Franchising and Marketing Judgement

Judgment

Franchising may be described as a form of marketing whereby a business owner grants individuals the right to a trademark for the purpose of undertaking a commercial operation ((Rosado-Serrano, Paul, & Dikova, 2018). In our example is a franchise beauty salon. One of the advantages that accrues to a franchise beauty salon is customer loyalty. In today’s world, most customers want to be associated with a specific brand and in this case, the franchise beauty salon is not an exception. The franchisor also assists the business through making suppliers available and logistics of supplies easier. The situation of the franchise beauty salon is losses as a result of price distortion. Prices of services rendered at the beauty shop do not seem to break even with the costs incurred as a result of conducting business. This is as a result of the harsh economic conditions that prevail in today’s world.

Although, the customer base is good and the business seems to have maintained and attracted more customers, profit margins are still thin. The situation of poor profits in the beauty salon may be caused by various factors. First, the government has implemented laws that protect employees and therefore the company cannot pay employees less than the minimum wage implemented. The cost of supplies is also high and the firm may need to dig into its coffers and pay more for supplies. The firm is also required to follow various guidelines of the owner of the franchise - including the quality of services, the quality of supplies, and the location of the shop which could also be attracting high leasing prices while at the same time ensuring constant traffic.

When other firms in the same industry change the prices of their commodity to win more customers as suggested by the 4P’s of marketing, the beauty salon is not mandated to do the same because it follows the guidelines of its owners. This means that the beauty shop may be less competitive. The strategies may be termed as rigid and unfulfilling. The other problem is that the firm has to split profits between itself and the franchisor since they use his trademark. Other players in the not so perfect market may end up acquiring more customers using a better pricing strategy.

The task at hand is to maintain customers or at least attract a few others to enjoy services at the beauty salon. The factors that need to be kept in consideration is pricing and quality. The firm may engage its owner and present claims about the consistent losses made, and establish whether prices of products could go up while quality of services is maintained. Another way of handling the issue would be to avoid giving poorly thought-out discounts which may, for instance, only attract customers rooting for quantity, and not quality. Improving and restructuring modes of selling including selling online. The other task would be to slash costs significantly.

There are several actions that the beauty salon has made with the aim of mitigating losses as a result of price distortion. The first action is to ensure that the firm does not compete based on price. Price is a marketing component. However, there are consumers who do not only consider the price. The beauty salon may need to establish other factors such as quality of services. In today’s world, customers are more aligned to the quality of service rather than the price charged (Brandoni, 2018). Customer experience is a major selling point for a firm that operates in the service industry.

The other action to take is making the services available online. Communication technology has made the world a global village and any company that is left out may not enjoy the benefits and upsides of today’s technology. Furthermore, establishing the crucial roadblocks in business is also crucial. Roadblocks may be found in poor financing, high costs of supplies or increased employment costs.

The result of the various actions taken in the beauty salon would be improved traffic as a result of the advertisements made online. The firm may be able to prepare from tomorrow’s business using the current day’s appointments. This ensures that business is aligned properly and is persistent. The other result is increased profits because of price adjustments in relation to tie various services in the beauty salon. As earlier stated, customers today do not solely align their preference to prices. Therefore, improving the quality of services widens the customer base.