreover, it has become difficult for industry players to differentiate their service offering. This has motivated most firms to adjust their price in order to attract customers and enhance their competitiveness.
Competitor analysis
The salon industry is Singapore has gained huge popularity over the past few years8. It is estimated that consumer expenditure on beauty services increased by 36.7% from 1995 to 2007.
The Singaporean beauty and wellness industry has undergone significant transformation over the past two decades. It is estimated that there were approximately 1507 salons the country by 2002.
However, findings of a survey conducted by IRAS in 2010 showed that there are approximately 18,0000 registered beauty and wellness firms in Singapore9.
One of the factors that have led stimulated the industry’s transformation relates to change in consumer attitude. Traditionally, patronising salons and other beauty parlours was reserved for special occasions.
However, visiting salons is currently considered as an important part of personal grooming. This has led to emergence of a large number of salons that are located in shop houses, housing estates and shopping malls.
These firms deal with diverse products and services which makes them to be very competitive. Some of the services offered include hair treatment and hair styling.
Despite the 2007/2008 economic recession, the Singaporean beauty and wellness industry was not adversely affected. Its resilient nature safeguarded the industry from suffering permanent setback.
In addition to the small and medium sized enterprises, Shunji Matsuo Hair Salon faces intense competition from a number of large enterprises.
The firm’s top competitors include Next Hair Salon, Kimage Hair Studio, Komachi The Hair Cult and Toni & Guy Hairdressing.
In addition these salons, the firm also face intense competition from other firms which include Citispa, Marie France, Jean Yip, FIL and Adonis. These firms have effectively positioned themselves in the local market.
The firms have incorporated effective operating strategies which have enabled them to gain substantial market share.
Some of the tactics that these firms have integrated include offering signature treatments, customising their services offerings and integrating effective marketing strategies.
Furthermore, most of these firms have incorporated the concept of research and development in an effort to offer their customers high quality services10.
Internal analysis
SWOT Analysis
Customer analysis and market segmentation
Market segmentation
To improve the likelihood of succeeding, the firm will conduct a comprehensive analysis of the local market. The firm will incorporate the concept of market segmentation. Market segmentation refers to the process of dividing the entire market into small market segments.
The segments are comprised of a number of individuals who are characterised by homogeneous purchasing behaviour. Market segmentation provides organisations with an opportunity to develop a comprehensive understanding of a specific market.
By integrating the concept of market segmentation, the management team of Shunji Matsuo Salon will be able to understand and predict the consumers’ behaviour. As a result, the management team will be able to adjust the firm’s marketing strategies effectively.
Moreover, market segmentation will enable the firm to effectively exploit the market opportunities in addition to dealing with the market challenges.
Shunji Matsuo’s management team will ensure that the market segments are substantial, differentiable, measureable, accessible and actionable11.
The firm will take into account a number of market segmentation basis which include geographic, behavioural, psychographic and demographic segmentation.
With regard to demographic segmentation, Shunji Matsuo Hair Studio will consider incorporating a number of variables. Some of the demographic variables that the firm should incorporate include age, gender, income, occupation, and social class.
Currently, consumers of different age groups in Singapore are increasingly visiting salons in an effort to look beautiful. Due to growth in technology, most hair salons in Singapore have become very innovative.
Technology has led to emergence of various hair styles such as perms’, hair irons and colorants. These styles and innovations are very popular amongst the younger generations because they them feel more fashionable.
Findings of a study conducted by PR Newswire revealed that approximately 39% of men aged between 18 to 34 years interviewed visit salons for a haircut once a week. This is relatively high compared to only 6% of the women who visit hair salons weekly.
Additionally, there is emergence of a new trend whereby a large number of women are visiting hair salons as they grow older. This trend has emanated from the need to improve their appearance.
The trend is also evident in Singapore. As a result, it is paramount for Shunji Matsuo Hair Studio to consider marketing its products to the aged.
Findings of a study conducted by Euromonitor International in 2009, personal grooming is an important aspect amongst Singaporean women. This arises from emergence of a trend whereby both genders are increasingly patronising salons.
A study conducted by Euromonitor International revealed that grooming amongst men has undergone significant growth from 2012.
The firm’s management teams should also consider the consumers’ purchasing power. Consequently, it is paramount for the firm to take into account the consumers’. One of the factors that consumers take into account prior to making a purchase decision is their level of income12.
With regard to psychographic segmentation, the firm should evaluate the target customers’ interests, attitudes, values and opinions with regard to beauty.
To be effective in integrating the concept of psychographic segmentation, the firm should undertake a comprehensive consumer market research. This will enable the firm to understand the consumers’ interests and attitude towards beauty.
In addition to the above personal attributes, the firm should also analyse the activities undertaken by the various customers that it targets. This will enable the firm to be innovative with regard to developing hairstyles and haircuts that are aligned with the customers’ needs.
Seeking the customers’ opinion will also improve the effectiveness with which the firm comes up with hair salon services that easily gain market acceptance. Incorporating the consumers’ psychographics is vital in helping an organisation design products that suite the market.
For example, an organisation is able to set the price of its products or services at a point that acceptable to the market. As a result, the probability of Shunji Matsuo maximising its sales revenue and hence its profitability will be increased13
The firm should also integrate behavioural market segmentation. Some of the behavioural variables that the firm should consider include the users’ status, brand loyalty, and the benefits sought.
Currently, consumers are increasingly focusing on developing consuming products and services that communicate their self-worth and status.
To be effective in developing products and services that attract a large number of customers, it is paramount for the firm to ensure that it offers hair services that are unique and meet the customer’s needs14.
Customer expectations
Consumers have certain anticipations regarding certain products and services. The expectations emanate from internal and external sources such as past experiences and external information.
Considering the intense competition in the beauty industry, Shunji Matsuo’s management team ensures that its customers derive unique experience by patronising the salon.
The firm offers its customers personalised services. This has played a critical role in dealing with the unique characteristics of the services it offers. These services include intangibility, perishable, inseparability, and heterogeneous.
Service as the boundary spanning
One of Shunji Matsuo’s marketing objectives is to increase the size of its customer base in order to maximise its profit. To achieve this, the firm appreciates the importance of customer focus. The firm’s employees are required to ensure that their activities contribute to improved customer value.
As a result, Shunji Matsuo has integrated a continuous employee training program that is aimed at developing the employees’ level of professionalism.
By training its employees, Shunji Matsuo has successfully transformed the various hair salon services offered into a connector between the firm and the customers. In summary, the firm’s employees play a critical role in spanning the firm’s boundaries.
Service product analysis
Shunji Matsuo is committed towards developing a strong customer relationship. As a result, the firm has the concept of product differentiation in an effort to attain the desired market position and to attract new customers. The firm has achieved this by appreciating the concept of servicescape.
Shunji Matsuo has integrated the stimulus-organism-response theory in an effort to influence customers. One of the ways through which the firm achieves this is by ensuring a high level of professionalism in the course of delivering services.
The firm has incorporated a comprehensive employee training program. The program is aimed at equipping the employees with emerging skills and knowledge on how to serve and treat customers.
Secondly, the firm appreciates the role of physical evidence in delivering services. To appeal to the customers’ emotions, the firm has created an effective ambience by integrating the concept of interior designing.
The salon has an appealing layout and is fitted with modern salon technologies and equipments. As a result, Shunji Matsuo is able to satisfy its customers’ emotional and psychological needs.
For example, the salon’s interior is painted with a mixture of colours hence giving customers with a feeling of satisfaction.
Moreover, the salon is fitted with air conditioners which aid in maintaining the room temperature. The salon also promotes employee-customer interaction and customer-customer interaction.
The employees are trained to be courteous and honest to clients. Additionally, employees are required to consult with the customers before offering any service.
This is vital in ensuring that the customers are optimally served. The firm servicescape is also enhanced by the CRM software that the firm has integrated.
Service provider analysis
Service quality is an important component that service-oriented firms should incorporate in their operation.
Service quality can be evaluated by integrating the SERVQUAL model which is comprised of five main dimensions. These dimensions entail reliability, empathy, assurance, tangibility, and assurance.
The tangible dimension refers to an organisation’s physical evidence. Shunji Matsuo has attained the element of physical evidence by establishing outlets in various parts of Singapore. The outlets are well designed and strategically located in various parts of the country.
Consequently, a large number of potential customers are able to access the store. The firm has designed outdoor posters which direct customers on how to access the store.
Shunji Matsuo is very reliable in delivering services. The firm’s frontline officers are very courteous in the process of offering services to customers. For example, all customer enquiries are satisfactorily responded to hence increasing the level of customer satisfaction.
In an effort to satisfy customers, the firm advocates for a high degree of accuracy in serving customers.
One of the ways through which the firm achieves this is by consulting the clients on their service needs and expectations before offering the service. The firm’s employees are very competent in undertaking their jobs.
To assure the employees, the firm is concerned about the customers’ beauty and appearance. As a result, the firm provides hair salon services that are unique hence improving the customer’s self-worth.
Shunji Matsuo has implemented an effective external communication system which enables the firm to interact with the customers. Moreover, the firm’s employees are very empathetic. This evidenced by the fact that they are very patient and pays attention to the customer’s needs.
As a result, the firm has managed to develop a strong customer relationship. The courteous nature of the firm’s employees has significantly contributed to improvement the level of customer loyalty.
Consumer perceived risk
Perceived risk refers to the degree of uncertainty associated with purchasing and consuming a particular product.
Shunji Matsuo will evaluate the perceived risk of its target market. In the process of developing its marketing strategies, it is paramount for Shunji Matsuo’s management team to take into account the various types of perceived risks.
Some of these risks include economic risks, ego risks, social risks, psychological risks, physical risks and performance risk. Economic risks relate to the financial loss associated with purchasing a particular product or service.
The salon industry in Singapore is characterised by a relatively low economic risk. This is evidenced by its resilient nature. Most Singaporeans have integrated consumption of beauty products and services as a part of their daily routine.
Consumers in Singapore have experienced challenging economic times over the past decade. As a result, the level of consumer confidence has declined significantly.
This is evidenced by the 2007/2008 economic recession which made most consumers to review their consumption behaviour. Economic recession leads to increment in the level of stress amongst consumers.
In an effort to minimise their level of stress, most Singaporeans are increasingly focusing on improving their wellbeing.
This has led to emergence of self-care trend whereby consumers are seeking beauty services in so as to feel refreshed and rejuvenated. Beauty firms that offer high quality services in Singapore are likely to benefit from this trend
The firm should also evaluate the ego risks. This relates to evaluating how consuming a particular product or service impacts the consumers respect, prestige and status.
In order to minimise ego risks, it is paramount for Shunji Matsuo’s management team to ensure that the services offered contribute towards improvement in the consumers’ status and self-ego. The firm will ensure that that the services it offers result in attainment of the desired outcome or feeling.
Hair salons are associated with a relatively low perceived risk compared to other products. By offering high quality hair salon services, Shunji Matsuo will significantly minimise the performance risk associated with its products15.
To survive in the long term, Shunji Matsuo’s management will also ensure that the salon services it offers lead to a high level of emotional and psychological satisfaction. Understanding psychological risk will enable the firm to improve the level of customer loyalty.
Shunji Matsuo’s management team will also take into account time risk which refers to the amount of time that consumers take during their decision making process.
To minimise this risk, Shunji Matsuo’s marketing department will create substantial market awareness regarding the services offered within the firm.
Method by which demand and supply is managed
To satisfy its customers, the firm has incorporated a comprehensive blueprint which outlines the sequence of service delivery.
The blueprint is comprised of the customer’s actions, visible contact with the firm’s employees, backstage or invisible contact with the employees and the support processes. The chart below illustrates Shunji Matsuo’s blueprint.
To stimulate market demand, the firm ensures that adequate market awareness is created. This is achieved through integration of various promotional strategies. This informs and persuades customers to seek the firm’s services.
Upon visiting the store, a customer is welcomed by a frontline officer who provides detailed information regarding the services offered. The customer is then booked into the salon’s queuing system in order to be served.
The frontline then informs the hair stylists regarding the customer’s needs. The queuing system is very effective in ensuring that customers are served systematically.
Analysis of customer quality, satisfaction, perceived value and customer retention efforts
In their quest to enhance the level of their competitiveness, it is essential for a firm’s management teams to evaluate whether its products and services are aligned with the market needs. Moreover, a firm should analyze whether the product contribute to a high level of customer satisfaction.
Such an analysis provides firm’s management on the customer’s perceived value. It also informs a firm’s management team on the most appropriate customer retention strategies to adopt.
To achieve this, firm’s management should undertake a comprehensive market research16. Shunji Matsuo has integrated the concept of market research. The firm undertakes primary and secondary market research.
The research mainly focuses on two main market variables which include the firm’s competitors and customers.
Consumer market research enables the firm to understand the consumers’ decision making process, their level satisfaction amongst and the perceived value. Consumer market research has enabled the firm to incorporate effective customer retention strategies.
Shunji Matsuo has incorporated the concept of Consumer Relationship Management (CRM) in an effort to understand the prevailing market changes. Decision to incorporate CRM was motivated by the low-involvement nature of the service offered.
The firm mainly targets fashion conscious customers. Shunji Matsuo has implemented CRM software in an effort to access market feedback. Customers are able to submit their opinion regarding the services offered by the firm through the CRM software.
The firm is also able to develop a strong relationship with its customers. By reviewing such feedback, the firm is able to improve on its services and the delivery process.
Current pricing strategies
Price refers to the amount of money that an organisation charges for its product or service. It depicts the value that the consumer is required to exchange for a product or service. Pricing is a complex process.
As a result, it is important for an organisation to analyze a wide range of information in order to set the most effective price. The main category of information that an organisation should collect relate to information on costs, competition and the customer’s value.
Information on the customers’ value gives the firm a clue on the value that the customer as attached to a particular product or service. On the other hand, competitor information enables an organisation to set the price of its product or service at the most competitive point.
An organisation should also conduct a cost benefit analysis by evaluating the variable and the fixed costs associated with a particular product or service. Cost-benefit analysis gives an organisation a clue about the price point that it should set in order to be profitable17.
Currently, Shunji Matsuo Hair Studio has adopted the concept of value pricing in order to attain their desired marketing and corporate objective. For example, the firm has set the price of its AVEDA hair-care products at $180 dollars.
Upon purchasing the product, the customer is awarded an aromatic set whose cost is $55. Value pricing strategy has played a significant role in improving the customers’ perceived value. This is due to the fact that consumers receive additional benefits by consuming the firm’s products.
In its pricing strategy, the firm has integrated psychological pricing. As a result, the firm has been able to influence the consumers’ decision making process.
For example, the firm has set certain hair cut at $ 75. According to the firm’s marketing manager, adoption of value pricing has significantly enhanced the firm’s competitive advantage.
Current promotional strategies
To increase their customer base, it is important for organisations to incorporate effective promotional strategies in order to inform and persuade potential customers.
One of the ways through which an organisation can effectively promote its products is by adopting the concept of Integrated Marketing Communication (IMC).
Over the past few decades, the beauty industry in Singapore has undergone significant growth. Consumers of diverse demographic characteristics are integrating consumption of beauty products.
To exploit the emerging market trend, it is important for the firm’s management to create sufficient market awareness regarding its services.
Currently, the firm adopt both pull and push strategies. Pull strategies entails integrating both emerging and traditional marketing strategies.
Some of the traditional strategies that the firm should integrate include undertaking sales promotion, advertising, public relations and direct marketing. Shunji Matsuo has also integrated the concept of price discounts in its sales promotion efforts.
To celebrate the 2013 Mothers’ Day, the firm designed a price discount program whereby all the mothers were to receive a 28% discount on all hair services for the entire month.
By offering discounts, the firm will attract new customers hence increasing the probability of developing a strong customer base.
With regard to public relations, the firm has also incorporated the concept of endorsement by collaborating with renowned celebrities such as musicians and model.
For example, on 20th May 2013, the firm held a public event which was aimed at introducing the Shiseido Professional product in its hair studio.
Some of the guests who were invited during the event include Lydia Izzati who is a renowned blogger and teen actress. Such endorsements play an important role in the firm’s effort to improve the consumers’ perception towards its services.
The firm also participates in various beauty events. For example, in 2013, the firm was one of the sponsors of Mrs Singapore. Its hairstylists offered some of the beauty pageants various hair salon services.
The firm is also one of the sponsors of the 2013 NAFA Graduation Fashion Shows. By sponsoring such events, the firm has been able to bond with a wide range of potential customer groups.
To create awareness to a large number of potential customers, the firm utilises traditional and emerging marketing communication mediums. Some of the mediums that the firm has integrated include radios, televisions, print mediums and outdoor advertising such as billboards.
The firm also uses emerging technologies for example the internet. By incorporating the above promotional strategies and mediums, the firm has been able to differentiate, remind, inform and persuade its clients.
Marketing strategy
Target market
Currently, Shunji Matsuo targets high income customers. This may limit the likelihood of the firm attaining the desired level of profitability considering the competitive nature of the beauty salon industry in Singapore.
Therefore, it is paramount for Shunji Matsuo’s management team to incorporate low income customer groups.
This will significantly improve the firm’s market position hence improving its long term survival18. To attain an optimal market position, Shunji Matsuo Hair salon should ensure that it offers its customers’ high quality services.
Product strategies
Previous studies conducted reveal that incorporating marketing mix is a critical aspect that organisations should consider in their marketing process19. Shunji Matsuo is committed towards developing a strong customer base.
To achieve this objective, it is paramount for the firm’s management team to improve its marketing mix strategies. Considering the fact that the firm deals with services, it is important for the firm to integrate other marketing mix strategies which include people, physical evidence and process.
Marketing services is challenging compared to marketing goods. This arises from the fact that services are intangible20. Despite this, the effectiveness with which service firms such as hair salons market their products determines their success.
In the course of its operation, Shunji Matsuo has incorporated the concept of product diversification in an effort to meet the customer’s needs.
Some of the services that the firm offers includes diverse head spa treatments, colouring, hair straightening, body treatments, blow drying, cutting, and shampooing.
By offering these services, the firm has been able to attract a large number of customers. This arises from the fact that the service contribute to the customers feeling relaxed and healthier.
Secondly, the firm offers various signature treatments such as Arimino Caretrico Treatment, Sherpa and Prego Nano Moisturising Technology.
In its quest to attain an optimal market position, the firm ensures that the services it offers are up-to-date by integrating emerging market trends. As a result, the firm is able to provide its customers with new hair styles and haircuts that appeal customers.
The firm also ensures that the services offered contribute to customers receiving value for their money. To ensure effective service delivery, Shunji Matsuo ensures that its workforce is well trained. The firm’s employees are required to be friendly, helpful and attentive to the customers.
Moreover, they are required to consult the customers prior to serving them. This plays a fundamental role in ensuring that the service delivered is aligned with the customers’ expectations.
Considering the competitive nature of the beauty industry in Singapore, it is paramount for the firm’s management team to consider improving its product offering.
To achieve this, the firm should undertake continuous service innovation in order to align itself with the changing customer tastes and preferences.
Pricing strategies
Pricing is one of the most important factors that firms’ management teams should consider in their quest to attain their desired level of profitability21. However, setting the price of a product or service is a complex task.
This arises from the fact that it requires the input of various departments such as the production, marketing, accounting and the finance departments. Prior to setting the price of its services, it is paramount for Shunji Matsuo Hair Studio to take into account diverse factors.
Some of these factors include the environmental, market, company and product or service specific factors.
To be effective in setting the price of its set the price of its services, Shunji Matsuo should undertake a comprehensive market analysis. One of the market variables that the firm’s management team should take into account includes the competitors.
The firm should evaluate of its competitor’s pricing strategy. This will enable the firm to set the price of its products competitively.
Shunji Matsuo Hair studio specialises in providing customers with high quality hair salon services. Consequently, the firm should consider integrating premium pricing strategy.
This strategy entails setting the price of a firm’s products or services at a point that is relatively high compared to competitors. Premium pricing strategy will enable the firm to communicate the high quality of its hair salon services.
As a result, the firm will be able to meet the customers’ psychological needs such as status, lifestyle and social class. Most consumers associate high price with quality.
In addition to premium pricing, the firm should also consider integrating psychological pricing strategy in order to appeal to the consumer’s emotions. This will enable the firm attract a large number of customers22.
Promotional strategies
Currently, consumers are increasingly using the internet in the process of searching for various product and service information.
Therefore, it is important for the firm’s management team to consider exploiting the opportunity associated with this trend. The firm can achieve this by partnering with major search engines such as Google, Yahoo and MSN.
Additionally, emergence of social networks also presents a unique opportunity for the firm to create awareness to a large number of potential customers23.
Some of the social networking tools that the firm should consider integrating include You Tube, Wikis, and Blogs. The firm can post images of celebrities who patronise the salon and the services offered. This will play a critical role in influencing the consumers’ decision making process.
Using social networking tools will improve the effectiveness with which the firm interacts with its customers hence understanding their needs.
Moreover, social media will make the marketing communication process more interactive. As a result, the firm will be able to develop a strong customer relationship.
Distribution strategy
The hair salon will ensure that its services are easily accessible by a large number of customers. To achieve this, Shunji Matsuo will establish branches in different parts of the country.
The outlets will be strategically located in shopping malls, estates, major towns, cities and other parts of the customers’ neighbourhoods. The firm will ensure that the various branches established offer optimal hair salon services.
People
To satisfy its customers, Shunji Matsuo hair salon should ensure that it offers high quality services. Considering the intangible characteristic of the services offered by the firm, it is important for the firm’s management team to ensure optimal service delivery.
One of the ways through which the firm can achieve this is by training employees to offer personalised services24. The firm will also train its employees to be courteous to the customers. This will contribute towards development of a strong bond between the customers and the employees.
Furthermore, offering personalised services will lead to development of customer loyalty. Shunji Matsuo Hair Salon should improve its service delivery by ensuring that the firm is adequately staffed.
Process
In the course of its operation, Shunji Matsuo should ensure that it designs effective workflow processes. One of the ways through which the firm can achieve this is by integrating the concept of queuing. This will improve the effectiveness with which services are delivered within the firm.
Additionally, the firm should ensure that its employees such as hairdressers appreciate the importance of offering services in a coordinated manner. The firm should also ensure that the employees are accurate in the process of delivering services.
Physical evidence
This refers to the various physical elements that customers come across in the process of purchasing a product or service25. Shunji Matsuo should ensure that its salons are effectively designed, decorated and furnished.
The firm’s management team should also ensure that the salon is always kept clean. This will stimulate a sense of comfort amongst customers’ when they are in the salon. The firms should also increase the number of outlets.
Reference List
Ahonen, Tomi, Kasper, Timo and Melkko, Sara. 3G marketing: communities and strategic partnership. Chichester: John Wiley and Sons Limited, 2004.
Anandan, Charles. Product management. New Delhi, Tata, McGraw-Hill, 2009.
Berkowitz, Edward. Essentials of health care marketing. Sadbury, MA: Jones & Bartlett, 2011.
Bhasin, Balbir. Doing business in the ASEAN countries. Singapore: Business Expert Press, 2011.
Blakely, Edward and Leigh. Planning local economic development: theory and practice. London: Sage, 2009.
Bryman, Andrian and Bell, Edward. Business research methods. Oxford, Oxford University Press, 2007.
Campbell, Daniel and Houston, Bryman. Business Strategy: An Introduction. Oxford: Elsevier: Butterworth-Heinemann, 2009.
Creswell, John. Research design: qualitative, quantitative and mixed method approaches. Newbury, CA: Sage Publishers, 2003.
Diane, Richard. Recent trends in US services trade, 2008 annual report. New York: Cengage, 2008.
Ferrell, Charles and Hartline, Michael. Marketing strategy. Mason, OH: Thomson South-Western, 2008.
Ferrell, Orian, Michael, Smith and Hartline, Michael. Marketing strategy. Ohio: Cengage Learning, 2003.
Fifield, Paul. Marketing strategy master class. Oxford: Butterworth-Heinemann, 2008.
Fortenberry, John. Healthcare marketing: tools and techniques. Sudbury, MA: Jones and Bartlett Publishers, 2010.
Havaldar, Krishna. Business marketing: texts and cases. New Delhi: Tata McGraw Hill Education, 2010.
Hitt, Michael, Ireland, Duane and Hoskisson, Robert. Strategic management: competitiveness and globalization. Mason, OH: Cengage Learning, 2007.
Ingenbleek, Paul, Debruyne, Marion, Frambach, Ruud and Verhallen, Theo. Successful New Product Pricing Practices: A Contingency Approach (Atlanta: Wageningen University, 2003), 4.
Kumar, Simon. Marketing and branding: the Indian scenario. New Delhi: Dorling Kindersley, 2007.
MontGomery, Charles. Strategy: seeking and securing competitive advantage. Harvard: Harvard Business Press, 2008.
Nyholm, Charles. Product line development: an overview. London: Sage, 2002.
Pride, William and Ferrell, Orian. Marketing: concepts and strategies. Boston, Houghton, 2003.
Pride, William and Ferrell, Charles. Marketing. Boston: Houghton Mifflin, 2008.
Radomski, Michael and Trombly, Charles. Occupational therapy for physical dysfunction. Baltimore, MD: Wolters, 2008.
Saee, John. Contemporary corporate strategy: global perspective. New Jersey: Routledge, 2007.
Sandhusen, Richard. Marketing. London: Barron’s Educational Series, 2008.
Stevens, Loudon and Wrenn, Brian. Marketing planning guide. New York: Routledge, 2006.
Tafani, Edward and Michael, Gerald. Vertical product line extension strategies: an evaluation brand halo effect according to range level. Miane: University of Maine, 2009.
Winston, William. How to write a marketing plan for healthcare organizations. New York: Routledge, 2012.
Wirtz, Jochen and Chung, Cindy. Marketing in Singapore; macro trends and their implications for marketing management. Nanyang: University of Singapore, 2002.
Footnotes
1 Tomi, Ahonen, Kasper, Timo and Melkko, Sara. 3G marketing: communities and strategic partnership (Chichester: John Wiley and Sons Limited, 2004), 54.
2 William, Winston. How to write a marketing plan for healthcare organizations (New York: Routledge, 2012), 234.
3 Jochen, Wirtz, Jochen and Chung, Cindy. Marketing in Singapore; macro trends and their implications for marketing management (Nanyang: University of Singapore, 2002), 282.
4 Paul, Fifield. Marketing strategy master class (Oxford: Butterworth-Heinemann, 2008), 123.
5 John, Fortenberry. Healthcare marketing: tools and techniques (Sudbury, MA: Jones and Bartlett Publishers, 2010), 38.
6 Charles, Anandan. Product management (New Delhi, Tata, McGraw-Hill, 2009) 45.
7 Michael, Hitt, Ireland, Duane and Hoskisson, Robert. Strategic management: competitiveness and globalization (Mason, OH: Cengage Learning, 2007), 74.
8 Edward, Berkowitz. Essentials of health care marketing (Sudbury, MA: Jones & Bartlett, 2011), 98.
9 Daniel, Campbell and Houston, Bryman. Business Strategy: An Introduction (Oxford: Elsevier: Butterworth-Heinemann, 2009), 65.
10 Balbir, Bhasin. Doing business in the ASEAN countries (Singapore: Business Expert Press, 2011), 231.
11 Krishna, Havaldar. Business marketing: texts and cases (New Delhi: Tata McGraw Hill Education, 2010), 146.
12 Richard, Diane. Recent trends in US services trade, 2008 annual report (New York: Cengage, 2008), 23.
13 Charles, Ferrell and Hartline, Michael. Marketing strategy (Mason, OH: Thomson South-Western, 2008), 64.
14 Edward, Tafani and Michael, Gerald. Vertical product line extension strategies: an evaluation brand halo effect according to range level (Miane: University of Maine, 2009), 149.
15 Orian, Ferrell, Michael, Smith and Hartline, Michael. Marketing strategy (Ohio: Cengage Learning, 2003), 125.
16 Simon, Kumar. Marketing and branding: the Indian scenario (New Delhi: Dorling Kindersley, 2007), 33.
17 Paul, Ingenbleek, Debruyne, Marion, Frambach, Ruud and Verhallen, Theo. Successful New Product Pricing Practices: A Contingency Approach (Atlanta: Wageningen University, 2003), 4.
18 Charles, MontGomery. Strategy: seeking and securing competitive advantage. (Harvard: Harvard Business Press, 2008), 73.
19 Charles, Nyholm. Product line development: an overview (London: Sage, 2002), 60.
20 William, Pride and Ferrell, Orian. Marketing: concepts and strategies (Boston, Houghton, 2003), 79.
21 Edward, Blakely and Leigh. Planning local economic development: theory and practice (London: Sage, 2009), 43.
22 Michael, Radomski and Trombly, Charles. Occupational therapy for physical dysfunction (Baltimore, MD: Wolters, 2008), 84.
23 John, Saee. Contemporary corporate strategy: global perspective (New Jersey: Routledge, 2007), 65.
24 Richard, Sandhusen. Marketing (London: Barron’s Educational Series, 2008), 176.
25 Loudon, Stevens and Wrenn, Brian. Marketing planning guide (New York: Routledge, 2006), 253.