Evoe Spring Spa Positioning Dilemma

The assignment analyzes Evoe Spring Spa's position in the Indian market, identifies a target audience segment (Racers), and recommends an 'Affordable Health' positioning strategy. It also suggests building credibility through high-quality services, educating consumers about health benefits, and breaking stereotypes.

Evoe Spring Spa: A Positioning Dilemma
The focus of this analysis is on Evoe Spring Spa, a venture envisioning a chain of
affordable and accessible spas with the aim to destress Indian consumers. Currently,
the company is deciding on how exactly its position in the Indian market should be.
Even though the Indian population has always shown great interest in health and
wellness practices, the increase in stress related issues caused by a hectic way of life
opened new opportunities for the spa industry. This can be seen on the expected
Wellness sector growth rate of 20% over the next three years. Overall, Indian
consumers have become more health aware, sensitive to peer pressure, and with an
increasing preference for natural products. Besides, a growth in disposable income led
to people enhancing their quality of live. Anyhow, the majority of consumers is price
conscious. Furthermore, the market is fragmented. According to the positioning map,
competition is particularly concentrated in the affordable beauty and premium wellness
segment. Contrarily, the map shows a huge gap in the affordable health sector.
In order to find a suitable segment, Evoe Spa’s team undertook focus group discussions
to find similar patterns in behavior. They realized that their concept needs to make
costumers “feel good” about their life. Research revealed a huge untapped segment in
the field of low and medium income. These consumers are rather averse to trying out
new things, but mainly due to the costs involved. Also, these costumers are not really
keen on pampering and self-indulgence. Nonetheless, accessibility and opportunity are
main decision factors. Women are willing to spend more on spa service if time allows to,
as it is their biggest constraint. Next, particularly younger consumers are increasingly
open for wellbeing practices. Their focus is, however, on trusted brands as wells as on
organic products. Finally, urban consumers living a hectic lifestyle have a positive
attitude toward spa services. After analyzing all these key factors, it is obvious that only
wealthier people are aware of spa services, while the larger segment lacks awareness
and seems price sensitive. The question arises whether the decision makers should
invest in the larger segment, or only target the few who are already aware of the benefits
of spas and less price-sensitive, or even both.
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In our perspective, the company should mainly target the segment of Racers. This group
is health aware, conscious about the brands it is associated with and prefers natural
products. The Racers are willing to spend on wellness if they were convinced, for
instance, of its destressing benefits. Part of them are non-spa users, however, they
appear to be willing to try spa services that are well differentiated from competitors. The
Sprinters are also a segment the company should keep an eye on in the long run, as
they perceive spa visits as a lifestyle form. Besides, as they are always aware of health
and wellness developments, they will look for the most innovative and convenient
alternatives in the market. Climbers are also well aware of the spa services; however,
because their motivation to use these services is driven by peer pressure, the main
benefit they sought is pampering oneself in order to have immediate results. The Snails
are unwilling to make major life changes unless it affects their health, which means
educating them by showing the importance of wellness on their health at low prices can
be an incentive to acquire few Snails as first time users. Additionally, they make up the
largest group by far.
Evoe saw a differentiated positioning opportunity in the intersection of affordable prices
and spa’s wellness/ holistic health vertent of the market share (see Appendix 1). In that
sense, it should follow the “Affordable Health” positioning, as this concept provides the
highest potential market volume (see Appendix 2-4). Aiming at an average penetration
rate of 2% year, the firm could reach a max. of 9.8 million people in their target
audience. This positioning would be sufficiently motivating that both spa users-
Sprinters- and non-spa users- Racers- would want to try Evoe. Furthermore, in the short
run, a part of the Snails segment could also be convinced to test its services. By offering
a trial service, the firm could convert some of them into first time users. With these
consumers trying out the services, brand image and credibility will increase, which will
attract more Racers, as well as Sprinters in the long run. However, by entering this
sector, they are faced with a major concern: how can they build credibility? This should
be built upon positioning the brand as a high-quality supplier at affordable prices, for
instance, by using professionals on advertisements/ events and by actively educate
consumers about health benefits of using Spa Services (see Apendix 5). Besides, Evoe
should locate its services in urban areas near corporate buildings and the city centre,
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and also try to break all stereotypes, such as only women using spa services, by
addressing cultural and social issues.
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