Nyel Berroya
Pranav New York Case Analysis
Strategic or functional?
The primary problem of the case is strategic. Mark and Karlo missed the appropriate location which should be the east wing and center position of Robinsons Galleria instead of the west wing. Location is the key here since the primary target market of Pranav are the male working professional surrounding the mall. Pranav failed to anticipate the flow of their PTM such as mall habits and behaviour. 3rd level as a location has a low foot traffic and inconvenient for PTM male professionals and mall goers to go to which is less accessible to potential customers. Male by nature prioritize flexibility and convenience. The salon is doing well as it progress which is contrary to its SPA due to space expense and limited customers. The sales of SPA was declining monthly although it's auxiliary services such as hot oil and nail are progressing but not enough to cover the total customer base. Majority of the salon customers are availing the basic services instead of stylish and trendy look which is a premium grooming services. In the 3 months of operation, less than 15% are loyal customers specifically in haircut services which are dominated by customers concern more of their urban and classy look, aged 20-39. Spa segment was unsuccessful hitting their PTM due to low share of total customer based segment and loyalty is an issue as well. Basically, spa segment is greatly eating up the revenue of the salon due to fixed expenses such as rent and having low sales. Essential equipments are not maximizing instead of being multi-purpose such as chairs and others. Employees are de-motivated especially on the sales aspect such as absence of commission for all goods and services. Up-selling and cross-selling the spa and salon for every customer may significantly increase sales volume. Promotional activities such as loyal cards, discounts, GC's and other groupon sites may actually create awareness and intensify loyalty for existing and potential customers.
Basically, Spa is not sustainable and feasible considering the poor location and low foot traffic of PTM-males. Female market is more dominant especially paying on premium services. Pranav failed to study its competitor which is getting more clients than their usual rather than focusing only of being unique.
Split salon and spa?
Looking at profitability and sales trend of the both segment of Pranav, splitting and retaining the salon is a wise decision especially on the expense aspect. Salon is manageable and may potentially go bigger in a short span of time especially if its relocated at the ground east wing level where it's dominated by their target PTM. Redesigning the concept of the salon as UNISEX may capture female market share from the competition. Or Pranav-salon may stay on their existing PTM but finding a competitive edge over competition by offering certain hair-styles which is trendy so they can be deemed different yet fashionable, fresh and unique in the industry. It may also be a salon offering pampering services as additional feature like a one-stop shop for their PTM. However, the equipments must be changed especially the chairs should be functional yet comfortable. Chairs can be reclined or may turn to SPA bed instantly.
Closing the PRANAV-SPA may be an better option due lack of sales, high maintenance and poor loyalty and location. However, it can also be remodel and relocated to a high end market such as Makati, the fort or Alabang area. I think having a unisex PTM is a best option offering a new SPA flavour to be distinctive yet attractive. Remodel like having different rooms w/ unique themes, mixing traditional massages or just offering a totally new SPA service which it is the first in the industry. The object is to give an excellent, premium and one-of-a-kind services to its customers which will make a milestone and hopefully be the new trend.
