Business description, analysis & review: Ivy Hair Salon - Iloka Benneth Chiemelie

0.1 BUSINESS DESCRIPTION

     Ivy hair salon was founded in 2003 with its branch located in Kuching Sarawak, Malaysia. A sole proprietorship business founded and owned by Ms. Ivy Chan Mee. Ivy Chan Mee acquired the necessary knowledge and skills needed to run and manage a hair dressing salon business with a degree in hair dressing and Masters in Business Administration, both from Massey University New Zealand. Ivy hair salon is a service firm, which specializes in hair dressing and treatment, facial treatment, manicure and pedicure as well as other beauty packages that ranges from personalized packages for different customers according to their specification, and group packages for different segments of the market.

     With the skills and experiences acquired, Ms. Ivy Chan Mee developed a strong management system and this is one of the reasons why the business has been successful since its establishment. Compared with other hair salons in Kuching, the quality of services offered by Ivy hair salon are attractive, and their seasonal promotion packages have been viewed as growth opportunities for. Ivy hair salon is currently franchising with L’Oreal Paris as their main licensed distributor in Kuching.

     L’Oreal Group is the world’s largest cosmetics and Beauty Company. Headquartered in Clichy, Hauts-de-Seine, in France. They are concentrated in hair colour, skincare, sun protection, make-up, perfumes and haircare. Ivy hair salon operates from 10am to 10pm on weekdays and 9am to 12pm on weekends, making it convenient for their customers to request services at their own convenience. Price skimming strategy is also one of the ways Ivy hair salon appeals to customers in the market as well as attracting new trends of customers.

     As suggested by Potter-Brotman (1994), in modern day market, efficient and effective management system determines how far and how well an organization can go. The E square service formula used by Ivy hair salon is a clear description of their belief in Potter-Brotman’s suggestion. Their goal is to maintain an effective and efficient management systems that aims towards keeping their customers delighted as this would help them in reach the company objectives which is to become one of the market leaders in hair salon industry across Malaysia.

1.0 BUSINESS ANALYSIS

     Business analysis, is a process by which financial data and other information related to a particular business are analyzed to gain insight about markets, competitors, internal and external management processes, consumers and other factors related to day to day running of the business (Groh, 2004; Kotler, 2000). Thus, the main purpose of conducting this business analysis is to better understand Ivy hair salon’s customers, competitors and the market where they operated.

     Every entrepreneur starts with high hopes of success, but there are liabilities caused by newness (Morse et al., 2007; Levy and Weitz, 1992). Each year firms go down in business, although not all close downs are failures, but it is certain many businesses do fail each year(Bates, 2005). Dennis and Fernald (2001) highlighted the odds of forming a profitable business as critical for those weighting the risk of starting up a new business. Since Ivy hair salon is new, they have to critically understand the market conditions where they operate to position themselves not just for the present but also for the future.

     Ivy hair salon’s business will be analyzed based on Belk’s two factors description of environmental (non-situational) and situational(Belk, 1975). Figure (1) below outlines the processes involved in a business analysis.

Figure 1 - Business process analysis

Source as Adopted from: Business process analysis by Barney (1996).

2.0 ENVIRONMENTAL ANALYSIS

     Environmental analysis is better defined by Hobbs and Young (2000), as a systematic process that starts with indentifying environmental factors, analyzing their nature and impact, categorizing them to find their impact on the business environment, and making various profiles for positioning. It comprises of scanning, monitoring, analyzing and forecasting the business situation (Frolich and Westbock, 2001; Lindgreen and Hingley, 2003). It is theoretically credible to understand that they are many type of environmental analysis, depending on the business operated and operating environment, but for the sake of meeting up with this paper’s requirements, this paper will analyze the environment where Ivy hair salon operates based on three categories (changes related to customer, technology and competition) by Belk (1975).

2.0.1 CHANGES RELATED TO CONSUMER

     Understanding customers within a market in terms of their behaviour is necessary for Ivy hair salon, for better positioning and pricing. Smith (1956) was the first to identify market segment as vital in meeting organization’s goals. Kotler (1991) further underlined the idea that market and its segment are clusters of potential consumers, and for any organization to enjoy marketing success, they have to match their capabilities to the market segment’s requirement.

2.0.1.1 DEMOGRAPHIC PROFILE OF IVY HAIR SALON CONSUMERS

     Researchers have labelled understanding of consumer’s demographic profile as critical in customer retention and satisfaction(Lavesque and McDougall, 1996). This is because, rapidly changing competitive environment characterised with choice varieties, sophisticated marketing communication and product, decreases product and service differentiation (Nanji and Parsons, 1997; Kline 1997), thus, understanding consumer’s demographic profile is vital for one label branding and direct market communication (Cahill, 1995; Turnbull et al, 2003).

     Consumer demographic profile generally involves dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality.  

Table 1 -

Levels of variable	Objectives	Subjective
General (behavioural patterns: person characteristics	Income Age Education Behavioural patterns	General values Lifestyles Personality
Domain-specific (product-class usage)	Situation Frequency of use Substitution behaviour	Opinions Perception Attitude Domain-specific values
Brand-specific (brand-usage)	Brand loyalty (behaviour) Frequency of use Actions	Brand loyalty (attitude) Preference Evaluation Purchase intention

Source as Adopted from:  consumer demographic profile by Evans, F.B (1995)

     Table (1) above, classifies the Kuching market where Ivy hair salon operates in three different categories of general pattern, domain specific and brand specific as proposed by Evans (1995). Evans described the general pattern in terms of common norms and no strong attitude towards usage, while domain specific is related to situations for example wedding, or party which could prompt the need for a new hair style or body makeup and finally, the brand specific is related to brand loyalty, which in this sense described loyal customers. Understanding this market segment as illustrated will help Ivy hair salon to better position and price their services as well as conquering niche markets. 

2.0.2 CHANGES RELATED TO COMPETITION

     While business collegiality has been widely accepted as a professional ethos (Goode, 1957; Greenwood, 1957; Haber, 1991; Parsons, 1968), the strength of the professionals has been proven to be less robust when challenged by external force (competitors). To a better understanding, competition means rivalry between competitors or monopoly to a quasi-market (Walsh, 1995). Rivalry in these sense, entails the idea of being above or staying ahead your competitors. They are many hair salon industries in Malaysia, and basically, all the hair salons have common services thus differentiation could be a difficult task for Ivy hair salon. This makes it important for Ivy hair salon to identify their competitors.

2.0.2.1 IVY HAIR SALON COMPETITORS

     Competitor and customer orientation, are considered important strategic orientation (Gatignon and Xuereb, 1997; Zhou et al., 2005; Slater and Narver, 1994; Day and Wensley, 1983, 1988). Competitor orientation can generally be seen as performance differentials between firms offering the same service or product (Stoelhorst and Van Raaji, 2004). Understanding your competitors is important for improving market-sensing capabilities, and response strategies, particularly in an unpredictable and hostile environment (Day, 1994, 1999; Jaworski and Kohli, 1993; Vargo and Lusch, 2004).

     Ivy hair salon’s competitors include basically all hair salon industries and other industries that offer the same products, such as other L’Oreal Paris distributors. Recent years have seen an increase in the number of hair salon industries; this makes it important for Ivy hair salon to monitor their competitors in terms of product offerings and pricing in other to different their products and services.

3.0 SITUATIONAL ANALYSIS

     Belk (1975) developed a distinction between situational and non-situational factors. Situational factors refers to all those factors connected to a time and place of observation which does not follow personal knowledge and stimulus attributes and which has visible and systematic effect on current behaviour.

Belk (1975) also suggested situational factors to include task definition, physical and social surroundings, temporal perspectives and antecedent states:

1. Physical surroundings includes geographical and institutional location, decor, sounds, aromas, whether and visible configurations of merchandise, lighting or other material surrounding the object of stimuli.
2. Social surroundings include the presence people, individual characteristics, apparent role and interpersonal statues.
3. Temporal perspective maybe specified in units ranging from time of day to season of year.
4. Task definition refers to the situational features, such as intent or requirements to choose, shop for or gather information about a general or specific purchase.
5. Antecedent states refer to momentary situations or conditions of purchase such as acute anxiety, pleasantness, hostility, cash on hand, illness and fatigue.

     The SWOT model has enjoyed consistent popularity in the past decades among both researchers and practitioners. Originally introduced in 1969 by Harvard researchers (e.g. Learned et al, 1991),SWOT framework became popular because of its inherent assumption that managers can plan the alignment of a firm’s resource within its environment.  Current empirical work suggests that successful marketing strategies emerge from a comprehensive situation audit (Menon et al., 1999). This audit involves a planned input to a systematic evaluation of both external (opportunities and threats) and internal (strength and weaknesses) environment. On the other hand, information about competitors is collected as well to enable managers in resource commitments (Day and Nedungadi, 1994).

     Understanding both the internal and external environments where Ivy hair salon operates is important as suggested by recent researches because firms that generate disseminate, and respond to market intelligence and planning inputs are likely to enjoy enhanced financial performance (Jaworski and Kohli, 1993). The key feature of a market driven firm is indeed the culture that values both intelligent-based and continuous learning about the firm’s environment and planning processes of developing a value proposition that matches customer value requirements and differentiates the firm from their competitors (Cravenset al., 1997). This proposal integrates both the intelligence and marketing inputs of Ivy hair salon into the SWOT framework. Ivy hair salon’s environment will be analyzed using the standard SWOT framework.

Table 2

Source as Adopted from: Barney, 1996.

     Table 2 above illustrates the situational factors that directly or indirectly impact on the performance of ivy hair salon. Thus, the SWOT analysis will be based on the figure (2) above.

3.0.1 OPPORTUNITIES

• Quality service – services offered by Ivy hair salon generally meets the standard of hair styling industries across the globe and it is an opportunity because it creates brand image for Ivy hair salon.
• Main licensed L’Oreal Paris distributor – being the main distributor of L’Oreal Paris healthcare and beauty products in Kuching, presents Ivy hair salon with the opportunity to position its self as a world class hair salon and draw new markets to themselves.

3.0.2 STRENGTHS

• The management – Ivy hair salon’s management is made up of educated personnel with experiences in theoretical and practical beauty and healthcare programs as well as business management. This gives them a competitive edge within the industry.
• Organization’s culture – Ivy’s culture is built on “just do it now” approach. This is strength to the hair salon, because customers get quality service in considerable time frame compared to other hair salons in Kuching.

3.0.3 THREATS

• Competitors – just like in every other business, the main threat of Ivy hair salon are competitors. This is because they increasing number of market entries, increases customer’s choices and reduces number of loyal customers(Hill and Westbrook, 1997).
•  Product and service differentiation – another threat faced by Ivy hair salon is the lack of product differentiation, with new entries into the industry, the task of differentiating products and services has been made difficulty since the Kuching market sees them as virtually the same.

3.0.4 WEAKNESS

• Local media advertising – advertising is an effective way of attracting new customers, but the number of customers an advert can reach depends on the form of advertising used (Wing, 1988). The use of local media (newspapers) by Ivy hair salon is a weakness because of the low number of customers it can reach.
• Lack of expansion and diversification – this is a weakness for Ivy hair salon because with just 1 branch in a Kuching market of over 700 thousand in population, their competitors will find it easy to penetrate the market.

• 4.0 PROPOSED MARKETING OBJECTIVES

     Traditionally, marketers have characterized marketing performance in terms of profit, sales, and/or market share goal with relation to certain product: (by product, includes services, goods or programmes) within a specific period (Aaker, 1984, Day, 1984, Shetty, 1979).

     It should be noted that marketing objectives details guidelines to individual efforts and functions; an objectives that serves to motivate performance and implementation and provides steps to evaluate and control activities (Day, 1981, 1984). To better meet Ivy hair salon’s goal and mission, two marketing objectives was proposed to conceptualize the company’s objectives, attract new markets, increase sale and profit and build customer loyalty.

4.0.1 INCREASE PRODUCT AWARENESS IN KUCHING MARKET BY 20 PER CENT IN ONE YEAR

     The first step is to specify the target market to be served. Market selection has traditionally been associated with market decision among marketers. This involves indentifying consumer groups from the population in general, which are more likely to purchase and use Ivy hair salon’s products and services. For example, Ivy hair salon can traditional identifies viable consumer segments by using product-related variables (e.g. product benefit, product usage, and brand loyalty) and consumer-related variables (e.g. demographic, lifestyle, socio-cultural, economic and geographic) (Buell, 1984). Once Ivy hair salon has identified their consumer market, they should prioritize the segments in terms of their marketing “viability (Kotler, 1988).

     The next step is to specify the consumers that are most like to impact on Ivy hair salon’s marketing objectives. They are varieties of impact indicators, usually divided in terms of subjective indicators and objective indicators (Sirgy et al., 1982) as highlighted in table (1) above. Subjective indicators include life satisfaction. These customers can be categorized based on their frequent usage, lifestyle and occupation.

     Finally, Ivy hair salon will have to specify the nature of the product (s) directed to the target consumers. The main issue here involves product selection and design. This is designed to facilitate strong focal consumer behaviour. For example they can configure their products based on their target segments demography, in terms of age, gender and race to better maintain focal interested from the consumers and facilitate the extent of result from their consumer’s focal behaviour.

4.0.2 INFORM TARGET AUDIENCE ABOUT FEATURES AND BENEFITS OF THEIR PRODUCTS AND SERVICES, AND ITS COMPETITIVE ADVANTAGES, LEADING TO A 10 PERCENT INCREASE IN SALE EACH YEAR

     Literary, there is some ambiguity with regards to the definition of product awareness. Researchers in retailing have argued whether product awareness involves brands known to consumer or just those consumers remembers at a particular time (Alba and Chattopadhyay, 1985). Product awareness involves visualization and recognition. Recognition has been identified as a major determinant in consumer choice and decision making situations (Chattopadhyay and Nedungadi, 1992). Production of stimulus has been established to enhance information efficacy and results in higher product recognition (du Plesis, 1994). This was demonstrated by the Pavlov’s classical conditioning theory of “Dog and Bell’. Ivan Pavlov together with his assistant Ivan Filipovitch Tolochinov, both Russian psychologists found the dog always salivates once the bell is ringing, irrespective of food availability or un-availability (Todes, 1997).

     Based on the Pavlov’s philosophy of mind, Ivy hair salon can developed what marketer refer to as Pavlov’s Dogs – a set of consumers who react to product brands without critical thinking. This is achievable through product awareness, which involves informing the target market about their products features, positive results, benefits and competitive advantages over other existing products. When the target market develops a stimulus for Ivy products and services, they will salivate (react positively) to their brand and unconditionally make purchases as well as become loyal customers. This will generate new sales and profit to Ivy hair salon and therefore meet set objective of 10 percent sales per year.

5.0 ADOPTED MARKETING STRATEGY

     Marketing strategy are measure firms use to position themselves above their competitors (Zehir, 2005). Examples of these measures include reducing costs, cutting production, improved efficiency, entering new and international markets. Nevertheless, these measures have no positive impact on the company if they don’t increase sales (Zehir, 2005; Laitinen, 2000; Uslu, 1999; Beaver and Ross, 1999; Pearce and Michael, 1997). Porter’s generic (strategies) business model was adopted as a marketing strategy for Ivy hair salon.

5.0.1 PORTER’S GENERIC BUSINESS STRATEGIES

     Porter (1985) identified three basic business strategies – differentiation, cost leadership, and focus – and a company performs best by concentrating on one of these strategies. Many researchers supported porter’s idea by suggesting that these strategies can help companies gain the best chance to achieve competitive advantage(Cross, 1999; Karnami, 1984; Miller and Friesen, 1986; White, 1986; Hill, 1988; Mathur, 1988; Murray, 1988; Miller, 1992; Dess and Miller, 1993; Johnson and Scholes, 1993, Fuerer and Chaharbaghi, 1997; Hlavacka et al., 2001). Nevertheless, whatever the strategy a company chooses, it must fit its objectives and goal to gain a competitive advantage (Kippenberger, 1996; Surowiecki, 1999; Parker and Hems, 1992; Ross, 1999).

Figure 2

Source as Adopted from: generic business model by Porter, (1985).

      Figure (2) above illustrates Porter’s Generic business strategies. Cost leadership and differentiation has been identified as the measure Ivy hair salon should adopt to attract new customer and differentiate their products and services from that of their competitors.

5.0.1.1 COST LEADERSHIP

     Cost leadership is one of porter’s generic strategies (Malburg, 2000). This strategy focuses on having the lowest cost within an industry in other to gain competitive advantage (Porter, 1979; 1987, 1996; Bauer and Colgan, 2001; Hyatt, 2001; Anon, 1998; Davidson, 2001; Cross, 1999). In other to achieve a low-cost advantage, the organization must have a low-cost management, low-cost manufacturing and products, and low-cost workforce, and must be willing to discontinue any activity that does not offer cost advantage and consider outsourcing with other firms with a cost a cost advantage (Malburg, 2000). Low-cost leadership can be achieved in many areas such as access to raw materials, input cost, and capacity utilization of resources, product design, technology, mass production and mass distribution(Malburg, 2000; Venu, 2001; Davidson, 2001). As proposed byPorter (1985), only one firm in an industry can be the cost leader(Venu, 2001; Sy, 2002), and if this is the only difference between an organization and its competitors, then it is the best strategic choice to make (Malburg, 2000).

     By implementing this strategy, Ivy hair salon will be able to meet their business objectives of improved sales, enhances profit and market leadership, through adopting the Porter’s cost leadership strategy. The benefits of this strategy to Ivy hair salon includes as mentioned above, competitive advantage, customer attraction and retention, increased sales, maximized profits, market leadership and increased growth(Cross, 1999). This is because lower price results in higher demand and, therefore a large market share is achievable (Helms et al., 2007).

• DIFFERENTIATION

Differentiation is another of Porter’s generic strategy (Reilly, 2002). This strategy focuses on providing a unique product or service (Hyatt, 2001; Porter, 1979, 1987, 1996; Bauer and Colgan, 2001; Hlavacka et al, 2001; Cross, 1999). It enhances customer loyalty because of the uniqueness of products or services offered (Cross, 1999).

     To meet the business objectives of Ivy hair salon, adopting differentiation is a great way of maintaining consistent sales and direct marketing. Differentiating their services in terms of quality, processing time and added values will enable them to remain competitive in the market, attract new customers and penetrate new markets

6.0 TARGET GROUPS AND CONSUMER PROFILE

     Target marketing is a vital stage in decision making for all organizations undertaking marketing and strategic planning (McDonals, 1995; Piercy, 1992). It is the part of marketing segmentation process that groups consumers with similar needs and buying behaviours together (Dibb and Simkin, 1996). Identifying target groups are important for conquering niche market, direct marketing and increased brand loyalty. This due to the idea that customers in a particular group demand same kind of product and service, a solution for a particular customer could me solution to all customers in the same group with regards to same need and demand. Ivy hair salon’s target markets are group in 3 categories:

• Adult – this includes both genders from the age of 35 and above. Marketing to this group is different because majority of people in this group comprises of graduate, working class and parenting individuals.
• Adolescents – it includes both genders between the ages of 15 to 34, but advertising is mainly focused on females since they make up about 80% of this group.
• Adopters – they include both genders from the ages of 6 to 14. This target group is classified as adopter because majority of consumers in this group seeks permission from their parents to use the products and services or are both new into beauty and healthcare.

6.1 DEMOGRAPHIC PROFILE OF CONSUMERS

     From the primary research in the first section of this research paper, the figure (3) below Ws inducted to explain Ivy hair salon’s customers. From the figure below, it is noticeable that majority of Ivy hair salon’s customers are females, educated and Chinese between the ages of 16 to 35. Chinese is one of the biggest ethnic groups in Malaysia, mainly known for their classy nature and spending power, having them as one of their major consumers means Ivy hair salon is presently in the right direction.

     Nevertheless, other Races and demographic constraints should not be ignored because they make actually 60 percent of other consumers apart from Chinese, so understand their behaviour is critical for Ivy hair salon’s progress. From the other groups Malays are the highest with 30%, followed by other Malaysian locals (a combination of other ethnic groups in Malaysia) with 20% and foreigners with 10%.

     With increased growth in tourism and education, a marketing plan that focuses on foreigners is also crucial (Davidson, 2001; Porter, 1979, 1987, 1996; Bauer and Colgan, 2001; Cross, 1999; Hyatt, 2001; Hlavacka et al., 2001). This is because majority of the foreigners exchange their currencies at lower rates in Malaysian Ringgit such as the US Dollars and the British Pounds. This makes service payment cheaper for them and encourages use of Ivy hair salon products and services.

Table 3 Ivy hair salon's customers

CLASSIFICATION OF IVY HAIR SALON’S CONSUMER DEMOGRAPHIC PROFILES
Races %	Gender %	Ages in %	Occupations in %
Chinese = 40 Malays = 30 Other locals = 20 Foreigners = 10	Females = 80 Males = 20	16 – 35 = 60  6 – 15 = 30 35 and above = 10	Students = 45 Employees = 30 Employers = 5 Others = 20

7.0 JUSTIFIED MARKETING MIX AND COMMUNICATION PLANS

     It is now 46 years since McCarthy (1964) presented the “marketing mix” as a means of translating marketing planning into action. The marketing mix is commonly known as the “four Ps”. These includes theproducts (both services and products) tailored for customer’s satisfaction, and priced at an affordable rate, made available for the customers to buy (place) and promoted to create awareness of the product being offered

     Kotler (1967) widened this scope to include consumer, environmental, competitive and marketing decision variables. This implies that the marketing mix also includes the internal market and controllable variables. Borden (1964) focused more on manufacturing industries to define the four external forces on an organization as customer’s purchasing behaviour, trade behaviour, competitor’s behaviour and government regulations.

     Another model for marketing mix was developed by Rohins (1991)who offered an alternative mnemonic known as the “four Cs”. These are defined as customers (who make purchases), competitors (who provide alternatives to customers), capabilities and company, (both which refer to the organisations with the ability to satisfy customers). Many of these and other models have defined marketing mix in different concepts. But the similarities that exist between these models is that customers are group of individuals with similar needs, organizations target customers, and resources and capabilities are organized in a way that satisfies customer’s needs.

     Ivy hair salon’s marketing mix will be developed from McMcarthy’s (1975) concept of 4P’s – product, price, promotion and place, marketing mix. For many years, these has been used as a bases for designing a marketing plan.

• Product – features, quality, quantity.
• Place – location, size of outlets and market.
• Price – strategy, determinants, levels.
• Promotion – advertising, sales promotion, public relations.

7.0.1 PRODUCT

     To ensure that Ivy hair salon meets the set product standards, a quality assurance teams should be created with the responsibility of monitoring the quality of their products and services, both in salon, suppliers and partners alike. This will include a continuous round of visits, inspections and audits, announced and unannounced, to all product and service facilities, distribution centres and salons. This will ensure that all their products and services and manufactured and delivered at a very tight specification, which details the exact quantity and quality of raw materials used, dimension of finished products and application of services (Anon, 1998; Hyatt, 2001).

     The quality control measures should be extended at the salons as well, to ensure that all the services offered meets the necessary quality control measures. If implemented as stated, it could enhance and maintain the quality of services and products offered at Ivy hair salon, thus positioning them as a standard hair salon industry within the market gaining competitive advantage and increasing customer loyalty.

7.0.2 PLACE

     Ivy hair salon currently has just one outlet in the Kuching market. The focus here would be to implement managerial capitals into outlaying an effective, prudent and strategic expansion within the market (Venu, 2001; Darrow et al., 2001). This is geared towards enhancing its competitive advantage and strengthening their leadership position. There is no doubt that the higher number of strategically positioned market Ivy hair salon has, the better their market shares.

7.0.3 PRICE

     Ivy hair salon should realise, that despite the cost saving advantages inherent in standardization, success is often attributed adaptation abilities within specific environment (Martin, 1999; McCracken, 2002). Thus, their pricing strategy should be based on reduced cost of production, which will reduce product and service price as well in other to increase demand and sales. They can achieve psychologically pricing – dividing their prices based on their customer’s demographic classification and product packages.

7.0.4 PROMOTION

     Using the promotional tools, Ivy hair salon should look to localise its marketing communication strategy by considering the enormous range of cultural, demographic and other differences that would be faced in each market (David, 200). Ignoring the local markets and the factors which could affect the demand for their products and services will be naive. Thus, they should analyze their customer’s attitude towards their products and services, usage patterns and ethics, and moral and religious consideration in that environment. This is necessary to ensure niche targeting and concurring all niche markets in Kuching.

7.1 MARKETING COMMUNICATION PLAN

The marketing communication was seen by Kotler (1994) as consisting of five major tools:

• Advertising;
• Direct marketing;
• Sales promotion;
• Public relations and publicity; and
• Personal selling.

From the above communication plan, attention will be given to advertising and public relations as they are the adopted marketing communication plan for Ivy hair salon.

7.1.1 ADVERTISING

     Ivy hair salon should induct a wide range of advertising campaigns within Malaysia. For example, they should consider using Malaysian celebrities to promote their products and services. These advertisements should include different campaigns targeted to different market segment, but the message should all be the same. Targeting different advertisements to specific market segments will ensure that there is no racial biasness, or criticism. Advertisement is necessary because it would increase product awareness as well as building stronger brand image with the use of celebrities and different advertisement campaigns targeted to different market segments (Grein and Gould, 1996).

     Nevertheless, whatever meaning that they intend to convey to a targeted group, advertisement will certainly been seen by other who are not the targeted group (Pollay, 1986). The groups used in this study are the ethnic groups in Malaysia. Malaysia is a multi-ethnic country in South East Asia. It has a population of 23.27 million, with Malays as the majority (50 per cent), followed by Chinese (26 per cent), and Indians (7.7 per cent) (Anonymous 2004). Ethnic differences are visible in Malaysia, and are based on language use in both formal and informal situations (Abraham, 1999; Platt, 1981; Watson, 1980). Thus an indirect mass advertising is necessary. This can be achieved by using Bahasa Malaysia (Malaysian language) and English to communicate their ideas to each group.  

7.1.2 PUBLIC RELATIONS

     Public relationship should be well planted in the communication plan of Ivy hair salon. This because it is essential for clearly communicating product features and benefits, assisting customer by offering needed support and promoting brand image since it often involves face-to-face approach. According to du Gay (1997), public relations is a negotiation and dialogue model, and they should be understood and analysed with respect to political, cultural and social contexts rather than narrowing the definition (Holtzhausen, 2000, p.95).

     Ivy hair salon should provide public relationship officers that will handle the task of answering customer’s questions. To reduce costs involved, they train their staffs on public relationship management, giving them the necessary skills required to better entertain their customers, and offer them a comfortable atmosphere. The main aim it to retain their customers and maintain a strong brand image.

8.0 REALISTIC ACTION PLAN AND RECOMMENDATION

     Action plan basically involves setting an achievable goal in a way that it leaves no question as to what is to be accomplished, building clear and discrete steps to achieve the set goals, setting up a team responsible for achieving the goal, and measure the extent or degree of accomplishment for the set goals (Amosford, 2007).

Figure 3

     From the figure (3) above, the main object is expanding Ivy hair salon. This is important because Ivy hair salon presently have just one branch in Kuching, Malaysia. Expansion is necessary as it increases market shares, profit and strengthening their leadership abilities, as well as brand recognition.

8.0.1 OBJECTIVE

     The main objective is to expand within Malaysia, as Ivy hair salon can only boost of one outlet as of present. Expansion is necessary for gaining competitive advantage, increasing marketing shares and brand recognition.

8.0.2 STEPS AND TEAMS RESPONSIBLE

     The first step is market research and advertisement. Market research is necessary to better understand consumer behaviour, targeting and proper positioning within the market (Prahalad and Hamel, 1990; Amit and Schoemaker, 1993; Nonaka and Takeuchi, 1995; Calantone et al, 1995) . While the researching is going on, advertisement should follows as well to create product and service awareness, communicate possible location and pricing to customers. Research will be handled by the market research teams, while advertising agencies will handle advertisement. The market research is expected to go through January to April, while the advertisement will run till April. The advertisement is estimated to be 200 thousand, Malaysian Ringgit, while the research will cost roughly 50 thousand in Malaysian Ringgit

     By September, the new location is expected to be open, and Ivy will have to shift from advertisement to promotion. This is geared towards attracting new customers, building customer loyalty and encouraging purchase. This can be achieved by using any of the promotion and communication tools discussed above. The cost of renting the outlet is between 5 to 30 thousand RM per month. . 

8.1 RECOMMENDATION

Figure 4

Sources as adopted from: Deloitte (2006)    

To better achieve the set action plan, it is recommended that Ivy hair salon should make use of the “Thinking and Action” strategy as illustrated in figure (4) above. This involves critically evaluating each step and process made (Kotler and Keller, 2006; Cooper and Kleinschmidt, 1990; Deloitte, 2006). It will ensure that they are on the right track, while reducing excessive overhead cost through deploying the right strategy and team.

9.0 CONTINGENCY PLAN

Contingency plans are set to tackle unforeseen circumstances that arises in business which might result in lose to organisations involved(Wheelwrieght and Clark, 1992). Two contingency plans have been developed for Ivy hair salon.

9.0.1 SUDDEN ABSENCE OF AN IMPORTANT STAFFS

     If one of the staffs is not there to offer the needed services, this could dent Ivy hair salons image. Let’s take a situation where a customer came to do facial treatment, and the staffs went out, or did not show up for work due to sudden illness, it could result in the customer leaving unsatisfied. To ensure that the customer does not lose his trust on the brand, and services (Van de Ven, 1986), provided by Ivy hair salon, they will have to use the solutions below.

1. Take down customers phone number, and promise to call him back when the staff is available, will ensuring him that if he comes back, the staffs will attend to him first, even if it means ignoring other customer.
2. The second plan would be to issue him a discount coupon to encourage him to come back.
3. In cases where the customer is a diamond customer (uses their products and services frequently), sending one of the staffs to his home, to offer a home service could be a necessity.
4. The final step is to convince the customer that such situation will not repeat itself again, let the customer know how much the inconveniencies are regretted and show appreciation for his use of their services.

9.0.2 FAILURE OF THE SUPPLY CHAIN

     In cases where they are inadequate supply of needed products, it renders the services useless because they don’t have the necessary materials required to undertake the services demanded by customer. The solutions recommended for such situations should include some if not all of the steps mentioned below.

1. To keep serving the customers, they should change the products they use. This is to ensure that customers don’t leave without receiving the services to require.
2. Change of supplier is necessary. If the case gets worst, it could be the only option because they can’t afford to use a different product for a long time, or their customers will notice the difference faster.
3. They might consider having more than one supplier. This is to ensure that repetition of such situation is limited in the future.

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