BMM3013 - Business Plan: Starting a Home Salon & Marketing Strategy

This document presents a business plan for a home salon service, addressing the market gap created by the Covid-19 pandemic. It includes an environmental analysis using PESTEL, a SWOT analysis, and a competitive analysis of the UK beauty industry. The plan outlines the target market, segmentation strategy focusing on trendy and appearance-conscious individuals in London, and a comprehensive marketing plan encompassing product strategy, pricing, placement via a mobile application, and promotional activities using both traditional and modern methods. The venture aims to provide safe, personalized salon services at a premium price, targeting high-income groups seeking convenience and quality.

BMM3013 Starting a Business and Fundamentals
of Marketing
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TABLE OF CONTENTS
SECTION 1.....................................................................................................................................3
INTRODUCTION...........................................................................................................................3
Market gap and business summary..............................................................................................3
Skills and experience...................................................................................................................3
Location and justification for business........................................................................................3
SECTION 2.....................................................................................................................................3
Environmental analysis................................................................................................................3
Competitive analysis....................................................................................................................5
Industry analysis..........................................................................................................................5
Target market and segmentation strategy....................................................................................6
Marketing plan.............................................................................................................................7
REFERNCES...................................................................................................................................9
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SECTION 1
INTRODUCTION
Market gap and business summary
Covid 19 pandemic created a new trend of social interaction and distancing which had
great impact on beauty and salon services (Ghanbari and et.al., 2017). Thus as safety measure
most of the people are avoiding salon services so that they do not get infection because these
services often indulge lot of public gathering and resource sharing among users. Thus business
idea to open a new salon services which will provide salon services at home on request is great
idea to fill this gap. The venture will serve its clients on request and services will be provided to
client with personalised equipment’s at their home so that safety and hygiene is not
compromised.
Skills and experience
In order to successfully manage this business good resource management, decision making
and time management skills will be required. To meet the needs of client one must have ability to
have creativity along with decision making expertise (Lindh and Nordman, 2017). Since due to
covid restrictions all individuals experience needs of safe salon services the experience can be
easily used to understand the needs and preferences of client.
Location and justification for business
The proposed business of home salon will operate across entire London which will be
further expanded to other cities depending upon growth. The business idea is highly profitable
because people need salon services which are highly safe and personalised but there are very
limited options regarding that.
SECTION 2
Environmental analysis
The business is influenced by variety of uncontrolled or external factors. In order to take
appropriate decisions, it is necessary that these factors must be identified and assessed. This can
be done by using PESTEL analysis.
Political: The political factors such as taxation policies can have great impact on business. As
beauty products have high tax rates it can be challenging for the firm to balance expense and
profits (Tuzovic and Paluch, 2018). With pandemic impact government is also regulating
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operational standards for cosmetic and beauty industry which can affect supply chain as well as
operational mechanism of business.
Economic: With decreasing employment rates and expenditure abilities of people after Covid 19
purchasing decisions of customers towards buying salon services may affect greatly. Higher cost
of beauty products and supply chain disruptions can also make it a challenge for business to
maintain justified prices.
Social: Socially in order to prevent infections people are giving more priority to personalised and
home salon services. Further many professions such as journalism and entertainment along with
increasing social media trends have greatly motivated people to focus on their looks and style.
Thus these social changes increase the demand of home salon services (Jukova and et.al., 2019).
Technological: The business will use advanced technology based mobile application software
for bookings and service monitoring. Use of such technology based applications makes services
very quick and transparent. Though it need high maintenance and monitoring from cyber security
but they play great role in outreaching vast segment of customers by means of digital platforms
and effective data management system. Along with service quality it also delivers cost efficiency
in business operations.
Environmental: With environmental changes people are demanding for more organic beauty
products. Thus home salon must tie up with suppliers who have strong brand along with safe,
high quality and organic cosmetic products. It will help organisation to meet sustainability goals
as well as to contribute in its corporate social responsibility (Snieska, Zykiene and Burksaitiene,
2019).
Legal: Being related to health and skin care business will have to comply with several beauty
and safety legislations to ensure that safe services are delivered to client. Along with this as
business will have access to personal information and home of customers it must also follow all
legislations related to privacy and confidentially of the customers (Broekhuizen, Bakker and
Postma, 2018). Failure in this aspect can result in extreme harsh legal actions against the
organisation.
On the basis of these external factors the internal skills of business can be assessed by using
SWOT analysis for the business.
Strength: In context with the social changes the home salon will have strength that it will have
broad customer segment. The active use of social media will also be beneficial for the business
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to manage its operations more effectively. The organisation will use different approaches of
marketing and promotion such as social media publicity and website promotion so that its wide
access to targeted market will also act as its strength to achieve desired profit targets.
Weakness: The venture is new and thus customers may find it difficult to trust the organisation.
This can be a weak aspect of the organisation as it will affect the firm’s performance and its
ability to manage competitive threats (Fila and et.al., 2020).
Opportunity: Business will have lot of opportunities to access broad market segment because
now a day along with certain professionals and personality aspect social media has made it very
common trend for every individual to focus on appearance and salon services. Thus there are
high opportunities for expansion and growth.
Threat: The high competitive threats, Covid and safety protocols and increasing cost of beauty
care products are the major threats for the firm which must be addressed so that desired
outcomes can be achieved. The skill gap among professionals and guarantee to ensure the
professionalism among service providers will also be a threat or challenge for the service
provider. A minor negligence in services will affect the brand performance and profess to a great
extent.
Competitive analysis
The proposed home salon services will experience great competitive forces from existing
as well as new emerging organisations. The major industry players in UK beauty and
hairdressing segment are Rush hair and Mascolo limited along with plenty of local and small
service providers. In addition to big brands there are significant number of self-employed service
providers who used to offer salon services (La Rocca and et.al., 2019). They are providing
services from years and thus have strong presence and brand value in the market of London.
Being a fashion hub London also have highly qualified professionals who are working in this
sector from several years. It will be very difficult for a new venture to compete with such big
forces. However, organisation can begin with making a strong grip on local customers. Gradually
it can expand its operational network to other industry which have frequent demand of on request
salon services.
Industry analysis
For gaining competitive advantage it is important to assess the beauty services and salon
industry. The key consideration of industry are as follows:
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New entry threat: The investment in cosmetic and salon industry is of high level and need high
expertise in operations along with strong brand identity. Despite this fact there is high threat
from new entrants in industry because of ease of operations and easy supply chain networks.
With increasing demand of such home services it is expected that in future there will be huge
growth in such establishments.
Substitution threats: The skin care products can be easily substituted with natural or home
ingredients but they are limited to mainly rural areas (Levushkina and et.al., 2018). Chosen
location for this venture does not have much impact of it. In addition to this hair treatment does
not have any major substitutes thus proposed venture will have very low substitution threats.
Competitive rivalry: This force is quite high in salon sector as various popular brands from local
as well as global brands compete in this sector. Competition is not only on behalf of services but
also on behalf of resources used by organisation. The differentiation in this industry is medium
along with high exit barriers. Hence competitive rivalry will be very high which must be
managed by means of high service quality and impactful promotional tactics.
Supplier power: In cosmetic industry there is plenty of suppliers with low differentiation and
thus suppliers have low bargaining power. With low supplier power it will be easy for the
venture to survive in the industry because multiple switching options will be available without
compromising quality or cost considerations (Kurochkina and et.al., 2019).
Buyer power: As competition is high and several salon options are available customers in this
industry have high bargaining power. With vaccinations and normalisation in post Covid
situations people are returning to normalcy. Thus organisation in this industry can face challenge
in maintain profit. These forces may also force organisation to lower the prices.
Target market and segmentation strategy
The target population chosen for the proposed business idea will be London only. The
target market for the business will include people who are trendy, stylish, working professionals
and those who are conscious about their appearance. College students and professional and
young women of age group 20-35 will be the potential customers. One of the customer
segmentation will be based upon psychological grounds. The venture will mainly target
consumers who are beauty addicted. Along with the general population individuals who are
engaged in professions of media and entertainment will also be targeted. Those who are part of
fashion industry are can become important segment of the venture. In psychographic
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segmentation organisation can target the people with social class which gives more preference to
social gathering or appearance. The individuals with more emphasis on social or travelling life
style will also be targeted. As many people who may not be frequent visitors of salon but are
looking for safe salon services can also be targeted on the behavioural segmentation basis
(Larjovuori, Bordi and Heikkilä-Tammi, 2018). This will include all customers who seek salon
services on frequent basis like routine hair or shave treatment, occasional basis as well as loyalty
towards services. The proposed business will provide services to all genders and age groups but
to high income groups who can pay premium pricing for the products.
Marketing plan
The key marketing approaches which will be used for promotion and delivery of the
satisfactory customer services are as follows:
Product strategy: The home salon will provide all essential beauty services such as hair cutting,
waxing, nail art, skin care treatments, colouring and hair styling, massages as well as
complementary care services like aromatherapy. The venture will not cover vast range of
services initially due to cost limitations but gradually with formation of strong client base service
range will be expanded to more salon options and services. The cosmetic products or
equipment’s will be of great quality and popular brands so that customer safety as well as
hygiene is followed and given preference.
Pricing: The venture will have premium or high pricing strategy. Since the purpose of venture is
to provide customised as well as highly safe services it is offered only the customers who can
pay premium services. It will make it more convenient to approach high income groups who can
frequently demand such home services (Breuer and et.al., 2018). Since prices will be high only a
sorted group will be there to address so that service delivery can be made more manageable and
improved.
Place: The salon will operate through mobile application on which customers will make request
and authorised or agreed salon partners will reach out to destination for providing services. It
will help to cover large distance in minimum cost. The venture will have an interactive website
or chat platforms so that customers do not find any difficulty in coordinating or contacting to us.
An operational office layout will also be established so that management aspects can be
performed in more efficient way.
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Promotion: It is important to make customers aware about the services. Thus being a new start
up the venture will use both traditional and modern promotional methods. Suitable promotions
will be made on social networking sites, blogs or website and mobile application. In addition to
this magazine or newspaper promotions, discount coupons and flash sales will also be used to
attract potential customers (Kurochkina and et.al., 2019).
These marketing strategies will assist in understanding consumer needs and to withstand
competitive challenges with best service delivery.
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REFERNCES
Books and Journals
Breuer, H., and et.al., 2018. Sustainability-oriented business model development: Principles,
criteria and tools. International Journal of Entrepreneurial Venturing, 10(2), pp.256-
286.
Broekhuizen, T.L., Bakker, T. and Postma, T.J., 2018. Implementing new business models: What
challenges lie ahead?. Business Horizons, 61(4), pp.555-566.
Fila, M. and et.al., 2020. Innovations for Business Management: Motivation and Barriers.
Ghanbari, A. and et.al., 2017. Business development in the Internet of Things: A matter of
vertical cooperation. IEEE Communications Magazine, 55(2), pp.135-141.
Jukova, E.E. and et.al., 2019. Planning a new business: typical mistakes of a business plan in the
service sector. Journal of Environmental Management & Tourism, 10(3 (34)), pp.441-
447.
Kurochkina, A.A., and et.al., 2019. Management features of small and medium-sized business
enterprises. Revista Espacios, 40(34).
La Rocca, A., and et.al., 2019. The role of supplier relationships in the development of new
business ventures. Industrial Marketing Management, 80, pp.149-159.
Larjovuori, R.L., Bordi, L. and Heikkilä-Tammi, K., 2018, October. Leadership in the digital
business transformation. In Proceedings of the 22nd international academic mindtrek
conference (pp. 212-221).
Levushkina, S.V., and et.al., 2018. Methodology for assessing the sustainable development of
business structures. Research Journal of Pharmaceutical, Biological and Chemical
Sciences, 9(4), pp.938-950.
Lindh, C. and Nordman, E.R., 2017. Information technology and performance in industrial
business relationships: the mediating effect of business development. Journal of
Business & Industrial Marketing.
Snieska, V., Zykiene, I. and Burksaitiene, D., 2019. Evaluation of location’s attractiveness for
business growth in smart development. Economic research-Ekonomska
istraživanja, 32(1), pp.925-946.
Tuzovic, S. and Paluch, S., 2018. Conversational commerce–a new era for service business
development?. In Service business development (pp. 81-100). Springer Gabler,
Wiesbaden.
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