Target marketing strategy must include a marketing research approach to find out if there is a need and/or want for the services offered. Marketing research is defined as, the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions (Kerin, 2006).
Target caters primarily to women customers between the ages of 18 and 50, therefore already has the foot traffic of tens of thousands of customers in each store on a weekly basis. Majority of who typically use salons for the services Target will make available. The presence of the customer base is a great opportunity to market the idea of a full service salon. Having the salon in the store will offer the customer the opportunity to take care of one of their beauty needs in a one stop shop.
In addition to the foot traffic in the stores, Target has an advertising program already in place with weekly ads; full-page ads in local newspapers and television commercials that will be utilized to promote the new services offered that separates Target from the competition. These venues of advertising along with the Internet and direct mailer coupons to encourage customers to give our salon a try will definitely get the salon off to a lucrative start.
Target Corporation realizes that we will not have a large market share of the salon services market and that individual contracted salons largely saturate the salon services market (Gale, 2006). Subsequently there is a huge market for beauty salons and an open opportunity for Target stores to penetrate that market; according to 2002 U.S. Census Bureau statistics, There were 82,414 establishments in this industry, generating $16.7 billion in revenues (Gale, 2006). Hairdressing services is said to be recession-proof as consumers adjust their spending to meet the needs of the recession they tend to continue to take care of their beauty needs (Gale, 2006). The advantage that target has over a start up salon is that we have already developed brand loyalty of the target brand with our customers and can therefore introduce a new service to our existing customer base.
Consumer reports have deemed Wal-Mart the number one retail store with Target following close behind as number two. Wal-Mart seems to have the idea on what to offer other than just the traditional items found at retail stores. They offer a full line of supermarket and pharmaceutical services within various stores. Wal-Mart has learned that killing two birds with one stone gives an upper hand on the competition. To keep in competition with their competitor Target will be opening a full service spa salon inside of their already existing stores.
The full service salon will offer hair care services such as hair extensions, woven hair extensions, braids, dreadlocks, cornrows, hair styling, highlights, corrective color, perms, straightening and a special occasion hairstyle. In addition, Targe’ full service salon will offer skin and body care with relaxing massages, a luxurious facial, microdermabrasion, and waxing. No salon is complete without a nail care service to apply silk fibers for strengthening the nails, tips or acrylics to extend the nails, as well as, the classic manicure and pedicure. We realize that men require grooming and pampering as well, so for out men clientele we will offer haircuts, beard trims, mustache trim, hair shape ups, and color treatments as well. Targe’ salon will provide all the services and products you need to look and feel your best.
When starting a new service or introducing a new product the biggest question is how to capture the markets attention. Through the years companies have learned that it does not simply mean showing a commercial or radio promo, to successfully launch a product or service. It has been learned that extensive research and strategizing is the first step to developing a new marketing plan. A company has to survey the market, pick the consumers minds and find out what their needs and wants are. Starting a new business takes motivation, dedication along with lots of research and planning. It is important to develop a strong marketing/business plan. This brainstorming will allow you to consider some issues that may have been overlooked with the initial development of the idea.
S.W.O.T.
As a component of an effective marketing strategy, it is a good idea to identify both the internal and the external factors that surround a product; therefore, a SWOT analysis is necessary. The acronym “SWOT” refers to reviewing of the strengths, weaknesses, opportunities and threats that may be associated with the product.
Two primary advantages or strengths of opening a salon within Target stores include the ability to identify with the brand name and the convenience factor. The name alone will generate attention, as it is a publicly traded company, and consumers are familiar with the stores in most major cities across the United States. Having a salon within Target stores would also afford clients the convenience of having a central location to take care of most of their personal needs. There would be no guesswork involved with finding the location; and being that most people tend to gravitate towards having their needs met with the least amount of instruction or direction, the location would prove to be beneficial.
The truth is that no one really wants to discuss weaknesses, but in business, it is good to attempt to identify areas that may need work before those same areas become the downfall of one’s marketing strategy. The principal area to address here is lack of change. If a person shops in the store on a regular basis, she may feel the need to go elsewhere for the products and services available in the store simply to have a change of scenery.
Opportunities involved with incorporating a salon into the established environment of Target stores would include attracting new consumers to the store. Other opportunities would be to market the salon’s products outside of the store and eventually setting up salons independently of the stores yet retaining the brand’s name.
The most common threat to any business is its competitors. Target’s immediate competitor is Wal-Mart stores, and at this time, there are no indications that Wal-Mart is in discussions about this type of venture, although if they were, that would be a direct threat to the success of this salon. However, Wal-Mart is not the only competitor or threat. Independent salons would be a threat possibly due to their independence of the outside elements that would present in a busy target store. The noise and distractions that may accompany the traffic associated with the stores operations may threaten the successfulness of the salon because clients tend to expect a certain environment when they are obtaining services provided in the salon.
Services Offered
Targe’ salon will offer an array of simple beauty treatments to full body relaxation time.
Let’s take a look at the services offered.
Hair Care Services: Hair care services will be provided in a comfortable private area depending on the selected service. Not only will each stylist work in a private room with no more than 3 stylists in a room, the customer will be offered complimentary robes. We want to make this experience truly relaxing. Some services such as color, or perm chemicals can cause permanent clothing damage that can ruin even the most relaxing mood.
- Wash & Blow Dry
- Press & Curl
- Perms (Straight or Curly)
- Cut & Style
- Deep Conditioning Treatment
- Hot Oil Treatment
- Highlights
- Corrective Color
- Hair Extensions (short term)
- Woven Hair Extensions (long term)
- Braids
- Dreadlocks
- Cornrows
- Special Occasion Hairstyles
Nail Care Services: Hand and feet treatments will take place in lush comfy recliner chairs. The foot tubs used for pedicures will have massaging jet spas to soothe and relax you into a daze. The lush reclining chairs will have massaging and climate control functions as well.
- Manicure & Pedicures
- Silk Fibers
- Nail Tips/Acrylics
- Custom Nail Art
- Paraffin Foot and Hand Treatment
Waxing and Hair Removal Treatments:
- Eyebrow Waxing
- Upper Lip Waxing
- Full Face Waxing
- Leg Waxing
- Underarm Waxing
- Full Body Waxing
- Specialty areas (Bikini, Brazilian)
Facial Care Services: The perfect getaway when you can’t really get away. Our salon will offer you the experience to just disappear for a few hours and make you feel like you’ve been gone for a week. Our goal is to blend tradition facial treatment with proven innovative new technology that is safe and effective
- Exfoliation and toning Facials
- Microdermabrasion
- Enzyme Peel
- Vitamin A&C Peels
- Ultimate Facial
- Oxygen Facial
Full Body Treatment: Our salon has created a remarkable world of indulgence comfort and quickness. We offer private pampering areas for full body or specific area massages. We offer massages in increments of ½ hour to 3 hours.
- Pure Relaxation Full Body Massage
- Deep Tissue
- Pregnancy Massage
- Reflexology
- Foot Massage
- Leg Massage
Segmentation Criteria
Retail is a challenging and dynamic field. Target is drawing on the formal knowledge of its marketing team. Target’s marketing team has learned that planning is one of the most important functions of being a cutting edge retailer. Targets marketing team must decide how to make the best use of their resources, such as people, funds, and advertising. In order to utilize these resources in the most creative way, the marketing team plans for the future. The most important aspect of a business is planning. The planning must be executed before you pursue any type of business. Careful planning can greatly enhance a business of any chance of success. By synthesizing and gathering the appropriate data into a retail business plan, the marketing team can make better decisions. A great business plan should include the following a detailed, specific, and in writing plan to identify the needs and wants of its customers. The marketing plan for the Targe’ salon includes identifying the segmentation criteria and who our target market is, the organizational buyers and consumers. The plan must clearly develop a distribution strategy and precisely outline the details of the product or service.
According to , “Target Corporation, group's principal activity is to conduct merchandising business under discount, middle market and department store retail segments. The merchandise retailing is carried out through three operating segments: Target, Mervyns and Marshall Field's. Target segment is an upscale discount chain located in 47 states and has 1,053 stores. Mervyns is a middle-market promotional department store located in 14 states in the West, South and Midwest and operates 264 stores. Marshall Field's, a traditional department store located in 8 states in the upper Midwest, has 64 stores. Target accounted for 84% of 2002 revenues; Mervyns, 9%; Marshall Field’s, 6% and other, 1%.
Loyalty doesn’t change. Targets customer base have been loyal customers throughout the years. Target has identified that its consumer base consist of mostly women in single or dual families. Ranging from ages 18-45 also most of their consumers are minorities and fall in the middle class category. With this in mind we will measure loyalty in order to get the most precise possible picture of customers future purchase behavior. Targets consumers have been comprised of rural middle class residents. There were several factors used to determine the market. The first is demographic segment- measurable statistics such as age, income, occupation, etc. Secondly is psycho graphic segment such as lifestyle preferences. Lastly, the geographic segment location such as home address, business address, etc. Since resources are limited and cost need to be kept down, a concentrated strategy is the best route to ensure a profitable result. The geographic segment is used in determining a target market is to examine the income levels of the consumers. The lower incomes cannot afford and seem less likely to be interested in the product or service. (, 2006).
A good marketing mix will identify your customers. With the previous data from marketing segments the marketing team will be using the data to incorporate the appropriate services and products to be utilized at each salon. Also, with this data we will be able to form a pricing chart as well.
Consumer Purchasing Decisions
Many arrive at certain decisions without giving much thought as to the underlying factors that influenced the decision itself. (Armstrong & Kotler, 2005) “Ninety-five percent of the thought, emotion, and learning [that drive our purchases] occur in the unconscious mind—that is, without our awareness,” There are however, times when one may sit down, after coming to a particular mindset, wherein he would consider how he arrived at this conclusion. This may require the act of reflection and evaluation. In marketing, this is where research and analysis would have their respective places. The next few paragraphs will discuss various factors that influence decisions of both organizational buyers as well consumer purchases.
Marketers utilize tools to influence the decision of a consumer to purchase their products or services. These tools: product, price, promotion and place together create a marketing mix and have the exclusive purpose of drawing the attention of buyers of their products. If a product appears to satisfy a need, the actual product alone may be enough for the consumer to make the purchase; however, this is not always the case. In instances where it is questionable as the whether or not the product will actually satisfy a need or if the product qualifies as a desire, any combination of pricing, place and/or promotion may be the winning incentives to making a particular purchase.
Other factors that may influence the decision to buy a certain product over another include: the economy, technology, politics and a person’s culture. (Armstrong & Kotler, 2005) A recent example of an economic influence would be the recent increase in gasoline prices. As the price of gas began to rise, consumer spending began to decrease. Gas is a product, which many consider a necessity; therefore, if thirty dollars were available for spending, the newest style of jeans may get overlooked for the fact that the gas tank is almost empty. Launching a new line, at this point, may not prove to be an effective marketing strategy. Target’s marketing team understands this concept; therefore, the team will focus on pricing and promoting to appeal to those who may not feel the necessity of going to a salon.
Technology, in the minds of many individuals, has made significant breakthroughs to enhance our lives by allowing basic and even more difficult functions appear to be much easier and a lot faster. Research would be done to assess what types of modern technology is available with regards to the latest in salon equipment and how this equipment would give the salon what it needs to attract new clientele. Target stores accept both debit and credit cards; this can be an advantage for the salon, as many local, independent salons do not accept these forms of payment.
Politics and culture could affect buying decisions as well. Based on a consumer’s personal belief system, he may or may not be persuaded to make certain purchases. Having this knowledge allows Target’s marketing team to avoid certain themes in the salon that may discourage patronage.
Buying Process
The buying process is different when it’s for a business rather than an individual. The diagrams below illustrate such differences.
Business Buying Process
(Armstrong & Kotler, 2005)
Consumer Buying Process
As the illustrations have shown, Target’s marketing team has to undergo a few more steps with regard to its purchasing process. As with consumer purchasing decisions, there are factors that influence the actions taken within the business buying process as well. The four major influences are: environmental, organizational, interpersonal and individual. (Armstrong & Kotler, 2005)
This salon will at some point be a part of all three buying situations. Initially, the “new task” situation will occur, as everything for the salon(s) will be new. Being that the salons will provide both products and services for sell, not to mention, the products that will be used for service, the “straight re-buy” and the “modified re-buy” situations will manifest.
Channels of Distribution
Additionally, in order to effectively execute this new service with the Target stores, one must develop a channel of distribution strategy. The channels of distribution are directly related to the place element in the marketing mix. Place is concerned with all the decisions involved in getting the “right” product to the target market's Place (Perreault, 2004). Obviously the place that the service will occur is within the Target stores, yet the functions that must occur from the inception to the finished service must be clearly identified. In order to facilitate a salon there must be equipmnent, supplies and employees that will deliver the services.
There are equipment and product needs involved in order to execute the business of the salon. Some of the equipment needed would be ergonomic salon chairs, hair dryers, wash sink, spa chairs for pedicures, and massage tables. In addition all of the necessary curling irons and hair care equipment will be a part of the distribution.
Separate from the fixed assets, there will be an ongoing need for beauty products. Since these products will be used as a part of the service and not sold as the other beauty products sold in Target they cannot be ordered and received in the same manner that Target orders and receives their standard cosmetics merchandise. These products must be ordered and received at cost and do not have to be assigned a retail value as they will be used on the patrons. The cost of this merchandise will be factored into the price charged for each service accordingly.
Where will the Targe’ salon be located within the store? The average target store is more than 100,000 square feet in size (). Target has over 1600 stores and therefore the marketing strategy does not include placing a salon in each location on the other hand Target stores has already identified some prime locations to open Super Target and currently operates 140 of them (). The salon will be piloted in 5 of the Super Target stores initially and then expanded to the remaining Super Target stores as the service is perfected. The square footage needed to house the salon is a mere 2000 square feet that Target can carve out of the appropriate area. The revenue of the full service salon will more than compensate for the sacrifice of loosing the square footage of selling space.
Although placing the salon at the front of the store would offer more visibility, this may make some of the patrons uncomfortable to be receiving services in plain sight of the other customers waiting in line to pay for purchases, therefore the Target salon would not be located at the front of the store. The salon will be located in the most obvious and convenient place that will cater to those customers already seeking beauty products and services, at the end of the cosmetics department. The more secluded location will be sufficiently advertised throughout the store and printed on the register receipts. There are some services that will require further privacy and therefore a private consultation area will be available in the rear of the salon.
Targe’s full service salon will offer luxurious surroundings and gracious hospitality. Our stores are placed in the heart of many hectic cities we want to offer our customers a chance to simply relax and enjoy our fine ambiance, service and amenities. Health and beauty practices are not only a luxury but in this day and time a necessity.
Price and Promotion
Price and promotion are two key elements of a good marketing mix. Pricing is an integral element of the marketing mix. Having enticing packages to offer consumers make for attractive bargains for customers. Example a pedicure is $25; however, a manicure and pedicure together are only $35. At this price, consumers would decide to spring for both. Promotional Pricing is also a great marketing tool. To promote a service we will utilize the approach of BOGOF (Buy One Get One Free). Example: if you a customer would like hair color, we will give them a hair color free. Pricing is always a difficult decision.
Normally, a good way to assess what you should charge a consumer is to evaluate what competitors are selling the same product or service for. In order to create a service that people desire, one must first know your competitors' strengths and weaknesses. What has other salons have done in the past, and what is the competition doing now in this particular market? Also, estimating your competitions market share, sales volume, reactions to new competition will enable us to understand the market’s potential.
Creating a survey that will address the consumers’ needs will allow the salon to create a pricing strategy. For example, the survey would include the following.
- Respondent’s sex
- Respondent’s age
- Respondent’s income level
- Frequency of salon visits.
- Name of hair salon used most frequently.
- Average amount spent per visit in hair & spa salons
- What Specific services purchased at hair & spa salons?
- Preference of large versus small salons
- Salon respondent would use if changing salons, and explanation for choice.
- Familiarity / awareness of particular hair salons
- Image held of competitor’s hair salons.
- Comments/ Suggestions:
Salons and spas are becoming more visible and are utilized more now than ever. With this in mind, the overall promotion objective is to persuade clients to choose the Targe’ Salon for all of their hair care and their personal pampering experiences. The two promotion approaches to be utilized for the Targe’ Salon will be the AIDA approach combined with the pushing approach. AIDA will be the primary approach to accomplish the goals signified by its name:
A – to draw the attention of potential clients
I – to hold the interest of said clients
D – arouse the level of desire
A – on the end stands to provoke the consumer to action.
(Perreault & McCarthy, 2005)
Secondly, the pushing approach will allow product vendors to promote the respective products featured in the salon; which will promote interest in the salon. Manufacturers of the equipment for the salon will push the salon as well.
The following outline will serve to produce insight into the promotion approach to be implemented for the Targe’ Salon.
- Advertising
- Magazines
- American Salon - Full page ad
- Celebrity Hairstyles - Full page ad
- Hype Hair - Full page ad
- Children’s Digest - ¼ page ad
- Television
- Two 30 second primetime spots - ABC, KTLA, NBC, CBS, UPN
- Internet
- Link to Targe’ page on Target’s Website
- In Store Brochures
-
Packages (including visual of salon with product placement options) sent to suppliers and manufactures
- Introductory offers
- 20% off first visit, 30% off if visit includes both hair and spa
- 15% off first product purchase
- 50% off companion spa services (attract 2)
Numerous efforts have been made to narrow down the promotion approach to only the truest options which would best benefit the Targe' Salon. Items in this outline may be altered or deleted based on the further analysis of research data obtained from multiple sources.
Pricing affects the number of sales, revenue and expenses. An appropriately priced product will cover the expenses of creating the product, whether that is specific ingredients for the good, packaging, promotion or production. In our case, we have to ensure that the amount we decide to charge for the spa services allows us operating expense as well as room for revenue. The marketing managers have to set clear pricing objectives and policies. Pricing strategies have to allow for coverage of promotion. Price strategy must spell out what price situations the company will face and how it will handle them. (Perreault & McCarthy, 2005) We have learned that no matter how great of a good or service you may offer if no one knows about it, it will not flourish.
Often time’s promotion will be the highest expense faced. This expense has to be broken down for final consideration when pricing the item or service. Price polices usually lead to administered prices, consciously set prices (Perreault & McCarthy, 2005) The price will be consistent for an extended time frame but will often be adjusted based on the company’s objective.
When setting price policies we have to consider two types of policies, one-price and flexibility. Once price, be definition, is offering the same price for all customers who purchase products essentially under the same conditions. (Perreault & McCarthy, 2005) Most services rendered will be the same for all customers. With the variety of products and services offered, many may be overlooked without special promotions or discount offerings. However, that is not to say that we will not be flexible. A flexible price policy means offering the same product or service to different customers at different prices. (Perreault & McCarthy, 2005)
Some aspects of our services will require fluctuations. Hair and nail care would be areas where we would have to be flexible. Flexibility of the prices will still be set under price policy, as well. The changes of the prices will already be set as well, offering the same changes to all customers.
Marketing Budget
In order to implement all of these wonderful marketing efforts one must develop a marketing budget to determine the funds available for marketing as well as the appropriate usage of said funds. The following is the marketing budget for the Targe’ Salon.
Life Cycle
Everything has a life cycle as nothing lasts forever. The life cycle is from the products inception to its demise and everything in between. The product life cycle describes the stages that a new product idea goes through from beginning to end (Perreault & McCarthy, 2005).
The lifecycle of a product is simple. The product goes into the market; it reaches the growth cycle, the maturity cycle and finally the decline. The marketing plan of a service, just as a product must evaluate the life cycle of that service. Is the service seasonal; or is it used regularly? The length of the life cycle may vary and usually not precise yet, it is more important to expect and plan for the different stages than to know the precise length of each cycle (Perreault & McCarthy, 2005).
The life cycle of the salon service can be very short or endure for a long time dependent upon many internal and external factors. Internal factors such as the quality of the service and the customer satisfaction can lengthen the life of this service. When customers feel valued and pampered they will continue to patronize the establishment. External factors such as the economy and weather can shorten the life cycle. When economical decline affects the overall society, the salon business is not exempt. Using these services is not a necessity; therefore, when funds are low, consumers may eliminate discretionary spending. Weather may affect this business. Many clients will get their hair done in the rain. They may opt to wait until the weather is better, thus reducing the revenue of the salon temporarily. To combat this, the salon may offer rainy day specials.
From its inception, the Targe’ Salon was expected to be introduced and to produce very favorable results in the first stage of its life cycle. In the introduction stage, the product and services make their introductions to the market. In this stage, there may be much advertisement and marketing efforts to get the attention of the consumer. The introduction stage is when the service enters the market slowly and does not make enough revenue at this time to cover the investment cost in order to start the selling process. This stage may take up to one year to fulfill.
In the case of the salon, there are many start-up costs involved to get the salon prepared to provide services inside the store. There is equipment and product costs, leases to acquire, and payroll costs to cover. In essence, the service begins in the negative and the introduction stage more than likely will not cover the cost initially.
The next stage is the growth stage. In the growth stage, the salon service will flourish. At this time the revenue from the new service will more than cover the costs and produce a lucrative profit. The service given will be of such great quality that the word of mouth advertisement as well as the continued marketing efforts will result in increased customer flow and customer loyalty. The growth stage will continue as long as the salon continues to offer the best most innovative products and services available in the beauty industry. The expectation is that the new service stays in this stage for a many years.
As the salon enters the maturity stage, the marketing management strategy is to continue to focus on being a cut above the competition and continue to improve upon the services offered in order to decrease the risk of falling into the decline stage.
Conclusion
Targe’ Salon will be nothing short of genius due to the fact that most of consumers are women. Women generally look for convenience. We do understand that there is an abundance of hair, nail, and skin care salons. Most salons are not full service, either they offer hair care, but no skin care, or often they will offer hair and nail care, but no skin care. We want to be able a one stop shop salon, with the finest products, and experienced technicians. Currently our retail competitors are only offering to merchants food, apparel, household items, automotive service, optometry center, and even full line of groceries. By offering a full service salon to our consumers that will give us a greater edge over all of our competitors increasing revenue as well as obtaining new customers. The ability to have a one-stop full service salon will definitely affect the product positioning from the customer’s point of view. It is anticipated that the salon will rank highly in the industry in positioning of the service.
Targets new innovative full service salon will separate Target from the competition in the area of being a one-stop shop. The consumers will be able to relax and beautify themselves in a beautiful spa environment within the Target store. The in depth marketing plan has explored the identifying the segmentation criteria and identified that our target market is the middle class female consumer who is in the age range of 18-45, The factors that influence the organizational buyers and consumers, factors such as technology, politics and economics. The place element of the marketing mix has been examined by developing a distribution strategy for the necessary equipment and supplies and the plan has precisely outlined the details of the services offered. Targets customers will love having this service available in a location that they already frequent.
References:
Marketing: An Introduction (2005) G. Armstrong & P. Kotler. Pearson/Prentice Hall, Upper Saddle River, NJ
Kerin, R., Hartley, S., & Berkowitz, E. (2006). Marketing. 8th ed.: McGraw-Hill Companies.
Gale, T. (2006). Beauty shops. Encyclopedia of American Industries (Vol. , pp. ). Farmington,
Michigan: Gale Group, http://galenet.galegroup.com/servlet/BCRC
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