PRANAV CASE ANALYSIS by Dr. Melquecedes T. De Guzman Jr.

PRANAV CASE ANALYSIS

Melquecedes T. De Guzman, Jr. MD, FPSNM, CCD

MBAH-10B

Is the case problem Strategic or Functional?

Pranav New York, a male salon/spa business initiated and operated by AIM students Karlo Nisce and Mark Orbos as partial requirments for their course, has posted Php 850,000.00 in losses in their first three months of operations. The losses were attributed to weak sales. A review of their case (and their subsequent observational study of their competitors) shows that the problem is more STRATEGIC than functional because of the following points:

1.      CHOICE OF PRIMARY TARGET MARKET: Pranav was envisioned to be a male spa, thus all their services and marketing were designed for male customers and excluded females; however, their initial interviews with Industry experts showed that male customers accounted for only around 50% of their total customers, and thus excluding the female segment slashes your target market already by half. Furthermore, their subsequent observations revealed that females outspend males in salon/spas by 91%, too great a proportion to be excluded as their primary target market.

PROPOSED SOLUTION: Redesign services, marketing, branding to be not male exclusive, but to include females, and probably add family oriented services (for children, parents) as well.

2.      LOCATION: Pranav was located in the 3^rd floor of the west wing of the mall, near the bidy senses section, which was an area catering to services for women. As a start-up business catering to services for men with no prior publicity , their location was not conducive to generate enough foot traffic from their primary target market.

PROPOSED SOLUTION: Relocate to an area with better foot traffic.

3.      PRICING: Pranav’s pricing of services are on the high-end. Their subsequent observational study showed that competitors with more market shares have lower prices, while those competitors with higher prices have less market shares.

PROPOSED SOLUTION: Re-evaluate pricing scheme, create new but less expensive packages

4.      STAFFING: Pranav’s all female staff, although eventually trained, may not be best suited to deliver all services for men. Classic cut and shaving are important to male customers and should be delivered by skilled service providers.

PROPOSED SOLUTION: Replace some of the staff with skilled barbers for classic cut, shaving and other services.

5.      FACILITY SIZE, LAY-OUT AND EQUIPMENT: The visit and observations of Karlo and Mark’s professors pre-opening already revealed some flaws in their facility; chairs were not barber’s chairs (which was shown to be instrumental in customer loyalty during their subsequent observations), spacing between chairs were to narrow, and spa was too cold. Furthermore, they immediately leased a large space (153-sq meter) jacking up their operational overhead expenses which cannot be addressed by their weak sales. Further analysis showed that the SPA segment of their facility generated high losses.

PROPOSED SOLUTIONS:

a.      Replace chairs with barber’s chairs

b.      Redesign layout for more adequate spacing in between chairs

c.       The SPA segment may not be closed, it can still be operated but in a smaller scale

a.      Decrease SPA segment space (if they relocate to a different area in the mall, they should get a smaller space and appropriate smaller space fot the spa)

b.      Decrease SPA staffing

The business is salvageable, but drastic situations require drastic measures.They need to implement changes in their business' main value proposition, branding and marketing if they want to generate different results.