Observation and analysis of a local small business

Toshi Dream Spa and Salon is a full-featured spa and salon business located on Main Street and open seven days per week from 10AM until 7PM. They have been in business for fifteen years. Five years ago, they expanded and modernized, going from a hair salon with five chairs to a full-service spa that offers facials, body treatments, waxing, manicures, and pedicures. Their shop is modern, clean, and slick looking. The decor is minimalist, with a cool color scheme using white and icy blue and purple shades. Toshi Dream Spa and Salon wishes to convey an image of cleanliness and being in touch with the aesthetics and grooming needs of contemporary urban consumers.

This business uses a wide range of marketing methods to promote their business. Word of mouth is their primary marketing method, which is enhanced by relationship building through multiple social media platforms. The Toshi Dream Spa offers promotional contests through their Facebook and Instagram accounts. One of the promotional contests partnered with local artists to offer art giveaways for customers. Another contest asked followers of their Facebook and Instagram accounts to post pictures of "their favorite urban legend," "their favorite urban dog," and "their favorite food," and selected winners for receiving a $25 gift card. Through these creative promotional events, the Toshi Dream Spa has shown how social media can be wielded in a highly successful manner. Every month or two, Toshi Dream Spa also offers promotional giveaways to customers who tweet to the salon using the hashtag #dreamspa.

Similarly, the Toshi Dream Spa reminds customers often about rating them on Yelp and other ratings websites for consumers. There is a little blurb on their pamphlets requesting customer ratings, and a sign in the window as well. Customers are reminded in ways that make them feel empowered, too, such as by saying "We want you to be happy! If there is anything you did not like, please tell us now. If there is anything you did like, please tell your friends on Yelp!" This approach helps to minimize negative content on Yelp but in a non-coercive way, encouraging customers to be open about their complaints. The policy is supported by a managerial staff that remains actively engaged with the customer, soliciting feedback while the customer is still in the salon.

When Toshi Dream Spa first opened as Toshi Salon fifteen years ago, their primary demographic was Asian females in the younger demographic. The expansion completely changed the business's approach and marketing strategy. Whereas they used to offer hair treatments and styling options only, the opening of the store front adjacent caused the owner to consider expanding into the additional space and partnering with the owner of a day spa in one of the suburbs who was seeking to open an urban branch. Together they created Toshi Dream Spa and Salon. The Toshi Dream Spa and Salon concept was to provide an integrated full service spa and aesthetics center, differentiating Toshi from any local competitor. Also, the expansion meant that their demographic changed, and expanded from a small group of Asian women to a broad subset of affluent, trendy young adults in the urban core who seek regular services, including hair, skin, nails, and spa treatments. Relationship building and customer loyalty are the primary focuses of the business's marketing strategies. Toshi Dream Spa and Salon achieves its marketing goals by using a variety of strategies.

Toshi Dream Spa places small advertisements in local entertainment newspapers, targeting their primary customers in the young but affluent demographic. Their age demographic can be divided into segments depending on the services offered. The spa services are targeting the 30-40 demographic, with the salon services skewing a broader age range starting from the young 20s extending into the 40s. The primary market is also predominantly female, which is why recently since their expansion, Toshi Dream Spa and Salon has identified the opportunities in marketing to their secondary market, which is males from the same affluent urban demographic. As Thompson (n.d.) points out, an "ideal marketing plan should effectively target both your primary and secondary audiences." This can be achieved in a number of different ways, such as by marketing different products to each of these segments, or incorporating "different levels of analysis" into the same marketing campaign or strategy to create a gender-neutral approach (Thompson, n.d.). Indeed, this is exactly what Toshi Dream Spa did when they devised their creative social media strategies asking customers to upload pictures and share them. Additionally, Toshi Dream Spa decided to take out separate ads specifically for the male secondary market. These ads promoted men's services including waxing, manicure, and hair/beard salon during critical times of the year including Father's Day, Valentine's Day, and Christmas. Separate ads for the primary demographic focused on the other options offered by the salon. As Webb (n.d.) suggests, "The secondary market should be piggy-backed with your primary market." Toshi achieves this piggy back approach by appealing to the needs of male consumers.

Finally, one of the most helpful marketing strategies used by Toshi Dream Spa and Salon has been their membership program. Both both the primary and secondary markets, the membership program offers the opportunity for discounts on services, special announcements, product releases, and invitations to parties and events sponsored by the salon around the city. Toshi Dream Spa and Salon has also positioned itself as being part of the community, remaining involved with local artists, featuring the artwork in the salon, and sponsoring cultural events throughout the city including concerts by local musicians.

Toshi Dream Spa has several local competitors. One is the Relax Urban Spa and the other is Salon Fixe. Toshi Dream Spa and Salon is differentiated from both Relax Urban Spa and Salon Fixe. Neither Relax Urban Spa nor Salon Fixe has membership programs, although they both have loyalty cards. Neither Relax Urban Spa nor Salon Fixe offers the full range of services that Toshi Dream Spa offers. Relax Urban Spa only offers facials, waxing, and massage. Salon Fixe only offers hair styling but recently hired an independent nail technician. Relax Urban Spa and Salon Fixe do not market to men at all, even though they both offer men's services. Both of those competitors have a Facebook and social media presence, but do not maximize the potential of their social media by offering special promotions and interactions with consumers to create brand loyalty and a sense of belonging to a bigger community, which is what Toshi achieves through its positioning supporting arts and culture. Therefore, Toshi Dream Spa and Salon has solidified a competitive advantage in the community. Because of their unique branding, social media maximization, and collaboration with local artists, Toshi Dream Spa and Salon has become more than just a place where customers come for their services and treatments. The business has become like a local institution.

However, the recent success of Toshi could be a passing phase or trend. Toshi Dream Spa and Salon needs to insulate itself from changes in the market. The market may be fickle and changeable, or the technologies and tools of social media marketing might change in the future. The changes in the demographic of the city, which does have a large number of transient people who work only for a few years on contract, presents an additional challenge to the business. Also, the services offered are luxury services. If the economic conditions of the city were to change, fewer people would have the disposable income to spend on Toshi. Toshi Dream Spa and Salon therefore needs to focus more on establishing a long-term client base for its hair services, which were the original foundation of the business, and which tends to be more insulated from economic downturns than spa services due to the luxury positioning of the latter versus the fact that people always do need their hair cut.

If Toshi Dream Spa and Salon were my business, I would start to differentiate the hair salon more from the spa services. The hair salon is in many ways run separately anyway. The original owner of the hair salon, Ms. Takomoto, maintains separate revenue streams from her partner. However, the membership program is for the entire Toshi Dream Spa and Salon. This should not change in itself, as the membership program has proven successful and is a great way to retain loyal customers. I do believe that a separate loyalty card for hair services might help for two reasons. One is that many of the customers, and especially those from the secondary market (males), do not use the spa services as much as the hair styling services. The second reason a separate loyalty card for the hair salon might be helpful for the long-term health of the organization is that it will insulate the business from potential economic fluctuations.

Other things Toshi Dream Spa and Salon might be able to do would be to introduce an additional element like a mascot. Currently, the branding is clean with only color schemes and abstract elements in the logo. I believe that adding a cat or other animal might help to create more of a brand identity that can remain stable over time, even seeing if it would be possible for the company to have a live-in cat or rabbit. A cute animal would further differentiate the company from its competitors and attract customers on that basis alone. Otherwise, I believe Toshi Dream Spa and Salon might be one of the most exemplary examples of a small local business succeeding at creative and cutting-edge marketing strategies using a clever mix of social media and traditional methods.

References

"52 Types of Marketing Strategies," (n.d.). Cult Branding. Retrieved online: http://cultbranding.com/ceo/52-types-of-marketing-strategies/

Thompson, V. (n.d.). What is a secondary target audience? Houston Chronicle. Retrieved online: http://smallbusiness.chron.com/secondary-target-audience-81046.html

Webb, C. (n.d.). Strategy for secondary target market promotion. Houston Chronicle. Retrieved online: http://smallbusiness.chron.com/strategy-secondary-target-market-promotion-30523.html