CASE ANALYSIS ON PRANAV NEW YORK
Pranav
New York was the first male salon and spa in the Philippines that
offered fusion of the modern ambiance, amenities and style of a full
service salon and spa with the masculine atmosphere of a barbershop. The
establishment was the project of Mark Obson and Karlo Nisce, both
students of Asian Institute of Management (AIM) taking up Masters in
Business Management (MBA). Together with their two partners, the salon
and spa was formally opened to the public on November 2004 and was
located at the 3rd floor of Robinson's Galleria mall fronting the west wing along EDSA.
If
one will look back to the groups' venture in putting up this business,
we can say that they were able to do the proper procedures. First was
the development of idea, then its conceptualization and preparation with
viability verification processes like general scanning, interview with
industry experts, exploratory focused group discussion and general
immersion exercises wherein Mark and Karlo personally observed and
experienced the service delivery of their would be competitors. After
they gather the data and address the issues raised, they were able to
formulate the groups' vision and mission. Finding the business location
was not smooth sailing because their Management Research Report (MRR)
mentors at AIM did not give them the approval because they did not have
the proper location study. They also admitted that no sufficient market
data was gathered on the customer dynamics even though they were able to
do selected location analysis on the following: 1) foot traffic, 2)
demographic mix, 3) micro-market competitors, 4) exploratory
micro-market survey and 5) male market concentration. However, the
partners push through with the plan so they could open Pranav New York
to the public by December which they believe is a good month for opening
new businesses. Just before the opening, one of the professors, Dr.
Morato Jr. made several comments, 1) can an all female crew would appeal
to the "macho" psychographic target customer of Pranav, if they are
trained in shaving men? 2) The chairs are not barber chairs. 3) The
spaces between the chairs are too narrow. 4) The spa was too cold. 5)
The office space blocked some of the frontal window and 6) the location in the third floor did not seem conducive to an all male patronage.
The initial euphoria on the business results soon faded three months from its opening with Pranav New York losses amounting to Php825, 568. Analysis of the data on existing operations was mainly due to weak sales and not enough generation of the volume it needed to finance its operations.
After realization that they were losing, Mark and Karlo did an analysis
based on the data they have from the existing operations. These data
includes their offered services to the customers as to what were mostly
availed of as well as differentiation if the service was salon related
or spa related. They also studied the demographics (age bracket and
status level classification) of clientele and found out that they were
gaining ground from the male customers' age 20-49years belonging in the
working professional segment. It was also noted that from these data
that the same age group of clients avail of both salon and spa services.
Salon services were from males within 20-29 years old (53.63%) and spa
services were from 30-39 years old (40.45%). Combined salon and spa
segments services were most frequently rendered to the 20 – 29 year old
bracket which made up 65.5% of the total number of customers. They also
did a Customer loyalty assessment with a combined 13.49% (visit of two or more times) and could
be the only factor that made an impact on the number of customers they
had, that is through "word of mouth" campaign because no marketing nor
advertisement was done after the initial survey or after the viability
verification research as disclosed to them by the Leasing Officer of
Robinsons Galleria. The profitability assessment also was not very
good for it yielded a negative profit/cost ratio for the first three
months which depleted the enterprises' resources. Initially, the given
location of the enterprise was not frequently visited by their target
market as noticed by their mentor. Personally speaking I would not go
out of my way if I'll go to a mall for a haircut or a spa treatment. I'd
rather go to a barbershop near where I live to be able to take a shower
right away after the haircut because remnants of cut hair are itchy and
very annoying. If a spa treatment is needed, I'll have it at home where
I can relax very much longer in the comfort of my own room instead of
having it in a shopping center and be stressed out again battling the
traffic.
SUGGESTIONS:
1. First and foremost, they should have listened to their mentors, but the damage has been done so….
2. Relocating
the shop to a more frequently visited area in the mall by the male
population (if they will hold on to this concept) will help the business
even if there is not enough marketing and advertisement done.
3. Consider
a mixed demographic clientele instead of targeting only the male
population. After all, females spend more than males on grooming
services by more than 90% on the average.
4. The
partners should consider on adjusting their prices to a sensitive level
and not concentrate on the high end customers for them to be
competitive in the micro- market at Robinsons' Galleria.
5. If
they would still hold on to the all male clientele, barber's chair
should be placed instead of the narrow, immovable lounge chair. Together
with this concept, they should drop the spa services mainly because it
occupies much of the rented space and the profit/cost ratio on this
segment of the business is not favorable.
ENTREPRENEURSHIP Submitted by:
PROF. JORGE SAGUINSIN Abel M. Villamayor
BUSINESSMAN / ENTREPRENEUR AGSB – MBAH 10B 