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Created by Jasna Milicevic
Consultant at YPW
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Case Background Information
As a part of the procedures which is defined by a general
policy of the company, we conducted wide research on
market potential, trends and final segmentation. This
research has covered two basic elements: 1) Demand
for applications relying to the internet technology, which
will help customers of beauty centers, hair style studios
for women of color, to get the best service, will be the
first part of this research. 2) In the second round we will
conduct a market research followed by general analyses
on this specific segment of customers.
Initial idea for a development of this application
was introduced by the co - owner Ms. Pine-Smith.
After several years of searching for a new solution, she
offered a concept of the unique application with super –
designed website which will enter an opening door for
this service. Little Blaque Book LLC is actually on –
demand - service for searching and booking beauty
treatment for the specific population – African –
Americans (women). Her partner Mr. Brian Chisum,
has followed her in development of this project and they
created wonderful solution for
New way of life, everyday turbulences, timeless
business women, heating demand for lifestyle changing
and finally technology advancement brought into the
market a brand new solution in the cosmetics and
beauty industry. Style.com or Glamsquad.com are
leaders in this business. Their applications are available
on the mobile devices, and representing an easy way
for all women who need exquisite and fast service to
settle an appointment. Treatment at your home or even
spa – center on demand with possibility to book an
appointment within one hour.
Following this idea with special attention to needs which
are characteristic for black women, Little Blaque Book
LLC (in future text LLB), has developed strategy for
using tech innovation to cover this specific market.
As for this strategy, there has been planned three
phases, which will cover marketing, financial and
organizational construction. In its core, this application
has a model of corresponding data base – so all
enquiries from users will be automatically processed
and all answers will be available immediately or in a few
minutes. Current market is not covered in this segment
or it is not covered enough. One of the competitors in
this segment is beta.urbanbeautynetwork.com,
which don`t have mobile app yet. That is one of the
reasons why LLB has to bring its market presence on
much higher level.
Marketing promotion will be conducted through several
important channels in online environment, but also
combining event marketing, TV, and word of mouth.
Organizational aspect is very complex. General
organization of the company will be based on hybrid
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principle. Regarding, implementation of additional
functions and future growth, it will be changed and
adapted under a market fluctuations and organization
internal responses. This kind of responses are
characteristic for rapidly growing businesses with
highly-demanding market. Services provided by LBB
has to be delivered in real-time and IT support back-up
is the most important for this part. On the other hand
customers, who are applying for these services need
friendly – user platform without obstacles. Providing this
type of environment will be secured by the good
instructions, Q&A section and other ways of
communication. Very important part of this whole
system is well-packed database with all available
professionals which can offer various beauty treatments
(hairstylist, makeup artist, eyelash extension artist or
eventually barbers).
Financial flows are determined according to services
which are offered. This is totally online business –
customer is able to pay via Stripe account, credit card
or other payment method. After receiving total payment
on its account – LBB will transfer money directly to the
account of freelance professional, reduced for the
commission. In this structure – revenues will be
secured, the whole transfer process is controlled by
provider and commission is available instantly.
Market projections and forecast are developed for one
(or three) year plan, yet this development projection
can be redefined in the next few months if an increasing
demand and positive feedback evoke continuous
growth.
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Report Outline
I Review Objectives 4
a) Market Potential 4
b) Operational 4
c) Marketing 4
d) Services 5
II Overview and Methodology of the research process 5
III Customer Profile 5
a) Demographics 5
b) Average Applications Usage 7
IV U.S. Market – Landscape and Trends 7
a) Nationwide Industry Outlook 8
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b) Geographic diversity 8
c) Current Market Conditions 9
V Identification of opportunities, challenges, signals 12
a) The Markets Priorities and Concerns 12
i) Motivators and De-Motivators 12
ii) Opportunities 12
iii) LBB’s Advantages 14
b) Market Segment Challenges 14
i) Competitors 15
ii) Alternatives 16
iii) Technology 16
VI Company Analysis 19
VII Market Risk vs. Reward Analysis 20
VIII Preliminary Recommendations 21
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a) Target Stylists 21
b) Target Regions 21
c) Target Market Segments 22
d) Advertising Channels 22
e) Other Marketing Channels 22
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I Review objectives
This part of research has been analyzing all key issues
of the development this particular on – demand
platform, as well as its necessity, pre – launch activities
and all additional content. We tend to explore all market
challenges with one simple objective – How to penetrate
market and get more sales?
a) Market Potential
1) Determine the market potential and the
concentration of the targeted market
segment.
2) Find the best stylists, cosmetologists and
other professionals who will provide the most
quality and fastest service
3) Evaluate Little Blaque Book LLC ability to meet
the technological, marketing and sales
requirements to be successful in this market
segment.
4) Identify high potential prospects of planned
marketing and sales activities
Questions to be answered by the research.
b) Operational Questions
1) Are all features of LBB app sufficient to answer
on demands of the specific market? Alternatives?
2) Are our current team capable to handle all
services?
3) Will additional employees be necessary?
Alternatives?
4) How does the market now use this type of
services?
i. Direct at beauty shops
ii. Telephone/Fax
iii. Internet
c) Marketing Questions
1) What specific region will be covered? Are there
possibility for easy spreading?
2) What Associations of beauty professionals
have influence in the market? Are there publications and
/ or web portals with high market segment readership?
3) How do other products “go to market” within
the segment?
4) Level of market sophistication? Limitation of
the internet users or online payments?
5) Is there seasonality to the business?
6) What are the characteristics of the specific
market segment?
7) What are the main directions for marketing
promotion? What are the alternatives?
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The Prospect Directory
1) Identify and profile customers as a potential
users
2) Provide a directory of all stylists,
cosmetologists, manicurists which will be
available to users on demand.
II Overview and Methodology of the
research process
This research was conducted over a 60 day period in the
last quarter of 2015 by our Research Team. The
information which could be find here are the property of
the research sponsors (Little Blaque Book LLC). The
information from this report will not be made available
to others without the special permission of the research
sponsor. Sources of information include:
1) Company marketing information, advertising
2) Information about regulation and laws (Board
of Barbering and Cosmetology - Title 16,
Division 9, California Code of Regulations
3) On-Line research (Black Beauty App) including
third party references
4) Trade Associations, Directories and
Publications
5) Various private industry sources
Every effort is made to provide accurate information.
The information provided is “best available” on the day
the data was gathered. Changes in personnel, company
products and operations change daily. Previous
projects indicate the most volatile information will be
found with changes in personnel and company
operations reported in the Prospect Directory.
III Customer Profile
The targeted audiences for the prospected websites are
professional women and those with a full social
schedule, including brides (think: shower, bachelorette
party, rehearsal dinner). Habits, preferences and
general lifestyle of the customers are too complex, so
we can divide them in respective sub-groups.
a) Demographics
Group of customers which is very often used as an
exemplary for mobile beauty services is the group of
celebrities and high – class women. They look for
privacy, on-call service and flexibility. Later this option
has become available to much wider segment of
customers. Mobile hair stylists, makeup artists or
manicurists are especially popular for private events,
i.e. weddings. These kind of services are at disposal to
really huge population. With technics and technological
advances, limitations for using this kind of services have
been decreased at minimum. For more than 4 years,
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this market has been growing rapidly (over 149%
yearly).
By following a fast pace of everyday life beauty industry
is setting new type of the placement. This efficient
solution is also very interesting for the travelers. When
they find themselves in a new city without idea where
to go for hair blow or which spa center is the closest to
their location, search engine helps with all necessary
data and much more.
For those customers who have specific needs, this
application is the best solution, because it can provide
opportunity to fulfill diversified market demands.
Business women – this segment is definitely one of
the most interesting for the providers. Population of
women, with solid and stable income, lack of time and
standard lifestyle habits is the perfect piece of this cake.
Moms – at – home – are really in need for this service.
Simple analyses of their costs of time and money
(babysitting costs and spend when going to salon, bring
us to conclusion that in – home – price is saving their
money.
Travelers – is a special group of customers which has
to be exploited thoroughly. After attracting them to use
your application, you will probably get more and more
customers. Travelers are often very active on Social
Media and their good feedback could be just the right
thing.
Celebrities – extraordinary customers for any type of
service. When it comes to outlook, very often they have
unusual and extremely complicated requests. As an
answer to these requests, managers from beauty – on
– click industry adjusted general offer to them. Top
stylists, makeup artists or massagers are available on
call immediately or at the most convenient time and
always ready to carry out all requirements.
Within our general customer profile could be found a lot
of fractions. We recognize internal characterization of
each personality. As for this matter, we need to define
particular profile of customers which has diversity of its
own. Our sub-segments could be found across groups
of business women, travelers or moms – at – home
within African – American women. Black women are
have their own unique cultural ideas of beauty, product
preferences and beauty rituals. This population
represents really significant part of American women.
Regarding the fact that LBB is going to develop
application for them, our research took its own direction
across these sub – segments.
Specifically, for our research we extracted all interesting
facts that can explain market variety and special
requirements.
OBSERVATION: We were using online survey method for
interviewing, women in NYC and LA, because of an adequate
offer of mobile beauty apps which these two cities have.
Selected sample is constructed from different market
segments, so we could gather adequate conclusion. Among
all persons we interviewed: 1) 50% have answered that they
had used this type of service for once. 2) More than 65%
found app on App Store or have been using
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(recommendation) word of mouth. 3) 75% are interested for
services of the on – demand app for women of color
After processing data from online method we would like
to add more details about an experience which
customers are sharing without reserve.
Business women in the expert hand of stylists - "If I
can have someone blow out my hair while I'm sitting in
my home office, banging out emails and scheduling the
day, it's a no brainer," – said Julia Spillman - Gover, 31,
an associate real-estate broker who lives in Manhattan.
How beauty in – house services can help staying at
home – moms - Going to a salon requires a baby sitter,
which can easily push the price of the experience well
beyond $100.
Global trends in the technology enhancements for
various industries, find its own version within beauty
industry. As a necessity for an application which will
bring hairdresser to your door, grew stronger, several
start – ups, developed so called Uber for Beauty (Uber
after name of global-known application for
transportation), in the North American market. Most of
them are operating in New York, or other big cities in
the U.S. (L.A. Chicago etc.), but trend of growth is
significant. We can expect that national – wide
Glamsquad will be available very soon.
b) Average Application Usage
Typical customers for these services could be found
everywhere, especially in a large group of business
women. In our research we covered U.S. market with
special accent on the groups of African – American
women. Total sales among this segment in the U.S. is
more than 36% of the sales in beauty industry. General
sales in BI $26.5bn. Other relevant data will be provided
in the future chapters.
Geographic Locations which were comprised by our
research: Bay area – West Coast CA and Atlanta,
Georgia.
OBSERVATION: From our online survey and other
online resources, we made several conclusions, which
will be represented in the table below. Increasing
power of the internet, tech innovation are making an
impact on developing mobile beauty solutions. Their
index of satisfaction is not too high when we are
talking about quality of stylist`s work.
Impression on finding new stylist in last minute
Well 13%
Sometimes 8%
Not well 21%
Other 58%
Method of finding new stylist
Word of mouth 65%
My own stylist 13%
Online/Yelp 17%
Table 1. Mobile Beauty Applications
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IV U.S. Market – Landscape and Trends
This research is based on general data in mobile beauty
industry.
a) Nationwide Industry Outlook
General data from the beauty industry in the U.S. are
presented in the list below
1. Annual sales volume over $53 bn as of
2014 spent across different sectors of the
industry
2. Average rate of growth across various
sectors is 2.4%
3. Number of an active businesses is
1,223,585
4. Number of employees 1,732,584
Light shed on activities in the Hair and Nail Salons
reveals that operators in the Hair and Nail Salons
industry have begun offering a variety of new products
and services to boost revenue and leverage rising
consumer spending. As a result, revenue is expected to
grow. In the coming years, demand for industry services
is expected to accelerate thanks to improving
disposable income. Declining unemployment during the
next five years is expected to drive per capita disposable
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IBIS World – Industry Report
income growth and boost demand for price-premium
services offered by this industry.
b) Geographic diversity
The Mid-Atlantic has the greatest share of industry
establishments, estimated at 25.3% of the nation's total
in 2015. However, the region is home to only 15.5% of
the US population. The states with the highest
concentration of establishments include New York,
Pennsylvania and New Jersey, which hold a respective
11.0%, 6.0% and 5.9% of the total. New York, in
particular, has experienced strong growth in the number
of salons.1
When it comes to mobile beauty industry geographic
coverage is a bit different. At this moment, mobile
applications for beauty on demand services are
available in all major cities in the U.S.
In the next figure you will be able to understand
prospect of this industry across United States. As a
leader by the number of locations which are covered we
recognize StyleSeat with over 15.000 locations. All
others app are operating in New York, Los Angeles,
Miami, Chicago etc.
Bay area with East coast makes the top attraction for a
business development. This represents the current
landscape of mobile beauty industry.
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Figure 1. Geographic locations for Mobile Beauty
Application in 2014
c) Current Market Conditions
Trends and consequences
Internet and technology advancements (iPhone and
iPad became our extended hands and browsing through
the internet is actually substitute for breeding). In the
population of so-called millennials we often see leaders
of this new digital world order, but there is huge
population of baby – boomers and seniors in America
which use the internet every day. Some of the research
showed that more than 45% of women older than 65
are using Social Media.
Beauty industry is affected by technology disruption.
Online shopping has boosted during last decade. Now,
we have variety of services available on the internet.
Growth of sales is really significant.
“Figures for the new Philip Kingsley mobile-optimized
website launched earlier this year showed more than a
50 per cent increase in sales from all mobile devices”
Other emersions within industries made a strong effect
on certain changes. Although, growth of revenues and
general move forward in the industry have been
recorded in previous past years, there are some others
factors which made an impact to workforce.
According to the chart below, we can detect what kind
of effects in growth of revenues and number of
freelancers have directly to beauty on – demand
industry.
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Beauty industry is recording moderate growth in the
past few years and its influence in the labor market has
increased numbers of freelancers among stylists,
cosmetologists. With 28% of hairdressers, stylists and
cosmetologists already working as independent
contractors, the beauty industry is an ideal environment
for on-demand platforms to gain traction.
Opportunities
After determining effects of this prodigy on beauty and
cosmetics industry, it is necessary to analyze
opportunities for advancement in various aspects of
services. The whole thing started few years ago, based
on idea .
Vênsette featured as the first on-demand beauty
service to your home. E- Commerce solution adapted to
beauty services was an idea of CEO
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Clare O'Connor – Forbes – Beauty on Demand
who left her previous job in the finance for this
adventurous project.
Following her successful path, other start – ups, like
Glamsquad, Stylebee, Styleseat and others have started
developing various solutions for this kind of mobile
apps. Great success of Uber, inspired the whole new
range of applications within various fields.
Uber for Beauty is the name of one company based in
the Hamptons. This sintagm is also very often used as
a synonym for the total concept.
One of the leaders in the U.S. market is definitely
Glamsquad. Glamsquad`s CEO Alexandra Wilkis
Wilson “saw the moneymaking potential of applying an
Uber model to another massive, disparate market: U.S.
spas and salons, which will do $40 billion in sales this
year on the backs of a workforce that is 65%
freelance”.2
Competition
Research about beauty on – demand industry is
conducted among applications which are operating in
the major cities (New York, Los Angeles, Chicago etc.)
and across local markets where LLB application will
launch its platform. In the next chapter of this work, we
are going to analyze the main competitors who are
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2
4
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2011 2012 2013 2014
Chart 1. Growth of freelancers and
revenues in beauty industry
Freelance Laborforce Revenues in Beauty industry - total
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already functioning in geo-locations which will be
targeted by LLB.
The first mobile beauty application called Vênsette has
been founded by former hedge founded analyst Ms.
Platt. Her idea to create on – demand application for
beauty services was based on general picture of growth
in the services sector.
“When I started in 2011, we were really the first to
market. We built a network in New York City, and
eventually we grew the company to include dozens of
corporate and hotel partnerships” – company`s
strategy is relying to B2B revenues for about 50%. If a
corporation needs to have hair and makeup done for
15 VIP celebs, it’s the best option. If you go to a salon,
an agency, or individually negotiate with artist, it’s
going to be more of a production. The hotel piece was
a natural fit, too -- not every hotel has a salon”3
Vênsette, based in New York, now has artists available
for hire in New York, Los Angeles, San Francisco and
Miami.
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Fashionista – Vênsette – Big Success
After three years of continuous growth they raised more
funding ($3mil). This action means that they are trying
to keep the pace with extremely high competition.
Vênsette is actually super fashionable mobile beauty
service which proud itself with quality but expensive
service.
Prices Vênsette
Hair 100$
Makeup 150$
Hair & Makeup 200$
VIP 300$
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Among the leaders in mobile beauty industry
Glamsquad have special place. Company has been
founded in January 2014 by Alexandra Wilkis
Wilson, co-founder of Gilt Group, Victoria Eisner,
Jason Perri and David Goldweitz, with services
available in New York and L.A.
Glamsquad dream team
As a part of a dream team of executives plus is creative
director and veteran hairstylist Giovanni Vaccaro and
director of makeup artistry Kelli Bartlett. Glamsquad
artists are trained in the brand's proprietary technique
for consistent results.
is highlight goal of these experts.
After one year of rapid growth created new potential and
additional funding of $7mil in series A and $15mil in
series B.
Prices Glamsquad
Blowout 50$
Makeup 75$
Braid 75$
Up do 80$
Plans of Glamsquad is to create nationwide network and
always be able to create great services at affordable
price.
Stylebee - 2013 by former corporate attorney Anna
Santeramo, with services available in Los Angeles.
Pricing: Blowouts, $50; makeup, including lashes, $85;
men's cuts, $50; face painting, $50; 60-minute
massage, $120; 90-minute massage, $150.
Stlyeseat -
V Identification of opportunities,
challenges and signals
As we have already seen, market is extremely dynamic
and there are no barriers for new entries. Concerning
this situation, all marketers who think that their idea is
competitive and distinctive, are free to try their
chances. In this section of our research we will find key
priorities and issues. Also, we want to expand idea and
explore opportunities which are disposable to LBB
a) The Markets Priorities and Concerns
i) Pros and contra
Work within beauty industry could be interesting,
but complicated. Achieving the highest level of
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customer`s satisfaction is actually very hard task.
That is what makes beauty so intriguing.
What are the main goals of mobile apps for beauty
industry?
 Instant gratification
 Saving time (in some cases money)
 Comfortable service – flexible time, place
Analyses has shown that positive reaction of customers,
created very heaty demand for various opportunities.
According to our research – online questionnaire, we
have made a list of reasons – pros and contras reasons
for using these kind of services
Observation: Although, the half of interviewed
customers declared as an application user, we need to
emphasize that locations were restricted mostly to L.A.
and NY. So, we can add as one of the reasons contra
these applications – geographical unavailability.
Pros Contras
Choice of Stylist Selected stylist not avail
On doorstep Prices are higher
Fast Service Lower quality
Online Service App troubleshoot
Tandem Service
ii) Opportunities
From this point of view, mobile beauty applications are
just beautiful solutions for ladies. If companies can
cover the whole market and banish some flaws, then
beauty on demand could become one of the leading
industry for opportunities in higher employment, as well
as fulfilling specific demands of customers.
After thorough analyses Little Blaque Book LLC has
discovered specific niche in this industry, which hasn`t
been exploited enough. The most of these applications
are offering general services for a wide audience.
Segmentation has been done to the type of services. As
an example, we can mention Manicube platform for
manicurist, or which offers an opportunity to
professionals who specialize in reflexology, gymnastics
and self-defense. On the other side, we have a different
characteristics which could be used for final
segmentation, such as timeframe for appointments. As
we know, on – demand service purports immediately
response or within few hours. There are many sites
which have an instant response such as or
which allow users to make last-minute
appointments at salons and fitness studios in various
cities. There are other examples where services can be
appointed only for tomorrow.
Finally, we have observed situation in the various
environments and have noticed increasing number of
customers for specific niches.
As we have already mentioned LBB plans to pay special
attention to providing services within specific market
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segment – women of color. Among African – American
women and other ethnic groups is present the same
trend related to fashion and beauty industry. They
accept very easy aspirational products such as Chanel
lipsticks or Versace perfume.
What is recognized as a problem among this group is
actually marginalization from mainstream magazines.
They spend billions of dollars, trying to find something
that works. Perhaps, trouble is about choice of
celebrities who pitch the cosmetics like Hale Berry,
Beyoncé or Rihanna who represent only a light-skinned
sliver of what the general population of African-
American women look like. When talking about hair –
style there are various choices, but the point is to offer
good service exactly for this group.
New chances for development of totally different
concept is recognized in two geographic locations – Bay
area and Atlanta. After brief analyses we can say that
market potential for new heights lay in the income of
the African American women within these regions.
Figure 2. African – American income in the past 35
years
iii) LBB’s Advantages
As we have seen from the previous, this whole idea has
become a wider than initial one. From this reason, we
are going to analyze only the advantages in the first
phase.
Offer for the specific market - LBB has been founded
by Ms. Thressa Pine-Smith, young entrepreneur woman
who has giant will for new and bright ideas in the
domain of better life for African – American women. She
recognized not only an issue about unsuitable offer for
this segment, but also the opportunity how to give a
unique solution for the busy women who want special
service for their skin or hair.
Women of color - Hair style
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Professionals for this segment - Why this solution is
not exploited yet? Probably the most of founders don`t
see enough potential in this segment or they can`t
provide adequate stylists or cosmeticians for them.
After analyses on every possible direction for
development LBB has created a single action plan to
gather all relevant professionals who can offer an
excellent service to the customers.
Friendly-user on – demand application – Regarding
that one of competitors in this segment –
betaurbanbeauty.com doesn`t have an application
yet, LLB plans to get fast into the market and offers the
best solution for the clients. With this application users
will be able to book their services within one hour and
to choose their favorite stylist.
Find the best stylist within this segment – and offer
their services at affordable prices. It`s one of the first
tasks. Also, it is considered as credo line for LBB. If we
look at customer`s reviews from various websites like
yelp.com or others, we will notice one characteristic –
there is no offer for all – in one. Customers often have
different expectations and if salon specializes in
African-American hair style, there are no many of
those who offer the best for all types, i.e. Just
Extensions – the average review is about 4.
After we have covered basis of this concept, there is a
small space for an extras.
In the future, plan is to go in the new markets as well
as roll – outs (barbers for men, spas or other centers
for relaxations).
If the market response is adequate and LBB gets more
signals from it, then future actions will be focused on
those specific demands.
b) Market Segment Challenges
Market for beauty on – demand applications is very
young. The first company has been founded in 2011.
Although, the whole idea of mobile beauty is not new.
We had similar activities during all these years,
especially in the celebrity’s world. Of course technology
advancement brought this new model to the simple
resolution. Customers have approach to photos and
previous work of the selected stylist, and after easy
tapping in three steps they are able to set up an
appointment.
Looking for adequate solution for its application, LBB
pays special attention to several competitors which
could be dangerous for her area of action.
i) Competitors
In the Bay area are operating more than 16 companies
with similar or the same purpose. Vênsette and
Glamsquad have the main roles in the nationwide
scene, but among local competition they have some of
the really strong rivals. In the chart below you will find
Bay area display for beauty – on – demand application.
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If we observe our targeted market of Atlanta city, we
will notice that companies from this sector don`t have
many intruders, but as the economy fuels demand for
beauty services this region could become more
attractive in the future.
Current competition in Atlanta has a very short
experience and time for development. Services are
limited and offer for black women is limited. Final plan
is to grow this market rapidly, because competition is
not that strong and potential lays in huge population of
African Americans.
ii) Alternatives
Major directions for a realization of the business
strategy are
1) Attracting the best professionals, 2) Developing
application and 3) Starting extensive marketing
campaign.
Back-out strategy is developed under predictions of the
alter circumstances. If we take for instance possibility
of not gaining funding for this start – up, there will be
always possibility to offer simple web platform which
don`t require huge amounts of money for its
maintenance. Organic growth through Social Media
campaigns and other not very expensive online
marketing tactics, will help in finding new sources of
income.
In the final stage LBB will find adequate partner or
angel.
iii) Technology
Technology advanced application with solid solution for
iOS or Android. It is a simple explanation of technology
platform, but application will come to the end of this
whole project.
Project is actually divided in three phases based on
development of technology`s solutions.
Pre – launch phase serves for a research, observations,
writing and developing strategies. In this phase is
necessary to detect all key facts which can resolve
issues for customers as well for the stylists. Basic
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5
10
2014 2015
Chart 2. Beauty on-demand
applications in Bay Area
Vensette Glamsquad Stylebee Stlyleseat Others
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concept is already written, but market response, field
enquiries, and all other feedbacks will be crucial for the
final stage.
Grouping all data will be very important part for the
development because in this context, application will
become useful and marketing attractive.
Before Developing iOS and Android platform LLB has
developed www.littleblaquebook.com as own market
place. Supported with fancy design in WordPress our
blog-website has the first task to introduce the new
service. Links to Social Media profiles will be able to
connect an instant response for all FB or other users
who seek for this kind of information. Sharing through
SM will add special benefits for a promotion of LLB.
Creation and Development of the Platform is presented
in the short presentation below. All necessary details
will be available for readers on demand
Scope of Work
Customer App PLATFORM: IOS, ANDROID
A. Sign Up & Login 1. Ability to sign up/login via email
address or Facebook account. 2. Ability to enter OTP
(One time password) for verification. 3. Ability to view
and update personal profile.
B. Aggregation 1. Enabled geo fencing to track
customer’s location. 2. Ability to enter service location
manually or by dropping pin on map. 3. Ability to select
service: Hair Styling, Makeup, Hair Cut, Nails, Hair Color
etc. 4. Ability view price and duration of service. 5.
Ability to add instructions for artists. 6. Ability to place
instant service requests. 7. Ability to schedule service
requests for later time and date: a. List view of available
artists. b. Ability to view each artist profile, their review
and ratings, available time and date slots. c. Ability to
select an artist and schedule appointment.
C. Scheduler 1. Ability to view scheduled bookings,
cancel/edit them.
D. Promo 1. Ability to avail promo codes and referral
bonus benefits.
E. Matching 1. Beauty artist will be assigned
automatically in case of instant service requests. 2.
18
Ability to view allocated artist’s profile. 3. Ability to
call/SMS the artist.
F. Notifications 1. Ability to get real time emails/push
notifications: a. Service request accepted b. Artist
details c. Job status update like artist on the way, artist
arrived, service started, service completed. d.
Promotions
H. Payment 1. Ability to add credit card details
manually or by scanning the card (requires card.io
integration). 2. Ability to make payments easily through
integration of Stripe.
I. Review 1. Ability to provide rating and feedback to
artists through a questionnaire
J. Others 1. Ability to view payment history, booking
history.
Artist App PLATFORM: IOS, ANDROID
A. Sign Up & Login 1. Ability to sign up/login via email
address and phone number. 2. Ability to enter OTP (one
time password) for verification. 3. Ability to upload
relevant documents for approval from service owner
admin panel.
B. Aggregation 1. Ability to receive service requests.
2. Ability to view service details. 3. Ability to
accept/reject requests. 4. Ability to provide reason for
rejection.
C. Scheduler 1. Ability to view upcoming bookings,
cancel/edit them.
D. Promo 1. Ability to avail referral bonus benefits.
E. Matching 1. Ability to view customer’s profile. 2.
Ability to call/SMS the customer.
F. Notifications 1. Ability to get emails/push
notifications: a. Service requests b. Service details
C. Cancellations
G. Payment 1. Ability to view and manage payments.
H. Review 1. Ability to provide rating and feedback to
customer.
19
I. Others 1. Ability to update job status as arrived, start
service/stop service, left. 2. Ability to view job history,
payment history.
Service Owner Admin Panel PLATFORM: WEB
A. Aggregation 1. Ability to manage all users:
customers and artists on one platform. a. Ability to view
registered users. b. Ability to verify, approve and add
new artists. c. Ability to edit/delete user profiles.
2. Ability to manage pricing and services: A. Ability to
set/edit price for services. B. Ability to add/edit services
offered.
3. Ability to add/edit questionnaire for customer review
and feedback.
B. Schedule 1. Ability to view list of scheduled
appointments, cancel/edit them.
C. Promo 1. Ability to set/edit promo codes, referral
bonus and discount benefits.
D. Notifications 1. Ability to send emails/push
notifications to customers and artists for service
requests, payments, offers, feedback, etc.
E. Tracking 1. Ability to track real time location of each
artist and view ETA (Estimated Time of Arrival) to
service location.
F. Payments 1. Ability to manage payments.
G. Review 1. Ability to view ratings and feedbacks
provided by customers and artists.
H. Reporting 1. Ability to generate reports on
monthly/weekly basis for analysis.
I. Others 1. Ability to view payment history, job
history.
VI Company Analysis
Little Blaque Book LLC is a young start – up company
founded in 2016. Co-founder and CEO Ms. Pine-Smith
wanted to spread her idea of providing useful solutions
for American – African women and other groups of
customers who have similar issues to find an excellent
service for their needs related to beauty.
Company`s ownership is regulated by the Law of the
U.S.A. This firm is constituted as LLC with co-founders
– Ms. Pine-Smith and Mr. Chisum. Both of them have
20
experience in sales, tertiary sector and Mr. Chisum is IT
expert which will be extra benefit for the organization
and development of application. Start – up is a just
definition for the company`s market position. That
doesn`t mean totally unexperienced player. One of the
key factors is networking of her employees, previous
experience and very skillful management. Advantages
of the team, lay in agility and diversified skills. We will
present just an outlook and give fundamental analysis
on their organization and operations. Trademark and
mobile app registration. Organization structure has
been developed as a hybrid. Reason for this is probably
complexity and nature of business. Technological and
geographical diversity, are crucial motivators for
success. Winning competitors in such turbulent
environment couldn`t be possible without flexible
organization. In the chart below is presented
organization structure
Figure 2. Organization chart of Little Blaque Book
LLC
Beauty industry is a workforce intensive field. As we
already have seen a lot of freelancers are available for
potential employment and LBB has planned to create its
own recognized trademark which will attract the most
of professionals working in this segment. In the first
stage of development, team leaders from two regions
collect list of potential stylists and start with recruitment
process. After finalizing lists they will be integrated to
database which will be available for potential customers
via platform. Finally, there will be photo video catalogue
and really interesting offer for all customers.
Other sectors are organized in the standard form, sales
and marketing, operations and HR.
After research about organizations in this sector as well
as other similar industries, we revealed true necessity
of hybrid concept.
As for the matter of operations they have inclined to
become core part of the organization. Operations
comprise all segments of functional structure except
Sales and Marketing and HR sector. Importance of
operations descends from a moment of gathering IT
architecture with Customer Service. Entire business is
based on this platform. Well – timed answer to customer
requests is the key of success and that makes an
excellent management system.
For a start – up which tends to grow rapidly, this
structure could be not only an advantage, but the only
solution.
VII Market Risk vs. Reward Analysis
CEO
Sales and
Marketing
Director
Marketing
Manager
Customer
Service
Operations
Director
Finance Manager
IT Manager
HR Director
Project
Manager
Team Leader
BA
Team Leader AC
???
21
Analysis of market opportunities and challenges
combined with very high – sensitive internal structure,
gave us one very important conclusion.
– Reward could be huge, if apps starts running
successful. Risk is great, but it could be controlled.
During pre-launch phase, we were observing how
market could react to new idea. Responses are
satisfactory. Through this stage, costs of investment are
not really high and market potential is possible to
measure by various campaigns. Social Media as well as
social events are good opportunities to collect data for
the future action. What is the main advantage?
Online marketing campaigns are easy – accessible and
low – cost, but very effective. Tools which could be used
from online marketing are the major instruments for
measuring reaction of the targeted audience. General
advice is that observations from a campaign, could be
used for the future actions.
If the response of potential customers can achieve 53%,
company will be on the break-even point. By using
intensive marketing promotion this point can be
surpassed easily.
Reward aspects are various.
 Income
 Creative business
 Highly – responsive market
 Flexible organization
Risk factors:
 Low barriers for entry
 Relatively high costs of IT ops
 Unpredictable fragmentation
Difficulties with fragmented market and competition will
be predicted by expert marketing managers. Their
precise radars will be able to track even the smallest
changes and to prepare for reactions.
Costs of IT development will be lower as soon as
application reach more than 1500 requests monthly.
VIII Preliminary Recommendations
Research on various aspects of the market flows gives
a wide range of opportunities for LBB.
As for the future steps we created list of usual
recommendations for each field of activity:
1) Target Stylists
Company has a fashionable design and super
modern layout. In this context, stylists should be
chosen according to the same principles. Stylists
for certain market segment with the best offer
and available for response immediately. They
have to be adequate response to all demands of
the market. Where to find this kind of
professionals? Among freelancers who need more
promotion, who are willing to improve
themselves through team work and like to share
22
their creative ideas. Company has to pay
attention to different methods of selection. Even,
if they are dealing with less experienced
freelancer, there is no reason to neglect a good
chance for cooperation.
2) Target Regions
Probably the easiest question to give a
recommendation is the choice of regions. For a
start Bay area and Atlanta city seem as an
excellent choice.
In the future it is a possible to get into some other
areas. Prospect of rapid growth works for
3) Target Market Segments
The core idea of LBB is offering mobile beauty
services for women of color. Creating an
extraordinary offer is something which will attract
an audience very quickly. Using advices from
professionals and experts for beauty and care
could be extra benefit. Blog with advices from
these experts could be additional benefit. After
women of color, LBB will try to attract other
market segments i.e. men.
4) Advertising Channels
Marketing strategy will be based on two main
directions. The first method will be digital
marketing with all available such as SMM, SEO,
email campaigns, blogging etc. The second one
but not less important is conventional marketing
especially event marketing, promotions and
leaflets.
5) Other Marketing Channels
Alternative marketing channels are various, with
accent on word – mouth, reviews and other
onsite promotion models.
For the final word, we would like to emphasize
importance of all distributions channels.
Promotion and marketing is the best, if customers
are satisfied. According to words of some
companies, retention rate is very high, in some
cases 100%.
Finally, we can add that expansion of these
services will make particular changes in the
market segmentation. This should be great
opportunity, because LBB`s concept don`t have
high pressure from the competition. It will give
enough time for achieving the final goal – 3%
market share.

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Market Research Report

  • 1. 0 Created by Jasna Milicevic Consultant at YPW
  • 2. 1 Case Background Information As a part of the procedures which is defined by a general policy of the company, we conducted wide research on market potential, trends and final segmentation. This research has covered two basic elements: 1) Demand for applications relying to the internet technology, which will help customers of beauty centers, hair style studios for women of color, to get the best service, will be the first part of this research. 2) In the second round we will conduct a market research followed by general analyses on this specific segment of customers. Initial idea for a development of this application was introduced by the co - owner Ms. Pine-Smith. After several years of searching for a new solution, she offered a concept of the unique application with super – designed website which will enter an opening door for this service. Little Blaque Book LLC is actually on – demand - service for searching and booking beauty treatment for the specific population – African – Americans (women). Her partner Mr. Brian Chisum, has followed her in development of this project and they created wonderful solution for New way of life, everyday turbulences, timeless business women, heating demand for lifestyle changing and finally technology advancement brought into the market a brand new solution in the cosmetics and beauty industry. Style.com or Glamsquad.com are leaders in this business. Their applications are available on the mobile devices, and representing an easy way for all women who need exquisite and fast service to settle an appointment. Treatment at your home or even spa – center on demand with possibility to book an appointment within one hour. Following this idea with special attention to needs which are characteristic for black women, Little Blaque Book LLC (in future text LLB), has developed strategy for using tech innovation to cover this specific market. As for this strategy, there has been planned three phases, which will cover marketing, financial and organizational construction. In its core, this application has a model of corresponding data base – so all enquiries from users will be automatically processed and all answers will be available immediately or in a few minutes. Current market is not covered in this segment or it is not covered enough. One of the competitors in this segment is beta.urbanbeautynetwork.com, which don`t have mobile app yet. That is one of the reasons why LLB has to bring its market presence on much higher level. Marketing promotion will be conducted through several important channels in online environment, but also combining event marketing, TV, and word of mouth. Organizational aspect is very complex. General organization of the company will be based on hybrid
  • 3. 1 principle. Regarding, implementation of additional functions and future growth, it will be changed and adapted under a market fluctuations and organization internal responses. This kind of responses are characteristic for rapidly growing businesses with highly-demanding market. Services provided by LBB has to be delivered in real-time and IT support back-up is the most important for this part. On the other hand customers, who are applying for these services need friendly – user platform without obstacles. Providing this type of environment will be secured by the good instructions, Q&A section and other ways of communication. Very important part of this whole system is well-packed database with all available professionals which can offer various beauty treatments (hairstylist, makeup artist, eyelash extension artist or eventually barbers). Financial flows are determined according to services which are offered. This is totally online business – customer is able to pay via Stripe account, credit card or other payment method. After receiving total payment on its account – LBB will transfer money directly to the account of freelance professional, reduced for the commission. In this structure – revenues will be secured, the whole transfer process is controlled by provider and commission is available instantly. Market projections and forecast are developed for one (or three) year plan, yet this development projection can be redefined in the next few months if an increasing demand and positive feedback evoke continuous growth.
  • 4. 1 Report Outline I Review Objectives 4 a) Market Potential 4 b) Operational 4 c) Marketing 4 d) Services 5 II Overview and Methodology of the research process 5 III Customer Profile 5 a) Demographics 5 b) Average Applications Usage 7 IV U.S. Market – Landscape and Trends 7 a) Nationwide Industry Outlook 8
  • 5. 2 b) Geographic diversity 8 c) Current Market Conditions 9 V Identification of opportunities, challenges, signals 12 a) The Markets Priorities and Concerns 12 i) Motivators and De-Motivators 12 ii) Opportunities 12 iii) LBB’s Advantages 14 b) Market Segment Challenges 14 i) Competitors 15 ii) Alternatives 16 iii) Technology 16 VI Company Analysis 19 VII Market Risk vs. Reward Analysis 20 VIII Preliminary Recommendations 21
  • 6. 3 a) Target Stylists 21 b) Target Regions 21 c) Target Market Segments 22 d) Advertising Channels 22 e) Other Marketing Channels 22
  • 7. 4 I Review objectives This part of research has been analyzing all key issues of the development this particular on – demand platform, as well as its necessity, pre – launch activities and all additional content. We tend to explore all market challenges with one simple objective – How to penetrate market and get more sales? a) Market Potential 1) Determine the market potential and the concentration of the targeted market segment. 2) Find the best stylists, cosmetologists and other professionals who will provide the most quality and fastest service 3) Evaluate Little Blaque Book LLC ability to meet the technological, marketing and sales requirements to be successful in this market segment. 4) Identify high potential prospects of planned marketing and sales activities Questions to be answered by the research. b) Operational Questions 1) Are all features of LBB app sufficient to answer on demands of the specific market? Alternatives? 2) Are our current team capable to handle all services? 3) Will additional employees be necessary? Alternatives? 4) How does the market now use this type of services? i. Direct at beauty shops ii. Telephone/Fax iii. Internet c) Marketing Questions 1) What specific region will be covered? Are there possibility for easy spreading? 2) What Associations of beauty professionals have influence in the market? Are there publications and / or web portals with high market segment readership? 3) How do other products “go to market” within the segment? 4) Level of market sophistication? Limitation of the internet users or online payments? 5) Is there seasonality to the business? 6) What are the characteristics of the specific market segment? 7) What are the main directions for marketing promotion? What are the alternatives?
  • 8. 5 The Prospect Directory 1) Identify and profile customers as a potential users 2) Provide a directory of all stylists, cosmetologists, manicurists which will be available to users on demand. II Overview and Methodology of the research process This research was conducted over a 60 day period in the last quarter of 2015 by our Research Team. The information which could be find here are the property of the research sponsors (Little Blaque Book LLC). The information from this report will not be made available to others without the special permission of the research sponsor. Sources of information include: 1) Company marketing information, advertising 2) Information about regulation and laws (Board of Barbering and Cosmetology - Title 16, Division 9, California Code of Regulations 3) On-Line research (Black Beauty App) including third party references 4) Trade Associations, Directories and Publications 5) Various private industry sources Every effort is made to provide accurate information. The information provided is “best available” on the day the data was gathered. Changes in personnel, company products and operations change daily. Previous projects indicate the most volatile information will be found with changes in personnel and company operations reported in the Prospect Directory. III Customer Profile The targeted audiences for the prospected websites are professional women and those with a full social schedule, including brides (think: shower, bachelorette party, rehearsal dinner). Habits, preferences and general lifestyle of the customers are too complex, so we can divide them in respective sub-groups. a) Demographics Group of customers which is very often used as an exemplary for mobile beauty services is the group of celebrities and high – class women. They look for privacy, on-call service and flexibility. Later this option has become available to much wider segment of customers. Mobile hair stylists, makeup artists or manicurists are especially popular for private events, i.e. weddings. These kind of services are at disposal to really huge population. With technics and technological advances, limitations for using this kind of services have been decreased at minimum. For more than 4 years,
  • 9. 6 this market has been growing rapidly (over 149% yearly). By following a fast pace of everyday life beauty industry is setting new type of the placement. This efficient solution is also very interesting for the travelers. When they find themselves in a new city without idea where to go for hair blow or which spa center is the closest to their location, search engine helps with all necessary data and much more. For those customers who have specific needs, this application is the best solution, because it can provide opportunity to fulfill diversified market demands. Business women – this segment is definitely one of the most interesting for the providers. Population of women, with solid and stable income, lack of time and standard lifestyle habits is the perfect piece of this cake. Moms – at – home – are really in need for this service. Simple analyses of their costs of time and money (babysitting costs and spend when going to salon, bring us to conclusion that in – home – price is saving their money. Travelers – is a special group of customers which has to be exploited thoroughly. After attracting them to use your application, you will probably get more and more customers. Travelers are often very active on Social Media and their good feedback could be just the right thing. Celebrities – extraordinary customers for any type of service. When it comes to outlook, very often they have unusual and extremely complicated requests. As an answer to these requests, managers from beauty – on – click industry adjusted general offer to them. Top stylists, makeup artists or massagers are available on call immediately or at the most convenient time and always ready to carry out all requirements. Within our general customer profile could be found a lot of fractions. We recognize internal characterization of each personality. As for this matter, we need to define particular profile of customers which has diversity of its own. Our sub-segments could be found across groups of business women, travelers or moms – at – home within African – American women. Black women are have their own unique cultural ideas of beauty, product preferences and beauty rituals. This population represents really significant part of American women. Regarding the fact that LBB is going to develop application for them, our research took its own direction across these sub – segments. Specifically, for our research we extracted all interesting facts that can explain market variety and special requirements. OBSERVATION: We were using online survey method for interviewing, women in NYC and LA, because of an adequate offer of mobile beauty apps which these two cities have. Selected sample is constructed from different market segments, so we could gather adequate conclusion. Among all persons we interviewed: 1) 50% have answered that they had used this type of service for once. 2) More than 65% found app on App Store or have been using
  • 10. 7 (recommendation) word of mouth. 3) 75% are interested for services of the on – demand app for women of color After processing data from online method we would like to add more details about an experience which customers are sharing without reserve. Business women in the expert hand of stylists - "If I can have someone blow out my hair while I'm sitting in my home office, banging out emails and scheduling the day, it's a no brainer," – said Julia Spillman - Gover, 31, an associate real-estate broker who lives in Manhattan. How beauty in – house services can help staying at home – moms - Going to a salon requires a baby sitter, which can easily push the price of the experience well beyond $100. Global trends in the technology enhancements for various industries, find its own version within beauty industry. As a necessity for an application which will bring hairdresser to your door, grew stronger, several start – ups, developed so called Uber for Beauty (Uber after name of global-known application for transportation), in the North American market. Most of them are operating in New York, or other big cities in the U.S. (L.A. Chicago etc.), but trend of growth is significant. We can expect that national – wide Glamsquad will be available very soon. b) Average Application Usage Typical customers for these services could be found everywhere, especially in a large group of business women. In our research we covered U.S. market with special accent on the groups of African – American women. Total sales among this segment in the U.S. is more than 36% of the sales in beauty industry. General sales in BI $26.5bn. Other relevant data will be provided in the future chapters. Geographic Locations which were comprised by our research: Bay area – West Coast CA and Atlanta, Georgia. OBSERVATION: From our online survey and other online resources, we made several conclusions, which will be represented in the table below. Increasing power of the internet, tech innovation are making an impact on developing mobile beauty solutions. Their index of satisfaction is not too high when we are talking about quality of stylist`s work. Impression on finding new stylist in last minute Well 13% Sometimes 8% Not well 21% Other 58% Method of finding new stylist Word of mouth 65% My own stylist 13% Online/Yelp 17% Table 1. Mobile Beauty Applications
  • 11. 8 IV U.S. Market – Landscape and Trends This research is based on general data in mobile beauty industry. a) Nationwide Industry Outlook General data from the beauty industry in the U.S. are presented in the list below 1. Annual sales volume over $53 bn as of 2014 spent across different sectors of the industry 2. Average rate of growth across various sectors is 2.4% 3. Number of an active businesses is 1,223,585 4. Number of employees 1,732,584 Light shed on activities in the Hair and Nail Salons reveals that operators in the Hair and Nail Salons industry have begun offering a variety of new products and services to boost revenue and leverage rising consumer spending. As a result, revenue is expected to grow. In the coming years, demand for industry services is expected to accelerate thanks to improving disposable income. Declining unemployment during the next five years is expected to drive per capita disposable 1 IBIS World – Industry Report income growth and boost demand for price-premium services offered by this industry. b) Geographic diversity The Mid-Atlantic has the greatest share of industry establishments, estimated at 25.3% of the nation's total in 2015. However, the region is home to only 15.5% of the US population. The states with the highest concentration of establishments include New York, Pennsylvania and New Jersey, which hold a respective 11.0%, 6.0% and 5.9% of the total. New York, in particular, has experienced strong growth in the number of salons.1 When it comes to mobile beauty industry geographic coverage is a bit different. At this moment, mobile applications for beauty on demand services are available in all major cities in the U.S. In the next figure you will be able to understand prospect of this industry across United States. As a leader by the number of locations which are covered we recognize StyleSeat with over 15.000 locations. All others app are operating in New York, Los Angeles, Miami, Chicago etc. Bay area with East coast makes the top attraction for a business development. This represents the current landscape of mobile beauty industry.
  • 12. 9 Figure 1. Geographic locations for Mobile Beauty Application in 2014 c) Current Market Conditions Trends and consequences Internet and technology advancements (iPhone and iPad became our extended hands and browsing through the internet is actually substitute for breeding). In the population of so-called millennials we often see leaders of this new digital world order, but there is huge population of baby – boomers and seniors in America which use the internet every day. Some of the research showed that more than 45% of women older than 65 are using Social Media. Beauty industry is affected by technology disruption. Online shopping has boosted during last decade. Now, we have variety of services available on the internet. Growth of sales is really significant. “Figures for the new Philip Kingsley mobile-optimized website launched earlier this year showed more than a 50 per cent increase in sales from all mobile devices” Other emersions within industries made a strong effect on certain changes. Although, growth of revenues and general move forward in the industry have been recorded in previous past years, there are some others factors which made an impact to workforce. According to the chart below, we can detect what kind of effects in growth of revenues and number of freelancers have directly to beauty on – demand industry.
  • 13. 10 Beauty industry is recording moderate growth in the past few years and its influence in the labor market has increased numbers of freelancers among stylists, cosmetologists. With 28% of hairdressers, stylists and cosmetologists already working as independent contractors, the beauty industry is an ideal environment for on-demand platforms to gain traction. Opportunities After determining effects of this prodigy on beauty and cosmetics industry, it is necessary to analyze opportunities for advancement in various aspects of services. The whole thing started few years ago, based on idea . Vênsette featured as the first on-demand beauty service to your home. E- Commerce solution adapted to beauty services was an idea of CEO 2 Clare O'Connor – Forbes – Beauty on Demand who left her previous job in the finance for this adventurous project. Following her successful path, other start – ups, like Glamsquad, Stylebee, Styleseat and others have started developing various solutions for this kind of mobile apps. Great success of Uber, inspired the whole new range of applications within various fields. Uber for Beauty is the name of one company based in the Hamptons. This sintagm is also very often used as a synonym for the total concept. One of the leaders in the U.S. market is definitely Glamsquad. Glamsquad`s CEO Alexandra Wilkis Wilson “saw the moneymaking potential of applying an Uber model to another massive, disparate market: U.S. spas and salons, which will do $40 billion in sales this year on the backs of a workforce that is 65% freelance”.2 Competition Research about beauty on – demand industry is conducted among applications which are operating in the major cities (New York, Los Angeles, Chicago etc.) and across local markets where LLB application will launch its platform. In the next chapter of this work, we are going to analyze the main competitors who are 0 2 4 6 2011 2012 2013 2014 Chart 1. Growth of freelancers and revenues in beauty industry Freelance Laborforce Revenues in Beauty industry - total
  • 14. 11 already functioning in geo-locations which will be targeted by LLB. The first mobile beauty application called Vênsette has been founded by former hedge founded analyst Ms. Platt. Her idea to create on – demand application for beauty services was based on general picture of growth in the services sector. “When I started in 2011, we were really the first to market. We built a network in New York City, and eventually we grew the company to include dozens of corporate and hotel partnerships” – company`s strategy is relying to B2B revenues for about 50%. If a corporation needs to have hair and makeup done for 15 VIP celebs, it’s the best option. If you go to a salon, an agency, or individually negotiate with artist, it’s going to be more of a production. The hotel piece was a natural fit, too -- not every hotel has a salon”3 Vênsette, based in New York, now has artists available for hire in New York, Los Angeles, San Francisco and Miami. 3 Fashionista – Vênsette – Big Success After three years of continuous growth they raised more funding ($3mil). This action means that they are trying to keep the pace with extremely high competition. Vênsette is actually super fashionable mobile beauty service which proud itself with quality but expensive service. Prices Vênsette Hair 100$ Makeup 150$ Hair & Makeup 200$ VIP 300$
  • 15. 12 Among the leaders in mobile beauty industry Glamsquad have special place. Company has been founded in January 2014 by Alexandra Wilkis Wilson, co-founder of Gilt Group, Victoria Eisner, Jason Perri and David Goldweitz, with services available in New York and L.A. Glamsquad dream team As a part of a dream team of executives plus is creative director and veteran hairstylist Giovanni Vaccaro and director of makeup artistry Kelli Bartlett. Glamsquad artists are trained in the brand's proprietary technique for consistent results. is highlight goal of these experts. After one year of rapid growth created new potential and additional funding of $7mil in series A and $15mil in series B. Prices Glamsquad Blowout 50$ Makeup 75$ Braid 75$ Up do 80$ Plans of Glamsquad is to create nationwide network and always be able to create great services at affordable price. Stylebee - 2013 by former corporate attorney Anna Santeramo, with services available in Los Angeles. Pricing: Blowouts, $50; makeup, including lashes, $85; men's cuts, $50; face painting, $50; 60-minute massage, $120; 90-minute massage, $150. Stlyeseat - V Identification of opportunities, challenges and signals As we have already seen, market is extremely dynamic and there are no barriers for new entries. Concerning this situation, all marketers who think that their idea is competitive and distinctive, are free to try their chances. In this section of our research we will find key priorities and issues. Also, we want to expand idea and explore opportunities which are disposable to LBB a) The Markets Priorities and Concerns i) Pros and contra Work within beauty industry could be interesting, but complicated. Achieving the highest level of
  • 16. 13 customer`s satisfaction is actually very hard task. That is what makes beauty so intriguing. What are the main goals of mobile apps for beauty industry?  Instant gratification  Saving time (in some cases money)  Comfortable service – flexible time, place Analyses has shown that positive reaction of customers, created very heaty demand for various opportunities. According to our research – online questionnaire, we have made a list of reasons – pros and contras reasons for using these kind of services Observation: Although, the half of interviewed customers declared as an application user, we need to emphasize that locations were restricted mostly to L.A. and NY. So, we can add as one of the reasons contra these applications – geographical unavailability. Pros Contras Choice of Stylist Selected stylist not avail On doorstep Prices are higher Fast Service Lower quality Online Service App troubleshoot Tandem Service ii) Opportunities From this point of view, mobile beauty applications are just beautiful solutions for ladies. If companies can cover the whole market and banish some flaws, then beauty on demand could become one of the leading industry for opportunities in higher employment, as well as fulfilling specific demands of customers. After thorough analyses Little Blaque Book LLC has discovered specific niche in this industry, which hasn`t been exploited enough. The most of these applications are offering general services for a wide audience. Segmentation has been done to the type of services. As an example, we can mention Manicube platform for manicurist, or which offers an opportunity to professionals who specialize in reflexology, gymnastics and self-defense. On the other side, we have a different characteristics which could be used for final segmentation, such as timeframe for appointments. As we know, on – demand service purports immediately response or within few hours. There are many sites which have an instant response such as or which allow users to make last-minute appointments at salons and fitness studios in various cities. There are other examples where services can be appointed only for tomorrow. Finally, we have observed situation in the various environments and have noticed increasing number of customers for specific niches. As we have already mentioned LBB plans to pay special attention to providing services within specific market
  • 17. 14 segment – women of color. Among African – American women and other ethnic groups is present the same trend related to fashion and beauty industry. They accept very easy aspirational products such as Chanel lipsticks or Versace perfume. What is recognized as a problem among this group is actually marginalization from mainstream magazines. They spend billions of dollars, trying to find something that works. Perhaps, trouble is about choice of celebrities who pitch the cosmetics like Hale Berry, Beyoncé or Rihanna who represent only a light-skinned sliver of what the general population of African- American women look like. When talking about hair – style there are various choices, but the point is to offer good service exactly for this group. New chances for development of totally different concept is recognized in two geographic locations – Bay area and Atlanta. After brief analyses we can say that market potential for new heights lay in the income of the African American women within these regions. Figure 2. African – American income in the past 35 years iii) LBB’s Advantages As we have seen from the previous, this whole idea has become a wider than initial one. From this reason, we are going to analyze only the advantages in the first phase. Offer for the specific market - LBB has been founded by Ms. Thressa Pine-Smith, young entrepreneur woman who has giant will for new and bright ideas in the domain of better life for African – American women. She recognized not only an issue about unsuitable offer for this segment, but also the opportunity how to give a unique solution for the busy women who want special service for their skin or hair. Women of color - Hair style
  • 18. 15 Professionals for this segment - Why this solution is not exploited yet? Probably the most of founders don`t see enough potential in this segment or they can`t provide adequate stylists or cosmeticians for them. After analyses on every possible direction for development LBB has created a single action plan to gather all relevant professionals who can offer an excellent service to the customers. Friendly-user on – demand application – Regarding that one of competitors in this segment – betaurbanbeauty.com doesn`t have an application yet, LLB plans to get fast into the market and offers the best solution for the clients. With this application users will be able to book their services within one hour and to choose their favorite stylist. Find the best stylist within this segment – and offer their services at affordable prices. It`s one of the first tasks. Also, it is considered as credo line for LBB. If we look at customer`s reviews from various websites like yelp.com or others, we will notice one characteristic – there is no offer for all – in one. Customers often have different expectations and if salon specializes in African-American hair style, there are no many of those who offer the best for all types, i.e. Just Extensions – the average review is about 4. After we have covered basis of this concept, there is a small space for an extras. In the future, plan is to go in the new markets as well as roll – outs (barbers for men, spas or other centers for relaxations). If the market response is adequate and LBB gets more signals from it, then future actions will be focused on those specific demands. b) Market Segment Challenges Market for beauty on – demand applications is very young. The first company has been founded in 2011. Although, the whole idea of mobile beauty is not new. We had similar activities during all these years, especially in the celebrity’s world. Of course technology advancement brought this new model to the simple resolution. Customers have approach to photos and previous work of the selected stylist, and after easy tapping in three steps they are able to set up an appointment. Looking for adequate solution for its application, LBB pays special attention to several competitors which could be dangerous for her area of action. i) Competitors In the Bay area are operating more than 16 companies with similar or the same purpose. Vênsette and Glamsquad have the main roles in the nationwide scene, but among local competition they have some of the really strong rivals. In the chart below you will find Bay area display for beauty – on – demand application.
  • 19. 16 If we observe our targeted market of Atlanta city, we will notice that companies from this sector don`t have many intruders, but as the economy fuels demand for beauty services this region could become more attractive in the future. Current competition in Atlanta has a very short experience and time for development. Services are limited and offer for black women is limited. Final plan is to grow this market rapidly, because competition is not that strong and potential lays in huge population of African Americans. ii) Alternatives Major directions for a realization of the business strategy are 1) Attracting the best professionals, 2) Developing application and 3) Starting extensive marketing campaign. Back-out strategy is developed under predictions of the alter circumstances. If we take for instance possibility of not gaining funding for this start – up, there will be always possibility to offer simple web platform which don`t require huge amounts of money for its maintenance. Organic growth through Social Media campaigns and other not very expensive online marketing tactics, will help in finding new sources of income. In the final stage LBB will find adequate partner or angel. iii) Technology Technology advanced application with solid solution for iOS or Android. It is a simple explanation of technology platform, but application will come to the end of this whole project. Project is actually divided in three phases based on development of technology`s solutions. Pre – launch phase serves for a research, observations, writing and developing strategies. In this phase is necessary to detect all key facts which can resolve issues for customers as well for the stylists. Basic 0 5 10 2014 2015 Chart 2. Beauty on-demand applications in Bay Area Vensette Glamsquad Stylebee Stlyleseat Others
  • 20. 17 concept is already written, but market response, field enquiries, and all other feedbacks will be crucial for the final stage. Grouping all data will be very important part for the development because in this context, application will become useful and marketing attractive. Before Developing iOS and Android platform LLB has developed www.littleblaquebook.com as own market place. Supported with fancy design in WordPress our blog-website has the first task to introduce the new service. Links to Social Media profiles will be able to connect an instant response for all FB or other users who seek for this kind of information. Sharing through SM will add special benefits for a promotion of LLB. Creation and Development of the Platform is presented in the short presentation below. All necessary details will be available for readers on demand Scope of Work Customer App PLATFORM: IOS, ANDROID A. Sign Up & Login 1. Ability to sign up/login via email address or Facebook account. 2. Ability to enter OTP (One time password) for verification. 3. Ability to view and update personal profile. B. Aggregation 1. Enabled geo fencing to track customer’s location. 2. Ability to enter service location manually or by dropping pin on map. 3. Ability to select service: Hair Styling, Makeup, Hair Cut, Nails, Hair Color etc. 4. Ability view price and duration of service. 5. Ability to add instructions for artists. 6. Ability to place instant service requests. 7. Ability to schedule service requests for later time and date: a. List view of available artists. b. Ability to view each artist profile, their review and ratings, available time and date slots. c. Ability to select an artist and schedule appointment. C. Scheduler 1. Ability to view scheduled bookings, cancel/edit them. D. Promo 1. Ability to avail promo codes and referral bonus benefits. E. Matching 1. Beauty artist will be assigned automatically in case of instant service requests. 2.
  • 21. 18 Ability to view allocated artist’s profile. 3. Ability to call/SMS the artist. F. Notifications 1. Ability to get real time emails/push notifications: a. Service request accepted b. Artist details c. Job status update like artist on the way, artist arrived, service started, service completed. d. Promotions H. Payment 1. Ability to add credit card details manually or by scanning the card (requires card.io integration). 2. Ability to make payments easily through integration of Stripe. I. Review 1. Ability to provide rating and feedback to artists through a questionnaire J. Others 1. Ability to view payment history, booking history. Artist App PLATFORM: IOS, ANDROID A. Sign Up & Login 1. Ability to sign up/login via email address and phone number. 2. Ability to enter OTP (one time password) for verification. 3. Ability to upload relevant documents for approval from service owner admin panel. B. Aggregation 1. Ability to receive service requests. 2. Ability to view service details. 3. Ability to accept/reject requests. 4. Ability to provide reason for rejection. C. Scheduler 1. Ability to view upcoming bookings, cancel/edit them. D. Promo 1. Ability to avail referral bonus benefits. E. Matching 1. Ability to view customer’s profile. 2. Ability to call/SMS the customer. F. Notifications 1. Ability to get emails/push notifications: a. Service requests b. Service details C. Cancellations G. Payment 1. Ability to view and manage payments. H. Review 1. Ability to provide rating and feedback to customer.
  • 22. 19 I. Others 1. Ability to update job status as arrived, start service/stop service, left. 2. Ability to view job history, payment history. Service Owner Admin Panel PLATFORM: WEB A. Aggregation 1. Ability to manage all users: customers and artists on one platform. a. Ability to view registered users. b. Ability to verify, approve and add new artists. c. Ability to edit/delete user profiles. 2. Ability to manage pricing and services: A. Ability to set/edit price for services. B. Ability to add/edit services offered. 3. Ability to add/edit questionnaire for customer review and feedback. B. Schedule 1. Ability to view list of scheduled appointments, cancel/edit them. C. Promo 1. Ability to set/edit promo codes, referral bonus and discount benefits. D. Notifications 1. Ability to send emails/push notifications to customers and artists for service requests, payments, offers, feedback, etc. E. Tracking 1. Ability to track real time location of each artist and view ETA (Estimated Time of Arrival) to service location. F. Payments 1. Ability to manage payments. G. Review 1. Ability to view ratings and feedbacks provided by customers and artists. H. Reporting 1. Ability to generate reports on monthly/weekly basis for analysis. I. Others 1. Ability to view payment history, job history. VI Company Analysis Little Blaque Book LLC is a young start – up company founded in 2016. Co-founder and CEO Ms. Pine-Smith wanted to spread her idea of providing useful solutions for American – African women and other groups of customers who have similar issues to find an excellent service for their needs related to beauty. Company`s ownership is regulated by the Law of the U.S.A. This firm is constituted as LLC with co-founders – Ms. Pine-Smith and Mr. Chisum. Both of them have
  • 23. 20 experience in sales, tertiary sector and Mr. Chisum is IT expert which will be extra benefit for the organization and development of application. Start – up is a just definition for the company`s market position. That doesn`t mean totally unexperienced player. One of the key factors is networking of her employees, previous experience and very skillful management. Advantages of the team, lay in agility and diversified skills. We will present just an outlook and give fundamental analysis on their organization and operations. Trademark and mobile app registration. Organization structure has been developed as a hybrid. Reason for this is probably complexity and nature of business. Technological and geographical diversity, are crucial motivators for success. Winning competitors in such turbulent environment couldn`t be possible without flexible organization. In the chart below is presented organization structure Figure 2. Organization chart of Little Blaque Book LLC Beauty industry is a workforce intensive field. As we already have seen a lot of freelancers are available for potential employment and LBB has planned to create its own recognized trademark which will attract the most of professionals working in this segment. In the first stage of development, team leaders from two regions collect list of potential stylists and start with recruitment process. After finalizing lists they will be integrated to database which will be available for potential customers via platform. Finally, there will be photo video catalogue and really interesting offer for all customers. Other sectors are organized in the standard form, sales and marketing, operations and HR. After research about organizations in this sector as well as other similar industries, we revealed true necessity of hybrid concept. As for the matter of operations they have inclined to become core part of the organization. Operations comprise all segments of functional structure except Sales and Marketing and HR sector. Importance of operations descends from a moment of gathering IT architecture with Customer Service. Entire business is based on this platform. Well – timed answer to customer requests is the key of success and that makes an excellent management system. For a start – up which tends to grow rapidly, this structure could be not only an advantage, but the only solution. VII Market Risk vs. Reward Analysis CEO Sales and Marketing Director Marketing Manager Customer Service Operations Director Finance Manager IT Manager HR Director Project Manager Team Leader BA Team Leader AC ???
  • 24. 21 Analysis of market opportunities and challenges combined with very high – sensitive internal structure, gave us one very important conclusion. – Reward could be huge, if apps starts running successful. Risk is great, but it could be controlled. During pre-launch phase, we were observing how market could react to new idea. Responses are satisfactory. Through this stage, costs of investment are not really high and market potential is possible to measure by various campaigns. Social Media as well as social events are good opportunities to collect data for the future action. What is the main advantage? Online marketing campaigns are easy – accessible and low – cost, but very effective. Tools which could be used from online marketing are the major instruments for measuring reaction of the targeted audience. General advice is that observations from a campaign, could be used for the future actions. If the response of potential customers can achieve 53%, company will be on the break-even point. By using intensive marketing promotion this point can be surpassed easily. Reward aspects are various.  Income  Creative business  Highly – responsive market  Flexible organization Risk factors:  Low barriers for entry  Relatively high costs of IT ops  Unpredictable fragmentation Difficulties with fragmented market and competition will be predicted by expert marketing managers. Their precise radars will be able to track even the smallest changes and to prepare for reactions. Costs of IT development will be lower as soon as application reach more than 1500 requests monthly. VIII Preliminary Recommendations Research on various aspects of the market flows gives a wide range of opportunities for LBB. As for the future steps we created list of usual recommendations for each field of activity: 1) Target Stylists Company has a fashionable design and super modern layout. In this context, stylists should be chosen according to the same principles. Stylists for certain market segment with the best offer and available for response immediately. They have to be adequate response to all demands of the market. Where to find this kind of professionals? Among freelancers who need more promotion, who are willing to improve themselves through team work and like to share
  • 25. 22 their creative ideas. Company has to pay attention to different methods of selection. Even, if they are dealing with less experienced freelancer, there is no reason to neglect a good chance for cooperation. 2) Target Regions Probably the easiest question to give a recommendation is the choice of regions. For a start Bay area and Atlanta city seem as an excellent choice. In the future it is a possible to get into some other areas. Prospect of rapid growth works for 3) Target Market Segments The core idea of LBB is offering mobile beauty services for women of color. Creating an extraordinary offer is something which will attract an audience very quickly. Using advices from professionals and experts for beauty and care could be extra benefit. Blog with advices from these experts could be additional benefit. After women of color, LBB will try to attract other market segments i.e. men. 4) Advertising Channels Marketing strategy will be based on two main directions. The first method will be digital marketing with all available such as SMM, SEO, email campaigns, blogging etc. The second one but not less important is conventional marketing especially event marketing, promotions and leaflets. 5) Other Marketing Channels Alternative marketing channels are various, with accent on word – mouth, reviews and other onsite promotion models. For the final word, we would like to emphasize importance of all distributions channels. Promotion and marketing is the best, if customers are satisfied. According to words of some companies, retention rate is very high, in some cases 100%. Finally, we can add that expansion of these services will make particular changes in the market segmentation. This should be great opportunity, because LBB`s concept don`t have high pressure from the competition. It will give enough time for achieving the final goal – 3% market share.