Virginia is a small, Asian owned hairdressing located in Melbourne's China Town. It has been providing hair care for customers since 1985. Over the past years, privately-owned hair salons have increased in the China Town area, threatening Virginia with direct competition. Furthermore, increases of Western hair salons around the CBD have intensified the market.
In recent years, hair salons have moved from the traditional sense of just providing the customers with hair related services. Nowadays, hair salons offer customers with a wide range of other services, such as massages, hair removal and manicures.
It is important to break down the total market into self contained and relatively homogeneous subgroups of customers (Dibb, 1993). Accurate segmentation allows the firm to identify selling opportunities and thus tailor its marketing activities to satisfy the needs of the customers (David A. Collier, 1998).
Virginia hairdressing has segmented its target market on the main bases of demographic and psychographic.
It caters mainly to clients from an Asian background, most being students of an age between 17 and 25. The value and lifestyles of Virginia's customers are likely to be 'achievement orientated', in which they tend to care more about status and image.
Most customers are motivated to attend hair salons with the urge to satisfy their belonging or esteem needs. Hence the perceived social risk of a hair cut or treatment can play a large role in the consumer's decision making process. As the services provided at Virginia are relatively more expensive than budget hair salons and may also take longer, the consumer can also perceive financial and temporal risks involved. The greater the risk perceptions, the more effort the consumer would put into the information search to reduce those uncertainties. In this case, recommendations from respected personal sources and...