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In the number UNO Race – ‘Trends in Vogue’*

CASE STUDY, MARKETING MANAGEMENT
ET Cases - GSMC, 15 Pages
AUTHOR(S) : Deepa Ittimani Tholath, Assistant Professor, Loyola Institute of Business Administration (LIBA), Loyola College Chennai

Case Preview

In the Number UNO Race – ‘Trends in Vogue’

 

“We need to be the number one salon chain in the country” – Ranganathan’s (the founding Chairman, CavinKare Group) statement seemed to follow Chackochen  Mathai (Chackochen), GM, Business Development, ‘Trends In Vogue’ Pvt. Ltd. He was very sure that Ranganathan expected actionable data before the next meeting to meet this goal. Chackochen had scheduled a meeting with his core team of five and they had discussed and reached a consensus regarding the material needed  before the next meeting. They had to work on the material furnished by the customer insights group along with Human resources and Finance department to understand the customer decision process behind salon usage, the employee problems and the financial implications to draw up the action plan for the race to be number one.

Beauty Salon Business in India

Beauty care industry is flourishing industry in India with a growing number of beauty conscious women and their demand for variety of services catering to the importance and growth of this industry (Annexure I). Thousands of beauty care services providers have sprung up all over the country decade (2000-2010) as the significance of being beautiful is increasing. At the social level, physical beauty is an advantage, as being beautiful gives a person much more confidence..........

Green Trends – How The Journey Began

Looking at the ever increasing demand, which was mainly due to the ever changing lifestyle and the slow shift of Indian youth towards western culture, C.K Ranganathan established his pioneering footprints in the organized salon space way back in 2000. Understanding the different orientation and needs of products and service business, Cavinkare spun off a separate company ‘Trends In Vogue’ to handle the retail salon space.............

Franchaisee @ Green Trends

“When a potential franchisee is keen to collaborate with Green Trends or Limelite, we have an exhaustive list of parameters of the applicant to evaluate them thoroughly. In a nutshell, we look for people with passion, money, business acumen, and educational background. Our process of recruiting franchisees is procedural and well defined. We don’t give a franchise if the aspiring franchisee doesn’t meet the criteria. We verify the aspirant’s background and his stability record in whatever he has done so far and try to ascertain his involvement and commitment to run this business,” said Gopalakrishnan, Business Head........

Consumer Insights

The Consumer insights team conducted a study to find out the choice preferences of a typical customer and came up with the following factors:

Competitive Space

According to the studies conducted by different agencies Green Trend features in the top ten salon chains in India along with Lakme Salon, JawedHabib, Shahanaz Husain, VLCC, Naturals Unisex.............

Customer Profile

Between the ages of 30 and 55

• Income levels of Rs 25,000 and above
• Female/Male
• ..............

Brand Recall

The brand recall for Green Trends as obtained from the survey is high with 78% of the surveyed people having Green Trends as one of top 3 salons that they can recall. ‘Naturals’ is the main competitor of Green Trends, with a 97% brand recall having an edge over Green Trends.............

...................

Human Resource Woes

Over 50% of the workforce in salons, slimming and rejuvenation sub-segments are women. However, men are increasingly gaining interest, especially in hair styling. Segments such as physical fitness and counter sales continue to be dominated by men. Transitional changes are being observed in the economic profile with candidates from mid-income households taking to the sector in urban areas.In rural areas, the workforce continues to be constituted of people from lower socio-economic background............

MOU with Bharatiya Mahila Bank

As per the MOU signed by Usha Ananthasubramanian, CMD of Bharatiya Mahila Bank (BMB), had signed a memorandum of understanding with C K Ranganathan, CMD of CavinKare Pvt Ltd., BMB would provide a loan amount between 65-75% of the total project cost and is available for franchises to avail across India. The rate of interest will be from 11.5% to 12.5%, with one percent concession to the women entrepreneur.............

Arming the Forces

Although at this stage Chackochan believed that‘Trends In Vogue’ was a known brand doing well, to become the number one some tough choices will have to be made. While reviewing the insights from the studies, Chackochan wondered how they can be used to increase brand loyalty. How would they be able to increase the customer satisfaction?.............

Exhibits

Exhibit I: Green trends’ Logo

Exhibit II: How does Price Play a Role in Decision Making?

Exhibit III: Performance Attributes and Evaluation

Exhibit IV: Social Influencers

Appendix

Appendix I: Performance Attributes Ranking

Appendix II: Turnkey Salon Project – Financials

Annexures

Annexure I: Beauty Industry’s Facts

Annexure II: Trends In Vogue

Teaching Note Preview

In the Number UNO Race – ‘Trends in Vogue’

 

Synopsis

‘Trends In Vogue’, which was started in the year 2000 by C K Raganathan, the founding Chairman, CavinKare to cater to personal grooming needs, was able to carve out a space for itself in the unisex family salon space. It was one among the ten best salons in India. Ranganathan has initiated the drive to make ‘Trends In Vogue’ Salon Chain, which has two brands – Green Trends and Limelite, the number one salon chain in India. The case traces the GM-Business Development of ‘Trends In Vogue’ edeavour to arm himself and his team with actionable data which can be the catalyst for the ‘Ashvamedha’ or the conquer envisioned by the founder.

The case initially traces the beauty salon business and its evolution in India and narrows down to the growth of ‘Trends In Vogue’ over the years. It also speaks about the franchisee model of ‘Trends In Vogue’ which has been the vehicle for its major growth. But the dynamics of which might have to be rethought to take the growth further in a highly competitive space.

The team also collects data about the competition, customers, customer choice tactics, satisfaction levels, and influencers who influence the customer.

In order to go comprehensively they also draw upon information from the human resources department and also finance department. With these information in hand, GM-Business Development and team is drawing up their action plan to move forward.

Marketing

Learning Objectives

  • • To identify the major customer segments for Unisex Beauty Salons.
  • • To identify the requirements of various customer segments and identification of the target group.
  • • To familiarise students regarding the customer Choice tactics and Social Influencers.

 

Target Audience & Use of the Case

The case can be used in postgraduate management courses or executive programs to bring forth the concepts of Segmentation, Targeting and Positioning. It can also be used in Consumer Behavior sessions to highlight the consumer decision making process – choice tactics and Influencers on the decision process. This can also be used to discuss satisfaction and dissatisfaction paradigm. No prior course work regarding the subjects is necessary to appreciate the key concept discussed in this case. The board plan (marketing) for the case is provided in Exhibit (TN)-I. Case questions may be handed over to the students/participants in advance so that the class discussion can be guided through the questions and taken forward through the qualitative and quantitative data given in the case.

Assignment Questions & Teaching Plan

The following questions are suggested for a 90 minute class

  • 1. What was the process of evolution of the professional grooming scenario in India? Where does it stand now? Who are the major players? (25 minutes)
  • 2. Whom does a beauty salon typically target? Which alternate segments should they consider for market expansion? (30minutes)
  • 3. .........................

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Abstract

'Trends In Vogue', which was started in the year 2000 by C K Raganathan, the founding Chairman, CavinKare to cater to personal grooming needs, was able to carve out a space for itself in the unisex family salon space. It was one among the top ten salons in India. Ranganathan has initiated the drive to make 'Trends In Vogue' Salon Chain, which has two brands - Green Trends and Limelite, the number one salon chain in India. The case traces the GM-Business Development of 'Trends In Vogue' edeavour to arm himself and his team with actionable data which can be the catalyst for the 'Ashvamedha' or the conquer envisioned by the founder.



Pedagogical Objectives

Marketing-

  • To identify the major customer segments for Unisex Beauty Salons
  • To identify the requirements of various customer segments and identification of the target group
  • To familiarise students regarding the customer Choice tactics and Social Influencers
Human Resources-
  • To identify the difference between a service industry work force and a product industry work force
  • To identify the factors to be considered when evaluating prospective employees for a service industry
  • To familiarise students regarding the guidelines for establishing good employee relations
Finance-
  • To give the overall picture of how a Break Even Analysis is done
  • To work out the working capacity, total capacity investment and cost of production for a new venture
  • To familiarise students regarding the turnover per annum, profit and rate of return

Case Positioning and Setting
Marketing – The case can be used in postgraduate management courses or executive programs to bring forth the concepts of Segmentation, Targeting and Positioning. It can also be used in Consumer Behavior sessions to highlight the consumer decision making process – choice tactics and Influencers on the decision process. This can also be used to discuss satisfaction dissatisfaction paradigm.

Human Resources – The case can be used in postgraduate management courses or executive programs to bring forth the concepts of difference between a service industry work force and product industry work force. It can also be used to bring forth the factors to be considered in recruiting and retaining a service work force.

Finance – The case can be used in postgraduate management courses or executive programs to bring forth the concepts of working capacity, cost of production, turnover, profit, rate of return and Break even Analysis.


* GSMC 2016, IIM Raipur

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