April, 2010 INTERNET MAKRKETING PLAN Fruition Day Spa Capilano University BMKT 369 – Ivan Surjanovic Gagan Mahal Jingyi Niu Janine Cannon Raquel Del Nero Zhang Siwei Table of Contents Executive Summary ............................................................................................................ 3 Introduction ....................................................................................................................... 5 About the company ............................................................................................................. 5 Vision................................................................................................................................ 5 Strategic Goals ................................................................................................................... 5 Situation Analyses .............................................................................................................. 6 Industry trends .................................................................................................................. 6 Competition ....................................................................................................................... 8 Opportunity ....................................................................................................................... 9 Company’s Strengths and Weaknesses................................................................................... 9 SWOT Table ..................................................................................................................... 11 Marketing & Internet Marketing Objectives ........................................................................... 12 Target Profit..................................................................................................................... 12 Target Online Sales Profit ................................................................................................... 13 Target Offline Sales Profit .................................................................................................. 13 Target Website Traffic ....................................................................................................... 13 Alternative Evaluation........................................................................................................ 14 Marketing Objectives ......................................................................................................... 14 Our suggestion: ................................................................................................................ 15 Marketing Mix .................................................................................................................. 17 Product ........................................................................................................................... 17 Price ............................................................................................................................... 17 Promotion ........................................................................................................................ 17 Place / Distribution............................................................................................................ 20 Market Space Matrix.......................................................................................................... 20 Target Market Strategy:..................................................................................................... 22 Online target market: ........................................................................................................ 22 Offline target market:........................................................................................................ 22 Positioning strategy: ......................................................................................................... 22 Business and revenue model strategies: ............................................................................... 23 Multi-channel distribution strategy: ..................................................................................... 23 Communication Mix ........................................................................................................... 24 Communication Budget: .................................................................................................... 25 The Control of the Overall Project ........................................................................................ 25 Methodology .................................................................................................................... 25 What You Do .................................................................................................................... 26 What We Monitor .............................................................................................................. 26 Citations .......................................................................................................................... 28 2 Executive Summary Fruition Day Spa, located in North Vancouver, is an affordable high quality service spa. Fruition has efficiently succeeded in maintaining their vision. The products they offer are similar to those available in high end resort spas. The price of their services are very affordable, so the making the services less expensive will only hurt the image of quality services. Marketing Co. would like to help promote the spa and increase awareness through use of keyword popularity tools. We would also like to strengthen the awareness of Fruition’s ability to sell and distribute gift cards online. There are many trends occurring in the spa industry, including medical spa treatments in the spa menu, as well as the new opportunity of targeting men who have become more interested in spa services. Becoming a branded spa is also an industry trend. One excellent way of branding your business is to have a company website. Fruition currently has a website with sufficient content regarding services and products offered, location, and promotions. However, there is also room for enhancing the website. Fruition’s strengths include the affordable prices and quality of service in an intimate and less intimidation environment. Although there are male oriented services available at Fruition, there is a weakness. The website theme is strictly feminine and would not appeal to the male market and therefore there are fewer male customers. The website also has room for improvement. The target market of Fruition includes men and women between the ages of 16 to 65 with middle to high income. These customers also live in a close geographic proximity to Fruition. The members of Marketing Co. have analyzed the spa industry, Fruition’s website, target market, and strengths and weaknesses. Through our experience with website optimization and design we have determined three things. First, Fruition’s website requires more efficient use of imagery. As it stands there is not something eye catching on the homepage to draw web users into the site. Second is search engine optimization through the use of Google AdWord campaigns and keyword saturation throughout the website and page titles. Third is to increase links to Fruition’s website to improve their traffic and page rank. 3 Through the use of these marketing tactics Marketing Co.’s goal is to increase Fruition Day Spa’s traffic rank and page relevance and extend the reach through use of AdWord campaigns. We will be doing ongoing evaluations to determine the effectiveness of these strategies. In turn, these strategies will generate an increase in revenue to Fruition Day Spa. 4 Introduction About the company Fruition Day Spa was founded in 2001 by Laura Gobbo, who is now the President of Fruition. It is located on Dollarton Highway in North Vancouver, British Columbia. Fruition has been recognized in popular magazines for their services1. Vision “Have a smaller, more intimate and more affordable Spa that appeals to people who have never visited a spa, or who prefer a less intimidating and more relaxing experience than achieved through visiting a typical large spa”1. Strategic Goals Be profitable but affordable to their target market, which is people with middle to upper income. They are to do this through franchising. The Day Spa’s will only be open in one area each so they do not intrude on other franchisers’ territory1. 1 Fruition Day Spa Canada. (n.d.). Retrieved April 5, 2010, from Fruition Day Spa: http://www.fruitiondayspa.ca/Default.aspx 5 Situation Analyses Industry trends There are 7 trends that have been recently occurring in the spa industry. 1. “Better, Cheaper, Faster”2 With the way the world is going, everything is speeding up. Technology has made communication faster, has made travelling faster, and even cooking faster. However, for some reason people still are finding that they never have enough time. Especially when it comes to enjoying a peaceful spa service every once and awhile. One of the major competitive advantages for spa’s at the moment are to provide high quality, reasonable priced, yet quick services to satisfy their customer needs2. 2. “Niche Equals Rich”2 It is growing more and more important for spa’s to distinguish their role in the marketplace. Once a clear identity is established it helps consumers position the spa to help them fulfill a need they may have. Due to the fast paced environment and improvements in services, it is important to maintain values, and image to be profitable in the industry2. 3. “Medical Spa Mania”2 Combining medical spa treatments with relaxing spa treatments has become a trend. Many consumers, especially middle aged men and women with middle to high incomes, have become more and more interested in medical treatments, such 2 7 Trends in the Spa Industry - Massage Magazine. (n.d.). Retrieved April 5, 2010, from Spa Massage News: http://www.massagemag.com/spa/news/107.php 6 as microdermabrasion, pulse lighting to remove fine lines and redness, and botox injections2. 4. “Corporate Connection”2 Corporate clients are helping to bring a significant revenue into day spas. It is a trend now that spa services are provided at corporate events and many planners are coming to spas and using the area as a place to have meetings and conferences while enjoying a service2. 5. “Branded Spa”2 Spa that are known regionally and nationally. These spas tend to group in certain areas, and the Branded Spa provides the same management, marketing, and technology practices to all the spas under the same name2. 6. “Retail Rallying”2 Customers are increasingly become more interested in the ingredients and the benefits of the products sold and used in spas. Especially with the Green Trend that has been occurring. Many people are interested in the environmental contributions that the supplier of the products have. This knowledge is now part of the decision criteria of the buyer. Having home-care protocols part of the service and selling technique helps to bring in revenue and increase the importance of homecare products in the consumers mind. This helps to increase loyalty to the spa, especially when the product does exactly what the customer is told it will do. It is important to have a strong retail selling strategy2 2 7 Trends in the Spa Industry - Massage Magazine. (n.d.). Retrieved April 5, 2010, from Spa Massage News: http://www.massagemag.com/spa/news/107.php 7 7. “Say Goodbye to Stereo Types”2 Now there are no stereo types for the typical sap goer. The services offered are now considered a part of keeping your self-care balanced. This is happening more and more because day spas are becoming much more common. Spas are now considered more of a social outing and meeting place creating as extended customer profile2. 8. “More Man!” There is also an increase in male spa goers in the recent years. Competition There is a lot of competition in the surrounding area in North Vancouver. Day spas are only beginning to establish in North Vancouver, and many of them offer fairly small facilities. Spa Utopia is a large corporate Spa that is nationally known and has the ability to offer much more in a larger area. Absolute Spa is another well-known large spa that targets high income consumers in resorts for the most part. Many celebrities have come to Absolute Spa and have left testimonials. Fruition Day Spa is in a completely different level and, with their current market share, could not compete efficiently with such large spas. The main competition are the smaller salons with spa services like manicures, pedicures, and waxing, and the smaller Nail Bars. They are much more numerous and the cost for services are much cheaper. Although the quality of service is by far much less than what Fruition can offer, many consumers (especially in North Vancouver), are not used to paying more for similar services even if they are better quality. 8 Opportunity Many opportunities are arising with new trends becoming more relevant to the success of a day spa. Fruition is currently offering a franchisee program1. This will help improve their name and create a Branded Spa, which is one of the trends. They are providing more affordable services, however, there is an opportunity to develop even quicker services since most of their services are over an hour with the option for many add-ons1. They offer only a few services that are 30 minutes1. Also, with the trend of having medical spa services available in day spas, there is an opportunity to partner with already existing medical spas, or to make the investment to bring medical treatments and technologies to the business. Now that the target market for day spas is much broader, the opportunity to clearly define and target a certain demographic is much easier as different spas may appeal to different people. There are also a lot more people using internet now than ever before. It is now advantageous to draw people to your spa through online tools as well. The website helps to define their brand and position the spa in consumers’ minds. Company’s Strengths and Weaknesses Strengths: Fruition offers a variety of services for both men and women of many ages. They have facials that are for teenagers and for aging , or acne skin. There are body scrubs and manicures and pedicures offered. Many of the retail products they offer are popular among consumers1. They have also had articles written about them in popular magazines, as well as nominations for favourite spa facility and 1 Fruition Day Spa Canada. (n.d.). Retrieved April 5, 2010, from Fruition Day Spa: http://www.fruitiondayspa.ca/Default.aspx 1 Fruition Day Spa Canada. (n.d.). Retrieved April 5, 2010, from Fruition Day Spa: http://www.fruitiondayspa.ca/Default.aspx 9 services for 20091. Since Fruition is a much smaller facility it is much less intimidating for people who are coming to a spa for the first time, or prefer more personalized services. Weaknesses: The website is not targeted towards men, even though there are male services available. If a man were to search on the internet and click on Fruition Day Spa, it is less likely they will look into the spa further. Currently there is only one location with opportunities to grow. The website is also not optimized to its full potential and the imagery and overall design is not efficient. They do not have many links to their website and could broaden the medical services that they are currently lacking. 10 SWOT Table Medical Treatments Franchise More internet users Broad Target Market Website Brand Image Lots of competition from smaller nail spas Large corporate spas Trend towards fast spa services Offer a variety of affordable services Recognized in Fashion Magazine Website not optimized Don’t offer many medical services One location only Offer affordable medical treatments Recognized Franchiser Optimize website Optimize website Partner with medical spa Open more locations in area Offer quick and affordable services that have similar quality to high end spas Target specific customers through use of online tools 11 Marketing & Internet Marketing Objectives Target Profit Our total profit is determined by our prices. In our prices we need to allocate money for labour and supplies, overhead, and profit. When these things are added into our prices we will be able to determine how much of a profit will be made. Certain expenses that will be added into labour will be benefits and salary costs for all of the staff. This cost can also vary depending on how much time is spent on certain services. Overhead expenses will include all of the costs that are required to run the day spa not including labour. This would include rent and utilities. This will amount to be about 40% of the labour and supplies. Our target profit is $318,208 per year. Income Statement Ending Dec.31st 2009 Fruition Day Spa Sales Fixed Expenses: Rent Salaries Expenses (Managers) Wages Expenses Appreciation Total Fixed Expenses Variable Expenses: Commission Expenses Product Expenses Total Variable Expenses $1,000,000 $ 312,000 $ 110,000 $ 14,400 $ 6,000 $ 442,400 $ 160,000 $ 36,000 $ 196,000 Total Taxes $ 43,392 Total Profit $318,208 12 Target Online Sales Profit Since most of the money is made in the store, it is hard to say how much profit would be adequate from the website. The only product that we sell online is a gift card to our spa. A target profit of 10% of total sales per year would be an awesome target. Making $31,820.80 ($318,208 x 10%) off of the website would be nice and achievable. Target Offline Sales Profit To achieve this is a simple mathematical equation that needs to be done. $318,208/52weeks =$6,119.38 $6119.38/77(hours a week- 10am-9pm (11hr days) =$79.47/hr >> $80/hr Staff will need to provide an $80 service to customers per hour so we can make this profit. We will also need to add profit margin of 10 % the total will come to $ 88 per hour. Target Website Traffic Our current web site traffic rank is 12,872,539. Our main competitors (Spa utopia) traffic rank is 1,167,489. We would want to be a lot closer to Spa Utopias traffic rank. A target for us would be somewhere near the 2,000,000 mark. 13 Alternative Evaluation We have evaluated each alternative based on Potential, Return on Investment, Cost, Timeline, and Ease of Implementation. Each alternative is scored from 1 – 5 in terms of desirability, and then tallied to see which the preferred alternative is. Potential of Growth Return on Investment Cost of Implementation Timeline Ease of Implementation Turns out we found the optimum choice for Fruition Day Spa is to implement entire strategic plan in order to achieve a systematic change throughout the company. All the criteria weighted the same at this point due to the urgency of improvement. Marketing Objectives Marketing Co. has determined three required strategies to achieve the target profit and increase web traffic and revenue to the company. 1) Fruition’s website requires more efficient use of imagery. As it stands there is not something eye catching on the homepage to draw web users into the site. We suggest changing the menu style of the website to something more easily navigated. Right now the menu is small and hard to read. When web users scroll over the menu items they tend to get hidden by other menu items. We also feel that we could make the homepage more interactive through use of YouTube videos related to the business. One suggestion to appeal to the male market would be to change the colour theme of the website as well. 2) Second is search engine optimization through the use of Google AdWord campaigns and keyword saturation throughout the website and page titles. We suggestion adding a little more text content to the homepage with keywords we will be highlighting later in the report. Fruition currently is using viral marketing tactics such as 14 Facebook and Twitter. Marketing Co. would like to see the use of YouTube as well. We would also like to optimize the use of blogging and RSS Feeds. 3) Third is to increase links to Fruition’s website to improve their traffic and page rank. An excellent site to link to us would be spasincanada.ca. They are a website that indexes spas throughout Canada and helps consumers locate spas near them. A blog will also improve link popularity to Fruition. Our suggestion: Initially our suggestion for the website would be as the image shown below: However, we highly recommend changing the theme color. As mentioned before, this website is not target towardsman, and changing the theme color to a more neutral color would definitely be more visual appealing to both men and women. The image below shows another theme color suggestion: 15 16 Marketing Mix Product Founded by Laura Gobbo in 2001, Fruition Day Spa has been recognized over the years in popular magazines for their services. It offers beauty services that goes form facial therapy to Hands and Feet care. Five different beauty packages are accessible for the clients: For Men; Lavender Luxury; Spa Escape; A Touch of Heaven and The Diva. However clients can also choose services outside the packages. Their main competitive advantage is the quality of services that they provide. Price In terms of pricing, Fruition Day Spa’s services have traditionally been sold at a premium price. As they are known for providing a high quality service we will continue to recommend this pricing strategy. Premium or prestige pricing is effective because the target market has higher disposable incomes than that of the general population. It would not be in the best interest to decrease the prices of products or services. Within the eyes of consumers there is an association with premium pricing and premium quality. Promotion a) Domain name Fruition Day Spa currently owns and operates the domain www.fruitiondayspa.ca b) SEO (brief description- suggest SEO for the home page) Due to Fruition Day Spa’s luxury services, initially we investigated the possibility of optimizing the site for the keywords beauty spa, and luxury spa (see graph below form google trends). 17 However, due to the large amount of sites already appearing in this search and a lack of geographic segmentation we wish to additionally optimize the site for the term “North Vancouver Spa”. This allows for greater ability to segment potential clients based on geographic location. Also, this geographical area has a higher average income than anywhere else in the GVRD and therefore has the ability to afford the high-end product offerings from Fruition Day Spa. This SEO will be achieved through the use of page titles, content and Meta Tags. These tactics when utilized are very effective in improving a site indexing on search engines. These tactics will be combined with additional links created through social media sites like Twitter and BlogSpot. This will increase the pages relevance on search engines increasing the site rank due to link popularity. The “home” page Fruition Day Spa will be optimized in accordance with the following table: Keywords to stress Day Spa, North Vancouver Spa Title Tag Day Spa – North Vancouver Beauty Spa Desc. Meta Tag Fruition Day Spa provides luxury services since 2001. Kw. Meta Tag North Vancouver Spa, Spa in North Vancouver, Beauty Spa in North Vancouver 18 URL www.fruitiondayspa.ca Text Title Fruition Day Spa – North Vancouver Beauty Spa First Paragraph Fruition Day Spa has been serving North Vancouver since 2001. Services we offer include: Relaxation massages, Body bliss … Alt Tags Day Spa – North Vancouver Beauty Spa Bold Spa (whenever they appear) Text Changes Include “North Vancouver Spa” and “Fruition Day Spa” in page content c) Advertising Keyword advertising will be used to promote the existence of the Fruition Day Spa site while increasing traffic. This will be based on a pay per click method via Google adwords. Again we will focus our keywords on geographic locations by buying ad space for the keywords “North Vancouver Spa”, and “North Shore Spa”. This will allow for geographic segmentation of web users and, as is evident in the image below, high rank can be achieved for low cost due to the lack of current advertising for the selected keywords. 19 d) Other promotion tactics Fruition Day Spa is currently implementing additional promotional tactics in the forms of print advertising, direct mail, discount vouchers and brochures. These tactics all drive traffic to the website with the hope of generating leads. Additionally, an EDM will be sent to the client database with the aim of increasing traffic and generating leads. The database will be drawn from site user activity data as well as current clients of Fruition Day Spa. Finally, Fruition Day Spa will contribute to a blog about beauty tips and advices, to create awareness for their brand. Place / Distribution The key-differentiating factor of Fruition Day Spa is their high quality of service. Therefore, we wish to create a mixed mode buying process in which the final purchase is made on a person-to-person level. This means that no purchasing will exist via the Fruition Day Spa site. However, e-mails and queries can be conducted between clients and Fruition Day Spa via either the site or personal e-mails. These interactions will include beauty information, quotes and general packages inquiries . Market Space Matrix Awareness Product Price Communication Dynamic Pricing Direct Mail Print Advertising Gift Cards Keyword Advertising SEO EDM Exploration Commitment Complimentary information packages Different pricing packages Website E-mail Telephone Direct Mail EDM Dissolution Customer Care Customer Compensation Personal interaction E-mail Telephone Loyalty programs Customer assistance 20 Community Distribution Yellow Pages Social Media C2C (Beauty advisor etc.) Individual Attention (emails phone calls etc.) E-mail Telephone Number of channels E-mail Telephone Mail 21 Target Market Strategy: Online target market: Fruition Day Spa has an entire new market segment that is virtually untapped. One of the fastest growing trends in the spa industry is men’s spa services and products created specifically for men. Fruition should start by creating a separate menu of men’s spa services and products that are catering specifically to men in their website. The best way to gain male interest is to set up advertisements in a visible position on the website. Use images detailing men’s facials and massages. Offline target market: Fruition needs to expand their location. Fruition needs to develop a marketing image and message promoting their skincare as the best local resource for customized facial treatments, massage, and body care therapies. Age Location Offline 20-50+ North and West Vancouver Gender Income (per year) Generation Benefits sought M/F $70,000 + Baby Boomer, G x, G y Service, Reliability Social class High level, Middle level Online 16-50 North and West Vancouver plus Lower Mainland M/F $50,000 + G x, G y Price, Online purchase, Quality, Service High level, Middle level Positioning strategy: Fruition Day Spa must position their brand as a high-end and high quality in comparison to their direct competition. This will differentiate the brand and allow them to occupy an empty segment of the local marketplace. In order to build the best positioning strategy, optimizing the website is a widespread way to promote the spa business. 22 Highly productive strategies to use: Establish partnerships with website owners and individuals who are targeting your same market. These people often have a large list of subscribers and customers can cross promote to Fruition’s spa services and products. Exchange links to the website with other spa industry related websites. For example, they can link the website address to www.spasincanada.ca. This is another effective strategy for generating the website for free. It involves contacting other website owners for a possible link exchange partnership. Submit the website address to blog search sites. And submit the website URL to websites such as Digg, etc. Having a blog is another way to build daily commentary about Fruition spa treatments and services. It also helps in building a relationship with their readers and clients. Such as, Facebook, Twitter, etc. Create RSS feeds for fruition website and submit the feed URLs to the major RSS feed directories online. Also make the website more user friendly by making the format of the site different, including more images and content. Business and revenue model strategies: Fruition Day Spa operates as a standard day spa has instituted that cost of products and services sold is 10% of sales on the basis of the projections provided in the case. The sales and marketing is projected to the major expense. In the following years it has been projected at a lower level. The advertising and promotion would continue but the initial costs would be higher. Multi-channel distribution strategy: Fruition Day Spa can begin to offer affordable medical treatments to keep up with the trends and advertise this by utilizing both online and offline sources. This will begin attracting future customers. Also, Fruition can offer online promotions to draw more people to their business. 23 Strategies: Set a link on the website that customers can use to redeem their direct mail coupons Offer bundle package deals. They could use this kind of deal to get more people to purchase spa products and try out new services. They could mail their clients or prospects a sample of spa or cosmetic products. They can send them a free instruction DVD to compliment the products. Communication Mix Communication Type Strategy Online PR Online Partnerships Search Marketing Offline Communication Viral Marketing Opt-in E-mail Interactive Ads Total $980 SEO AdWords Continue relations with Fashion Magazine to keep in contact with media Blog RSS Feeds Twitter, Facebook, Youtube Increase links with businesses targeting same consumers Affiliate marketing Direct mail – includes promotions and coupons Spa shows WOM Advertising – billboards and bus stop signs Sales promotions through staff E-newsletters Can sign in for a e-newsletter on website and to send to a friend Twitter, Facebook, Youtube Adwords Be party to other company’s e-newsletters Adwords with landing page Banner Ads 24 Communication Budget: Item Cost Per Month Cost per Year SEO $100 $1200 Keyword Advertising $190 $2160 Website Design $2084 $25000 Website Programming $2000 $24000 Website Maintenance $843 $10000 Blogs $100 $1200 Affiliate Marketing $280 $3360 Proposal Design Total $420 $6017 $5040 $17640 The Control of the Overall Project Methodology We are going to do periodical evaluations and continuous tracking of the new strategies and actions we’ve implemented and their effectiveness. The major purposes of follow up evaluation are to ensure the company goals and objectives are met, and keeping the company’s performance on track. However, the reality is that as a third party, it is difficult to coordinate closely with Fruition and its partners and clients due to many obstacles and inconveniences. At this point, we do need your cooperation by providing feedbacks, and we will do the rest of the systematic evaluation. In terms of the control plan, we have four systematic controls: Premise Control Implementation Control Strategic Surveillance 25 Special Alert Control Our team will mainly monitor the data related to your website and your sales via implementation control tools. And for other circumstances in the progress, we will implement other strategic controls if needed. What You Do As we can see from the charts above, Option x is the most preferable alternative for Fruition Day Spa since it has the highest score after considering all the criteria. The following evaluation action will be based on this alternative. In order for this plan to have great results, both of us will have responsibilities to fulfill. Many of the options require the participation of both parties to ensure the plan is implemented appropriately. We will be working closely on all the options we have mentioned, however here are your responsibility to coordinate with us: Develop and follow up on new joint ventures Actively be involved in company blog and social media sites Developing and updating a creative mission and vision statement Researching companies interested in carbon trading Researching international business opportunities in Asia and with local Native bands What We Monitor A close monitor of website visitor volume will start through statbrain.com. We will compare these statistics with Fruition Day Spa’s new revenue, amount of clients, and as well as the actual visit directed by Fruition Day Spa website. We will conduct a survey about new website appearance, layout, and online visibility through surveymonkey.com. In addition, we will be tightly concerning about Fruition Day Spa website conversion rate. As you wished, we also want the desire sales increase in the spa with 10-15% after website visit. We also have below criteria to control the entire plan: 26 1. Search engine rank: The sites rank on search engines will be used to measure the success of the SEO and to guide future SEO activities. 2. Search engine saturation: We will monitor the obvious increase in each major search engines such as google and yahoo. 3. Time spent per page and pages visited: This will be monitored via site analytics. We will use the data to consider about the new version of website content, layout and information relevance, in order to make immediate response and adjustment on them. 4. ROI: This will be the ultimate and overall measure of the success of our entire project. All the records from controlling phase will be used for future efforts if needed and help Fruition Day Spa and its website to maximize their value. 27 Citations Fruition Day Spa Canada. (n.d.). Retrieved April 5, 2010, from Fruition Day Spa: http://www.fruitiondayspa.ca/Default.aspx 7 Trends in the Spa Industry - Massage Magazine. (n.d.). Retrieved April 5, 2010, from Spa Massage News: http://www.massagemag.com/spa/news/107.php Entrepreneur- retrieved April 6th 2010, http://www.entrepreneur.com/startingabusiness/businessid eas/startupkits/article79550-6.html 28