Analyzing Buyer Behavior - Essay Example

?Arnold Stonewall has hired me as his business manager to help boost business and increase profitability because he has been in the business for overthirty years and now he has noticed change in fashion and he needs my Input. This is how I analyzed the data from statistics at hand. I went ahead looked at the grooming and promotion information then interpreted it as shown below. From the data on customer usage, amount spent on average visit is $15 and time spent to provide the service is 0.25 hours; number of visits per month is 1.20 for this service. Compared to the other two services unisex salon and Day Spar which take more time although the payment is high it can be concluded that it is economical to provide barber services rather than day spar in terms of man hours spent. So this tells me I have to stick to the economical service. In the analysis of revenue and cost Day Spar makes a revenue of 111,826 per year while barbershops make the least of the three that is 15,812,Unisex make 28,849, however statistics indicate that men are not comfortable in unisex salons so it can be concluded that option of unisex salon is not viable. Information at hand indicates that Stonewall customers are traditional customers who have been coming there for a long time and because it is easier to retain a customer than to bring in a new one I keep to the traditional operations targeting the present customers while adding value to the services I offer them. I will not transform the barber shop into a Day Spar. BROOKLYN DEMOGRAPHICS Statistics indicate that males aged 0-34 years old in Brooklyn constitute 56 percent of the population. Statistics further indicate that the older the customers get the less they need stonewall services so I need to work targeting the younger population. While analyzing income data from households it can see that households making more than $100,000 are only 65,936 the least of all categories. These are families with extra income to pay for services of Day Spar maybe. I will target the less income earners who are the majority in this area. Information at hand also indicate that when asked which salon they would go to males in Brooklyn aged 0-15 indicated they would go to a traditional barbershop like Stonewall therefore again it is important that I retain the originality of the shop. CUSTOMER PERCEPTION Data collected indicates that basic services are needed by 100 percent of those interviewed the rest of the services are in a way not needed. Fifty seven percent of the population indicated other services such as Jacuzzi are expensive and possibly they may not pay for them. Fifty eight percent of the males indicated that a salon is a good experience for them I am considering putting this into the mix. Fifty percent of the men interviewed indicated that grooming is important this shows that in order for the business to grow we have to include grooming services such as manicure. POSITIONING STRATEGY I finally settled on choosing the barbershop plus, with value added services that are, hairstyle, pedicure, tattoo, color and manicure. This is because as I added them in that order one by one to the services revenue kept increasing for the three years of projection and not necessarily increasing costs. This done also did not affect the budget under my disposal as I will work within the budget. The average projected revenue for this project was as below; 543+679=843/3=690, savings on available budget= 550-307=307 therefore 307+690=997 in revenue projections for the three years compared with other options as I will indicate below, again it is the most viable option. When analyzing Sports Spar I realized it is not a viable option because the total cost of implementation are very high ,average profitability for three years is only $644 with provision of an addition luxury service. Furthermore this is a different line of business all together as indicated by demographics. Barber Spar looks like a viable venture when analyzed indicates a revenue of $1164.However it brings in a different service, concierge which may target a different type of clientele. Again this deviates from the traditional business of Stonewall. Cutting edge is not viable at all because it includes massage only and the cost of establishing it is too high while the projected revenue is less as indicated from the workings below: 368+460+574/3=467 ADDITIONAL FACTORS TO BE CONSIDERED IN THE ANALYSIS OF THE SIMULATION Political factors have to be considered in any business settings as they affect business operations. The government sets various policies each year this may include licensing, tax laws and other regulations meant to streamline and control business operation. These issues have to be considered as they are unpredictable. Economic factors have to be looked into; the economy of any country is not static it keeps on changing depending on several factors for example other world economies. The level of disposable income is an important aspect to watch because if customers don’t have enough to spend they would not spend. Unemployment may also affect operations of a business because customers will not be earning money therefore limit their spending. Technological factors have to be considered, probably when Stonewall begun operations they were using scissors to cut hair, that is no more clippers have been developed which are faster and efficient. We never know maybe in the projected three years time new technology will be in place probably people would be cutting there hairs at home by themselves. Competition is important to watch on, what rival businesses are doing may be by the time we develop a new strategy they already have a better one. Look at your competitor’s strengths what are they doing better than we, why do they have more customers are aspects to monitor and capitalize on their weaknesses. Additional social factors to consider in this scenario include the fact that America is comprised of different races and there are racial boundaries within each race therefore this limits the flow of customers within businesses. Religion is another social issue we are told in the simulation for example Rastafarians would never cut their hair so we have to develop a product that suits them. Behavioral changes are another issue to look at what do the modern youth like? It is different from thirty years ago when Stonewall was started. Lifestyle of different groups is an important aspect to watch when determining marketring strategies. Population changes also affect marketing and sales strategies in this scenario we are told that as customers grow old they don’t need stonewall services so it is hard to predict how many customer we are going to lose in a few year due to age. Variations in different geographical regions depend on income, social factors, social class infrastructure to name only a few. I am looking at the right customer category in this case age is very important because the kind of business I am in is heavily determined by the age groups. The difference is majorly brought about by social economic factors which tend to divide customers according to their income, race and social class. It is important to keep existing customers in any business because it is more expensive to bring in new customers than keeping the existing ones. Do not lose the customers you have is the most important principle. Know what makes your customers happy and offer it to them so that they give you a “waoo” and spread word of your excellent service. Make it easy for your customers to get your services if you have a lot of clients increase the workforce so that you serve them without wait time. Courtesy is important in this kind of business because we are dealing with customers directly, they need respect and recognition. REFERENCES 1. Simulation, ‘Analyzing buyer behavior’ student website, http://ecampus.phoenix.edu 2. Build customer loyalty-open forum, www.openforum.com/…/5-easy-steps-to-buil-customer-loyalt,August 6th 2012. Retrieved on 1/21/2013 at 8p.m. Read More