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QUESTION
A. The Product or Service/Pricing Strategy
This section describes the unique features and benefits of your product or service. We suggest that the following information be included:
- If you already have a business, include a brief history of your company. Note: if a startup company, this section does not apply.
- A description of your product or service in terms of:
Features or characteristics (what does the product/service offer?). Include items in the appendix such as menu, brochure, price list.
– benefits (i.e., what market needs is your product or service satisfying? what
business are you in?)
– price (include price list) and pricing strategy (such as penetration/skimming,
Prestige/premium, at, above or below-market level, cost-plus fee or percentage) Also include a rationale for your pricing strategy
– what makes your product or service unique (competitive advantage/
differentiation strategy )
– a brief statement about how customers will access your product or service (i.e., retail, direct sales, internet, mail order, etc.). This will be elaborated on further in the operations section. Note: it is NOT your promotion strategy
- Include stage of development and proprietary position if relevant. Only pertinent if you are inventing a product and are in the process of developing it and bringing it to market. If relevant, do include any proprietary information such as patents, copyrights, trademarks or registering your name.
ANSWER
Ace Spa Pricing Strategy
Introduction
As discussed earlier in the course, we intend to start a mental and physical fitness center, under the name of Ace Spa. This Spa is intended to serve customers wishing to change their lifestyles and acquire a new way of life. The following is information regarding our proposed fitness center:
Service Description
Ace Spa shall be composed of (our menu) a state of the art gymnasium, a modern swimming pool, a dance class, a beauty center (which will include a beauty salon, a barbershop, three facial parlors, a waxing parlor, and two massage parlors), Kohler baths, yoga class, and a sauna. We intend to serve both men and women, of all age groups, and our services will be directed according to the requirements of each customer. We shall set up a swimming pool for grownups and another for children. Furthermore, yoga and gym trainers will be available for assistance to clients. Our Spa will also offer private trainers to clients desiring to conduct private sessions at their homes and other designated places.
Benefits to Customers
The decision of starting Ace Spa was inspired by the observation of the visible increase in obesity cases in every community, and the escalation of lifestyle disease cases. Modern lifestyles and the consumption of junk foods have largely contributed to the current poor health standards. Our Spa shall, therefore, benefit customers by offering services to improve their health by achieving physical fitness and mental well-being. Our aim is to provide quality workout (gymnasium) services to clients, in addition to high-end beauty services for both male and female clients. The massage parlors and a modern sauna are fashioned to provide relaxation to individuals burdened by stressful work schedules and exhausting jobs.
Competitive Advantage
Competition in the Spa service industry is stiff. As such, efforts have to be incorporated into the setting up of Ace Spa to edge out any competition. We intend to offer complementary services, such as free dance lessons for customers subscribing for gym periods for a period of one year or longer, alongside our fitness programs. We shall also give customers gifts, branded training suits, and other forms of training equipment. Ace Spa shall also focus on maintaining high standards of service at an affordable cost, so as to be more appealing to customers.
Ace Spa will be all-inclusive, constituting different services, all offered at one center. Most existing Spas offer just one or a few fitness services, say a gym and a swimming pool, or a beauty center and a barber shop. Ace Spa will provide efficiency of service to its clients, by saving their time (they can access many services at one location). Moreover, our clients may book training and workout sessions based on their availability and job schedules. Our service flexibility is tailored to ensure that our customers are able to carry on with their daily jobs without the worry of skipping workout sessions. This shall also provide Ace Spa with an edge over its competitors, most of who only work under strict set schedules.
With the setting up of Ace Spa, we also intend to put up a nursery for young children and babies, at the facility. The nursery will be constructed to enable lactating and nursing mothers receive our services. Many mothers find it extremely challenging to leave their residences and enroll for workout sessions or Spa services because they are inconvenienced by their duty of care to their babies. Our Spa nursery will also have trained nannies and caretakers, tasked with nursing the babies in the section, while the mothers are enjoying our various services offered at the spa.
Clients can access our services by physically availing themselves and enrolling at the Spa’s reception. We shall also set up a website for the business, where individuals can apply for enrolment and pay online.
Pricing
Pricing a product or service requires expert care and decision-making traits, as a compromise has to be made to achieve a price that will guarantee that customers acquiring the service get it in the correct way, at a cost that shall make a profit for the good or service provider, while also being affordable to the customers. The primary goal of our Spa is to provide efficient mental and physical fitness services of value, to our clientele. As such, we will utilize the penetration method of pricing, where we shall introduce our Spa into the American market while providing services at a relatively low price, so as to ensure that customers are interested in visiting our center. Later, we aim at increasing our prices sustainably, after consumers have experienced the benefits of our services and the Spa has established relevance in the US market.
Price Lists
- For Spa and beauty services:
| SERVICE | PRICE |
| TREATMENTS FOR WOMEN | |
| FACIAL SKIN CARE TREATMENT | $40.00 |
| SPA MANICURE | $12.00 |
| POLISH CHANGE (hands) | $5.00 |
| GEL NAIL MANICURE | $15.00 |
| GEL NAIL REMOVAL | $5.00 |
| SPA PEDICURE | $20.00 |
| POLISH CHANGE (feet) | $10.00 |
| MAKEUP APPLICATION | $15.00 |
| EYELASHES (TRIMMING) | $8.00 |
| EYEBROWS (GROOMING) | $5.00 |
| EYEBROWS (WAXING) | $15.00 |
| LIP or CHIN (WAXING) | $5.00 |
| UNDERARM (WAXING) | $10.00 |
| ARMS WAXING | $15.00 |
| WAXING (HALF LEG) | $25.00 |
| WAXING (FULL LEG) | $40.00 |
| TREATMENTS FOR MEN | |
| SPA MANICURE FOR MEN | $10.00 |
| SPA PEDICURE FOR MEN | $20.00 |
| BACK/CHEST WAXING | $18.00 |
| EYEBROW CLEAN UP | $10.00 |
| FACIAL SKIN CARE TREATMENT FOR MEN | $35.00 |
- For gym and sauna services:
| GYM MEMBERSHIP | |
| 24 Hour Gym Access | |
| ANNUAL (SINGLE) | $350.00 |
| ANNUAL (COUPLES) | $600.00 |
| SINGLE DAY ENTRY | |
| SINGLE | $5.00 |
| COUPLE | $8.00 |
| MONTHLY ENTRY | |
| MONTHLY (SINGLE) | $50.00 |
| MONTHLY (COUPLES) | $90.00 |
| HALF YEAR | |
| HALF YEAR (SINGLE) | $200.00 |
| HALF YEAR (COUPLES) | $450.00 |
| SAUNA STEAM ROOM MEMBERSHIP | |
| 24 HOUR GYM AND SAUNA ACCESS | |
| ANNUAL (SINGLE) | $400.00 |
| ANNUAL (COUPLES) | $700.00 |
Sessions conducted by personal trainers shall be priced depending on the length and number of sessions per month, as directed by the Spa management. These affordable prices shall ensure that our services shall be affordable to a majority of the members of the American society. With the above strategy and plan, we have no doubt that Ace Spa will be the dream stopover for every individual in the United States of America.
