Franchise Opportunities for Lotus Salon
Added on 2021-06-17
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Running head: FRANCHISING FRANCHISINGName of the studentName of the university Author note
1FRANCHISINGOrganization- Walk in Trim – A Hair Salon for men and women Introduction This report provides the identification of franchise opportunities of small organizationcalled “Lotus Salon”, which is located in New York City of USA. The purpose of the reportis to derive the franchise opportunities for Lotus Salon from its current operation andmarketing position. Thus, to meet the purpose of the report, a detailed market analysis hasbeen conducted including some particular element such as current market position, marketshare, and overall market share of the industry, competitors’ position and strategies. Tobecome specific about the franchise marketing, the target market for Lotus Salon has alsobeen identified in the report. Overview of the business conceptsIt is certain that hair care sector is rapidly developing because both men and womenare more concerned about the treatment of hair. Thus, the demand of an established salon orhair care is rapidly growing. Thus, as the initiative of meeting the growing demand of theservices, Lotus Salon provides a broad range of service being small firm such as hair care,cutting, color, trim, hair spa, and other related services. As the organization is located at theNew York City, the customer base of the firm is increasing gradually despite being a smallfirm in size. Several small firms are trying to create a marketing position in the industry byinnovating their products and services. In this context, Korsak (2014) commented that futuregrowth of US Hair care is expected to be led by a surge in demand for both natural as well asmulti-cultural hair products. Rondan-Cataluña et al. (2012) also mentioned that industrygrowth could be bolstered due to increase in the annul expenditure on the hair care products,increasing disposable income as well as innovative advertisement campaign. On the other
2FRANCHISINGside, Terry and Di Lernia (2013) also mentioned that increasing fashion consciousnesstowards the hair color is also a driving factor for the growth of hair care industry in USA. Some large established organization such as L’Oreal, Henkel and Kao Corporationhave long been delivering excellent products and cater to the whole range hair care servicesand products with the inclusion of Shampoo, hair color, conditioners. Such hair saloncompanies tend to enhance products pertaining to both mass segment and luxury segmentproducts. Stefanović and Stanković (2014) conducted a research and found that the Shampoowas the largest segment which is accounting for 34% of the market revenues in 2015. It isalso identified that broad scale adoption of shampoo as the hair care item in United State ledto the growth of the segment. The industry statistic and market size indicates that the overallrevenue of the sector is around $44 billion and the annual growth is around 1.8% with thebusiness above 1 million. When it comes to growth, the growing consumer sentiment as wellas per capita income have boosted the growth of the sector over the five years to 2017. Thisfurther leads to increased demand for hair care services. According to Perrigot, Basset andMeiseberg (2016), increasing consumer confidence and disposable income could foster thegrowth of the sector. Niche market In order to create innovation in hair care products, the business should know aboutand find niche markets. In this context, Dhingra and Parker (2015) a niche market for haircare product is no different than a niche market in some other fields. As the hair careorganizations tend to share a similar categories of products and services, it is highlynecessary for the organizations in hair care sector to create niche market which would givesignificant and separate return.
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