Page 352 - Foundations of Marketing

Developing and Managing Goods and Services | Chapter 11 319

Entrepreneurship in Marketing

Drybar Discovers Simple but Profitable Market Niche in Hair Care

Can a company that relies upon one niche really succeed six states. Women appreciated the stylish looks they
in the service industry with so much competition? For received from a simple shampoo and blow out in a
Drybar, the answer is yes. Founder Alli Webb decided relaxing atmosphere. Although competition within the
to become an entrepreneur by developing a profitable industry is present, the idea has been profitable due to
service concept that many women responded positively the client-based relationships stylists build with custom-
toward. Drybar employs a simple concept: no color, no ers. Another profitable aspect is the pricing of services
cut, only blow outs with brushes and hair dryers. offered to customers. For around $ 40 , customers are
Webb opened her first salon in Brentwood, California. able to leave with an entirely new hair style that generally
Demand was so high that Webb engaged in wide-scale lasts 3 – 4 days. In four years the company has become a
d
commercialization by opening more locations across $ 20 million enterprise.

© iStockphoto.com/CRTd
runs a website called Visit California, which provides the public with information about vari-
ous things to do and see throughout the state of California. Visit California’s recent advertising
campaign involved television advertisements that featured several famous California natives
and promoted the various outdoor activities and sights that California has to offer to adventur-
ous tourists.
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Compared with goods marketers, service providers are more likely to promote price, guar-
antees, performance documentation, availability, and training and certifi cation of contact per-
sonnel. For example, it is common for fi tness centers like Gold’s Gym to promote degrees and
certifi cations earned by trainers as a way to ensure customers that the trainers will help them
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reach their fi tness goals. When preparing advertisements, service marketers are careful to
use concrete, specifi c language to help make services more tangible in the minds of customers.
Service companies are also careful not to promise too much regarding their services so that
customer expectations do not rise to unattainable levels.
Through their actions, service contact personnel can be directly or indirectly involved in
the personal selling of services. Personal selling is often important because personal influence
can help the customer visualize the benefits of a given service. Because service contact per-
sonnel may engage in personal selling, some companies invest heavily in training.
Because of the heterogeneity and intangibility of services, word-of-mouth communication
is important in service promotion. What other people say about a service provider can have a
tremendous impact on whether an individual decides to use that provider. Some service mar-
keters attempt to stimulate positive word-of-mouth communication by asking satisfied cus-
tomers to tell their friends and associates about the service and may even provide incentives
to the current or new customers. Groupon, which offers discounted deals at local businesses
in select cities, offers a free deal to customers who refer friends who become new customers.

ORGANIZING TO DEVELOP AND LO 7 . Be familiar with organiza-
tional structures used for devel-
MANAGE PRODUCTS oping and managing products.

It should be obvious by now that managing products is a complex task. Often, the traditional
functional form of organization does not fit a company’s product management needs. In this
case, management must find an organizational approach that accomplishes the tasks necessary
to develop and manage products. Alternatives to functional organization include the product
or brand manager approach and the venture team approach.

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