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This sample marketing plan was created with Marketing Plan Pro software.

Cranium Filament Reductions is in its first year of business as a start-up company.  Cranium recognizes the fact that a comprehensive, strategic marketing plan is required to ensure profitability and success. Cranium offers a wide range of hair cutting services.  The market need is for a one-stop, convenient, hair salon that is skilled and reasonably priced, serving the entire family.

Market Summary

Cranium Filament Reductions possess good information about the market and knows a great deal about the common attributes of its most prized customers.  Cranium will leverage this information to understand who is served, their specific needs, and how Cranium can better serve them.

Market Analysis

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Market Analysis
  20022003200420052006 
Potential CustomersGrowth     CAGR
Males9%54,00058,86064,15769,93176,2259.00%
Females10%28,00030,80033,88037,26840,99510.00%
Mothers w/children9%23,40025,50627,80230,30433,0319.00%
Total9.27%105,400115,166125,839137,503150,2519.27%

Market Needs

Cranium Filament Reductions is providing families with a one-stop option for providing a wide range of hair cutting/styling options.  Cranium seeks to provide the following benefits that are important to its customers: 

  • Convenience: Cranium can serve the entire family with no appointment necessary. Additionally, Cranium's storefront is in a centrally located area. 
  • Customer Service: Serving the customer with superior attention is what the employees are trained to provide.
  • Competitive Pricing: Cranium offers pricing that is a bit more than a traditional barber but far less than a dedicated women's hair salon.

The market trend for the hair cutting industry is one of consolidation.  Consolidation can be seen with the high-end hair salons as well as the full-service, full-family companies such as Best Cuts.  Over the last five years there have been an expansion of upscale chain salons in major metropolitan areas.  The expansion takes the form of opening new stores, as well as purchasing independently-owned salons and transferring them over to the chain.  Additionally, this trend has occurred with the full-service, family hair cutting stores.

The reason for this trend is similar to other industries that are consolidating; cost saving measures.  Cranium is not participating in this trend of aligning itself with a chain.  Cranium believes that it has better insight to its local market and would rather apply this specialized insight to its market instead of adopting the procedures of a national chain.

Market Growth

For the last seven years the hair cutting industry has grown steadily at 5% a year. The industry is generally unaffected by economic upturns or downturns.  While in upturns, women are more likely to purchase extra services such as hair coloring or perms, although generally the consumption pattern is unchanged.  This is somewhat intuitive as most people need and get a haircut based on an elapsed amount of time, independent of the economic environment that they are in.

SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing Cranium Filament Reductions.

Strengths

  • Excellent retail space in a well-traveled mall.
  • Well-trained employees with good hair cutting skills with a wide style repertoire, and customer-focused business practices.
  • A wide range of services offered.
  • Competitive prices.

Weaknesses

  • As a new entrant to the market, Cranium lacks brand equity that many of its competitors have earned over years of service. 
  • The struggle to appear continually on the edge in terms of fashion and style.
  • Large costs associated with a start-up company.

Opportunities

  • A steady growing market that is traditionally unaffected by the economic environment.
  • The ability to decrease marginal fixed costs as the customer base grows.
  • Increasing sales opportunities as more people from an individual family frequents Cranium.

Threats

  • Competition from already established chains.
  • A change in traffic patterns as they relate to the mall where Cranium is located.

Competition and Buying Patterns

Cranium Filament Reductions' competitors include:

  1. Traditional Barbers: They rarely serve appointments, it is generally a walk-in service. While barbers are usually willing to provide whatever cut you are interested in, they are generally providing straight-forward haircuts, typically on the conservative side. The advantages are an inexpensive service that is easy to use. Their disadvantages are an often conservative styling capacity, sometimes a long wait.
  2. Franchised "Quick Salons": An example of this would be Supercuts or Best Cuts. In essence, this is a franchised version of Cranium Filament Reductions. The advantage of this style is the store is the same from location to location and some people like this predictability.
  3. Independent Salons: These shops typically focus on a specific niche and do not serve a wide group of customers.

The buying patterns of men and women are quite different. Typically men are more price or convenience sensitive. Men typically care less about the task of getting their haircut. For them whatever is easiest works best. Women are more concerned with hair styling and tend to bond more with their stylists. This bond creates loyalty to their stylist. Once a stylist has earned their trust they are more willing to blindly put their hair in the stylists hands.

Service Offering

Cranium Filament Reductions provides hair styling for the entire family. This includes haircuts for men and women, permanents and hair coloring for women, as well as haircuts for children. Shampoos will be offered for all adult services. Service is offered on a walk in basis or by appointment. Cranium Filament Reductions will emphasize a customer-centric service where the customer's needs are always the priority.

Cranium Filament Reductions will also sell hair care products that are forecasted to account for 15% of sales. These professional quality supplies will include shampoos, conditioners, reconstructors, brushes, combs, and other styling aids.

Keys to Success

Keys to success include:

  • Professionalism.
  • Convenience.
  • Customer attention.

Critical Issues

Cranium Filament Reductions is still in the speculative stages as a start-up company.  Its critical issues are to continue to take a modest fiscal approach; expand at a reasonable rate, not for the sake of expansion in itself, but because it makes prudent fiscal sense to.

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