Good evening Sir!
Sending you my case analysis on the PRANAV CASE
ROMS
PRANAV CASE STUDY
by: Roman M. Cruz
SITUATION
Pranav New York was envisioned as the first male spa in the Philippines and the fulfillment of the need of the Filipino market for an integrated grooming and wellness services for men. It is situated at the third level, west wing of Robinsons Galleria. Something that is uniquely different from its direct competitor, Roberto’s barbershop who is located at the ground floor of the mall.
The business was a product of Mark Orbos and Karlo Nisce inspiration of their own experiences as patrons of barber shops, salons and spas, to which they are convinced that there should be one stop shop that will cater all these needs of the male population for grooming and wellness services. In starting the business concept, they had made their homework in conducting different market study to test the potentiality and success rate of their new venture. However, some data gathered were left unstudied and or unfinished, even their professor has noted disparaging comments on their ventured idea. In effect, after the third month of operation, the business is losing money.
PROBLEMS AND ANALYSIS
Identifying these data that were left unstudied by the two budding entrepreneurs are the following:
1. Demographics- though their conviction ofestablishing the first all male one stop shop that provides grooming services and wellness to the male populace is good, it has been noted that for theirselected location, the Robinsons Galleria, the foot traffic are skewed towards female segment which comprised about 60% of the mall goers. More so, this was further highlighted when they had found out thru the gender composition andmarket share, there was a dominant incidence of the female market in Robinson’s unisex salon, while only an average of 13.28 % of females was observed at Pranav. This should had been greatly considered during the initial stages of the business concept to which the wrong market reading as created a spiral effect on the output and structure of the business. In essence, there is lack of critical mass ( male segments ) that will be crucial in sustaining the business in which taking into consideration their Mission and Vision which is concentrated as the first all male one stop shop in the Philippines.
2. Location- the selection of the location of Pranav was a result of eagerness and without proper planning and study. Initially, Robinsons Galleria itself has a great potential in terms of having a big chunk on the catchment rate considering its high foot traffic characteristic. But locating Pranav at the 3rd level of the west wing of the mall is totally slashing its business potential because from the study itself by the leasing department, most male traffic are coming in from the east wing and on the center floor of the mall. Infact, its main competitor, Roberto’s barbershop is located at the ground level. Male segments will not exert a lot of effort on going in the third level only for Pranav especially if they are with their female partners, wives or girlfriends.
3. Price sensitivity- basing on the results of their further study, it has been revealed the leaders in the industry are those with a fairly affordable and competitive pricing. On the other hand, those high-end position brands are lagging behind. Pranav pricing is categorized in this set of high-end positioned brand.
4. Dominance of the female segment and higher spending level- on their study, female spent on the average, 91% more than the males. Thus females were certainly a market that was too profitable to exclude and overlook in the micro market of Robinson’s Galleria. Consequently, these female markets are often seen on unisex salons.
5. Structure and processes failure- as noted by their professors, there are all female crew that were to attend and appeal to the “macho” psychographic target customer of Pranav. Training was also an issue. Example of which is that the owners had failed to realize that these all female crew were not taught on shaving men. The choice of chairs were confined on immovable black lounge chairs rather than a barber’s chair which limits the potentiality to offer other services to its clients because, customers would always feel uncomfortable on hopping in to different chairs/area while availing of the services. The spaces between chairs are too narrow. The Spa was too cold. Air conditioning units could not be adjusted to a higher temperature. The office space block some of the frontal window which can contribute a negatively in the store visibility.
RECCOMENDATIONS AND ACTION PLANS
After identifying the problems, it has highlighted that the problem of the business was largely concentrated on the failure of proper strategic study before conducting the business.In effect, a weaker top line has been achieved that has causing the bleeding in the bottom line of the business PnL. The thought of being the first in the country in their offerings overshadowed the science of market study and interpretation, which is so much critical in putting up a business. However, in order to solve the problem and trouble shoot Pranav and realign it to make it a profitable business, here are the following recommendations:
1. Revision of its business objectives and realigning it to accommodate the female market in which it has a promising great potential for sales and market share growth just like of the industryleaders, which are commonly unisex salons.
2. Rationalize service offerings by removing services that are not contributing much but covers a bigger space in the salon. Instead, focus on its core services that are driving sales and attracting customers.
3. In relation to the rationalizing of service offerings, realigning of the structure of the salon is needed to accommodate the entry of the new market segment, which are female. This means also leveraging on their strength of having a large floor area that could handlelarge capacity or volume of customers in a given period of time.
4. Relocate the business into high traffic areas if its possible catering to both male and female market.
