PRANAV NEW YORK
Situational Analysis:
Karlo Nisce and Mark Orbos, first year MBA students at the AIM, year 2003, decided to adopt a business concept on the first male spa in the Philippines for their venture MRR as arequirement for graduation. They agreed together with an affirmation from their professors to set up this spa which was a new idea and with optimism that it was a promising business venture. The spa opened in 2004 at Robinson's Galleria, which was named Pranav New York.
Prior to the opening of Pranav New York, Karlo and Mark made a conceptualization and preparation for almost one year and considered the following:
1.) Validated the viability of their business concept in the local market and conducted a general screeningof the grooming industry in Metro Manila. They found out that salons outnumbered barber shops and more males go to salons for their grooming services.
2.) They conducted an exploratory interview with industry experts to familiarize themselves with current trends in the industry. They found out an increase in number of males who went to salons for hair styling services. Some males were hesitant to to go to salons because it connoted a female-biased motif. Salons started to offer spa services for health and wellness.
3.) They conducted Focused Group Discussion (FGD), a tool to test the acceptability of Pranav as a male spa concept. Spa was regarded as a venue to relax, relieve stress and be pampered.
4,) They conducted general immersion exercise, observing establishments on basis of location convenience and market prominence, customer behaviour and profile.
With these information gathered, they realized the male market's need for grooming and wellness was not sufficiently addressed by barbershops. And filipino urban males were not ready to patronize female-centric salons and spas. Thus a clear opportunity for Pranav to capitalize on with a vision of, Pranav would be a seamless fusion of the modern amenities, ambience and style of a full service salon and spa, with a masculine atmosphere and experience of a barbershop.
Hurriedly with enthusiasm, Mark and Karlo decided to work out on Pranav for reasons of completion of a requirement in MBA and considered December a perfect month to open the spa.
Robinson's Galleria was thought of to be an ideal location (a thorough location study and customer dynamics was not made). A 153 sqm space, west wing, fronting main walkway of the mall which revealed good foot traffic, demographic mix of generally female segment, with micro-market competitors of several grooming and wellness shops. Frustratingly, two months after Pranav opened, end of January 2005, it incurred losses amounting to Php 825,568.00 Problem Analysis:
The incurred losses did not stop Karlo and Marc to pursue the bussiness. They were determined to analyze and investigate the reasons for the loss and were positive on regaining and reposition- ing Pranav to eventually succeed. It was evident that the losses were due to weak sales. Why?
The reasons: client patronage of spa services declined from November to January; auxillary services (nail, hot oil) were increasingly availed by the male; dominant demographic profile were aged 20-29 (47%) were on salon services and 30-39 (35%) more on spa hence ratio of 76:42; dominant was haircut services, styling more favored by 37.1% loyal customers; Regarding profitability assessment: negative profit to cost ratios; negative income/sqm; revenue/sqm and variancee/revenue sqm was significantly lower in spa; not generating enough customer volume.
The decline in spa massage patronage is a big factor since this service carried the larger cost burden. The predominance of females with higher spending level on grooming services in the micromarket of Robinson Galleria is also a big factor. Pranav would certain loose if it is male exclusive. Another contributing factor is loyalty-building initiatives. And to consider too is the location of Pranav in which high traffic incidence is not experienced, not accessible and not a direct catchment area. Pranav did not have essential equipment to achieve revenue maximization.
Decision Analysis:
The first three months of Pranav was on the verge of failure. Mark and Karlo have to act fast, signals urgency! The next steps will be very crucial to save the business and their MBA after a thorough analysis of the problem, they decided:
1.) Study and analyze the operations of Roberto's barber shop, a leading competitor which caters to the male market. The main objective was to identify critical factors for it's success hence establish a benchmark, gain insights on in-mall/stand alone market, operations, manpower/shop size, market behaviour (did interview of clients, employees and observe "walk by the branch). All findings were aligned with the data of Pranav.
2.) Analyze a direct competitor, a unisex spa which specializes in massage and wellness services.
Findings: customers were motivated to go to a shop primarily because of a convenient location which was the main factor which dictated volume and demographic mix; changing foot traffic results to propensity of customers due to convenience; older segment, higher income because of availment of high value services. *more important too, it was not only the share of the male market but the size and viability within the micromarket that woud ensure success. In summary, it was very important to heed the advice of their AIM mentors and carefully, slowly go back to understanding the logic of the business they are engaging in.
Opportunity Analysis:
1.) Good to be in-mall location with high, constant foot traffic, hence higher probability of in-
cidental walk-in customers. Ground floor more ideal for accessibility and catchment area.
2.) Maximize floor area and at the same time more working space, convenient and comfortable
barber's chair. Observe cleanliness and system.
3.) Seriously consider female market (female spent 90% more on grooming services)*targetting the male segment exclusively will be detrimental to the succes*, therefore for both gender.
4.) If Pranav targets female, repositioning must be done with addition of more services.
5.) Cultivate customer loyalty for sustainability and they sure will bring in more customers.
6.) Hire Skilled employees to be continously trained and give incentives for them to be motivated hence their dedication contributes to Pranav's profitability.
7.) Consider volume and value driven services which are main contributors to profitability
not to forget fair prices. ( all services of a salon and spa).
Submitted: Cecilia Ann Barretto Ching, MD FPOGS, MBAH 10B, Entrepreneurship
Submitted to: Professor Jorge Saguinsin Date: March 06, 2013
Situational Analysis:
Karlo Nisce and Mark Orbos, first year MBA students at the AIM, year 2003, decided to adopt a business concept on the first male spa in the Philippines for their venture MRR as arequirement for graduation. They agreed together with an affirmation from their professors to set up this spa which was a new idea and with optimism that it was a promising business venture. The spa opened in 2004 at Robinson's Galleria, which was named Pranav New York.
Prior to the opening of Pranav New York, Karlo and Mark made a conceptualization and preparation for almost one year and considered the following:
1.) Validated the viability of their business concept in the local market and conducted a general screeningof the grooming industry in Metro Manila. They found out that salons outnumbered barber shops and more males go to salons for their grooming services.
2.) They conducted an exploratory interview with industry experts to familiarize themselves with current trends in the industry. They found out an increase in number of males who went to salons for hair styling services. Some males were hesitant to to go to salons because it connoted a female-biased motif. Salons started to offer spa services for health and wellness.
3.) They conducted Focused Group Discussion (FGD), a tool to test the acceptability of Pranav as a male spa concept. Spa was regarded as a venue to relax, relieve stress and be pampered.
4,) They conducted general immersion exercise, observing establishments on basis of location convenience and market prominence, customer behaviour and profile.
With these information gathered, they realized the male market's need for grooming and wellness was not sufficiently addressed by barbershops. And filipino urban males were not ready to patronize female-centric salons and spas. Thus a clear opportunity for Pranav to capitalize on with a vision of, Pranav would be a seamless fusion of the modern amenities, ambience and style of a full service salon and spa, with a masculine atmosphere and experience of a barbershop.
Hurriedly with enthusiasm, Mark and Karlo decided to work out on Pranav for reasons of completion of a requirement in MBA and considered December a perfect month to open the spa.
Robinson's Galleria was thought of to be an ideal location (a thorough location study and customer dynamics was not made). A 153 sqm space, west wing, fronting main walkway of the mall which revealed good foot traffic, demographic mix of generally female segment, with micro-market competitors of several grooming and wellness shops. Frustratingly, two months after Pranav opened, end of January 2005, it incurred losses amounting to Php 825,568.00 Problem Analysis:
The incurred losses did not stop Karlo and Marc to pursue the bussiness. They were determined to analyze and investigate the reasons for the loss and were positive on regaining and reposition- ing Pranav to eventually succeed. It was evident that the losses were due to weak sales. Why?
The reasons: client patronage of spa services declined from November to January; auxillary services (nail, hot oil) were increasingly availed by the male; dominant demographic profile were aged 20-29 (47%) were on salon services and 30-39 (35%) more on spa hence ratio of 76:42; dominant was haircut services, styling more favored by 37.1% loyal customers; Regarding profitability assessment: negative profit to cost ratios; negative income/sqm; revenue/sqm and variancee/revenue sqm was significantly lower in spa; not generating enough customer volume.
The decline in spa massage patronage is a big factor since this service carried the larger cost burden. The predominance of females with higher spending level on grooming services in the micromarket of Robinson Galleria is also a big factor. Pranav would certain loose if it is male exclusive. Another contributing factor is loyalty-building initiatives. And to consider too is the location of Pranav in which high traffic incidence is not experienced, not accessible and not a direct catchment area. Pranav did not have essential equipment to achieve revenue maximization.
Decision Analysis:
The first three months of Pranav was on the verge of failure. Mark and Karlo have to act fast, signals urgency! The next steps will be very crucial to save the business and their MBA after a thorough analysis of the problem, they decided:
1.) Study and analyze the operations of Roberto's barber shop, a leading competitor which caters to the male market. The main objective was to identify critical factors for it's success hence establish a benchmark, gain insights on in-mall/stand alone market, operations, manpower/shop size, market behaviour (did interview of clients, employees and observe "walk by the branch). All findings were aligned with the data of Pranav.
2.) Analyze a direct competitor, a unisex spa which specializes in massage and wellness services.
Findings: customers were motivated to go to a shop primarily because of a convenient location which was the main factor which dictated volume and demographic mix; changing foot traffic results to propensity of customers due to convenience; older segment, higher income because of availment of high value services. *more important too, it was not only the share of the male market but the size and viability within the micromarket that woud ensure success. In summary, it was very important to heed the advice of their AIM mentors and carefully, slowly go back to understanding the logic of the business they are engaging in.
Opportunity Analysis:
1.) Good to be in-mall location with high, constant foot traffic, hence higher probability of in-
cidental walk-in customers. Ground floor more ideal for accessibility and catchment area.
2.) Maximize floor area and at the same time more working space, convenient and comfortable
barber's chair. Observe cleanliness and system.
3.) Seriously consider female market (female spent 90% more on grooming services)*targetting the male segment exclusively will be detrimental to the succes*, therefore for both gender.
4.) If Pranav targets female, repositioning must be done with addition of more services.
5.) Cultivate customer loyalty for sustainability and they sure will bring in more customers.
6.) Hire Skilled employees to be continously trained and give incentives for them to be motivated hence their dedication contributes to Pranav's profitability.
7.) Consider volume and value driven services which are main contributors to profitability
not to forget fair prices. ( all services of a salon and spa).
Submitted: Cecilia Ann Barretto Ching, MD FPOGS, MBAH 10B, Entrepreneurship
Submitted to: Professor Jorge Saguinsin Date: March 06, 2013
