MK4024 – Contemporary Marketing Principles

Running head: MARKETING PRINCIPLE
Marketing Principle
Student’s name:
Name of the University:
Author’s note:

Executive Summary
Kinder Salon, a new start-up is going to open its first salon in Larnaca. Kinder Salon will offer
haircut, hairstyling and hair colour to the children aged between 2 and 14 for the general
purpose, party-ready and event-ready. Kinder Salon will have a playground for the children and
the children can have fun activities during the haircut. PEST analysis of Cyprus has also been
explained to show the external environment which could impact the new start-up. The current
political condition of Cyprus is unstable; however, the economic situation of Cyprus will help
Kinder Salon to start their business. Kinder Salon will use the best technologies to style the hair
of the children. SWOT analysis has been conducted of Kinder Salon to understand the strengths
and weaknesses of the organisation. Target customers of Kinder Salon will be the higher-middle
class parents who would take the children to the salon. Some of the parents get anxious when
their children visit the salon as children are reluctant to visit the salon. Kinder Salon will be
positioned in the market as the low pricing and high-quality quadrant. Kinder Salon will keep the
price low so that the customers visit the salon in large numbers. Major objectives of the business
are to increase the market share and open a new salon in two other places. Kinder Salon will
promote the business through outdoor advertising, social media and discount pricing. A financial
plan is also attached to the business.

Table of Contents
1. Brief overview of the business plan.............................................................................................4
1.1 Business Mission...................................................................................................................4
2. Situational Analysis.....................................................................................................................5
2.1 PESTLE Analysis..................................................................................................................5
2.2 SWOT analysis......................................................................................................................7
3. Marketing objectives...................................................................................................................8
4. Core strategy................................................................................................................................9
4.1 Segmentation.........................................................................................................................9
4.2 Targeting..............................................................................................................................10
4.3 Positioning...........................................................................................................................10
4.4 Competitors’ analysis..........................................................................................................11
4.5 Competitive advantage........................................................................................................12
5. Marketing mix.......................................................................................................................13
6. Financial Plan............................................................................................................................14
7. Control and measure..................................................................................................................19
Reference List and Bibliography...................................................................................................20

1. Brief overview of the business plan
Kinder Salon, a hairdressing salon for children with staffs that entertain children, even
the salon will also have a playground. Kinder Salon will be based in Larnaca, Cyprus. Kinder
Salon will provide unique haircut experience to the children in the playground and the staffs will
be experienced in the field. For the parents, it is always a thing of anxiety when they take their
children to the salon for a haircut. The hairdressers know the kids who wail, wiggle and may
even bite the hands that shear them. There will be a restroom and waiting rooms for the parents
who would come to the salon with the children. There will be swing, Bugaboo, rides pin, slip,
carousel and deep diver inside the playground where the children can play. This Kinder Salon
will be for the children aged between 2 years and 14 years. There will be a kids’ library where
the children can read books also. This salon will offer different types of haircuts to the children.
The salon experts will use the latest cutting edge technology to cut, colour and style the hair. The
parents can take the children for a general haircut, for party-ready and for events by making an
appointment.
Hours:
Monday: Closed
Tuesday- Friday: 9:30am -7pm
Saturday and Sunday: 10am – 4pm.
1.1 Business Mission
The mission statement of Kinder Salon is to be the one-stop hairdressing salon for new
haircuts, styles and colours for the children where the haircut is amusement and fun.

2. Situational Analysis
2.1 PESTLE Analysis
Political:
The country has unitary presidential representation, where the President of Cyprus is the
head of the state and the head of the government. The political condition of the country is still
unstable as both Greece and Turkey tried to invade the nation. There are some military
enforcement form the UN, and Green Line divides the country into two parts (Tsangas et al.
2018). The population of the country combined both the sections is 1.1 million and that will help
to increase the productivity of the business.
Economic:
Cyprus got independence from the UK in 1960 and became the member of EU in 2004.
The GDP contraction of 16.8% in 1974 and 19% in 1975 experienced some external shock for
the business (Savyides 2016). Collective focus changes the into rapid business growth and in
1976 economy was in 18.3% and in 1977 the growth rate was 15.8%. Economic freedom score is
67.8 and that is the reason, Cyprus is considered as the 48th freest nation in 2018 and thus
business advancement is there. $21,698 billion is the GDP stat of the country and they have
achieved 109th rank in case of GDP (Hadjikoumis et al. 2017). There are 426,000 labour force
included in the different sector of organisation and that increase business development and
opportunities.
Social:

Greek and Turkish people are accumulated in the nation, so there are some cross-cultural
problems. This problem may hamper the business process as the mentality of all the people are
not the same. In the case of the emerging situation of a business, social support is the most
important aspect of business advancement. The business will emphasise the change in business
through the social outcome of people. Households Debt to Income in the country Cyprus got the
average 151% until 2017 and it reached all time high in the year 2014, 203% (Giannakis and
Mamuneasb 2018).
Technological:
Improve ICT and cyber security policy is important and Science technology Park
improved the technological advancement in business (Tsangas et al. 2018). As the country has
communities of Greece and Turkey, thus promotional work, sustainability activity, use of
nanotechnology in business will be there and this process will help in any sort of business
innovation and advancement.
Legal:
The judiciary system segmentation is the major process of Cyprus to consolidate their
law and regulation. There are Supreme Court, District court, Assize courts, Family courts, Rent
control courts, and Administrative court. The status of EU and their regulation is maintained in
Cyprus. The unification of government and the accession is the major legal procedure maintained
by the nation (Hadjikoumis et al. 2017). Legislative power is drilled by the government and
parliament and the executive legislature is independent in nature and it controlled by the
judiciary system.
Environment:

Reservation orders of Town and Country Planning Law of 1972 and the protection of
heritage places like buildings, trees, forest and other restrict points are covered by that initiative.
The coastal business advancement and the make a concerned outlook for erosion, agriculture and
natural resources are the prime environmental protection that Cyprus does to save the foreshow
protection law (Hadjimitsis et al. 2016).
2.2 SWOT analysis
Strengths
 Strong knowledge of hairdressing
 New playground theme for children
 Large range of service
 Extended opening hours during a
special occasion
 Excellent customer experience
 Good location
 Price range is affordable
Weaknesses
 The flexibility of staffs working hour
 Financial capacity
 Only for kids
 Lack of capacity for high numbers of
visiting
 Not having experience in internet
marketing
Opportunities
 Development of packages
 Strong marketing growth
 Good opportunities in the market
 The stock of organic product for
children
 Male and female experts
Threats
 Home visit stylists
 New salon in the area
 Discount of competitors
 Cost of having the best technologies

3. Marketing objectives
Objective 1:
Specific To attain a market share of 5% within two years of business
Measurable This objective can be measured by calculating the revenue and profitability of
the organisation, the organisation can also measure the sales percentage of
other competitors
Attainable This objective can be attained by increasing the sales and promotions
Realistic This objective is realistic as it will help to get a large customer base
Time-bound By the end of 2021
Objective 2:
Specific To open two new salons in Nicosia and Limassol in the next two years
Measurable This objective can be measured by the progress of opening the salons
Attainable This objective can be attained by taking the initiative to open the salons and
by recruiting new staffs
Realistic This objective is realistic as the organisation can open up for new customers
and the population is overall low in Cyprus
Time-bound By the end of 2021

4. Core strategy
4.1 Segmentation
Demographic:
Parents’ are the main target market for the
demographic segmentation. Kinder Salon
targets the parents of children age group 2 to
14 years. Age group of 2-7 years need
special attention and the playground is
mainly used for that reason.
Behavioural:
Grouping of customers and their service
taking process is the main segmentation in
that case. The loyalty of customers, user
status, occasional timings, and regular
customers are the main distribution in this
case (Michael and Antoniou 2018). The
loyal customers need some effective
innovation from the company and Kinder
Salon needs to provide those.
Psychographic
Customer personality, trait, values and
lifestyle all these are considered in the
psychographic process. Upper-middle-class
people are the target market for Kinder
Salon (Michael and Antoniou 2018). The
people who are very much worried about
their child hair cutting will access the
process as efficient employees are allocated
for the job.
Geographic
Larnaca is in the southern coast of Cyprus.
The riverside areas are covered environment
beauties. The people are well off in this city
and they can afford the bill required for the
hair cutting. The area is good for business in
terms of assimilation of foreign people they
have the good opportunity in business as
well.

4.2 Targeting
The primary target market of Kinder Salon will be upper-middle class parents of the
children aged between 2 and 14. The people, who are working with Kinder Salon, are efficient
enough to deal with children. Parents', those become anxious while their children cut hair and
hairstyle, will find optimum relax in Kinder Salon. The treatment is the high standard and all the
facilities for children to convince them, present in the Kinder Salon.
4.3 Positioning
Kinder Salon will be positioned in the market based on the quality of hairdressing for the
children as the organisation wants to avoid the price competition. Kinder Salon will also be
position in the market by providing convenience to the children as customers gravitate towards
good service which makes life easier. The location of the salon is perfect and usability of the
salon will ease up the lives of the parents who are anxious for their children during a haircut.
Therefore, the positioning strategy of Kinder Salon will be high quality and low price. Kinder
Salon will offer diverse hairstyles to the children with activities along with support experts in
hairdressing which can maximise the investment in the salon. Positioning statement of Kinder
Salon will be focusing more on targeting the children and marketing directly to the audiences.

Figure 1: Perceptual map of Kinder Salon
(Source: Self-developed)
4.4 Competitors’ analysis
Rivalry among the salon is high in Larnaca, Cyprus as there are many salons already
existed. These salons have their own loyal customers who visit the customers. Kinder Salon will
have the differentiation in the market as it will provide the children playground and fun activities
during the haircut session. Rivalry among the existing customers is high due to the large numbers
of the cheap salon are already present in the market. In addition, the threat of new entrant in
Cyprus is high as the salon does not need large investment and the Cyprus Government is helpful
to open the business (Cyprus-mail.com 2018). The threat of substitute in the market is medium
as Kinder Salon will provide a different type of salon experience to the customers. Bargaining
power of customers is also high as the customers have switching power and price sensitivity.
Some of the competitors’ of Kinder Salon will be Body and Soul Beauty Salon, Larnaca Hair
and Beauty Salon, Tony and Guy, Hair Heaven and Backstage Hair Salon.

Name of salons Strengths USP
Tony and Guy This is one of the oldest salons
and has its own customer base
This is special for the children
haircut
Larnaca Hair and Beauty
Salon
This salon offers hairstyling
and haircut for children and
for the adult's women also
It is a large salon and experts
are trained
Hair Heaven It is a small barbershop and
cheap. Have a large customer
base
The place is very crowded and
rating in online is also high.
4.5 Competitive advantage
Kinder Salon will offer high-quality hairdressing experience to the children at a
competitive price. Kinder Salon will offer quality haircut from best experts. The price of the
service will keep competitive and low; therefore, large numbers of parents will bring their
children to Kinder Salon. Low-cost leadership in the market increase the market share in the
industry and it also improves the profit margin as large numbers of customers visit the stores (Hu
et al. 2016). Kinder Salon will keep the price competition in order to use penetration pricing in
the industry. The competitive advantage of the organisation will be lower pricing and high-
quality service in the industry. The customers will have better prices from Kinder Salon.
Kinder Salon will have the competitive advantage by its unique service experience to the
children who will have playground and fun activities during the hairstyling and haircut sessions.
Kinder Salon differentiates the service by providing fun activities and playground. This
differentiation will allow the salon to have large numbers of new footfall each day as the parents

will bring their children to the salon. Differentiation in the market will help the organisation to
reduce the competitive rivalry and it will also help to stop the entry of the competitors in the
market (Brain Cruz et al. 2015). Kinder Salon will have the negligible threat of the service
substitutes.
5. Marketing mix
Product or Service: Kinder Salon offers children hairdressing and stylish haircut. Kinder
Salon will also offer the hairstyling, colour and haircut to the children during occasion, events
and general purposes. Most importantly, Kinder Salon is going to mitigate the issue of the
parents as the parents feel anxiety when they take their children to the salon. Kinder Salon will
serve the children and teens aged between 2 and 14. Kinder Salon will also have male and female
experts. This new salon will have a playground where the children can enjoy and the salon will
also have a library where the children can read books. The customers have to take the
appointment before they visit the salon.
Price: Kinder Salon will take the low-pricing strategy after they start their business in
Cyprus. Kinder Salon will charge less from the customers in the beginning stage so that they can
increase the market share. Lower pricing strategy in the industry will play the role of penetration
pricing in order to have the large customer base (Vergas-Hernandez 2016). Kinder Salon will set
the price lower than the competitors to do the hairstyling and haircutting of the children. The
parents will see the advantage of lower price and additionally, the children can enjoy their time
being in the salon.
Place: Kinder Salon will start their journey from opening its first salon in Larnaca,
Cyprus. The political condition of Cyprus is not stable at present; however, the organisation is

thinking to roll on their business in different cities in future. Larnaca city is located on the
Southwest coast of Cyprus and it is the third largest cities in Cyprus (Larnaca.com 2018). The
city is beautiful and the population at present is 51, 400.
Promotion: Kinder Salon will start their promotions through social media network like
Facebook and Twitter. Kinder Salon will open their business page on social media network
where they will post content and images to attract the customers. Kinder Salon will advertise on
Facebook and Twitter to allure the parents of the children. Social media network will start the
campaign to attract the customers. Apart from social media, Kinder Salon is thinking of doing
PPC and SEO on the online platform.
OOH (Out-of-home) promotions will also be done by Kinder Salon as the firm is thinking
to promote their business by providing billboards and hoarding near Larnaca city. This outdoor
marketing will help the organisation to know about the salon.
Discount pricing strategy will help Kinder Salon to increase the footfall. Kinder Salon
will offer discount pricing for first-five visits of the customers. The management of Kinder Salon
is thinking of membership card for the children.
6. Financial Plan
Summary Statement
Sources of Capital
Owners' and Other Investments € 85,000
Bank Loans

€11,500
Other Loans
-
Total Source of Funds €96,500
Startup Expenses
Social Media 68,650
SEO
12,050
Mobile Marketing
25,000
Google Adwords
8,500
Out-of-home advertising
20,000
Advertising / Promo Expenses
7,000
Other Expenses
50,000
Total Startup Expenses €384,200
Profit and loss Account

Year 1
(2019)
Year 2
(2020)
Year 3
(2021)
Gross revenue €
2,688,000
€
2,741,760
€
2,851,430
Cost of goods sold € 196,875 € 200,813 € 208,845
Gross margin € 2,491,125 € 2,540,948 € 2,642,585
Other revenue [source] € 0 € 0 € 0
Interest income € 0 € 0 € 0
Total revenue € 2,491,125 € 2,540,948 € 2,642,585
Sales and marketing € 7,000 € 7,140 € 7,426
Payroll and payroll taxes € 50,000 € 51,000 € 53,040
Depreciation € 25,140 € 25,643 € 26,146
Maintenance, repair, and
overhaul
€ 0 € 0 € 0
Total operating expenses € 82,140 € 83,783 € 86,611

€ 2,408,985 € 2,457,165 € 2,555,974
Interest expense on long-term
debt
€ 0 € 0 € 0
€ 2,408,985 € 2,457,165 € 2,555,974
Loss (gain) on the sale of assets € 0 € 0 € 0
Other unusual expenses (income) € 0 € 0 € 0
€ 2,408,985 € 2,457,165 € 2,555,974
30% € 722,696 € 737,149 € 766,792
€ 1,686,290 € 1,720,015 € 1,789,182
Cash Flow
Year 1 Year 2 Year 3
Operating activities
Net income € 0 € 0 € 0
Depreciation € 25,140 € 25,643 € 26,146
Accounts receivable € 0 € 0 € 0

Inventories € 0 € 0 € 0
Accounts payable € 0 € 0 € 0
Amortization 1,000,000 1,000,000 € 1,000,000
Other liabilities 50,000 50,000 € 50,000
Other operating cash flow
items
150,000 150,000 € 150,000
Total operating activities € 1,225,140 € 1,225,643 € 1,226,146
Investing activities
Capital expenditures € 0 € 0 € 0
Acquisition of business 0 0 0
Sale of fixed assets (€ 722,696) (€ 737,149) (€ 766,792)
Other investing cash flow
items
0 0 0
Total investing activities (€ 722,696) (€ 737,149) (€ 766,792)
Financing activities
Long-term debt/financing (€ 11,500) € 0 € 0
Preferred stock 500 500 500
Total cash dividends paid 5,000 5,000 5,000
Common stock 0 0 0
Other financing cash flow
items
0 0 0