Pranav Case Analysis by Rosalynn Pangan MBAH 10B

----- Forwarded Message -----
From: rosalynn pangan <gijan_aalijah@yahoo.com>
To: "profjorge.entrep@gmail.com" <profjorge.entrep@gmail.com>
Sent: Saturday, March 9, 2013 4:04 AM
Subject: Fw: Pranav Case Analysis by Rosalynn Pangan MBAH 10B

----- Forwarded Message -----
From: rosalynn pangan <gijan_aalijah@yahoo.com>
To: "profjorge.entrep@gmail.com" <profjorge.entrep@gmail.com>
Sent: Saturday, March 9, 2013 3:59 AM
Subject: Fw: Pranav Case Analysis by Rosalynn Pangan MBAH 10B

Dear Prof Jorge

Sending po my case report. I just read Doc Elsie's comment that we should send it through your gmail account po.

Regards

Rosalynn Pangan

Dear Prof Jorge, 

Here's my take on the Pranav Case po:

Situation Analysis

Karlo Nisce and Mark Orbos conceptualized the first male spa in the Philippines in 2003 as part of their Development of Enterprise assignment during 1^st year of MBA studies at AIM. Then they pushed thru implementing their concept and opened Pranav New York in November 2004 at Robinson's Galleria.  In their first three months of operations, Pranav New York incurred losses amounting to Php 825,568. With this they had to trace back their process of developing the concept. In addition, their completion of their MBA degree is at stake.

It is important to know about the following about Pranav New York and relate it to how we they can go about resolving the issue or recovering from the loss:

Company	Pranav New York was established through the joint venture of Karlo Nisce and Mark Orbos together with 2 other friends with a vision to provide personalized service, innovative delivery, and customer satisfaction through teamwork, understanding of our clientele, and, relentless pursuit of excellence. Their mission is to accurately address the growing need of the Filipino male market by seamlessly fusing the modern amenities, ambience and style of a full-service salon and spa with the masculine atmosphere and expertise of a barbershop.
Competitor	Based on the case, they have identified 5 potential competitors, a barbershop, 3 salons and a nail spa. All provide hair and nail services but only the barbershop provides service for the body. All 5 shops have unisex target market. The barbershop and nail spa are located at the body senses are while the 3 salons are located separately at the 3rd level, east wing and basement.
Customer	The primary target market is male customers with estimated 39% traffic count at Galleria. Pranav New York is positioned for high end market and shares a potential 8.97% market.

Mr. Nisce and Mr. Orbos made a good feasibility study but failed to look deep into the data have gathered which I think does not hold true for what they have said in their vision and mission. If they truly understood their target market, which I think they are a bit confused about, they failed to look at the customers' needs and requirements.

Problem Analysis

The main problem is that they are losing money which is a result of another problems is weak sales.  Using a fish bone diagram, we can flake out deeper problems that may be useful in generating alternative solutions to sustain their operations:

Main Problem: Weak Sales
Materials	Chairs used are not barber chairs. The chairs too narrow for men to fit and do not allow conduct of simultaneous service processing.
Methods	Female crew doing the hair cut.
Measurement	They do not have an exact measure on the competency of their crew.
Machines	Not an issue
Manpower	Questionable competency of women to shave and to haircut for men
Environment	Location at the 3rd is not ideal for male patrons which usually visits the mall together with friends, wives, girlfriends or family members who would probably not go out of their way All-female barber crew which may hinder the "macho" proposed ambiance Centralized airconditioning unit which may hinder ideal temperature when receiving a massage There are too many chairs that may not allow enough working space.

The fishbone analysis seems to show that there is mismatch on addressing the needs of the male population. But there is also need to identify gaps in marketing the shop. Using the 4Ps of marketing, we can match the needs of the primary target market they intend to capture:

Product	Most preferred service is the haircut service which shares 44.44% of the services offered which is either the classic cut or styling cut. Spa therapy shares 24.24% while the spa-salon package share 6.06% Majority (53.63%) of their clients who availed of the salon services belong to the age bracket of 20-29 while customers within the age bracket of 30-39 availed the spa service alone (40.45%). Similar to the patrons of salon service alone, majority of the customers belonging to the age bracket 20-29 availed of the packages representing 65.52% of the customers.  Based on their 3 month operations, their clients' age range from 20-39 years old.
Price	Based on their customer motivation survey, price was the least concern of male customers. Male customers prefer barbershops mainly because of convenient location, consistency of haircut and speed of service.
Promotion	They promoted their shop by starting with a soft opening and distribution of flyers.
Placement	The shop is located at the 3rd floor of Robinson's Galleria at the heart of Ortigas which is a business district.

Going to what they claimed to aim, it seems that they have a confused target market and their concept does not meet what the clients need.

Alternatives Generation

Based on their previous feasibility and subsequent analysis of their business performance, it was evident that limiting their service to the male clientele will not make them financially viable, female spent 91% more than males on grooming services. There is high predominance of females going to the mall. Even if they are able to capture the whole male market, the 24.39% segment will not enable them to yield a positive bottomline figure in terms of profitability. In order to target the female market, setting up a unisex salon should be an opportunity to capture this greater market. In their observational study of their direct competitors, clients prefer spas based on convenient location and reasonably priced. As for salon service, convenient location is important and efficiency in terms of speed of service and technical expertise.

Data reveals also that hair cut services is the most availed service as compared to the spa service.  Their chances of getting a positive bottomline figure are with the salon services. With a significant margin of 71% and 55% for haircut services as compared to spa services which have a gross margin ranging from 41% - 56%.

In terms of expense, they pay a lot for the rental space and their space requirement is huge due to 5 beds they have for the spa service. The rental shares make up most of their operating expense which amounts to Php 89,759.00.

Decision  & Action Analysis

Based on the data, it would be best to reconsider their target market and to open their doors to the female market. At the same time, they may have to consider reducing their lease space to cut down their operating cost on rentals. This is similar to what Mr. Nisce and Mr. Orbos decided on. This will help them maintain financial viability by increasing sales through expanded captive market and reduce operating expenses through reduction of lease space requirement

Thank you

Rosalynn L. Pangan, RPh

AGSB MBAH 10B