Pranav Case - Hannah Abellera

Hannah Rhuelle B. Abellera

S10-ENTREP

Pranav Case:

1.    1. Since what Mark and Karlo missed before putting up Pranav New York was to study the pros and cons of the location they have chosen in a detailed manner, the problem of the case is strategic. They felt the need to start up the business so they decided to do further location study, simultaneously. Later, in their study, foot traffic is distributed on its key entrances was a good number. Sadly, the location of Pranav New York was not an area where an incidental traffic, especially for male, would occur. Body Senses section inside the mall must be passed by first before Pranav can be accessed by mall-goers. A customer must intend to reach the place, located on the 3^rd floor of Robinsons Galleria. Still, they looked at the situation wherein there would be possibility that Pranav would be noticed if a mall-goer would enter the Body Senses section. Generally, the mall has a larger percentage of female mall-goers, about 60%. This demographic should have been considered before, since their target market were males, and men seldom go to 3^rd floor just to get a haircut. The professors were correct in stating the fact that men would preferably go to a more accessible area, like the ground floor for a fast service like haircut. Having weak sales, to sustain the operations and gain profit became the result of the non-strategic location of Pranav, because of its poor accessibility. Chairs that were not fit for the customers and spas with a condition that was not preferable for men, contributed to its failure also. If Pranav is building a male image, they should have hired skilled and artistic straight men to facilitate some service, especially hair cutting, so as men would be comfortable in going to Pranav. They should have also stood by the promotion of "macho" image for the establishment.

2.  2.   It was determined that in the analysis of Mark and Karlo of unprofitability of Pranav New York, the spa section had a big contribution. Discontinuing of the spa service was practical, because it would only incur further cost to the business. By this action, they could facilitate and concentrate in the salon wherein they were gaining money like in haircut, hot oil and hair color services. These services were acquired more by men rather than the spa. Probably, they could sell the equipment and unused materials of the spa to recover from losing money.

Marta Freitheim's Pranav case analysis

Pranav New York

Strategic or functional?

The main problem of Pranav is that they are not aggregating enough customers, not even to cover the minimum costs. Though an increasing number of males went to the salon for contemporary hair styling services the mall had mostly females. As well as the location inside the mall did not have enough foot traffic. The mall has more than 60% females and they spend more money in the salons. Targeting both genders is a strategic decision. The question about discontinuing the Spa is also a strategic decision as it affects the target market. I will discuss this further below.

This being said, I also think there are operational actions to be made. Like getting barber chairs in order to increase efficiency (research shows that the price leaders in Robinson`s are also the ones with the highest market shares). And changing the cost structure to a commission based salary in order to constrain fewer resources and motivate the staff to sell more of their products.

Split salon and spa?

Pranav NY is experiencing losses and is struggling to make ends meet. They are out of cash and in a hurry to gain profit for their graduation. The Spa is tying up a lot of capital and has the highest negative variance with 241 customers compared to the minimum monthly break even of 308. According to the research done post-opening, the Spa users are also the ones getting the classic cut. They do not see the need to spend additional money for the styling services. But spend money on basic grooming and wellness needs for men. So they do not leave much money in the salon and compromise a significantly smaller percentage of Pranav NY`s customers. Since they are lacking time and the Spa service is costing more than it is earning as well as there is a lack of critical mass, I would advise them to discontinue their Spa service and reduce their lease. This way they can focus on their salon services in order to post positive returns.

by Marta Fretheim

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