Chapter 7: Advertising, Marketing And Promotion
Often a misunderstood term, marketing in its broadest definition encompasses
every facet of running a business. Marketing includes choosing your
location, deciding on type of services, interior decorating, buying
equipment and products, hiring employees, setting prices and planning
advertising. In short, a marketing plan is everything that goes into
providing a tanning service to your customers.
When you decided to go into business, you undoubtedly believed that
your salon could provide a needed or desired service to the community.
In exchange for this service, you expected that the community would
pay a reasonable price. All of the principles of marketing rise from
this simple scenario.
First, you had to decide what services you would offer for the community's
consumption, what setting would best accommodate the performance of
those services and the price the public was willing to pay. Then, so
the members of the community would make use of and pay for your services,
you had to ensure that your customers' expectations were fulfilled so
they would return in the future. And, if you were successful in each
step of the process, you made some money.
Simple marketing procedures are inherent in the basics of operating
any business, including an indoor tanning salon. However, to make a
business boom, you need to pay particular attention to the entire marketing
scheme. You must be aware of what you are and aren't doing to enhance
the climate in which your tanning services are performed.
The Marketing Plan
According to almost any marketing text, the primary points to keep
in mind in devising a marketing plan can be distilled to four essential
areas or the Four Ps--product, price, place and promotion.
Before placing an item on the market, a company must conduct a large
amount of research to come up with a product and its accessories. Product
planning involves the entire process of investigation that goes into
the making of a new product.
Some of these steps include:
·surveying consumer needs
· buyer expectations (meeting them)
· determined final needs
· brand name
· services that accompany product
The product isn't just a physical entity to a consumer, it is a physical
entity that suits some purpose and completes some need. Many excellent
products have failed because they are clever items but no one needed
Product development is an ongoing affair, and every manufacturer has
new products, products at the height of their maturity and products
in decline. Each of these products experiences a lifecycle that begins
and ends relatively quickly.
In tanning, the first widely used tanning systems were quartz lamps,
initially used for the treatment of disease and later picked up for
recreation and beautification. This product, like any other, went through
a period of popularity and then entered a decline. Modern tanning began
with the introduction of UVA lighting systems and, since the introduction
of modern tanning equipment, the products have gone through several
phases. New models and refinements of old ideas are being changed constantly
for new tanning equipment. They are becoming more efficient and reliable.In
a toy store, the product is a toy. In a plant store, it's a plant. In
a salon, the product you are selling is the tanning session or any of
the other ancillary services you provide. It isn't a tangible, concrete
item, but it is a marketable product nonetheless.
When a large corporation decides to begin production of a new product,
it does a great deal of research to determine what features will entice
the desired audience to buy it. It then sets out to design a product
with those features that will be attractive to the audience.
Are you catering to the under-30 age group? To women aged 30-50? To
retired persons? To professionals on their lunch break or on the way
home from work? It is entirely possible to offer services for all of
these audiences in one facility, but the needs and wants of each group
will be different.
Those in the first group will be receptive to tanning and to a variety
of fitness and beauty services, but it may take some personal selling
to hook them on some of your other ancillary services.
Professionals at lunch are pressed for time. If they can take the time
to come in, they will be in a hurry and may book appointments well in
advance for quick tanning sessions. They may pass up other services,
unless the session time is short. On their way home, time is often less
of a factor. After a busy day, a stop at your salon may be considered
time to unwind. While a fast tanning booth or a 10-minute bed may be
the ticket for lunching yuppies in a time crunch, a slower bed with
a good sound system could be the key to reaching rush-hour relaxation.
In assembling and re-evaluating the product line of your salon, then,
you need to visualize the prospective audience for each service and
then look at ways to tailor that service to that audience. Certain services
will lend themselves to a particular audience and vice versa.
Price is still one of the guiding factors that companies live by because
it represents the power of logic and marketplace. A product must be
sold at a price high enough for a company to make a profit but low enough
to entice the consumer to buy it. More specifically, a producer will
consider a number of factors when structuring the final price:
· cost of production
· consumer price attitudes
· competition pricing
· laws governing fair pricing
· industry pressures
As a general rule to fiscal happiness is never regularly sell something
for less than it costs. That is not to say that you can't give free
promotional sessions to boost your potential customer base, just don't
make a habit of it.
There are other ways of getting new customers into your salon. In figuring
what each session costs you, simply add up your costs for a month and
divide by the number of sessions taken. If you take everything into
account--including utilities, space, rent, payments on the machinery,
maintenance and payroll--you should come up with a fairly accurate per-session
cost. Include the desired profit and the result is the target price.
However, your target price may or may not be attainable, depending
on many market conditions. If your competition is charging less for
an identical or similar service, it may not be possible to make the
profit you want without distinguishing your service in some way. In
tanning's early boom phase, price wars became common and drove many
salons out of business. The principle at work was that the more business
a below-cost price generates, the more it hurts the company.
Think about it. Suppose salons A and B are both losing $1 per session
because of their price war. If A is "winning" and is running
150 sessions per day to B's 75 per day, salon A is losing $150 a day
to B's $75. They're both cutting their own throats; salon A is just
doing a better job of it.
On the other hand, if salon B combated the price war by selling sessions
at cost and lost another 25 sessions to salon A because of the price
difference, it would be running 50 sessions per day and breaking even.
However, salon A would be tanning more customers than ever, but paying
$175 every day for that privilege.
Maximum price will vary by region. Generally speaking, the going or
market price will stabilize at a value determined by the community as
a whole. If every salon in your area is asking $7 for a tanning session,
you may have difficulty charging more unless the service you offer is
perceived to be better or special in some way.
For example, if you can offer a first-rate service in correspondingly
elegant surroundings, and you can communicate this to the right clientele,
you may be able to persuade them that the difference is worth a higher
There are a number of other ways to price services and products. Loss
leaders (normally supermarkets) take a loss on some items in the hope
that the consumer will come in and buy other items on which the retailer
can make a profit. Salon owners try this on a temporary basis by giving
inexpensive tanning sessions and then making up the short fall on more
Flexible pricing means that the unit cost of an item is negotiable.
That is, the manufacturer can afford to sell the same product at different
prices to different levels of the retailing chain. For example, a manufacturer
of tanning equipment can afford to sell its equipment to a wholesaler
at a reduced price but would only sell at a higher price to an actual
salon owner. There are two actual prices, but only one for each market.
Multiple unit prices are like quality discounts--the more you buy,
the less you pay per item. Two effective strategies are skimming and
penetration pricing. Skimming means getting the most profit from a product
or one with limited competition. The policy quickly changes when demand
lessens or competition enters the scene. Penetration pricing is charging
an artificially low price (similar to loss leaders) and hoping to make
up for it with dramatic sales. The low profit margin discourages competition
and provides substantial benefits to consumers.
Both skimming pricing and penetration pricing have been applied to
tanning with mixed results. When many salons opened, there was little
competition and several salons took advantage of skimming prices to
maximize their profit. Competition hit these salons hard and forced
many into competitive price wars. Other salons that later entered the
market tried penetration pricing but found it difficult to service heavy
client loads and maintain an adequate profit margin.
Commercial tanning systems equipped with various options basically
will run anywhere between $2,000 and $10,000, and higher for high-pressure
units. When examining equipment costs, take into consideration the return
profit potential that the system is able to produce. Average session
costs vary from $3 to $12 for low-pressure tanning.
Generally, equipment with a longer recommended exposure time such as
a tanning bed would have a higher cost factor when establishing a pricing
schedule. Therefore, the shorter the recommended exposure time, the
easier it is to establish more competitive pricing and the greater the
profit return. Based on a 15-minute session time at $5 a session, it
would take 1,200 sessions to recoup a $6,000 investment. Realistically,
this could be accomplished easily in less than two months, providing
your service is promoted properly.
Once the manufacturer decides what to produce and how much to charge
for it, he has to get it to the place where a potential customer will
buy it. Among the considerations for product placement are the following
· Where will customers shop for the product?
· What is the best perceived location?
· Does location affect the quality appeal of the product?
· Will consumers know to look for it here?
· Are there other locations that are overlooked that could
be suitable locations for the product?
Whatever location or locations a manufacturer chooses, the main point
about a place is the consumer's expectations. In the past, consumers
have bought products like the ones they've bought before, by looking
for the product in the locale where new and old products are grouped
according to category.
The process of placing the tanning service is a difficult one because
the salon owner must select a location that will draw in the most tanning
customers. Attractive display shelves and point-of-purchase displays
within the salon warn the consumer that this is an opportunity to purchase.
One way the manufacturer places his goods is with a wholesaler who in
turn distributes them to locations where they will get the best attention.
Convenience is very important in our society, and unless a product
or service is important to people, they won't go out of their way to
purchase it. Therefore, having decided on your primary audience and
what will appeal to them, you must find a way to offer it in a location
that is convenient to them. That may mean that it is near their home,
their work or other places they frequent.
It is also important that the location mesh with the other facets of
the marketing plan. If rent is prohibitively high and will push the
cost of offering the service beyond your target audience's reach, the
convenience of the location is irrelevant. Or, if the salon is in a
seedy part of the downtown district, and your target audience is young
female professionals, it doesn't matter if it is close to their work
or if the rent is low.
The particular requirements of the services that you offer also must
be considered in choosing a location. At the very least, minimum space
requirements must be met. If you anticipate a bright future, you should
make sure there is room for expansion.
If your service is unique or is perceived to be more desirable than
that of your competition, you may be able to get away with operating
in a less convenient location that accommodates those features that
make your services distinct. As long as your potential customers know
about you and will go out of their way for what you have to offer, the
location may not be a major handicap.
In choosing your location, keep in mind the overall image you want
your salon to portray. If you're aiming for an upscale, elegant salon,
you're going to have to locate in similar surroundings. Its decorating
style also will have to be correspondingly tasteful. Even with an existing
salon, you must be aware of how the location is working to sell your
product. In any service industry, it is imperative that the space be
clean and attractive and promote the type of atmosphere you want your
salon to convey.
The act of promotion is creating an interest in your product by a variety
of methods. Many excellent products languish because they lack the proper
promotion. They never capture the public's attention, and therefore,
never reach a broad market. Specific means of promotion include:
· personal selling
· sales manuals
· dealer cooperation (displays/rebates, etc.)
Most salons have small budgets for advertising, if they have any budget
at all. It makes sense then to try to ensure that those few dollars
are spent as wisely as possible.
Before you pick up the phone to call the local newspaper and arrange
for an ad, stop and think. Do the customers you want to attract read
the paper? In what section will an ad reach them in the right frame
of mind? What should the ad say to get their attention and then make
them want to come into your salon? Is a local radio station a favorite
of the desired audience? Might fliers distributed at a local mall work
as well? Can you get hold of a mailing list specific enough to make
direct mail pay off?
After you choose and run an ad, make sure the dollars were well spent.
Get in the habit of asking new customers where they heard about you
and keep track of their responses. You'll begin to see patterns indicating
the effectiveness of different promotional efforts. Keep those patterns
in mind in future advertising decisions and you will see results without
wasting advertising money.
A fifth "P" inherent in making decisions about each
of the other four is People. Meaningful marketing decisions always
must take the desired customer into account.
The four Ps, then, are the basis of any effective marketing scheme.
The effective and efficient interrelation of them may not guarantee
success, but it goes a long way in that direction.