Background Information

iA manicure is a cosmetic beauty treatment for the fingernails and hands, while a pedicure
consists of similar treatments used to improve the appearance and health of the feet and their
nailsii. These treatments are typically carried out by professionals that are referred to as nail
technicians (or manicurists & pedicurists). Pedicures are not limited to the treatment of nails on
feet. The removal of dead skin under the feet using a pumice stone is also a frequent part of
pedicure services. Some clients also expect that depilation services (hair removal on the leg) will
be provided during pedicures.

A manicure treatment is not only a treatment for the natural nails but also for the hands. A
manicure consists of filing, shaping of the free edge, treatments, massage of the hand and the
application of polish. Other nail treatments may include the application of artificial nail tips,
acrylics or artificial nail gels. Some manicures can include the painting of pictures or designs on
the nails or applying small decals or imitation jewels.

Project Description
You have been asked to help with the development of a Marketing Strategy for a new Nail Salon
outfit. The outfit is intended to cater to both men and women and will focus on offering manicure
and pedicure services. The proprietor is not sure of the range of services that she can profitably
offer. Your tasks will be to:

1. Undertake a detailed Market Analysis of the Nail Salon business

2. Identify the market segments, determine the target market(s) and the suite of services that
will be required to meet the needs of the target market(s)
3. Develop the launch strategy for this business, clearly noting the marketing mix strategy that
will ensure the profitability of the business.

Overview of Costs
A facility has already been acquired for the business at a suitable location on Lagos Islandiii. The
facility is large enough to accommodate 10 Nail Technicians at one time. A waiting area is planned
that can comfortably sit an additional ten people.

The facility has associated rental fees of N400k per annum. A 25 KVA generator has been
acquired for the business at a cost of N2 millioniv. Each Nail Technician (Manicurist-Pedicurist) is
paid N50k per month. Two administrators have been hired to take care of issues such as the
scheduling of appointments, purchase of materials, customer service monitoring, maintenance
of facilities and other necessary tasks. The more senior Administrator will be paid N70k monthly
while the junior administrator will be paid N50k monthly. The proprietor intends to pay herself
at least N250k monthly.

If other services such as artificial nail tip applications, depilation services, etc are to be offered,
then more materials would be needed. Through some contacts, the proprietor has been able to
obtain some relevant costs (See Table 1).

Market Estimate

The total market for manicure and pedicure services in the catchment area that the outfit is
located can be assumed to comprise of 50,000 people, only 10,000 of whom are currently being
served by the competition at this time.

Table 1

Activity/Application Cost (N/Application)

Filing Not known
Buffing Not known
Scrub 120
Glue 120
Powder 150
 Liquid Monomer 150
Extension Tips 150
Primer 150
Base Coat 150
Top Coat 100
Polish 150

Marketing Strategy

Our marketing strategy is a simple one: satisfied clients are our best marketing tool.
When a client leaves our business with a new look, he or she is broadcasting our name
and quality to the public. Most of our clients will be referrals from existing clients.

No major advertising campaigns are anticipated. Our research has shown that word of
mouth is the best advertising for this type of business. We will, however, run specials
throughout the week. We will also ask clients for referrals, and reward them with
discounted or free services depending on the number of clients they bring. We will also
offer discounts to the new clients who have been referred. There are plans for a lottery
that will offer a free trip to, say, Cancun. A client would simply refer new clients to us,
and we will place a card in a box for each client he or she brings. The more they bring,
the more chances they have of winning the trip.

4.3 Sales Forecast

The following table and charts show our projected sales. We expect income to increa

Go beyond the business plan.

Planning carefully before launching a new business is not limited to preparing a
business plan, says Bruce Bachenheimer, clinical professor of management and
director of the Entrepreneurship Lab at Pace University in New York City.
"While preparing a business plan is generally a valuable exercise, there are other
ways to plan carefully," he says. Bachenheimer recommends three planning
methods.
 Market Analysis/Trends
The nail salon industry has constantly witnessed changing innovations, with
 customer appetite on the rise and the need to meet the desires of the clients and
even surpass them also being pursued.
 With this increasing potential in the industry, nail salon business has had to either
innovate and follow the competition, or run out of business due to unsatisfactory
services leading to clients being lost to rival nail salons.
 One important aspect of the nail salon business has been word of mouth marketing.
Clients are more likely to patronize a nail salon because their friends told them such
salons were ok.

icing Strategy
[Company Name]’s pricing will be moderate so customers feel they
receive great value when patronizing the salon. The anticipated price
point for a standard nail treatment is $25, in exchange for which a
customer can expect to receive personalized attention during and after
their visit. The customer can expect to receive quality nail care from a
familiar technician, for a more affordable price than what they pay at an
ultra-premium salon.

Market Analysis Summary

There are no exact competitors, and few related competitors in the greater Raleigh area.
There are no related competitors in the downtown Raleigh area. The space at 510
Glenwood was recommended to us by the managing realtors because they had targeted
that space for a spa type tenant. By nature of the service SoulSpace will provide, success
will be readily achieved.

4.1 Market Segmentation

Our target market will be divided by salon customers and spa customers. Salon customers
will be from every age and gender; however, since the salon and spa will be in direct
association with each other, we expect that the spa market segment will greatly affect the
salon market segment. Thusly, our target market segment will be male and female
professionals and retirees, from the age of 25, with individual and household incomes
greater than $25,000.
Need actual charts?

We recommend using LivePlan as the easiest way to create graphs for your own business plan.

Create your own business plan

MARKET ANALYSIS

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Potential Growth CAGR

Customers
 +$25K 5 mi. 2% 50,500 51,510 52,540 53,591 54,663 2.00%
Radius Raleigh

+$25K 5 mi. 2% 53,000 54,060 55,141 56,244 57,369 2.00%

Radius West
Raleigh

Total 2.00% 103,500 105,570 107,681 109,835 112,032 2.00%

Need real financials?

We recommend using LivePlan as the easiest way to create automatic financials for your own business plan.

Create your own business plan

4.2 Target Market Segment Strategy

The members of these market segments have luxury money on hand, and lead
professional lives filled with stress at a consistent level. All persons usually need hair
styling regardless of income level, and make the effort to find the money available to
style their "look."

4.2.1 Market Needs

People love to look good. This has created a community of wealth, mobility, and growth.
Raleigh has successfully implemented a refurbishing plan of "old" downtown, which now
makes Glenwood South, the Warehouse District, and Hillsborough Street one of the most
popular destinations in the whole city.

4.3 Service Business Analysis

We are part of the retail health and beauty industry which has four major types:

1. Salons: Stores with only hair styling services and products.

2. Day Spas: Stores specializing in body health maintenance through a variety of

services and products.

3. Day Spa & Salon: Stores combining the services of the two aforementioned.

4. Health & Beauty Products: Stores selling only merchandise products covering the
wide range of products available but not inclusive of those sold by salons and spas.

4.3.1 Main Competitors

The main competitors are Salon 21 with a location in downtown Raleigh, Von Kekel with
locations in East Cary and North Raleigh, Soigne' with a location in mid North Raleigh,
Emerald City with a location in Northwest Raleigh, Image with a location in far North
Raleigh, Millennium 2000 with a location in North Raleigh, Devine with a location in
mid North Raleigh, and Warren Scott with a location in far North Raleigh. Also, by
nature of their popularity we must also include these spas as main competition: Skin
Sense with locations in downtown Cary and far North Raleigh, and Iatria in far North
Raleigh.

Strengths of the above are services offered: location proximity to major housing
developments, and name recognition. The weaknesses of these competitors are general
lack of promotion, concentration mainly in North Raleigh.

With our target location being downtown Raleigh, we will be servicing East, South,
West, and Old Raleigh, as well as downtown commuters. There are no salon-spas in West
Raleigh, the closest being Von Kekel in East Cary, and the spa only Skin Sense also in
Cary. The only downtown competitor, Salon 21, is very small, not very well known, and
concentrates most of their business on the salon end.
Our market advantage is wide open, and will give us the opportunity to service a large
population base that is not currently being well served. When you include our service of
energy works, we become the sole provider of all three services of hair works, body
works, and energy works not only in downtown Raleigh, but for the entire greater
Raleigh area.

4.3.2 Business Participants

Industry participants are those whose services include salon and spa offerings. Salon
services concern hair styling, while spa services concern body relaxing and rejuvenating
offerings such as massage, and nail and face works.

4.3.3 Competition and Buying Patterns

Customers choose spa and salon services based on proximity to their daily travels from
home and work, reputation for quality, and good pricing. With our combined services, we
expect to compete mainly against other combination spa-salons.

i
http://en.wikipedia.org/wiki/Manicure
ii
http://en.wikipedia.org/wiki/Pedicure
iii
You can assume that the facility can be readily accessed by your selected target market
iv
Electricity power requirements for this facility have been estimated to be approximately 20 kW during normal
operations. Assume that diesel operated generator systems cost N50/kWh. Note that 1 KWh = 1 KW X 1 hr.
similarly, 1 KW operated for 5 hrs = 1 KW x 5 hrs = 5 kWh

Market Analysis
Market analysis is often confused with SWOT analysis. SWOT analysis is
focused on discovering your strengths, weaknesses, opportunities, and
threats, but market analysis looks at the market as a whole. This
includes:

Market trends
Analyze emerging trends in the industry and write them down. Trends
can be very important, as they are often a good indicator of customer
behavior and the general direction in which an industry is heading.

Your target market

You should also identify your main audience. Since you’re opening a nail
salon, it would make sense that your audience is predominately female.
However, you need to break this group down into smaller fragments
(teenagers, housewives, etc.) and use specific messages to target each of
these groups.

Market Positioning and Pricing Strategy

Once you’ve learned more about the market, it’s time to find your place in it.
Will it be a posh nail salon with high prices and high levels of expertise? Or
will your nail salon focus more on nail art and creative solutions for a younger
audience? These are all important questions that you need to answer, as they
will dictate many aspects of your business.

For example, your position in the market will have a strong impact on your
pricing strategy. Lower prices usually attract more customers, but higher
prices can make you seem more professional and attract customers that are
willing to spend more. Choose your pricing strategy carefully while keeping
your competition in mind.

Sales and Marketing Strategy

Even if you have the best nail salon in the country, it may never take off
without adequate promotion. That’s why it’s important to have a good sales and
marketing strategy in place. You can take care of sales and marketing yourself,
but it’s best if you hire a consultant or an agency. Having a team of
professionals to take care of your marketing will leave you more time to focus
on growth and development.
If you do decide to do it on your own, increasing your online presence would
be a great start. This will help you get the word out and increase brand
awareness.
Sustainability and Growth Strategy
Nail Salon Business Plan – MARKET ANALYSIS

 Market Trends

 The Target Market

The target market should be primary the female folks. It should cut across women of
different classes. That is both the low income earners and high income earners. In general
the business should target the whole of the state:
Below are our market segments:

 Students in tertiary Institutions in Akwa Ibom State

 Housewives
 Females in the Banks, Insurance Companies and other related Financial Institutions
 Females in Businesses and Entrepreneurs
 Mothers
 Teenagers

Our Competitive Advantage

A close study of the beauty and nail industry reveals that the market has become much
more intensely competitive over the last decade. As a matter of fact it is becoming really
tough to break even in this market because of the number of people who are in it. However,
we are also aware that this hasn’t deterred people from breaking even and smiling to the
bank. This is one of the reasons why we have added other services that are beauty related;
this is so that we do not miss out in any way.
Fingers and Toes nail salon may be a new entrant into the business beauty industry in the
United States of America, but the management staffs and board members are considered
gurus. They are people who are core professionals and licensed and highly qualified
beauticians in the United States. These are part of what will count as a competitive
advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among
the best within our category in the industry meaning ;that they will be more than willing to
build the business with us and help deliver our set goals and achieve all our aims and
objectives.
Nail Salon Business Plan – SALES AND MARKETING STRATEGY

We mindful of the fact that there is stiffer competition amongst nail salons in the United
States of America; hence we have been able to hire some of the best business developer to
handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the
industry and they will be trained on a regular basis so as to be well equipped to meet their
targets and the overall goal of the organization. We will also ensure that our excellent job
deliveries speak for us in the market place; we want to build a standard beauty business
that will leverage on word of mouth advertisement from satisfied clients (both individuals
and organizations).
Our goal is to grow our nail salon to become one of the top 20 salons in the United States of
America which is why we have mapped out strategy that will help us take advantage of the
available market and grow to become a major force to reckon with not only in the U.S but in
the world stage as well.
Fingers and Toes nail salon is set to make use of the following marketing and sales
strategies to attract clients;

 Introduce our business by sending introductory letters alongside our brochure to

organizations and key stake holders in New York and other parts of the U.S.
 Advertise our business in relevant business magazines, newspapers, TV stations,
and radio station.
 List our business on yellow pages ads (local directories)
 Attend relevant international and local expos, seminars, and business fairs et al
 Create different packages for different category of clients.
 Leverage on the internet to promote our business
 Engage direct marketing approach
 Encourage word of mouth marketing from loyal and satisfied clients

Sources of Income