Company Analysis Of Tony And Guy Hairdressing Salon

Company Analysis Of Tony And Guy Hairdressing Salon Tony and Guy hairdressing salon is a multinational corporation, which deals with hair care business. The company has not only competent management team but also qualified, dedicated and committed. The company has more than 200,000 employees worldwide. The Dubai branch has two branches with one of them performing poorly due to lack of planning and proper management (http://www.toniandguy.com/). Toney and Guys experienced employees are well trained will always ensure the success of the company. Tony and Guy hair care salons mission statement is to ensure that, the hair care services reach all the people all over the world. It also seeks to ensure its customers and potential customers get high quality services that are reliable, accessible, and universally acceptable. The hairdressing salon business, since its inception, has had the main goal of becoming the leading provider of hairdressing and care services in the United Arab Emirates (UAE). The salon, as the business is known, has shown without doubt its capability and potential that it can achieve success, if it is provided with the required financial resources. It is one of the leading international hair care companies in the world and it has a commitment and continuous service improvement. It dominates the market because it has the largest market share and customer base in the industry, in all the regions of its operation. The company is driven by the returns it is targeting and this has made it to gain growth and success by providing relevant and reliable hair care services to its esteem customers. In addition, the company offers variety of hair dressing services to its customers depending on their needs (Perry Sherlock, 2008). Though the company has not been performing well, there are recent reports of trivial improvements attributable to improved economic growth, leading to increased customers and subsequently increases in profits. Its services have attracted millions of customers and potential customers, who have ensured a consistent stream of revenues to the firm no matter the numerous challenges it is facing. The firm is targeting everybody in the market irrespective of the age, gender, ethnic group, tribe, religion, or nationality. The hair care firm has established many salons in major and strategic sites in Dubai, where customers can locate with ease and they are accessible to all. The firm advertises its products and services through the TV, radio, beauty magazines and the firms well-established website where people can access it wherever they are. There is stiff competition in the industry because of rapidly changing fashion trends, peoples taste, and preference. The firm is strategizing to ensure it outperforms its competitors and gain a competitive advantage. Its services are of high quality that meets the customers requirements and standards. The firm should improve on the marketing strategy to appeal to many customers to accept the services of the company. An aggressive advertising and promotional campaigning in all media, both locally and internationally should be planned and intensified. This will ensure the firms services are provided and marketed to many people (customers and potential customers). For the firm to expand its operations, it needs one million US dollars ($1000000). The funds will be used for campaigning, opening new salon centers, training employees and purchasing new equipment that will ensure the customers hairstyle is done according to his or her expectations in order for him to get satisfied. This will in the end, ensure that, the firm retains and maintains the customers for a long period. Building trust and loyalty in customers requires total commitment and dedication from the employees and the top management. The success or failure of the firms services will be measured based on the customer increase or decrease in number, profits, and comments from the customers about the firms services and products. If the numbers of customers are increasing, then, the firm is becoming successful and vice versa. The set goals, targets, and objectives of the firm can be used to measure the firms success or failure. The firm should open several branches in strategic locations that the customers can easily locate and serve according to their expectations. The management especially the human resource department should employ permanent employees with the required skills, knowledge, competencies, and experience. The employees should be continuously trained to equip them with new technology and any changes in the industry, which are deemed important (http://www.toniandguy.com/). 2.0 Introduction Tony and Guy is an international hair care business, which was established in London, United Kingdom in 1963 by the two brothers Giuseppe (Guy) and Gaetano Mascolo (Toni). Their two younger brothers Anthony and Bruno later joined the two brothers. The organization has more than 400 salons and it has been able to win many hairdressing awards for many years. For example, in 2006, it won the South West Hairdresser of the Year and it has won the London Hairdresser of the Year (11 times) consecutively. The organization has its own in-salon television station known as Toni and Guy TV and a UK Magazine. In addition, the firm has opened many salons and academies around the world in countries such as Canada, Malaysia, Taiwan, Hong Kong, Australia, Sweden, Russia, New Zealand, Pakistan, United Kingdom, Ireland, Germany, Norway, and United States of America. The company manufactures its own hair care products such as styling, hair irons, and shampoo. The companys main aim is to expand its services to all parts of the world by providing quality services. The company has a sister salon group known as Essensuals headed by Sacha Mascolo-Tarbuck and Christian Mascolo; both are Tonis children (Perry Sherlock, 2008). The Dubai branch was established in the year 2000, which gave everyone a wakeup call as the new salon, which was the first to be opened in UAE. It was not only the best salon but fair and reliable to all customers depending on their income level and ability to use the services. The color department at Tony and Guy do many color corrections from other salons work that they had not performed as per the customers expectations. After a few years, the performance in one of its salons was negatively affected in that performance targets were not met. The salon had hairdressers who were unqualified because they had not undergone the required stringent London Academy training. With the poor services provided, it has led to poor comments about the services provided about the salon; hence affecting its image and reputation of the firm negatively (Perry Sherlock, 2008). 3.0 Situational analysis Situational analysis is concern about internal and external environment, direct and indirect competitors (local shops with cheap prices), target market, and the positioning the firm would take. 3.1 Target market and positioning of the firm The firm targets the whole United Arab Emirates, and further expansion of its operations to other continents so as to become the market leader. The firm targets all the people irrespective of their age, gender, race, ethnic community, religion, economic status, and place of residence (urban or rural). This target market will ensure that the firm dominates the market before the competitors venture in. By targeting everybody in the market, it will ensure that, no one is discriminated and every one will feel satisfied. This is a positioning strategy that will ensure the firm gains competitive advantage over its competitors. In addition, the firm has set different prices for the product so as to ensure people with different income or economic status are reached. This is a positioning strategy because the firm is meant to serve all the people rather than other salons (competitors) who only target the urban rich people. The firm is therefore, positioning itself by offering high-quality products at affordable prices. The services and products have been made readily available, reliable, and accessible to all at the required quantities (http://www.toniandguy.com/). 3.2 Internal environment Internal environment is about microenvironment; what is happening within the firm and that can be controlled within. It deals with the explanation of SWOT Analysis. SWOT is the strengths, weaknesses, opportunities, and threats that affect the business operations from within. The firms strengths are: the firm has organized for customer training on how to maintain the different hairstyles after it has been plaited. This is strength because the customers will be taught on how to maintain the hairstyle for long before the next hairstyle hit the market. The salon has its own products sold at cheaper prices than its competitors in the industry do. Those with low income can afford because they are packed in small units that they afford due to their meager earnings. This is strength because no customers are discriminated based on income; hence attracting more customers. The services of the salon are of high quality than the competitors. This has helped the salon to gain the competitive advantage and dominate the market since 2000. The well-trained, competent, and qualified employees have made the salon to retain its customers and increase its profit margins. The courtesy, respect, dignity, and openness with their customers have made most of their friends and workmates to seek the salon services. Customers complaints are taken seriously and corrected or improved where needed, in order to ensure they get satisfied with our services and products at all times. The company values the customers because they determine the success or failure of the company. Though the firm has numerous strengths, there are a few weaknesses needed to be addressed and corrected. The location in which the salon is located is surrounded by a crowded area. The streets leading to the hotel in which the salon is in has many businesses therefore; the potential customers may not recognize it because of the congestion due to its poor location. Some of our customers and potential customers sometimes end up in the hands of our competitors due to our poor location in the street. This has made the saloon lose some customers because of lots of noises, hooting, people shouting and dust which is not health for our customers as they take their way to the location of the salon. The branchs employment criterion where employees are on a contractual basis has affected the firm negatively. Our customers keep on getting new employees and to get used to them will take time; and the moment they get used to one another, the employee quits forcing the employer to get another expert. Customers prefer to be handled by one employee for a long time because he or she will be used to him or her. Most of the customers have shifted to the other branch and to some of our competitors because it has experienced knowledgeable and permanent employees who can be relied upon. Employees on contract have offered poor-quality services to the customers because their aim is to be paid and go (Perry Sherlock, 2008). The high rate of employee turnover is a weakness in the side of the management (human resource department) and therefore, they should focus on employing permanent employees with the relevant skills, competences, and experience. This has affected the firms reputation because once the customers expectations are not met; they will look for same services from the competitors. This is a weakness, and at the same times a threat because the competitors will capitalize from the same weakness. Our major threat is our competitors who have opened many branches in all strategic locations within the city; but the firm has a long-term strategy of expanding its branches to all strategic locations so as to counter the competition. The other threat is from our competitors who have lowered the prices of their products and charges for their services. Some of our customers have decided to change; hence, it is a threat because the company can close down. The salons opportunities are numerous, and the firm has utilized them fully. The firms competitors concentrated the marketing of its services and products in the major urban areas only; but the Tony and Guy salon has expanded its services to the rural growing centers and towns so as to reap from the large readily available market. Our products are of high quality than the competitor; hence, it is an opportunity to maximize returns. 3.3 External environment External environment is also known as macro environment analysis. This entails factors that are beyond companys control. These are political, economical, social cultural, technological, and legal (PESTEL). Political analysis is about government change and political stability of a country. If there is political stability in a country, then business will prospers because there are no interruptions such as wars and conflicts. The government usually introduces new policies and guidelines in the industry, which sometimes affects the business operations negatively. The policies may be costly and time consuming due to the procedures and processes that must be followed during implementation. The government has been supportive and cooperating on various policies; in that, the government authorities and departments in charge of the industry has been engaging all the stakeholder for talks, discussions and consultations in case there are new guidelines and policies to be introduced. Economical factors can be a major challenge to the firm if it is not stable financially, when profits are decreasing, or when it is making losses. Because there is no taxation in Dubai, the banks increase interest rates without consultation because it is vested with power and authority to do so. If the firms returns are unstable, the company may end up making huge losses due to the costs associated. If the labor unions pressurize the companies to increase the employees salaries and other remunerations, the firm may close down if its profitability was not stable. This is because; it is from the profits that the company will increase salaries, repay the loans and to expand its operations (Perry Sherlock, 2008). Social cultural factors concern the change in taste and preferences, fashion, cultural beliefs and norms and likes and dislikes. When new styles and fashion hits the market, the salon has to adjust even if it means incurring more costs. Changes brought about by the fashion and tastes and preferences require further training and expenses for the employees. Some of these changes are inevitable, and the firm must adjust so as to fit into what the customers want in all market segments. With hair styles and its hairdressing products, most people want what is in fashion, and therefore, hairdressers must be updated to know the new hairstyles so that customers may be retained and to attract new ones because of the quality services offered. Different people, races, tribes, gender, and religions value certain hairstyles and products; this therefore, calls for the salon management together with the employees to understand what different customers needs. Technological factors are crucial in hairdressing because technologies keep on changing rapidly. Different hairstyles require different equipment and machines to be used. Technological advancement is costly and the already existing technologies become obsolete. The new hairstyles and fashion requires new machines and equipment to be used so that the customer gets satisfied. Technology also requires employees to be trained on the use of new technologies. Due to the stiff competition and fear of losing customers, the firm has to adjust its budget to purchase new equipment. With the new technologies, the firm is able to provide quality services, and to gain competitive advantage. Customers are sensitive and want to get value from their money by getting services from salons with the modern, advanced technology. Legal factors are important external factors in the business operations. Laws are the guiding principles in any business. Laws must be adhered to, otherwise, the business will be deemed illegal if it fails to comply with them. Implementation of laws is costly and sometimes the government can set stringent rules if it wants to you out of the market. In hairdressing associated with salons, the government can set laws banning the use of certain hairdressing products or certain hairstyles; hence affecting the firms sales and profitability. Some of these laws can make the firm lose its customers and to close down. Some of the laws can deter the firm from expanding to certain regions or from transacting certain business dealings. 3.4 Marketing Strategy Tony and Guy salon is working marketing strategy that would enable the company regains the control of the hair treatments market globally. More so, the company is working towards reviving and rejuvenating operational the Dubai Branch that has not been performing well. The organization has set aside $ 1000000 for the processes in the marketing strategy. The conservative, limited marketing budget will spread among such activities as marketing efforts renting showrooms in high-traffic areas in cities where there will not only be more visibility of the Tony Guy products, but also its professionally trained staff will offer hair treatment services at subsidized rates, and show case the organizations product and services. Apart from the existing outlets, the activities will be conducted in selected well-traveled, popular malls located in high human traffic areas. Although, it will be costly to lease these locations temporarily, as they are charged above the normal rates, part of the high cost of rents will be offset of the sales made during the exercise. The other proceeds will be used to finance more visibility through sponsored marketing events and activities such as road shows and other activities. The marketing strategy is composed of the following activities: Advertisements: there will be Advertisements in country specific and international magazines, journals, newspapers and other publications. Those publications that have wide readerships among women and youth will be give priority since these groups the biggest junk of the target market segments. Since not all the target markets may be reached by advertisements in publications, alternatives means of reaching them will have to be decided. One way will be using large billboards in major roads feeding major world cities. Electronic mediums such Television Commercials, radio and Internet Sponsored events and roads shows will be another marketing strategy to be used. 3.4.1 Mission The major objective of marketing strategies will be to inform the customers and those potentials customer that Tony and Guy products and Salon Services are not only available locally, but also that the company is committed to providing reasonably priced, convenient hair styling and the organization exists to attract and maintain customers. Their services will meet or exceed the expectations of their customers and eventually result in secured and protected future markets. 3.4.2 Marketing Objectives The marketing strategies will increase repeat customers by at least 9% per quarter. Product visibilities and awareness is to be boosted by 14% Non-performing branches such the one in Dubai is to maintain positive, steady growth each month. 3.4.3 Financial Objectives Ultimately, the marketing objectives of the marketing strategy must translate into sales. Upon full implementation of the marketing plan, the following effects are anticipated or targeted sales: 10% increase for products sold per year. Growth of the profit margin by 3% per year. Full recovery of sales and ultimately profitability in the Dubai branches and other branches initially performing poorly throughout the worlds; one year since the inception of marketing programs. 3.5 Target Marketing Target marketing as part of the strategy will enable Tony and Guy; to reach different market segments as demonstrated below: Men: past statistics show that men at least 70%-75% of men use hair make up, thus implying significant clientele potentials. Relevant communicational tactical ads will to reach these groups will be used. Upper-end and lower-end women markets: The biggest proportions (about 90%) of the revenues to the hair industry come from female customers. Women have generally been found to be fond of identifying themselves with classy, expensive, and fashionable products and services. Although they can be discriminated by class and prices, the quality of services and functionality of different brands of Tony and Guy brands will greatly influence this segment of the market. There therefore, great potential market in the women populations. Young Mothers with Children: Young children are an emerging market in the hair treatment industry. A typical family salon has playing facilities for children, where children safely spend their times as they wait for their parents or as they wait to be served in the Hairdressing and treatment. Each of the three groups will be targeted separately. The Tony and Guy outlets and the new-leased promotional centers will prepare its staff to offer quick and convenient services to the male customers. Outlets will close late at night 8 pm in high traffic centers and security services will be acquired from security companies. Throughout the periods, no appointments will be required, and most of the salon services will be on first come first serve basis but quick, convenient, and satisfactory to the customers. As for women, research has shown them to prefer the allure of classy salons, although practically not everyone can afford such luxury. For this reason, Tony and Guy will provide the different hair treatment services but strictly within the normal range prices. Tony and Guy will focuses their marketing strategies on these customers by put emphasis on the classy, ultra hype styling that Tony and Guy will offer at all their outlets all over the world during the promotion period or the time of implementing the marketing strategies. Entertainment will be offered. To reach both the high end and low-end market at the time while appealing wit classy but affordable services and products, Tony and Guy advertisement will be made to appeal to all. The advertisement while communicating the classiness of the services and products will also emphasize of the affordability. Above all, advertisements will demonstrate that making up and treating ones hair with companys products and or services is a necessity, as basic as clothing. It will communicate that it no longer a secondary need but a basic need for every woman. With the latest finding confirming that there is an emerging market in children for the hair industry, Tony and Guy cannot ignore the segment. To win the Children market, Tony and Guy, will focus its marketing strategies towards young mothers visiting the Salons with children by investing in kids toys, playing facilities, and offering hairdressing services friendly to children. In addition, the children will receive special rates that would entice the customers to visit the salons again. The tactical advertisement will be tuned to appeal to this group while reaching other segment with the same message. 3.6 Positioning Tony and Guy Salon marketing strategies will position the organization in the industry strategically to be a one stop-shop convenient and affordable place for services and products. While reaching families a corporate entity, the salons also will appeals to individuals with all the outlets prepared to offer quality services and products at competitive rates even after the promotional periods. Tony and Guy will be offering one-stop services and building it competitive edge by striving to achieve its desired positioning through; The staffs are incentivized to offer quality client services throughout. While Tony and Guy will invest time and money into training the employees, other concerted efforts will be arranged to ensure that clients receive the best possible experience that would make them loyal to the Salons and eventually turn them become long-term clients ultimately leading to improvement of the companys services and products reputations. Through its superior customer service, Tony and Guy will be in a position to effectively and competitively out-perform its competitors both retail and big dealers operating in the industry. Excellent customer services throughout all centers: Tony and Guys competitive edge will be based on superior customer service. The company recognizes that the hair treatment industry has crowded market with challenging situations id differentiating its products and services from those of the competitors. To stand out in the market, Tony and Guy, take advantage of its combined, concerted efforts to sell the hair products while at the same time operating salons. The two activities not only give an opportunity to customers to try the products and services but also enables them experience the quality of services and products the company offers. Tony and Guys have been trained in the London Academy in quality customers services. This will enable the company, throughout its branches spread across the globe, to continuously offer or provide superior customer attention. The staff will be as much as possible be flexible to the needs of the customer. 3.7 Strategy Pyramids To create a change, the old marketing strategies, with rejuvenated efforts, the single most apparent objective is to position Tony and Guy to be a prime one-stop hair-service shop for the family internationally. The pyramids marketing strategy attempts to first furnish all customers in the industry with the available products and services at the Tony and Guy Hairdressing and Salon before developing a firms customer base and eventually working towards improving customer referrals and loyalty. The message that Tony and Guy will be selling will be communicate and recruit the entire family into quick, professional services that come with excellent customer service at affordable rates. Various mediums will be used to communicate the message. During and after the promotions, the messages will continue to be communicated through in-store and storefront displays through all the outlets and partnering retail salons. This will be convenient and cost effective method that will attract potential and existing customers that walk around the or near the outlets and retail centre. This will complement the initially and conventional strategies of using publication and print mediums local and international regular publications newspapers. 4.0 Marketing Mix Tony and Guy marketing mix will carefully perform market research too selectively to influence customer behavior in favor of the services and product of the company. Theoretically, a typical marketing mix model is comprised of the 4Ps of marketing namely: pricing, Place (distribution), Promotion and advertising, and Product. 4.1 Pricing Tony and Guy Salon pricing system will be founded on a competitive pricing model that while making the services and products affordable remains competitive relative to competitors prices. This pricing strategy will be the most fundamental element that needs serious considerations in each market. Although the pricing of services and products by Tony and Guy will be guided by the current levels and those of the competitors, the company will strive to offer optimal prices, affordable and compelling to the customer, yet giving reasonable returns. During the promotions, the prices will be subsidized, but at a minimum, the revenues must offset the promotional expenses. Thereafter the new set of optimal prices will be offered for the products. Each markets retail outlet will be issued with pricing guidelines. Tony and Guy acknowledge the difficulty in standardizing prizes in all the markets considering the variations in income and economic levels. For this reason, each segment of economic separated by national boundaries and currency will have specific pricing model guidelines. Independent salons franchised to offer Tony and Guy products and services will be given discounts to together with customer identification to the loyal ones (Westwood, 2000). 4.2 Price Policy While Tony and Guy Company Salon admit that pricing is the most important element that influences customer or rather buyer behavior and the same determine the profitability of any enterprise, the company intends to develop policies that would assist the managements and retailing outlets in setting optimum pricings that are enticing to customers. These prices will be so strategic that that it will affect the overall performances and the future competitiveness of Tony and Guy. Attracting new clients and keeping the customers, will be the key agenda in the pricing policies to be developed. Because of these affordably but competitive prices, Tony and Guy will use other strategies expand its market. Larger sales volumes will compensate the lower prices. In this case, the best method that the company sees as what will attract customers and keep them. For the prices to be competitive and appealing to customers, the organization devises strategies and conducts feasibility analyses of custome rs experiences at different pricing scenarios. This requires some market research and testing to determine customer behavior at different selected rates. The Tony and Guy Hair products and hair treatment services will use the fixed price in specific regions, with similar market segment description such demographic, cultural, and economic situations. This policy involves determining the price for customers who are willing to purchase the product with the same prices, given the same-shared market conditions and environment. Though it sounds discriminatory in nature, the prices will be fixed in such a way that it will be very easy for the company to administer and in the end be able to maintain a good will within the customers. This strategy will enable the company to use a higher pricing in better economic markets to compensate the minimal rates charged in the markets, whose economic and average income levels are lower. This is one of the strategies often recommended for company multinationals operating in countries having different economic performances (Westwood, 2000). 4.3 Place (Place of Distribution) and Worldwide Marketing (Promotion) Tony and Guy Salon being an international company that deals with hair treatments products and services, has a strategic marketing plan program for its product and services with a world wide scope. Since the birth of the organization in United Kingdom, the company has always catered for the demand of its customers across the globe. Consistent with this global reach, the company has always been aware of its customer around the globe. In line with this element of the marketing mix and consistent to the marketing strategy, the strategy has always been to formulate and invent products exceeds the needs and preferences of the company customer wherever they are in the world. With much investment in research and development of Tony and Guy salon products, the organization has already identified the specific needs required in most parts of the world, including the strict Islamic Middle East (Perry Sherlock, 2008). Following adaptation of its products to meet the specific hair needs of customers in a different part of the globe, To