International marketing for hairdressing

The following sample essay on “International marketing for hairdressing”: analyzes hairdressing’s market in Japan, Russia and South Africa.

LOUIStylez, a well-established beauty enterprise was founded in 1989 in London as a small hairdressing salon in the heart of Soho. Over the years it grew to become one of the most respectable and recognised brand names in the world of hairdressing and beautification. Offering their state-of-the-art contemporary services to middle and upper-middle class individuals between 20 and 35 year old, LOUIStylez managed to open more than 35 salons in the UK.

Through their dedicated franchising program and successful performance, LOUIStylez is constantly looking for opportunities to enter new markets.

Unlike the majority of franchisees who provide only brand name, equipment and professional cosmetics, LOUIStylez offer in addition a design development, free of charge training on marketing, psychology, management and administration four times a year, web-site in the language of the country they operate in, intranet and corporative magazine, advertising assistance and discount system. Moreover, in order to promote the brand and increase consumer loyalty, LOUIStylez distribute the small bathes of their professional cosmetics through the major retail chains.

The company’s managers strictly watch the quality of services offered in their franchised salons. Now with a strong brand image and considerable financial and informational resources, LOUIStylez is about to enter three absolutely diverse countries on different continents: Russia, Japan, and South African Republic.

Market Analysis of Japan

Japan has remained a major economic power in Asia and globally, their government-industry cooperation is working a strong ethic, mastery of high technology, and a comparatively small defense allocation help Japan advance with extraordinary rapidity to the rank of the third largest economy in the world after the US and China.

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Japan is the largest technologically advanced producers in the world, they produce motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles and processed foods, etc.

Analysis

• Age structure: 0-14 years : 14.3%
• 15-64 years : 66.2%
• 65 years and over : 19.5%
• GDP – real growth rate: 2.1% (2005)
• GDP – composition by sector: Agriculture: 1.3%
• Industry : 25.3%
• Services : 73.5% (2005)

Japan is a famous place where the trends are starting from; their Japanese fashion is a wide range of product that people can find it in some modern places. There are many different chances for their designers to produce and built up their own brands. Most of the Japanese thinks out looking are very important; therefore they are willing to spend lots of money on their clothing, make-up and hairstyle, etc. Basically, more than 90% of Japanese starts spending on their body after 20 years old.

Because of their fashion trend, many young Japanese would like to become to be a hairdresser, they have demonstrated that their creativity, quality and performance in this fashion market. Also, there are many international hairdressing competitions for their potential hairdressers to perform and promote their works. As you know, Japanese technologically advanced products are very popular in world, they have also produced some new hair requirements for their people, such as straigtening system, style, colour, and permanently wave hair with chemical solutions, and provide clients with hair and scalp treatments.

To upgrade their hairdressing skills, many Japanese hairdressers study abroad in London and New York, at the same time, they can also improve their communication skills. Some of them have already opened their own shops in London after their study. Japanese have a very good customer service; they care about all of their customers. Therefore, some of them work with a client from start to finish.

Because of the Japanese fashions are successfully attracted a lot of people, so many western people are very interested in their hair dressing and fashions in this 5 years. However, most of the Japanese cannot speak good English, it is the most difficult thing to communicate to their overseas customers and their hair condition is totally different between Japanese and western people. Therefore, not all the western people are willing to try and no one can insure that they would accept or like their culture.

Some of the western people even had a bed experience with their Japanese hairdressers, so they are giving tips to people who are interested or looking for a Japanese hairdresser:

• Get recommendations from friends
• Check that the staff speaks English
• Make sure they have trained in their clients are foreigners
• When you see a woman with great hair, ask her for her stylist’s contact number- she’ll probably be flattered and happy to help

Market Analysis of Russia

At the Soviet Union an ordinary consumer didn’t have a wide range of salons to choose. Moscow was the place where the most famous beauty enterprises were situated, at the same time, the situation in regions was completely opposite, there were few proper salons and the most common ones were barbershops. “In the late 1980s in the USSR there were 64 thousand barbershops providing more than 210 thousand jobs”.

Only in the beginning of 1990s elite sector development emerged. Such world-known names as Wella Dolores, Yves Rocher, and Jacques Dessange became the first VIP beauty salons in Russia. The economic crisis in august 1998 severely influenced the beauty enterprises. Elite salons recovered very quickly though. However, business class sector regained its position only in 2000 and from that time it showed steadfast development as opposed to elite sector stagnation. “In 2002 the number of middle class salons tripled as compared with 1998 and they made 30% larger profit than in 2000”. Such market vivacity was strongly influenced by rapidly growing consumer demand which has increased by 15% in 2002 in comparison with 2001. Rising incomes and formation of business class in Russia reflected in constantly decreasing number of economy class salons.

“As welfare grows, people choose higher quality and wider range of services and prefer middle-class beauty salons to economy class barber’s shops. Each year economy class salons lose approximately 5% of their share (50% share in 2000 as compared with 40% in 2002)”. At the moment there are 4 thousand officially registered salons in Moscow and 350 thousand all over Russia. Moscow elite salons constitute 15-17%. However, elite salon sector matures and its growth rate is constantly slowing down, especially in Moscow. Analytics point out that this tendency is visible all over the world and, obviously, Russia is not an exception.

They explain it that well-to-do people, main consumers of elite beauty services, due to developing system of consumer crediting and allocation of funds for new luxury items such as cars, e-technologies, and mobile phones, people prone to shift from elite-class salons to middle-class ones. Currently the work load of economy class salons is 50-70% of maximum capacity, 30-50% for business class salons, and 10-30% for VIP salons. “A hair-do by elite master ranges in prices from US$60 to US$600. In business class salons this service will cost from US$20-40 to US$100-130. Cosmetological procedures range from US$40 to US$130 in elite salons and from US$25 to US$60 in business class salons”.

Analytics predict that the largest potential in the sector is in business class salons. Apart from the fact that the size of this sector during the last two years amounted only 5%, at the moment more than 70% of newly opened enterprises are targeted towards business class people. Moreover, 90% of graduates from beauty salon management are planning to open a business class salon.

The other tendency indicated in beauty salon business is demand for constant renovation. “Professional managers recommend the following scheme of reinvestment: 50% of net profit in the fist year, 35% in the second year and not less than 15% in all the following years”. A beauty salon has a life cycle of 5-7 years and requires a total restyling after this period of time.

The sum required to open a new salon ranges between US$10000 and 2 million depending on its size and form of ownership. Russian market is exceptionally favourable for franchising business development. This scheme is already used by such companies as Jacques Dessange, Tony&Guy, Riama. Such successful performance is explained by beneficial franchising conditions and well-organized promotional activities.

The other tendency seen is ineffectiveness of beauty enterprises as a part of hotel infrastructure. It is simply explained that Russian people come to do business, and not to beautify themselves. At the same time independent beauty salons are becoming very attractive for not demanding large area and investment, however, the chance for success is fifty-fifty due to severe competition and susceptibility to market fluctuations.

Certification system introduced by Moscow Consumer market government department is still voluntary. It pursues several goals: to protect consumers from low-quality service, to give a promotion to law-abiding salons and to attract consumers from the grey market. Moscow Administration for Ministry of taxation estimates that the grey market of services is equal in size to the legal one.

SOUTH AFRICA

POLITICAL

South Africa belongs to the Southern African Customs Union (SACU), a regional trade arrangement with Botswana, Lesotho, Namibia, and Swaziland.

In South Africa, taxation is the main issue that continues to hamper growth as there are tax duties on cosmetics, shampoos and shaving preparations which currently stands at 5%, thanks to the vigorous lobbying by the Cosmetic Toiletry & Fragrance Association (CTFA). South Africa’s top income tax rate is 40 percent. The corporate tax rate is 30 percent.

South Africa permits foreign investment in most sectors, and requires no governmental approval, and generally does not restrict foreign investment.

which ultimately means we are free to invest and run our hair dressing services.

ECONOMICAL

There are approximately 2000 identifiable black salons and an additional 10,000 to 12,000 informal salons. Black hair treatment is a market of 500 million euros in Africa alone.

While imports of cosmetics from the U.S., Europe and Asia are increasing, it makes it easier for us to get our resources from these huge corporations, and because South Africa has slowly liberalized during the past decade, and economic growth has improved. It remains the economic centre of sub-Saharan Africa, generating 36 percent of regional GDP.

In South Africa, about 70% of the ethnic hair-care independent retailers and informal distributors dominate the retail market, which is Spurred by the entry of multinational companies who are now investing into the ethnic hair-care market, as 79% of the population are of black origin, we are also waking up to the potential of this market segment.

South African cosmetic and toiletries industry grew by more than 65% from 1996 to 2000, and sales are expected to raise to $1.75 billion by 2005. This growth lies largely in the ethnic market, and in the area of men’s cosmetics, a traditionally neglected segment, which will be neglected no more as we also plan to reach these market segment.

SOCIOCULTURAL

African hairstyles and fashion often has a deeper meaning in south Africa than what we are used to in Europe. Techniques such as braids, twist, cornrows, weave on and water curls are used and are emphasised through occasions like weddings, birthdays and even funerals. With the different techniques used we can also do this as part of our service.

After 1994 in South Africa, the people began to be proud of themselves because before that they were made to believe in the European style of beauty.

Upscale salons in South Africa charge prices ranging from 80 Rand ($13) for a basic perm to 180 Rand ($30) for dreadlocks. Many consumers have to stretch their monthly earnings, which is usually around 2000 Rand ($300), and because they have other needs to cater to , they find that the street stylists offer the same services as salons at much cheaper prices. and because we do not want our clients going to the streets we will compete competitively with the street vendors.

but what is evident, is that the business of styling black hair is booming and black South Africans are now celebrating their ethnicity more then ever. Shop owners, street stylists and consumers agree that the days of assimilating to Europeans standards of beauty have passed.

TECHNOLOGICAL

As the figures show from the graph telephones and mobiles are widely used in South Africa so this would give us the help we need to communicate to them and tell them about our services via the phone internet and mobiles. we can also market our products through radio stations and television as a percentage of them have access to this technology which is advance and growing more and more. Electricity will also play a big part in our service as our hair appliances will need it.

Marketing and Media Strategy

We are offering state of the art contemporary services to middle and upper-middle class individuals between 20 and 35 year old people.

From time to time LOUIStylez places adverts, and advertorials in the internet, corporative magazine, local newspapers, actively promoting our discount cards, membership cards, and free offers and discounts for weekday appointments. We strongly believe that such an integrated marketing communications approach will bring in loyal and long-term customers. Moreover, through sending press releases, e-mail advertisements announcing salon changes, new innovations and services, in that way we are keeping in touch with our current customers, at the same time, attracting the new ones.

Moreover, in order to promote the brand and increase consumer loyalty, LOUIStylez distribute the small bathes of their professional cosmetics through the major retail chains. The company’s managers strictly watch the quality of service offered in their franchised salons in order to maintain our strong brand.

LOUIStylez also benefit from improved links with the local communities, through charity events and sponsorship.

Conclusion

In those countries, they have a healthy economy and good potential to produce their services and goods to worldwide. Hairdressing has been an important part of the dress of both men and women, people are willing to spend on fixing their hair.

Although Japan has a wide range of fashion trends, there are a lot of competitions in their fashion market. South Africa is so multicultural, people are living in different living standard, so there are many different kinds of salon and barbershop over this country. However, Russia’s fashion is close to European country, it has also attracted some foreign fashion investments, such as Tony and Guy. At the same time, market is not saturated, there are still plenty of space for new entrants.

References

• www.heritage.org/research/features/index/country.cfm?id=Japan
• http://www.cia.gov/cia/publications/factbook/geos/ja.html
• http://www.fashioninjapan.com/Free_Tour/FIJPresentation_ft.htm
• http://www.amphi.com/~psteffen/fmf/fashion.html
• http://jobguide.thegoodguides.com.au/text/jobDetails.cfm?jobID=778
• www.being-a-broad.com/living/hair.html
• www.metropolis.Japantoday.com
• www.web-Japan.org/trends00/honbum/tj990707.html
• www.thejapanesepage.com/readarticle.php?article_id=164
• www.mofa.go.jp/region/europe/uk/index.html
• www.japanesestreets.com
• http://www.cosmeticsinrussia.com/showart.phtm?reg=full&type=m&num=560
• http://www.heritage.org/research/features/index/country.cfm?id=Russia
• http://www.cdi.org/russia/johnson/9123-8.cfm
• http://www.citibank.ru/russia/pdf/eng/bal_rus2004.pdf#search=’balance%20of%20payments%20russia
• http://www.cia.gov/cia/publications/factbook/geos/rs.html
• www.cs-students.stamford.edu
• www.southafrica.com
• www.reserachandmarkets.com
• www.athens.com
• www.heritage.com
• www.journalism.berkely.edu/projects/southafrica
• www.euromonitor.com
• www.museums.org.sa