Understanding Market

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1Bachelor of Arts (Hons) Business Study

Understanding Markets

Assignment of Understanding Markets

Westminster International College

Student name: Akbar Badalov

Student number: ND/UZB/WIC/BABS/0608/567

Course: BABS

Module name: Understanding Markets

Module code: BSP 163

Semester: 2

Date of Submission: 15th April 2009, 5pm

Lectures name: Mr.Prem

Akbar Badalov | ND/UZB/WIC/BABS/0608/567


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Contents

Contents ..................................................................................................................... 2................................................................. 3

................................................................................................................................. 3

1.0 Introduction .......................................................................................................... 3

2.0 External marketing environment ....................................................................... 4

2.1 Market Segmentation ........................................................................................ 8

2.2 PLC of A Cut Above hair salon ...................................................................... 10

2.3 Pricing strategy .............................................................................................. 11

2.4 Marketing mix ................................................................................................. 12

2.5 marketing communication ............................................................................... 13

2.6 Importance of customer service ...................................................................... 14

2.7 SWOT analyses of the salon ............................................................................ 14

2.8 Positioning map of the hair salon .................................................................... 16

3.0 Conclusion .......................................................................................................... 16

Appendixes ............................................... 17

Appendix 1 ...................................................................................................... 17

Appendix 2 ....................................................................................................... 17

Appendix 3 ......................................................................................................... 18

Appendix 4 ......................................................................................................... 19

........................................................... 20

.................................................................. 20

References ..................................... 20



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1.0 Introduction

About A Cut Above

One of the well known hairdressing salons is A Cut Above hairdressing salon. It has many

franchising salons all over the world. We can find many A Cut Above salons in Malaysia,

France, USA, UK and other many countries. But the main office was opened in US. A Cut

Above haircut salon has been giving benefits to the customers for so many years but still it has

good reputation and still a lot of customers want to go to the salon. The reason is that it has god

very good customer service and well trained staff. The proprietor of A Cut Above hair salon



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which is situated in New York is Edith Younger. She has studied in many countries to learn hair

cutting and she has been trained in hair weaving and hair replacements at American Hairlines in

New York City, New Concepts and On-Rite in Ft. Lauderdale, Fla. and Great Lengths Hair

Extension based in St. Louis, MO. She has been working for 22 years in A Cut Above hair

salon as a proprietor. In salon, there are a lot of professional stylists and all of them have been

trained varied ways of hair cutting. One of them is senior Stylist La Kisha Purcell. Purcell has

been working in salon for ten years and he is very good in styling and he cuts braids, straw sets

and natural care1.

(Further information is available in appendix 1)

2.0 External marketing environment

When we talk about external environment of the place where we are going to do marketing

environment scanning, we have to give certain information about that place. That information

consists of economic, legal and political, social, competitive, natural and technological

dimensions of the external environment. We are going to do environmental scanning of South

Eastern part of London. Southeast part of London is one of the important places in UK. There

have many opportunities to start new business. But we have to find the place which is

strategically good place to open A Cut Above hair salon. It is better to open the salon in the

Inner London boroughs. (Further information is available in appendix 2)

1www.acutabovehair.net



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The reason is that in this area there are a lot of high class people. We know that most customers

of A Cut Above hair salon are high class people. Because, salon provides services which is in

very high condition and the price may not be suit to all. So demand will be high. Inner London

boroughs have many districts but one of the best districts for opening hair salon is Greenwich.

There are good opportunities for starting new business in Greenwich. Here we are looking for

economic environment of Greenwich2.

Economic environment

Nowadays there is global recession all over the world and it is giving its effects to everywhere.

That is why; it is affecting all Southeast part of the London as well. Because of that

unemployment is increasing in Greenwich and people are not spending their money for the

leisure. This may bring problems for growing business in Greenwich. We know that in this area

gross domestic product is very high, because of rich population. When we count GDP per capita

of Inner London borough where is Greenwich, it was 76,052 in 2005 and this number is higher

than Frankfurts and Paris GDP per capita. Disposable income of Asian, Black and minority

ethnical residents is over 16bn. So, income earning of the people is higher and it is very good

opportunity to open salon there3.

Political environment

In Greenwich it has a lot of legal policies for starting new business there. We know that The

Olympic Games 2012 will be in London and there are many opportunities for starting new

business in Greenwich. Of course, because of Olympic Games, most of incentives are focused on

infrastructure and delivery business agencies. Even though, there are some agencies which can

2en.wikipedia.org3wapedia.mobi/en/London_Borough_of_Greenwich



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support other businesses like hair salon business with incentives and some legal conditions. For

example, Greenwich Business Support Service (GBSS) provides to the new business companies

free startup support and it including4:

help with your business plan

guidance on raising finance

undertaking feasibility studies

market research

Those are one of the legal opportunities for starting new business.

Social environment

South Eastern culture is almost the same with culture of other part of the London. The reason is

that almost 70 percent of Greenwich is white British people. In this culture has special life style.

Young spend more money than others. The Culture of Greenwich like sport and health based

leisure. But they like to look their dressing and hair style as well. There are also other nations

like Indians, Pakistanis, Black Africans and Caribbean and others. They have also their different

life style but most of them like British culture5. (Further information is available in appendix 2)

Technological environment

4www.greenwich.gov.uk5en.wikipedia.org



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There is some new technological plan created by government. That plan is about implementing

electronic government. This plan includes such kind of new electronic facilities:

Replacing new ICT infrastructure

Corporate GIS system will be placed. This is new plan for improving land and property

Electronic financial system which includes e-payment, e-procurement

New electronic portal like new e-mails, new desktop, mobile and home working

solutions, developing the websites and e-forms.

All of these will be good opportunities for opening the salon in that place. It gives

advantage of doing electronic advertising and other things which can help to grow the

salon6.

Competitive environment

There are many hair salons in Greenwich and locals used to go to these salons and these salons

have their loyal customers. For example, there are salons like Parisian Day Spa, JC Penney

salon, Odysseys Hair Designs and others. So, there is very high competition and it will be threats

to A Cut Above hair salon7.

Natural environment

6www.greenwich.gov.uk7 www.yellowpages.aol.com



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In external environment it has also natural environment and it is not necessary to give

information about it. But we have to mention some information which is useful to the salon.

There are many useful natural resources like fresh water and health based resources like flowers.

These resources can be used for create new hair shampoo products, creams and other products

which can be good for hair.

2.1 Market Segmentation

Market segmentation divided into four parts. These parts are geographic, demographic,

psychographic and behavioral segmentation. It is very important analyzing market segmentation

for business.



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Geographical segmentation

Sub-regions of South East London consist of South (Bromley), East (Greenwich, Bexley,

Lewisham), Central ( Southwark, Lambeth). Climate of that region is cool and rainy. Maximum

temperature is about 23 in July and minimum temperature is 2.4 in January. Population of

South East Londons population is 1.5 million and ethnically diverse, highly mobile in most parts

and growing fast8. Age rate is higher in 35-39 ages. Numbers of females are more than males.

Demographic segmentation

The first we have to mention about ages and gender of the Southeast London. In Southeast

London female numbers are more than males. Asian women in Southeast London are dependent

to the children than British women. They like children and they will never leave as soon as they

have children. Bangladeshi, Pakistani and Black Caribbean women are more likely with their

children, but British women are more likely to work. In Inner London part of the Southeast

London has more unemployment between the ages over 50. Even though, people among ages 50-

69 year spent 300bn in one year and they like to buy fashion designed things, high quality cars

and expensive products than other groups. 72% of population is Christians and there are

1.8million Muslims, 0.6million Hindus, 336thousand Sikhs, 267 Jews, 152thousand Buddhists

and 179thousand other religions people.

Psychographics segmentation

People of the Inner London like sporting and health caring. They like health care products and

services very much. Young children used to go to sport clubs and older, average age people like

jogging in the morning. That is why; most of the champions of Olympic Games are from the

8 www.edina.ac.uk



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Inner London. But, there are smokers and drinker as well. For this reason, London Health Care

Agency tries to solve these problems.

Most people of the Inner London like walking on the road but, actually they dont like to walk if

the roads and streets are not clean9. The reason is that Inner London has very good places to

walk. But they also interested in personal view and hairstyles.

Behavioral segmentation

We know that Inner London is the part of the Southeast London where high class people live, so

that most of them affordable for many things. That is why; they dont attend much more to the

price of goods. If they like something, they will buy that thing anyway. They are not stingy for

spending their money for the thing which they like. But most affordable people are at the average

age. They are also loyal for their favorable brands.

2.2 PLC of A Cut Above hair salon

Opening A Cut Above hair salon in Southeast London will not be easy, because nobody knows

any information about the salon. That is why manager of the salon must to do some marketing

strategy in order to attract customers, because it is the first time opening of the salon and it will

in introduction level. In order to go to the growth level, managers have to do marketing

communication, promotion, innovation and other marketing strategies. We will talk about this

later on. Now, we can describe the situation in introduction as following diagram10.

9www.tfl.gov.uk10www.quickmba.com



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2.3 Pricing strategy

For the pricing strategy, managers have to make right decision. They have to think whether they

use pull or push strategy. But, pulling strategy is better than pushing strategy. The reason is that

business is just started and managers have to do marketing communication with customers and

know what is requested by them. That is why it is important to do marketing environmental

scanning and market segmentation in order to obtain information about customers needs.

Because it is difficult to know customers needs without knowing what they are requesting. So

managers should do marketing communication directly with end users.



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But in this picture it is described manufacture companys pricing strategy, but it is also can be

same with the service companies11.

2.4 Marketing mix

Marketing mix will be different in every stage. A Cut Above hair salon is in introduction level.

Service

If managers do marketing communication with customers they may not have so many problems,

because A Cut Above hair salon is already known and its brand. So demand for the services of

the salon can quickly increase because of reputation. Even though, customer relationship must be

good, because it will cause of having loyal customers.

Pricing

Price of the services must be lower in this stage in order to attract customers from other

competitors. In introduction level profit may not be high, even it may loss. But all of this will

help to gain new customers and the next stages business will grow.

Placement

Distribution of the services in other places will be slow in this stage. It will depends on

customers satisfaction. If demand will go very fast, then they can open another branch of the

salon. But this process will not be fast.

Promotion

11 www.books.google.com.my



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In introduction level promotion play vital role. Manager have to do innovation in order attract

customers. These promotions like reducing price for children, discount days, one time free

services for the customers who does ten times hair cutting and others.

2.5 marketing communication

For growing business, marketing communication is very important, because, this will help to

know customers about our business. There several steps doing marketing communication.

Billboards- Bill boards are most important advertising method, bill boards must be on the place

where can attract many people. We know that many people havent got so many times at home,

most of the time they spend their time outside and bill boards can firstly can attract their view. In

the bill boards must have catchy words in order to set a deep impression in people.

Radio and TV- is next important marketing communication method. It is possible attract many

people through TV and radio when they spending time at home and they are resting. It is good

idea to put advertisement of the salon when there is new TV serial or program is going on.

Distribution of catalogs- is also one of the well known marketing communication method. The

salon has to produce more catalogs and journals and hire special people to distributing catalogs

house by house.

Trade shows- are the last most important advertising. By inviting photo models and famous stars

the salon can organize special trade shows especially in holidays.



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2.6 Importance of customer service

When we see many companies which loss its customer, many of them loss their customers

because of bad customer services. It is real that all want to go places where staffs make good

relation with them. For this customer relationship has main role. Staff must build very good

relationship with customers and must serve them very honestly. For example, when customers

come to the salon, staffs must talk to them nicely and try to help them if they have some

problems. They have to do something additional which can make comfort to the customers like

massaging, washing hairs. Of course the view of staffs also must be properly. Sometimes it is

also good that doing special orders like going to home of the customer and doing hair cutting

there. It also helps to increase loyal customers.

2.7 SWOT analyses of the salon

Here is a SWOT analysis of A Cut Above hair salon which is going to open.

Strength. When we the salon opening in Southeast London, its first strength is

reputation. The salon can start the business in high reputation. Next strength can be

qualified staff, because haircutters of the salon are professionals and they have graduated

specialized school of A Cut Above haircut salon. Respect of the hair cut specialists the

salon can attract many customers and gain many loyal customers.

Weaknesses. One of the weaknesses of the salon is that in spite of its reputation it will

not be well known in Southeast London. Because the salon is the first time opening and

customers will not be familiar with the services of A cut above hair salon in reality.

Next weakness of the salon is that the salon most targeted to the high class people and not



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everyone can use the services of the salon. Most people in low and medium class level go

to the salons which is not so expensive. It happens especially in recession time.

Opportunities. One of the best opportunities is that the place where we are going to open

the salon has more rich people. So that customers will be more and demand may increase

because of the large number of high class people.According to the Southeast information

census there are also some incentives in Greenwich where we are going to open the salon

which make high condition to start up new business. Because, next Olympic Games

going to be in London and Greenwich one of the most attractive place for the tourists, so

that there are more opportunities for the new businesses.

Threats The most important threat of the salon is competitors. In Greenwich there are

many hair salons which have already been operating their business. It is written about this

in competitive environment of the PESTLE analysis as well.

Recession is also one of the threats of the salon. Because, during the recession time

people try to save their money and demand for the services will decrease. Customers may

prefer to go to the cheaper hair cut salons.



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2.8 Positioning map of the hair salon

Here we can see some of the competitors of the hair salon in different category. On the side

where high quality and high price, there are some wel known brands which can be threat for A

cut above hair salon.

3.0 Conclusion

In conclusion, I want to say that opening A Cut Above hair salon in another place is very large

work which includes further research and scanning environment. Without these things the salon

can grow. For doing good business manager have to know what kind of marketing strategy can

develop their business and bring their business to the growth level. For this they have to know

marketing environment, marketing segmentation of the place where they are going to open the

salon and of course marketing strategies like promotion, advertising and so on.



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Appendixes

Appendix 1

There are another salon of A Cut Above in Malaysia which was opened by Ms. Winnie Loo

and Mr. Richard Teo. They have also higher reputation between other hair salons in Malaysia.

Nowadays, they have 5 branches of A Cut Above hair salon12.

A Cut Above has got also special academy. There are a lot of students and workers are trained

in this academy. This will help to improves qualification of staffs of the salon. We know that

since so many years A Cut Above has been saving its reputation. The reason is that the salons

workers are always trained. Because of that there are always created new design of hair style by

stylists of the salon.

Appendix 2

The Southeast London is divided into two parts. There are Inner London boroughs which include

Greenwich, Lambeth, Lewisham, Southwark and Wandsworth and Outer London boroughs

which include Bexley, Bromley, Croydon, Kingston, Merton and Sutton.

In Southeast London when they have children, they will spend more money for their children.

When they kids went to the study to the universities, parents have DINKYS (Dual Income, No

Kids Yet). That time they will spend more money for travel and themselves.

12www.acutabove.com.my



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Appendix 3

In this picture Inner Londons map is described13.

Far view of the Greenwich14.

13 .en.wikipedia.org14 en.wikipedia.org



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Appendix 4

The photo pictures of A cut above hair salon15.

15 www.acutabove.com.my



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References

1-http:// www.acutabovehair.net /aboutus.html

2-http:// en.wikipedia.org/wiki/Inner_London

3-http:// wapedia.mobi/en/London_Borough_of_Greenwich

4-http:// www.greenwich.gov.uk/Greenwich/Business/StartingABusiness/

5-http:// en.wikipedia.org/wiki/London_Borough_of_Greenwich

6-http://www.greenwich.gov.uk/NR/rdonlyres/BB7BCD1A-9218-4B36-A25C-

E6DEBAE02596/0/IEG6Statementdownloaded.pdf

7- yellowpages.aol.com/search?area=Greenwich

%2C+ct&query=hair_salons&invocationType=localSimBus.search

8-

edina.ac.uk/digimap/casestudies/hospital_demands/RGSProjectedAcuteHospitalDemandInSoutheastLond

on.ppt

9-http://www.tfl.gov.uk/assets/downloads/businessandpartners/attitudes-to-walking-2008-research-

report.pdf

10-http:// www.quickmba.com/marketing/product/lifecycle/

11.books.google.com.my/books?

id=gyiQh6t0slUC&pg=PT90&lpg=PT90&dq=Pull+strategy+diagrams&source=bl&ots=0tqWeeWsmu&s

ig=VFVGTZs3L45oDgi0ZkBx5xLQVD8&hl=en&ei=tN7jSeRej4GRBc2nvNUL&sa=X&oi=book_result

&ct=result&resnum=2

12-http:// www.acutabove.com.my/aboutus/default.aspx

13-http:// en.wikipedia.org/wiki/File:LondonInner.png

14-http:// en.wikipedia.org/wiki/London_Borough_of_Greenwich#Parks_and_open_spaces

15-http:// www.acutabove.com.my/outlets/default.aspx



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