PROPOSAL
Marketing Plan for Client
SWOT Analysis and Recommendations
Submitted by: Shelley Kilmury
I. Executive Summary
Client is a privately owned facility that has undergone many renovations and
expansion(s) over the years and is the owner of the property that currently
rents to additional business ventures.
Client specializes in body treatments and esthetic services, with an emphasis
on European treatments that consist of holistic therapies such as herbal
treatments and reiki, reflexology, massage therapy, microdermabrasion,
lymphobiology, steam and hydrotherapy baths. New products and services
are being added to the wellness side of the business with emphasis on
services such as microdermabrasion facial peels, and melanoma (mole)
screening through a newly acquired, high-cost machine called a MoleMax II.
Client has a client base ranging from mid to high income women between the
ages of 20 and 70. Major challenges facing Client is high staff attrition and
lack of enthusiasm to up-sell and promote the full range of esthetic products
and services. The Centre currently employs eleven full-time and part-time
staff. Peak periods of business are Christmas, pre-summer, mid to late
summer and mother’s day (due to gift giving).
An evaluation of the company’s internal and external strengths and
weaknesses is the focus for this marketing plan and analysis. The plan also
focuses on the company’s promotional opportunities, development of its
customer base, garnering new clients and suggesting ways in which to
encourage staff participation and eliminate the high attrition rate of the past.
Client strives to offer services that its local competitors do not engage in and
is considered to be a strictly service oriented B2C establishment.
II
Situation and Environmental Analysis
In business for over 20 years, Client began operating as a local serviceoriented business offering basic esthetic services primarily to older, well-to-do
women. Since then, the business has evolved into a full-service day spa with
a European holistic component. The business owner has shifted the local
flavour of the business to that of a full-fledged marketing and advertising
based business that markets to the entire city of Winnipeg as opposed to the
smaller community base of St. James, which she once concentrated on.
Competition is prevalent in this market, with five other day spas offering
services similar to Client. The company has experienced a 15% decline in
sales.
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A. The Marketing Environment
Competition: Client has five primary competitors in the Winnipeg market.
The competition is very strong with XXXX, XXXX, XXXX, XXXX and
XXXX, offering similar esthetic and holistic services. Pricing is competitive
for like services however; Client offers an extensive array of services not
currently being offered by the competition. The owner wishes to shift the
focus of the business to the wellness centre aspect, but remains to offer
the basic esthetic services to consumers.
New technology and treatments are being explored and to-date a number
of them have been implemented such as microdermabrasion treatments
currently being offered by dermatologists and melanoma screening being
performed in a physician’s office. The last few years have seen an
increase in interest in the holistic services the business offers, therefore,
creating an opportunity to expand on services being offered in this area.
The owner is uncertain as to how much market share she currently holds,
but suspects it is shared somewhat equally with the competition. One
factor that determines the success/failure of the new treatments being
offered is based on successful referrals by practicing physicians and
dermatologists. The Province of Manitoba College of Physicians and
Surgeons does not recognize the expensive equipment that is currently
being rented by Client, and this hinders on the success of new service
integration.
As of late, the owner is considering hiring an additional massage therapist
that is licensed to accept Extended Blue Cross and Manulife medical
plans. The current on-staff massage therapist is licensed with lesserknown insurance providers.
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B. Economic Forces
The owner believes in the importance of marketing and advertising, but
realizes that costs are high. Recently, the owner purchased airtime on a
local television station and wrapped-up a two-day promotion with a local
radio station. The cost of the television buy was expensive, and may have
been the wrong demographic market to advertise in. The promotion with
the radio station however, is more in line with the intended demographic
she wishes to begin marketing to. Approximately 10 percent of profits
(before taxes) are spent on advertising with a very small percentage of
marketing being done.
According to a report issued by Jupiter Research, industry estimates
related to spas and spa products are a $5.3 billion industry in the U.S.
alone, and revenues from increased spa usage have risen by more than
20 percent in each of the past six years.
Statistics Canada reported in their General Social Survey that time spent
on personal care is approximately 9.8 hours per day for men aged 35-44;
10.3 hours for women aged 35-44 and men aged 45-54 spend an average
of 10.1 hours and for women 10.5 hours per day. Men aged 65 and over
spent 11.07 hours per day and women of the same age spent 11.8 hours
per day on personal care.
According to the Canadian market overview conducted by Statistics
Canada, expenditures on personal services, which include the use of
health spas, reached 6.1 million dollars in the western provinces in 2012
and it is expected to increase by 10 percent each year. Currently 1.1% of
the GDP stems from the service industry, specifically hair care, personal
services and related products.
C. Provincial Regulatory Forces
The lack of acknowledgement and referrals from the Province of Manitoba
College of Physicians and Surgeons is certainly a concern in terms of the
new technology that Client recently acquired.
Unfortunately, there is little to no hope that this will change, and at some
point the Wellness Centre end of the business may have to disengage in
the offering of these necessary services.
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D. Technological Forces
Concern in the area of the competition and the methods they use have
created some negative feedback from clients of Client. As Client focuses
on health as well as the safety of their services, a number of clients have
made comparisons to how certain services are being performed in other
spas. The use of a steaming machine prior to sea salt applications for
instance, is used differently in other spas whereas; at Client the focus is
health and safety. This message should be spread to new and existing
clients of the Spa and reinforced with clarity and can be used for
comparison purposes.
E. Sociocultural Forces
Today’s consumer appears to focus his/her energy on health and wellbeing. With so many of us working long hours and little time for rest and
relaxation, the services offered at Client are right on track. There is a
growing need for such services as facials, and healthy body treatments for
example, that with aggressive marketing could position the spa as the
forerunner in providing superior esthetic services.
III
Target Market(s)
As the business’ clientele is predominately women between the ages of 20
to 70, two other markets have been selected and targeted. These markets
consist of young women and girls between the ages of 12 and 25 and that
of the male market, 25 to 65. According to the 2011 report on the
demographics of the Winnipeg area, individuals aged 24 and under
represented approximately one-third of the CMA, with seniors aged 65
representing slightly more than 13%. The average family income in
Winnipeg was $53,759 with a median family income of $47,307. Another
area worth looking into is the corporate market where give-a-ways and
incentives could be offered via gift certificates to company employees. In
reference to the City of Winnipeg’s report on the St. James Ward, the
number of residents in the area was 36,175 compared to Winnipeg City at
618,475. The average income in the St. James Ward was $56,612.
A. Current Marketing Objectives and Performance
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The staff of Client currently engages in minor up-selling techniques, but
more emphasis should be placed in this area. Reinstating the birthday
coupon and greeting should also be considered as the Centre’s extensive
database is updated each time a client is serviced. Further investigation
into the area of co-selling, marketing with suppliers should be considered
as the Spa uses specific products and manufacturers. For instance the
nail polish manufacturers Jessica and OPI, should be contacted to explore
opportunities for co-promotions.
Client is located at the end of a strip mall that houses a number of other
businesses. Incidentally, the owner of the Spa is also the owner of the
strip mall itself. Some discussion has taken place as to developing a mural
for the outer wall of the building which faces and is adjacent to another
mall which houses many businesses and services. Additional income is
generated from the rents received from the businesses that rent space in
the Spa owners building.
Client previously implemented a promotion whereas they would utilize
their client data base by mailing out a birthday greeting with coupon to be
used within 30 days of the recipients’ birthday. This promotion has since
ceased, but could easily be reinstated.
The need for up-selling once a client is in-house is evident and current
staff should be well versed in this area. Training opportunities currently
exist and should be implemented.
As of December 14, 2011 business in the spa has been down
considerably, with fewer appointments for services as in previous years.
The owner of the spa has found it necessary to find esthetic work for
herself, outside of her own business. Currently citywide esthetics
businesses have realized a slide in business by approximately 15%.
According to recent economic forecasts, the economy is scheduled to
experience growth in the coming months and economics predict 2014 will
be a boom year. With an emphasis on consumer spending, the owner
believes business will pick up in the coming months with the increasing
need for relaxation and stress reducing services.
III
Strengths and Weaknesses
A. Strengths
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1. Client consistently offers services that the competition does not,
thereby positioning the business as unique. The owner is
somewhat of a risk taker, and is willing to invest in unusual and
trial-based services and equipment.
2. Most if not all, of the products used in the esthetic service, and
health and wellness areas of the business are foreign and are
unique to Winnipeg. Long-term relationships with these
manufactures and suppliers reinforce quality standards and unique
healthful properties. This message is addressed through positive
literature and professional consultations with clients.
3. The high percentage of repeat business from clients ensures
quality and satisfaction in the services provided to them.
Approximately 30% is repeat business from the same clients, and
word of mouth marketing has increased sales in the past. The
business has consistently grown since its inception 15 years ago.
4. The investment in new technology and decorum provides a
peaceful, up-to-date, classy environment for clients.
B. Weaknesses
1. High staff turnover is a concern not only for the owner, but may be
for clients of the spa as well. There may appear to be distrust and
speculation amongst clients as to why there consistently appears to
be new staff upon each visit. Through discussion with the owner, it
was unveiled that she has often attempted to involve employees in
promotions and developing new ‘packages’ for services.
Unfortunately these initiatives have not been successful.
2. Despite long-term relationships with suppliers, the owner has not
been successful in implementing co-marketing/promotional
initiatives with a number of suppliers.
3. The rental of expensive melanoma detection equipment has not
generated the income and interest it was intended to. Aggressive
marketing and/or advertising might be required, although the
success of this hinders on the lack of support of the Province and
the medical community.
4. With more emphasis being placed on advertising versus marketing,
this has created an expense and has limited the owner in proper
marketing opportunities. Further exploration of this area is required.
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IV
Opportunities and Threats
A.
Opportunities
1. There are a number of markets that have not currently been
‘tapped’ in the esthetic industry. Client realizes this, and is
willing to explore the opportunities available. In offering unique
services such as microdermabrasion and sea salt body
treatments, there are untapped markets that are currently not
being utilized.
2. The owner has an extensive database on client demographics,
services performed and requests for services, but it is not
utilized to its fullest extent. The database could be used for
relationship building in regards to lapsed clients, present clients
and referrals. Full name, address, birth dates and services
rendered are gathered on each and every client.
3. The owner is willing to take risks in offering services that other
competitors do not offer, thus enabling her to test the market to
see what clients are willing to try and those they are not.
B.
Threats
1. High staff turnover creates insecurity among clients as well as
internal staff. As well, the cost of training is much higher when
new staff must be consistently trained. It has come to light that
on occasion staff has discussed with clients the stressful
working environment and issues surrounding the nature of the
business. This is unhealthy for the owner’s reputation, working
conditions and overall perception of the business where clients
are concerned. The owner must strive to repair relations with
current staff and promote a healthy environment for all
considered.
2. Increasing competition as businesses that were strictly hair
design now realize the need to diversify and tap into the
booming esthetic services business. The need for up-to-date
services and competitive pricing is ever present. Strategic
marketing is required to bring the spa to the forefront in offering
exceptional service at a competitive price.
C. Matching Strengths To Opportunities/Converting Weaknesses And
Threats
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The company’s strength in its willingness to offer unique services
can be matched to new target markets. Currently very little
marketing is being done to establish and create awareness of
services being offered in the areas of elderly clients, teen clients
and men. Specialty packages can be formed to adapt to the needs
of these target groups.
Utilizing the current database and re-establishing the birthday
promotion, and marketing to frequent users of the spas services
can be adapted very easily. The information is readily available and
requires sorting and determining who to market to and when.
The owner must establish stronger and more trusting relations with
staff. If the work environment is pleasant and stable, staff may be
inclined to up-sell products and services and create an overall
uplifting atmosphere. Regular staff meetings and hands-on
approach to staff’s needs is required.
The company is in a strong position due to location, services
offered and competitive pricing. Further attention to marketing
opportunities in untapped target markets requires further research,
thus surveys are suggested to determine further packaging of
services, and products for future consideration. The teen market
has a large expendable income, thus research into providing
services to this group is required.
V. Marketing Objectives
Marketing Objective I
Build relationships with current, lapsed and new clients.
In the past a birthday promotion was established whereas, clients
received a personal greeting and five dollar off services coupon.
This promotion was very successful, but due to staffing and time
restraints the promotion was discontinued. Utilizing the current
database and gathering new data on clients can be done on a daily
basis. By sorting the information into months, cards can be
prepared and mailed out for the following month at the end of each
preceding month. This should be done on a monthly basis,
consistent throughout the year. The promotion entitles the bearer to
five dollars off each service booked prior to the end of promotion.
The redemption date is thirty days after the client’s birthday.
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The birthday promotion entices repeat business. It offers clients
personable service and keeps Client top of mind. It’s a little bonus
and personal greeting that goes a long way to establish client
loyalty. As thirty percent of the spas clients are repeat users, the
added bonus of the discount should establish continued patronage.
Marketing Objective 2
Marketing and packaging services that will attract a male market.
A promotion partnered with Moore’s has been discussed. Leaflets
can be stuffed into customer bags at the check out depicting
esthetic services for men. Specially priced packages that consist of
a 30-minute massage, sports manicure and pedicure could be
featured for a limited time. The promotion should run in late spring
to early summer and should last 30 days in duration. The number of
men scheduling appointments during the promotion will determine
the success/failure of this marketing initiative. Contact must be
made with senior management of the chain to agree to the
promotion, and simple leaflets with strong copy and photos will be
printed.
This promotion is something new for the esthetic business, as
traditionally local businesses have not specifically marketed to men
in the past. If this endeavor is a success, further research into
partnering with sports shops and other clothiers will be considered.
Marketing Objective 3
Marketing and packaging services that will attract the teen market.
As this particular market has expendable parental income and great
influence on their parents, the owner believes that further
exploration is required to market to this particular group. Many of
the services the business currently offers would be beneficial to this
group of young men and women aged 13 – 19. This group in
particular, may be interested through strategic marketing, in a
number of services and equipment that is currently not being
utilized to their fullest extent. The microdermabrasion service can
be marketed to those experiencing facial acne with emphasis
placed on proper hygiene and skin care techniques. Currently, the
waiting list for provincial Dermatologists is lengthy and is expected
to increase due to many of the province’s health care professionals
leaving the province. With Client offering many of the same
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services as Dermatologists, the waiting time for services is
decreased, and the attractiveness of having procedures done in a
relaxing setting as opposed to a clinic are much more attractive.
In discussion with the owner, it has come to light that opportunities
exist in offering lunch time sessions at local high schools that cover
topics related to skin care and regime. A list of high schools and
contact names will be provided along with a strategic plan on
developing theory related sessions to this market.
V1
Marketing Strategies
Target Market(s)
Target Market 1:
Males aged 25 – 70, ranging from young professionals to older
gentlemen requiring image enhancing to hygiene services.
Primarily this group lives and works in the St. James area, but is
not restricted to this suburban area. The younger group, 25-45 is
interested in image building, overall physical presentation and
health conscious. The older group is interested in improving health
such as circulation, foot and hand care and relaxation properties.
Both of these male target markets have mid to high-income levels,
with seniors being somewhat well to do. St. James houses a
number of upper income senior residences with many of the
women from these residences utilizing the spas services.
There is an untapped male market for spa services. Many spas in
the United States cater specifically to males and report high sales
figures. There is only one spa in the Winnipeg market that has
attempted to market to males, but in very limited proportions. Client
would benefit by strategically marketing to males in their respective
environments by offering specialized services and promotions.
Targeting gyms, male clothiers and sports clubs would bring the
desired result.
Currently, Client has one business in direct competition in the direct
catchment area. XXXX has branched into the esthetic services
market offering a full-range of day spa services such as facials and
body treatments. There are also six massage therapy
establishments operating in the local business area.
Target Markets 2 and 3
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This target market consists of both young teen boys and girls aged
13 - 19 whom seek treatments for acne and other related skin care
problems. This group lives and goes to school in the St. James
area. The younger teens 13-16 have expendable income derived
from relatives, and gifts of money. The elder teens 16-19 also have
income derived from parents, gifts of money, but also part time
employment. This group enjoys spending money on clothes,
entertainment and make up and related body products. They travel
either by local transportation, parents and in some cases the older
teens have their own vehicles. They tend to travel in groups and
often seek out adventures in two’s and three’s. Wearing labels,
using brand name products and having a leading edge are
important to this group. Peer pressure is existent with a great
emphasis on being trendy.
Seven local hair salons currently offer nail and limited esthetic
services. Aurora Day Salon, which opened nine months ago, offers
extensive body treatment and salon services. These businesses
are in direct competition to that of Client. The only difference is that
the owner offers a full and extensive range of services that include
microdermabrasion, body salt rubs, steam units, a whirlpool tub and
massage therapy.
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B
Marketing Mix
Marketing Mix 1
Product Strategies: To position the Day Spa as a leader in
European products and services, emphasis will
be placed on holistic and therapeutic
properties. Services related to the male market
will include sports manicures, sports pedicures,
back treatments and facial care. The message
pertaining to overall self-image will be front and
center.
Pricing Strategies: Services will be ‘packaged’ for special
discounts. Individual services will also be
offered at a first time, discounted rate with
subsequent products being offered for first time
users. A customer loyalty card will be offered to
clients who book follow up appointments,
thereby entitling them to further discounts on
repeat business.
Distribution Strategies:
Posters, pamphlets and informational circulars
will be distributed to men’s clothiers, Weeklies
and area businesses that cater to the male
market.
Promotion Strategies:
Management at Moore’s clothiers will be
contacted to discuss a co-promotion with the
Day Spa. A promotion is being considered with
local radio station CJOB to garner interest in
the area of sports manicures and pedicures.
Posters will be developed and displayed on the
outer exterior of the spa. A colourful mural
depicting the ‘essence’ of the spa will be
painted on the outer exterior of the north wall of
the spa, directly adjacent to a large commercial
mall.
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B
Marketing Mix
Marketing Mix 2
Product Strategies: To position the Day Spa as a leader in European
products and services, emphasis will be placed on
services related to the younger demographic (teens).
Services related to this market will microdermabrasion
techniques, problem skin solutions, make-up and
facial consultations. Sports manicures for the males
will also be promoted.
Pricing Strategies: Services will be ‘packaged’ for special discounts.
Individual services will also be offered at a first time,
discounted rate with subsequent products being
offered for first time users. A customer loyalty card will
be offered to clients who book follow up
appointments, thereby entitling them to further
discounts on repeat business.
Distribution Strategies:
Posters, pamphlets and informational circulars will be
distributed to schools in the St. James area.
Discussions will take place with school officials to
determine the feasibility of conducting lunch hour
consultations and informational sessions.
Transcontinental Weeklies, high-school common
areas and area businesses that cater to this
demographic will be contacted for distribution of
collateral materials.
Promotion Strategies:
School board officials will be contacted to discuss a
co-promotion with the Day Spa. A promotion is being
considered with local radio stations HOT 103 and
102.3 FM to incite interest in the area of esthetic
treatments specifically tailored for a younger
demographic. Collateral materials and informational
pamphlets will be designed with bright colours and
models of this age demographic. Contests with the
stations will support the overall marketing component.
Immediate considerations should include discussions
with online immediate discounters multi-buy operators
such as Groupon and Dealfind.
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C
Marketing Implementation
The marketing unit will be customer driven. Specific products and services will be
tailored to meet the needs of the specified target markets.
The overall authority in terms of decision-making must lie with the owner of the
day spa. In order to increase the overall morale of the spa, the owner must
realize the importance of including staff in certain decisions regarding marketing
components. Spa Staff that work in the areas of esthetics and reception are frontline employees and have daily contact with customers. Their cooperation is
essential in the success of the proposed marketing initiatives.
The owner realizes the importance of communicating up-selling techniques to
staff and will give further acknowledgment to the processes required in doing so.
Surveys will be distributed in-house to clients of the spa with questions regarding
service standards, products and suggestions. This information will be gathered to
determine how effectively the owner has improved morale and educated her staff
on up-selling techniques. As well, the surveys will determine whether services
have been packaged appropriately.
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D
Activities, Responsibility and Timetables for Completion
Product:
Task 1:
Package services to attract a teen market.
Responsibility:
Owner, esthetic and reception staff.
Target Completion:
June 1, 2013
Task 2:
Package services to attract the male target.
Responsibility:
Owner, esthetic and reception staff.
Target Completion:
June 30, 2013
Pricing:
Task 1:
Determine pricing for teen market service packages.
Responsibility:
Owner
Target Completion:
June 1, 2013
Task 2:
Determine pricing strategy for male market.
Responsibility:
Owner
Target Completion:
June 30, 2013
Distribution:
Task 1:
Meet with management at Moore’s clothiers to
determine the methods of distributing flyers, collateral
materials to male market.
Responsibility:
Owner
Target Completion:
August 15, 2013
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Tasks continued…
Task 2:
Meet with school board officials to determine the
methods of distributing flyers, collateral materials to
teen market (students).
Responsibility:
Owner
Target Completion:
September 15, 2013
Task 3 :
Gather information via existing data base and prepare
lists for direct mail segment.
Responsibility:
Reception staff
Target Completion:
September 15, 2013 (beginning of slow season)
Promotion:
Task 1:
Meet with promotions/sales staff at both HOT 103 and
Q94 FM to arrange promotion for teen market and
multi-buy online offerings with Groupon and Dealfind.
Responsibility:
Owner (would be positive move to include staff)
Target Completion:
September 20, 2013
Task 2:
Extract data, prepare and mail out first birthday
promotion to lapsed and current clients and
discounting.
Responsibility:
All
Target Completion:
October 1, 2013
Task 3:
Prepare collateral materials, date, location and time
for school presentations and contact online multi-buy
partners.
Responsibility:
Owner
Target Completion:
October 1, 2013
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Housekeeping and Coordination of Marketing
Regularly scheduled staff meetings will facilitate a smooth flow of information
from owner to staff. The meetings will consist of progress reports, sales and
promotion updates, sharing of ideas and brainstorming communication and
marketing tactics. Another form of communication will stem from the owner
encouraging staff to seek information from customers, friends and family
colleagues on products, services and service standards in order to generate
ideas to better position the day spa in the marketplace.
Incentives for success rates in up-selling and marketing the business outside of
the workday should be encouraged. The owner must be willing to trust staff and
project a positive image. Regular email and communiqués can also be used to
keep staff up to date and on the same page. An open door policy must be
instituted by the owner to allow frequent access of staff in their sharing of their
ideas. As morale is an issue within this company, it has been suggested to begin
some of these processes immediately.
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Evaluation and Control
Product Activities
Budget for in-school teen promotion.
Collateral materials ie: brochures, fact sheets.
Posters
Product discount on first time services
Total
$1500.00
$500.00
$1000.00
$3000.00
The success of this promotion will depend on the number of students that attend
the information sessions during the lunch hour, and on the number of coupons
for services that are redeemed.
Budget for Moore’s promotion.
Collateral materials ie: flyer/insert
Posters
Incentives and discount
Promotional items (product)
Total
$2500.00
$500.00
$2000.00
$500.00
$5000.00
The success of this promotion will depend on how the products/services are
received by the male market. Advertising and promotion must be bold and attract
the male audience. Success will be determined by an increase in appointments
and redemption of product/service discount coupons.
Budget for Birthday Greeting Promotion.
Cards, stationery
Postage
Discount on services ($5.00)
Total
$2000.00
$500.00
$5000.00
$7500.00
The number of lapsed clients that resume business with the spa is one factor in
determining the success of this promotion. An increase in appointments and the
number of coupons redeemed will also determine whether or not the message
has been received.
Radio Promotion and multi-buy discounting
Cost of air-time
Product Give-a-way
Online couponing opportunities
(possibly a contra deal with sales rep.)
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$3000.00
$1000.00
TBD
$4000.00
Auditing Process
During each promotion, new clients will be asked to complete an in-house survey
prior to leaving the spa. This survey will ask questions about service, pricing,
where they heard of the spa and what services they would like to see offered.
This information will be collected, entered into a central database to determine
steps for improvement.
After each promotion, sales figures, the number of increased appointments and
survey data will be analyzed to determine which promotion was the most
successful.
On-line redemption from multi-buy suppliers will be evaluated after promotion
run.
In relation to breaking into the male market for esthetic services, the number of
visits from this demographic will determine whether or not it is feasible to
continue to market to this target group. Marketing esthetic services to the male
market is fairly new and the owner realizes the promotion may not be successful,
but is ready to take the risk.
As well, the same can be said for the teen market. If there is little interest from
this particular group, marketing efforts could be sustained or downsized with
more attention focused towards the current client demographic that consists of
older, well-established women aged 30-75.
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