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INTRODUCTION

RATIONALE OF THE STUDY


The spa industry in the Philippines has been growing steadily since the mid 1990s. However, the boom of the spa industry has only happened recently. Over the past few years, there has been an increase in awareness of health and wellbeing. Based on research conducted in 2007, there were a total of 173 spas in the Philippines. Also, a Spa Survey conducted by the Department of Tourism in 2001 revealed that the Philippine spa industry grew by 7.9% annually from 1992 to 2001. The growth of the spa industry shot up in 1999 with 71% increase and has been an upward trend since then. Also based on the survey, there are 1,296 spa goers per day or an average of 35 spa visits per day per establishment, generating 1,069 jobs or employing at an average 29 employees per spa facility. In 2011, the Philippines continued to have a growth rate of 15% in health and wellness. There was increased spending on healthcare, and effective marketing campaigns, technology and innovative spa services contributed to spas' overall growth.

RATIONALE OF THE STUDY


Due to an increase in income as well as education, the desirability and the willingness to avail of the spa services strengthens. The market, currently being dominated by high-end spa services, now sees an emergence of numerous mid-end spa services being offered for the common people. Because of this rise in the Philippine economy, the competition in the spa industry has increased and companies are fighting to gain a foothold in the spa market.

Along with the growth of the spa industry, misconceptions and bad practices have also arisen. Certain spa establishments have been known to offer extra services that dont really constitute as a spa service. Also, common across other industries, franchises of spa establishments have been offering different services relative to their home establishment or have gone rogue. Thus, this study is conducted to examine the issues of the franchisees in the security of the services they offer.

STATEMENT OF THE PROBLEM


Although the spa industry in the Philippines has been established for quite some time, it is still growing at a steady rate. Many spa establishments have opened in hopes of capturing the market. Franchise spa establishments have popped up and are dominating the market.

Franchising the spa service requires strict adherence of the companys rules and regulations by the franchisees. Common problems of spa franchises are day-to-day operations mismanagement and management issues. Other issues involved in spa franchises are lack of employees due to illness, poor skill sets, bad attitudes, and lack of social skills of employees.

SIGNIFICANCE OF THE STUDY


The importance of this study is that it can help franchising companies in the spa industry of the common problems that arise during the course of business of their franchisee. The data gathered in this research help determine the outcome of the quality perceptions of the consumers when faced with the common problems. This study also collects data on the markets perception of the spa industry, which will help spa establishments determine their marketing weaknesses, as well as their target market weaknesses.

This study aims to help the franchising company in determining its key weak points and helping it overcome franchising issues across branches. It also aims to help the branding of the franchise by helping it improve its brand image by way of improving quality of service.
The results of this market research shall help the franchiser company in improving their branding as well as improve their quality of service. To conclude, this studys ultimate aim is to help maintain quality across different establishments, and improve public perception of the company.

INDUSTRY PROFILE

PRESENT SITUATION OF THE INDUSTRY


Intelligent Spas identified 87 spa facilities located in the Philippines. 76% of spas are stand-alone day spas and 20% are spas located in hotels and resorts. The average indoor area of spa facilities was 609 square meters. 52% of the total spa space was allocated to treatment rooms. Spas contained 10.9 treatment rooms on average, making them the largest across the Asia Pacific region.

70% of spas provided a relaxation room.


Aromatherapy was practised by 97% of spas. Baths with water and/or air jets were offered by 54% of respondents. One hour body wraps were priced from PHP 1418, on average.

Herbal tea was the most common complimentary food or beverage item provided by spas, with 62% offering it to visitors.
35% of spas surveyed noticed there are more spas opening in hotels and resorts.

COMPETITOR ANALYSIS

Based on findings from Table 2.1, Nuat Thai is the only spa establishment to cater to the D class. However, the services offered by Nuat Thai is paltry in comparison to The Spa, which offers 40+ services to its consumers. To conclude, Nuat Thai delivers the spa experience to the lower-middle class in the Philippines, and is dominating that market niche.

INDUSTRY ANALYSIS: PESTDEG


Political
The political factors present do not influence the company that much. There are no special tax policies, trade restrictions and environmental law for this industry. The only law that the industry will need to follow is the labor laws. The company should pay the right wages for the employees especially since most spa businesses operate during the night. Spas are considered as luxury services. When there the economy is down due to inflation, the number of customers that will avail of the companys services will be reduced. When the people have less extra income due to high inflation levels, they will not be motivated to spend money on luxuries.

Economic

INDUSTRY ANALYSIS: PESTDEG


Social

The social factors present are very influential to the spa industry. There is a growing number of young women carving lucrative careers, so there is an increasing demand for health and spa facilities. There is a growing demand from older people for health spa treatments and an increasing ability by these individuals to afford such treatment.

Technological Technological developments are not that relevant in the spa industry. However, innovations maybe related to the spa industry. With the increasing demand and experimental are in the health and beauty industry, there is a need to ensure that the therapists hired are well trained.

INDUSTRY ANALYSIS: PESTDEG


Demographic
Research shows that consumers under the age of 25 and above are more likely to avail of the spa services. In a socio-economic point of view, individuals falling under the class of A, B and C, are users of said services. Compared across genders, females have a more inclination toward the spa industry than males. Therefore, females under the age of 25 and above, in the class A, B or C, are the most common spa goers in the Philippines.

Environmental
The spa industry is not that affected with the environmental issues that they need to comply. The environment can help the spa company by increasing the demand of their services. There are a lot people who are health conscious and would pay more for organic and natural products. Thus, the company will not only ensure regulatory compliance, but may also encourage more customers at a premium.

Geographic
The spa companies are mostly located in highly urbanized areas in the country. Usually, the spa companies put up their business in a place where people can also afford to avail of the services that they offer.

MICHAEL PORTERS FIVE FORCES MODEL


Threat of Intense Segment Rivalry
There is a low threat of intense segment rivalry because the company has a sustainable competitive advantage. The company can offer quality services with affordable prices. The advertising expense of the company is not that high. There is a high entry barrier due to high costs to train staff and high initial investment costs. There is also low industry profitability. Barriers of exit are significant because there is a high investment in non-transferrable fixed asset and there are high redundancy costs (the company requires a large number of employees and the company may face significant costs if it wishes to leave the market).

Threat of New Entrants

MICHAEL PORTERS FIVE FORCES MODEL


Threat of Substitute Products
There is a high threat of substitute products due to alternatives being offered in the market. Instead of availing of the companys services, customers may purchase products that offer the same benefits and can be used at home. However, the buyers propensity to substitute is low because the target market of the company belongs to the B and C class and they are unlikely to purchase substitute products.

Threat of Buyers Growing Bargaining Power


With the target market of the company and their affordable prices, there is a low threat of buyers bargaining power. The company offers their services with low prices that can compete with other companies in the same industry.

Threat of Suppliers Bargaining Power


There is a low threat if suppliers bargaining power. In the market, there is a high supply of materials and consumables they need with a moderate demand. The company has the bargaining power to purchase their materials and consumables because they have a lot of alternatives to choose from.

COMPANY PROFILE

COMPANY BACKGROUND
NUAT THAI Foot and Body Massage originated from Cebu City and started last January 2005. Nuat Thai Services Inc., is a corporation created to bring the business name NUAT THAI Foot and Body Massage as well as the franchisor of the said business name. NUAT THAI Foot and Body Massage provide purely authentic Thai massage and Thai aromatherapy. Our services provide relaxation and easing stress to the 20th Century modern workers. This is unique in the sense that the massage is a dry massage applying acupressure to our body, relieving muscle aches and pains, anti-aging, improves blood circulation and relief of stress. These are just some of the benefits of Thai massage.

COMPANY ANALYSIS:SWOC ANALYSIS


Strength
The company offers affordable prices compared to its competitors. There are a lot of branches located nationwide. They employ numerous therapists to accommodate the demand of their services.

Weakness There is a lack of adherence to the policies implemented by the franchisor. Franchisees are able to offer their own packages without the franchisor knowing. Franchisees are able to continue operating using the name of the company without renewing their franchise contract. Not all services are offered by some of the franchises.

COMPANY ANALYSIS:SWOC ANALYSIS


Opportunities
The company can introduce a new service and customize their services. Some customers can mix and match the current services to satisfy their wants.

Challenges
The company is unable to attract customers due to the fact their services cater more to the customers wants. This is a challenge because, with the current economic conditions, the market is more likely to save money on needs rather than to spend it on wants.

VISION MISSION
Is to create and manage an Authentic Thai Massage Center to cater the old and young working class to relieve them of stress and live a healthful life and to address the needs in the field of relaxation in order to cope up a daily challenging environment, Without limiting the generality of the foregoing statement of purpose and it shall include the following;
a. Offer other in demand health massage other than Thai Massage. b. Promote and be a part of the solution in non-employment c. Offer franchises to expand and promote its mission and vision d. To assist entrepreneurs who are into health massage business. e. To encourage healthy living thru inexpensive massage services. f. Continually develop acupressure thru constant training in Thailand of their ancient Thai Massage medical school and share it to its franchisees.

GOALS AND OBJECTIVES


Health and Wellness Goals
NUAT THAI Foot and Body Massage is devoted to the health and wellness of others. It is essential to communicate the health benefits of massage to the community through personal contact, pamphlets and other various advertising schemes.

Expansion Goals
Currently located in 74 branches nationwide, NUAT THAI Foot and Body Massage still seeks to expand in strategic locations, relating to the growing number of the people demanding our services, in ways by: Research of authentic thai massages Increase number of after-work clients by 50% with reasonably priced package deals Increase new clients by 30% by advertising locally

GOALS AND OBJECTIVES


Financial Goals
NUAT THAI Foot and Body Massage tries to achieve a number of at least #__ massage hours per week and to keep cost of sales at a #__ percentage of the sales.

Professional Development Goals


This includes networking with other massage professionals, learning new massage techniques, developing one's business acumen and taking good physical care of one's health.

MARKETING STRATEGIES
Segmentation

MARKETING STRATEGIES
Targeting
The companys target markets are Class C and D which comprises 82% of the total market with average income of Php603,000 and Php191,000 per annum respectively.

Positioning
Each branch must me 5 kilometers away from each other and placed at a strategic location with at least 80 square meters in area.

MARKETING MIX DECISIONS


Product/Service
The following are the services offered by Nuat Thai: Foot Massage Back Massage Thai Body Massage

Swedish Massage
Aromatherapy Ventosa Massage Volcanic Stone Massage

MARKETING MIX DECISIONS


Panagdait Mabolo, Cebu City There are 118 branches Talamban, Cebu City nationwide. Branches located in the Visayan region are: Banawa , Cebu City Tabunok, Talisay Basak, Cebu City

Place or Distribution

MEPZ 2, Lapu-lapu City

Minglanilla, Cebu City


In front of SM Cebu, Mabolo, Cebu City

Basak, Cebu City


Ranudo, Cebu City Gorordo Ave., Cebu City Mango Ave.., Cebu City Llorente St, Cebu City

Pit-os, Talamban, Cebu City Consolacion, Cebu City Guadalupe, Cebu City Ormoc, Leyte

Banilad , Cebu City


Private Rd., Sambag I, Cebu City A.S.Fortuna , Mandaue City A.C. Cortes, Mandaue City

MARKETING MIX DECISIONS

MARKETING MIX DECISIONS


Promotion
The company promotes their services through the following: Advertisements Flyers Billboards

Newspaper

RESEARCH METHODOLOGY

RESEARCH DESIGN

RESEARCH ENVIRONMENT

RESEARCH RESPONDENT

RESEARCH INSTRUMENT

RESEARCH PROCEDURES

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

FINDINGS

CONCLUSIONS

RECOMMENDATIONS

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