OXY BAR Restore and refresh without the side effects

2013Service Marketing

[OXY BAR Restore and refresh without the side effects]Ali Ammar Yousuf, M. Fouad Siddiqui, Ozair Qadir, M. Aizaz Haq, Farzan Sheikh, Furqan Lakhani

Table of ContentsBackground of Service Concept and Company:4Service Concept:5High Contact Service7Facility Layout7Quality Control7Capacity7Front Line Worker Skills7Rhythm & Schedule7Service process8Service Offer8People Processing88 Ps Of Marketing:9Product Elements9Stressed Businessmen9Athletes9Young adults9Primary Product10Supplementary Products10Price10Place11Promotion & Education11Physical Environment12People13Process13Productivity & Quality14Conclusion:15

Background of Service Concept and Company:Blood is loaded with Oxygen, When air is inhaled the lungs siphon the oxygen into the blood, and the heart pumps these oxygen rich blood cells into the muscles and up to the brain. The quicker the body and brain receive oxygen, the quicker it will rejuvenate and the sharper it will function. The typical air we breathe is 20.8% oxygen, not all of which is absorbed into the body.Oxygen bars is a growing concept worldwide and is catching popularity as an industry. The trend has been catching on in Pakistan with one opening in Lahore and Islamabad each. There has been no such bar in Karachi yet and this provides an excellent opportunity and a first movers advantage into the business. Karachi currently is saturated with sheesha bars which is a modified version of huqqa with flavors. These are the most popular hangout spots for young adults all over the city. Sheesha contains harmful ingredients like Nicotine and consumption of sheesha is more harmful than smoking cigarettes. Therefore these young adults and parents alike are looking for alternatives that are less harmful and can provide the similar feeling of freshness and heightened senses. One such alternative is oxygen for recreation.Oxygen session has many benefits and few risks for the average person. Generally it takes 10 minutes to oxygenate ones blood, although a 15 - 20 minute session is mostly recommended. Whilst sitting at the Oxygen Bar one may not notice any immediate difference, however not long after the session is complete people will feel like they have more energy and less aches and pains. If the person suffered from lactic acid build-up in the muscles this will generally reduce and their stamina will be noticeably increased. If drinking, patrons are less inclined to experience a hangover the next day. The blood alcohol level will NOT change much although patrons can expect an increased tolerance to alcohol. oxygen has the potential to increase memory and awareness following an oxygen session.There are no risks and no adverse effects with short term use of oxygen. The American lung Association has said that breathing oxygen from an oxygen bar has no harmful effects and there is no evidence that oxygen used in bars can be dangerous to a normal persons health. Oxygen bars have been operating in several countries, for over 8 years; millions of people have enjoyed the sessions without a single health related incident. Oxygen bars are not intended to treat, cure, prevent or diagnose any illness or disease.Service Concept:Oxygen Bar will be a lounge or caf which will sell oxygen for recreational use. It is a new trend appearing globally. The purpose of this new respiratory innovation is to substitute the use of other harming vapors and smoking practices, primarily Sheesha/Hookah.According to a study conducted by Agha Khan University Medical College, 61% of the respondents smoked sheesha occasionally which indicates that there is a big market which is vulnerable and ready to be tapped and converted.[footnoteRef:2] [2: Cross-sectional study identifying forms of tobacco used by Shisha smokers in Pakistan, Aga Khan University Medical College, Center for Non-Communicable Diseases, Karachi, Pakistan.]

Hence our positioning statement would be:A posh cafe serving oxygen for recreation to young adults aged between 16 to 30 years, as an alternative to harmful smoking habits.

TARGET MARKET16-30 yearsOccasional Sheesha UsersOccasional Caf VisitorsSEC A & BAs evident by the aforementioned positioning statement, our core target market will have the following characteristics: Age bracket of 16 to 30 years Occasional Sheesha users Belonging to SEC A and B Occasional visitors of cafs

Moreover, customers will be coming to our cafs where they will enjoy the core service of oxygen shots in different flavors along with a few supplementary offerings of a usual caf. Key point of differentiation except for the core offering would be the ambiance where different rooms will be allocated to different flavors, for example, apple flavor will be available in apple farm and mint flavor will offered in a room where nice, refreshing scenery would be simulated by wall paintings and mild sound effects etc. Hence overall offering will be touching customers senses of smelling, hearing and sight.

High Contact ServiceThe service is categorized as high to medium contact. The service entails serving customers with oxygen shots, according to their order. Lets analyze using different aspects:Facility LayoutOur service facility is set up keeping in mind customer preference, rather than feasibility of our own resources, ie, it is a customer centric facility.Quality ControlPerceptions of quality standards are subjective depending on our customers. The deliverance on quality will be validated by the customers, externally, and not by metrics defined by the management. Management is going to try to extract this feedback by feedback form to gage their experiences and perceptions. Management may also set its own metrics, but those will be limited to production time, employee performance.CapacityCapacity required is directly related to demand by the customers at various times, and to be able to serve more customers, excess capacity is necessary.Front Line Worker SkillsFrontline employees will have to be trained to interact well with the customers and deliver on their expectations. With time, for regular customers, employees may also be able to cater specifically to their needs, using their judgments.Rhythm & ScheduleMore customers present at location can make delivering orders, taking orders, seating new customers, slightly more difficult.Service processThe service process if partially driven by customer, depending on when they get seated, decides, and then places an order. Otherwise, producing and preparing order depends on the typical timings in the kitchen.Service OfferMore variations may be introduced in terms of oxygen variants and more food items and drinks.People ProcessingOur oxygen bar can be categorized under people processing. The customer enters our oxygen bar, the physical location, where he is received by our employees, taken to a table, handed out menu cards. The order-taker notes the order and serves the order, and helps customers with the service. Most users will have to be informed or helped in taking the oxygen shots, by our employees. By and large the customers will largely be responsible for consumption of the service with assistance, thus they too will have to participate in service deliverance. Consumption and production are taking place at the same place, and the same time.

8 Ps Of Marketing:Product ElementsRestore and refresh without the side effects. No calories. No carbs. No caffeine. No crash.The product will be targeted to three different segments if the markets:- Stressed businessmen Athletes Young Adults for recreationStressed BusinessmenStress comes in many forms all which can be unbearable, emotional, physical, toxic, and mental stress. All forms of stress can affect the bodys capacity to take in and utilize oxygen, the most important nutrient to your body. Lengthy periods of stress can cause serious life threatening diseases. When people are stressed they are told to BREATH, this is because breathing gets more oxygen into the body, and more oxygen in the body helps people cope with stress. Recently Oxygen bars have become extremely popular. Most people who visit the oxygen bars report increased energy levels, a clearer mind and a relaxed euphoric feeling.AthletesInhaling 90% oxygen is like driving 4-5 times the oxygen into your muscles. Many athletes are now using oxygen during competition and between training sessions. With oxygen being a key factor in muscle recovery and brain stimulation, its benefits are finally being introduced to athletes in sports ranging from football, basketball, professional fighting, soccer and tennis. In the Gym when training oxygen allows you to do more reps and sets, whilst lifting heavier weights with minimal rest. This makes 90% oxygen is great for competition or track and training sessions.Young adults Since there are no health risks associated with breathing oxygen at oxygen bars. Therefore it provides a healthy activity for young adults to socialize and enjoy with friends. Breathing higher concentration of oxygen has several benefits; the most commonly reported benefits are increased energy, an uplifted refreshing feeling, clearing the mind, relief of toxic headaches such as hangovers, relief of stressand promotion of higher concentration levels. Therefore parents need not worry about the childs health.Primary ProductOxygen Bar and relaxing ambiance is the core service product aimed at providing a relaxing environment which is healthy and socially acceptable. The equipment allows you to wear the inhaler like a mobile headset and emits fresh scented and flavored oxygen to inhale while enjoying the ambiance and talking to your friends. Flavors available: 14 | Page

Mango Bubblegum Cappuccino Ginger Vanilla Lavender Peppermint Ginger Apple Orange

Supplementary Products Fast food and snacks Drinks and shakes Canned Oxygen Spa Massage corner LCDs (movies and cricket matches)Canned OxygenPriceSince it is the one and only oxygen bar in Karachi and the concept is new a market skimming pricing strategy will be used to create a premium positioning the market. The product will be priced at a premium to ensure that the quality of service is not compromised. The oxygen shots will be priced on the basis of time rather than consumption level. We will be having the following pricesS. NoProductPrice per unit (Rs)Group discount on 6

1Flavored Oxygen (all flavors)500 /30mins2500 / 30 mins

2Club Sandwich (beef, roasted chicken)2501300

3Soft drink (500ml)50250

4MilkShakes2001100

1Spa treatment500-

2Massage700-

Since the booths will be made for a group of 6 to aid yield management a discount will be given to groups of 6 and multiples. This would allow us to run on capacity without wasting seats. Also deals would be introduced on weekend lunches to attract more guests in this time.PlaceDue to the nature of the product the location chosen is Zamzama Street. It is a posh area known for high profile cafes and the target market is already going there for sheesha bars and cafes. We would also have an advantage of a cluster already prevalent there. Our location would be a separate building instead of a basement or a floor in a building. This would allow usfuture expansion possibilities and valet parking facilities would be provided as there is a known parking issue at Zamzama street.Promotion & EducationThis P of the marketing mix of our service will be dealing with introducing the concept of Oxygen Bars to the market. Our promotions strategy will be based on the category development and conversion from smoke-inhaling market, primarily by educating people about the benefits and superiority of oxygen bars over traditional inhaling utilities. However, since we are positioning it as one of the recreational item, the health benefits will be a sub-set of overall strategy.According to the already mentioned study, most of the people dont know about the actual contents of Sheesha and the fact that it contains harmful elements like heavy metals and Carbon Monoxide. Tobacco is perceived as the only harmful content of sheesha. Moreover, only a few health hazards of sheesha smoking are perceived, like respiratory and cardio diseases, whereas there are several other hazards like Cancer, Infertility and Low birth babies with very less awareness.After coming up with the communication message and estimating the size of the market, our promotional strategy will be using the following marketing tools: Social Media: Most of the recent caf chains have leveraged this medium to reach out to the masses and generating the business. Similarly, our strategy will also ensure that we are present on Facebook and Twitter to create awareness among the relevant groups. Although, there will be campaigns related to discount coupons and creating the required pull, but this medium will be kept specifically to create and maintain the awareness levels. BTL Activations: Since our target market is primarily the young adults, we will organize the BTL activations at schools, colleges, and universities. Moreover, different malls and sports complexes will also be targeted in order to directly reach out to our targets. Since in the human life cycle, sheesha smoking is started at around 20 years, all these aforementioned areas will provide us the point to market entry, where we will be taping these individuals from the very beginning of their consumption cycle. Word of mouth: Our major focus would be on the customer satisfaction and providing best of class experience. One of the by-products of this would be the word-of-mouth by the well-satisfied customers. Special efforts will be dedicated towards generating word of mouth so that our service is marketed properly.

Physical EnvironmentAs mentioned previously, physical environment of our overall service package would include the in-take of oxygen shots in the simulated environment. There will be different rooms dedicated to a group of flavors, and upon choosing a specific flavor; the consumers will be taken to that room. Simulated environment is present in order get support from the sensory marketing tools[footnoteRef:3] like mild sound effects, 3-D wall paintings, specific scent (air-freshner) and furniture. This will not only provide a good ambiance, but also help us to focus and touch the senses of consumer (smell, sight and hearing). [3: The Sense(s) and Sensibilities of Marketing, Dividend (Alumni Magazine), Ross School of Business.]

PeopleMajor Suppliers, i.e, our vendors from whom we will be getting our supplies of Oxygen Cylinders. One team member would be dedicated to ensure that the supplies meet the safety and quality requirement set by the Health Care organizations. Well trained and well groomed staff would be hired to provide a unique experience to our customers. The prime focus of these waiters would be to create maximum awareness and advocate the customers about the services provided by our caf. Our duty managers would keep vigilant supervision that the guests are served by the waiters in the best possible manner and with high courtesy. Our duty would also include Bar Serving Team( Drinks) , Oxygen filling team, Food Serving team, Security Team, Quality Inspection officers.ProcessProcess involved in this unique Oxygen Bar Cafes would involve various external and internal customers connected to this service. This is a unique service that is completely new to the Pakistani Market. The Chain would begin with finalizing our Primary vendors who shall be ensuring a constant supply of Oxygen gas Cylinders at our Caf. Our Vendor selection process would include: Analyzing the business requirement Vendor Search Request for Proposal/ Request for Quotation Proposal Evaluation & Vendor Selection Contract Negotiation Mistakes Once we have developed a strong vendor network then we would focus on acquiring consulting services from an expert. With his knowledge we can expect to attend to administrative business tasks while keeping up with laws, regulations, permits and licenses that affect the ownership and distribution of oxygen equipment, particularly reimbursements that are contingent upon Medicare and Medicaid billings.Investing in quality equipment would ensure that we keep a healthy supply of cylinders of liquid oxygen, compressed oxygen, transtracheal oxygen, oxygen concentrators, contents indicators (pressure gauges) and flow meters.We would also need to track trends in the medical oxygen supply industry so you're always at the forefront of new advances and delivery systems. Pay particular attention to updates on low-cost modalities, cylinder duration tests, lightweight cylinder material introductions and time- and cost-efficient Trans filling systems and equipment.Productivity & QualityOxygen Bars is the service that requires initially investments in terms of time and money to achieve a certain level of quality and productivity. After making these investments, maintenance of the apparatus is required only. Moreover, as promised by our brand, the apparatus used will be up to the international standards and special focus will be giving in order to maintain this image.

Conclusion:Oxybar is a great opportunity we can foresee. This opportunity can be tapped by our business plan. Being the first movers in the market we will have the advantage of a quicker and bigger customer base. We plan to target the athletes, young adults and stressed businessmen. This service bar will be premium priced and since location is the deciding factor of quick breakeven we will locate at Zamzama street which already has the target market who can afford our service. Apart from the main oxygen shots our revenue stream will be including snacks and drinks.Our future outlook is having multiple branches in the posh localities of the city and later on expanding to other cities.