EXECUTIVE SUMMARY

AYURVEDIC SPA, MERIDIAN HALL, KOTESHWAR

March 28, 2015
Research Objective:
To study the perception and attitude of existing customers towards ayurvedic spa.
To study the perception and attitude of potential customers who would want to avail the services
of an ayurvedic spa.
To study about the major factors which would influence customers to choose any particular
ayurvedic spa.
Methods:
The research was conducted in following two stages:
1. Exploratory or Qualitative research: This stage involved conducting Focus Group discussions and Indepth Interviews to collect the various variables that affect the research. Two FGDs were conducted, the
first FGD was conducted among the TAPMI students and the second was among the acquaintances of the
researchers via Google Hangouts. The in-depth interviews were conducted among both existing and
potential customers of ayurvedic spa services. In the Manipal-Udupi region three interviews were
conducted with people using the ayurvedic spa services at a local health and grooming center.
2. Conclusive or Quantitative research: In this stage a questionnaire was administered to the sample
population and then the data was analyzed using SPSS. Then a multivariate statistical technique called
Factor analysis were conducted on the data.

1.
2.
3.
4.

Key findings:
Majority of the people who visit spa, do so for relaxation purposes.
Word of mouth (friends & family) attracted more customers compared to other promotional activities.
The most favored marketing channel is the online presence
Key drivers of opting for the Ayurvedic Spa are Brand Perception, Value for Money and Convenience

Recommendations:
1. Increase in awareness through online presence. Have online presence through a website would serve the
purpose.
2. As per the analysis word of mouth from friends and family attracted more customers and also online
presence is the preferred medium.
Hence the spa should advertise via the social media channel.
3. Tie-ups with physiotherapists will be effective in attracting new customers.
4. The doctors reputation, well trained staff and the products used for the spa treatment should be the
distinguishing factors while advertising.

Table of Contents
LETTER OF TRANSMITTAL............................................................................................ 2
ACKNOWLEDGEMENT................................................................................................. 3
EXECUTIVE SUMMARY................................................................................................. 4
Table of Contents........................................................................................................ 5
1.0 INTRODUCTION..................................................................................................... 6
1.1 ABOUT INDUSTRY.............................................................................................. 6
1.2 NEED FOR STUDY.............................................................................................. 6
2.0 RESEARCH DESIGN & METHODOLOGY..................................................................7
2.1 RESEARCH DESIGN............................................................................................ 7
2.1.1 MANAGEMENT DILEMMA............................................................................. 7
2.1.2 RESEARCH PROBLEM...................................................................................7
2.2 METHODOLOGY................................................................................................. 7
2.2.1 RESEARCH OBJECTIVES............................................................................... 7
2.2.2 RESEARCH TECHNIQUES.............................................................................7
3.0 DATA ANALYSIS & INTERPRETATION....................................................................10
3.1 SAMPLE SIZE AND CHARACTERISTICS.............................................................10
3.2 LIST OF FACTORS............................................................................................. 11
3.3 FACTOR ANALYSIS............................................................................................ 11
3.4 KEY FINDINGS.................................................................................................. 16
4.0 RECOMMENDATIONS........................................................................................... 18
5.0 REFERENCES...................................................................................................... 18

1.0 INTRODUCTION
1.1 ABOUT INDUSTRY
Wellness is an active process that involves making healthy choices to attain a state of optimal well-being.
Over the last few years, the wellness industry in India has grown at an exponential rate. The businesses
involved in relaxation and rejuvenation therapy have benefited largely from the people's fast moving and
stressful lifestyle.
The spa industry in India suffers from high fragmentation. There are a very few brands that have chains in
multiple cities hence not many spas are recognised across India. As per PricewaterhouseCoopers(PwC)
report Indias total wellness market would surpass US$ 16.3 billion(Rs. 9800 Crores) during the next four
years. The spa industry itself has a estimated potential of Rs. 7000 Crores by 2020. However, such growth
requires regulating the spa industry to international standards.[]
1.2 NEED FOR STUDY
Dr. Rafique Ahmad plans to increase the spa facilitys current capacity from 10 beds to 250 beds. He
intends to find out the measures to increase the spas customer base that majorly encompasses customers
from metropolitan cities in India and abroad, who belong to upper middle and higher income group.
The fragmented and unstandardized spa industry thrives on word of mouth advertising and good
interpersonal relationship with the clients. It has multiple territorial and pan-India brands that provide
similar services and distinguish themselves on account of their value based services and packages.

2.0 RESEARCH DESIGN & METHODOLOGY

2.1 RESEARCH DESIGN
2.1.1 MANAGEMENT DILEMMA
What should be done to increase the customer base of the Ayurvedic spa centre located at
Kundapura

2.1.2 RESEARCH PROBLEM

To understand the reasons of purchase intent of consumers towards Ayurvedic Spa.

2.2 METHODOLOGY
2.2.1 RESEARCH OBJECTIVES
To study the perception and attitude of existing customers towards ayurvedic spa.
To study the perception and attitude of potential customers who would want to avail the
services of an ayurvedic spa.
To study about the major factors which would influence customers to choose any
particular ayurvedic spa.
2.2.2 RESEARCH TECHNIQUES
Our research was broadly divided into two parts:
EXPLORATORY RESEARCH
We used three basic techniques under exploratory research in order to get an overview of the
ayurvedic spa market and its potential customers.
Initially in order to get information regarding the current market scenario of the spa industry in
general, we went through a secondary research study. In this we gathered relevant data about the
industry from various relevant sources, ranging from internet to magazines.
Once we were able to complete significant groundwork regarding the industry we went forward
with the research by interacting with both existing and potential users of ayurvedic spa services.
The methods of in-depth interviews and focused group discussions (FGD) was used to get the
views of the consumers.
In-depth interviews were conducted with both existing and potential customers of ayurvedic spa
services. In the Manipal-Udupi region three interviews were conducted with people using the
ayurvedic spa services at a local health and grooming center. Through these interviews we were

able to get information about why these existing users preferred that particular spa and what were
the improvements they desired in the services which would make them consider any other spa in
the region.
We also conducted two telephonic interviews with existing ayurvedic spa users who lived in
metro cities like Bangalore and New Delhi. This helped us in getting information about the kind
of services they were getting in their spas and whether they were satisfied with it and if not, then
what additional services they wanted in their respective spas. Hence all the five interviews
conducted by us helped us in extracting information regarding the mindset of the customers and
also the quality and level of service they receive in both the settings of a semi-urban/ rural area
and an urban region.
In order to conduct a study on the potential customers of ayurvedic spa services, we conducted
FGD sessions in the TAPMI, Manipal campus. We conducted two separate FGDs, each of which
consisted of 8-10 people. These were double moderator sessions which was conducted for 15 to
20 minutes. Both of these FGD sessions helped us in extracting the factors which a potential
customer would prefer while deciding to avail the services of an ayurvedic spa.

DESCRIPTIVE RESEARCH
With the help of the in-depth interviews and the focussed group discussions conducted in the
exploratory research stage, we were able to extract the key factors that both existing and potential
customers of an ayurvedic spa service gave importance to while selecting an particular spa. In
order to know the level of importance customers gave to each of these factors individually we
conducted a survey based on a questionnaire. The survey also helped us in segmenting the
consumer base accordingly which would help us in our research study and analysis.
The questionnaire designed for the survey was of formalised and unconcealed nature. It would
collect all the relevant details of the customer which would help us in our segmentation process
of the study. The survey had a mix of dichotomous and likert scale based questions. With the help
of this we were able to narrow down on the most critical factors affecting a customers decision
while choosing an ayurvedic spa.
Next, the collected data from the questionnaire was consolidated and relevant analysis technique
and appropriate tools were used in order to conclude the findings from the entire research and
provide necessary recommendations.
POPULATION AND SAMPLE
The Ayurvedic Spa who was our client currently had customers who were above 40 years of age
and belonged to the high income group. The spa was in its expansion phase now and hence
wanted to increase its customer base and wanted to focus on customers in the 25-40 years bracket
as well.

Hence our research study consisted of people both from the 25 to 40 years age segment as well as
above the 40 years age segment. The population under study consisted of working professionals,
families and students all of whom either were existing users of ayurvedic spa services or had an
intention to join any such service if they found it to be productive. We collected information from
a total population of 85 respondents through various techniques of research like in-depth
interviews, focused group discussions and surveys.
DATA ANALYTICAL TOOL USED
For Exploratory Research we used the methods of In-depth interviews and focused group
discussions. For a descriptive research we used questionnaire and tools such as SPSS and
Microsoft Excel.
SPSS tool was used for Factor Analysis of the results from extracted from our questionnaire. We
also used Microsoft Excel in order to depict the graphical representations about the findings.

3.0 DATA ANALYSIS & INTERPRETATION

3.1 SAMPLE SIZE AND CHARACTERISTICS

INCOME
7%

11%

54%

24%
4%

Nil

Less than 20,000

20,000 to 50,000

50,000 to 1,00,000

Greater than 1,00,000

AGE
6%
19%

34%

40%

Below 18 years

18 to 25 years

25 to 40 years

40 to 60 years

60 above

Total sample size 73 (Male-50, Female-22)

Figure 3.1 : Characteristics of Sample

Key characteristics from Sample

We could only get 72 samples as we were looking for only those respondents who had enough
spa visit so that we can collect genuine data from them.
From our secondary as well as primary research we found out that the age of the most of the
regular customers of Ayurvedic spa falls in the range of 25-40 years. Other age group people
generally do not visit spa on a regular basis. So here we have tried to include persons from all age
groups so that we can study the perception of existing regular customers as well as of those who
can be the potential regular customers of Ayurvedic spa.
From our exploratory research, we came across no of people who think that spa is costly affairs
and that is why only rich people can afford it. We just wanted to check if this is true and therefore
we tried to maintain a healthy mix of people from every income groups.
The initial exploratory research was conducted manually to identify the possible variables to be included
in the survey questionnaire. The preliminary variables identified from the Focus Group Discussions
(FGDs) and In-depth interviews were.

3.2 LIST OF FACTORS

Distance from home

Price

Product variety

Well trained staffs

Online presence

Brand image

Time spent in Spa

Location

Price

Table 3.2: List of factors

The impact of these variables were checked through questionnaire where we asked our respondents to rate
the influence of these variables on the scale of 1 to 5. The data was collected on Likert scale these
variables were further reduced by Factor Analysis using SPSS.

3.3 FACTOR ANALYSIS

Factor analysis is a basically a statistical tool which groups the set of related data. It broadly categorizes
the variables in terms of a small number of latent factors.
Initially In our project we came across total 9 variables through our exploratory research i.e. FGD and Indepth interviews. Now our task was to check if there was any significant co-relation between the variables
because some variables are generally redundant and those variables can be broadly grouped into one
factor. Therefore through factor analysis our aim was to identify those factors that themselves will
account for the correlations between experimental variables, such that if the latent variables are held
constant, the slight correlations among observed variables can be ignored. In other words, these latent
factors will actually determine the values of the observed variables.
Factor analysis requires some specific conditions that must be ensured before executing the technique. We
have strictly followed those conditions during data collection of our project.

The conditions were.

In our survey research we used a five point Likert scale and thus the data we obtained were metric
in nature.
The size of our sample was 72 which fulfills the required condition that sample size has to be 4 to
5 times the no of variables.
The basic principle behind the application of factor analysis is that the initial set of variables
should be highly co related. If the co-relation across the variables are small, factor analysis may
not be the appropriate technique.
To check the validity of factor analysis the hypothesis was designed and then KMO and Bartlet test of
sphericity was used to verify the same.
H0 (Null hypothesis): Correlation matrix is insignificant.
H1 (Alternate hypothesis): Correlation matrix is significant.

Factor analysis was carried out in SPSS 14.0.

I.

KMO and Bartletts test: The results of KMO and Bartletts test are given in Table 1.2
KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

Bartlett's Test of Sphericity

.618

Approx. Chi-Square

105.185

df

36

Sig.

.000

Table 3.3.1: KMO and Bartlett's Test

Here KMO statistic is greater than 0.5, indicating that factor analysis could be used for the given
set of data. Further p value corresponding to the chi-square statistics is 0.000 which is less than
the assumed level of significance i.e. 0.05.
All these justify the use of factor analysis for the given set of obtained data.
II.

Extraction: This particular table displays all the extractable factors along with their contribution
in the variance and their respective Eigen values. Here it can be observed that all the 3 extracted
factors (those having eigenvalue greater than 1) account for more than 65 percent of the total
variation.

Table 3.3.2: Extractable Factors

III.

Component Matrix: The table below shows the loadings of the nine variables on the three
factors extracted. The more the absolute value of the loading, the more the factor contributes to
the variable.

Component
1
2
3
dist
.442
-.204
.642
pric
.420
-.669
-.304
tim
.329
-.347
.646
ambi
.716
-.379
-.243
tstaff
.771
-.181
-.068
bimage
.683
.348
-.166
locat
.758
.220
-.040
pvariet
.433
.479
-.262
online
.371
.767
.313
Extraction Method: Principal Component Analysis.
a. 3 components extracted.
Table 3.3.3: Variable Loading
IV.

Rotated Component (Factor) Matrix: The rotated component matrix is obtained from varimax
rotation. It is more or less same as previous table but it makes the interpretation of results simpler.
Looking at the table below, we can see that brand image and online presence are significantly
loaded on Factor 1 while price and ambience are significantly loaded on Factor 2. The other
remaining variables are substantially loaded on Factor 3 are time and distance. These factors can
be used as variables for further analysis.

Table 3.3.4: Rotation of Variables

Factor Labelling:

1. BRAND PERCEPTION

Brand image

Online presence

2. VALUE FOR MONEY

Price

Ambience

3. CONVENIENCE

Distance

Time

Table 3.3.5: Variables reduced into Factors

Factor 1: Brand perception:

For ayurvedic spa, we found out that brand perception is most important factor. Here the variables which
were included were brand image and online presence which clearly shows that people opt for only those
ayurvedic spa which are known and reputed in the industry. Ayurvedic spa requires trained and skilled
staff which generally branded player is assumed to have.

Factor 2: Value for money:

People in India are very price sensitive so every time people invest money they want the fair return on
their investment. Even in the case of ayurvedic spa people are very concerned about the services which
they are getting. This factor includes price and ambience.

Factor 3: Convenience:
From our research we found out that most of the ayurvedic spa are located in the outskirts of the city.
Generally it works well when it is in the remote place away from citys huge crowd and pollution. But at
the same time customers find it really difficult to get the 2-3 odd hours from their busy schedule to visit
spa. So convenience is the last factor. It includes distance and time which clearly supports the above
argument.

3.4 KEY FINDINGS

Majority of the people prefer visiting spa for relaxation purposes. 68 percent of people feel that
Ayurvedic Spa is meant for relaxation. While 11 percent says that it is for healing purpose.

Purpose of visit
21%
11%

Relaxation

68%

Healing

Other

When we asked our respondents about the frequency of their visit to ayurvedic spa per month.
The result was surprising as 45 percent people said only once they have visited whereas 22
percent said they dont visit on monthly basis. They generally go once in a two or three months.
When we asked them the reason of their less frequent visit they replied that its costly and only
rich upper middle class can visit it frequently.

Frequency of visit

27%

6% 22%
45%

Never

Once

Two to five times

More than five times

 Word of mouth (friends & family) attracted more customers compared to other promotional
activities. 58 percent of people said the same while 25 percent said that they look for internet for
finding information about the spa.

Means of communication
10%
1%

25%

6%
58%

Internet Search

Friend or Family

Physician

Television

Newspaper

Other

Findings from Factor output: As discussed before the key drivers for opting the Ayurvedic Spa
are Brand Perception, Value for Money and Convenience.
Secondary Research finding: The annual growth rate of India's medical tourism sector is
predicted to grow at 30%. So there is definitely going to be a great boom in this particular sector.
Going by this logic there has to be huge demand for the ayurvedic spa in near future.

4.0 RECOMMENDATIONS
1. From our research we found out that the ayurvedic spa despite catering to high income group
customers does not have any online presence. Hence it needs to increase awareness by having an
online presence through their own website. This would help customers to easily get details about
the services and other facilities on offer at the spa and hence they would be able to contact the spa
easily if they want to avail its services.
2. We came to know that when it comes to the wellness industry, people are more likely to choose a
spa based on the word of the mouth reviews they get from their family, friends or physicians.
Hence the spa needs to build its presence in the social media platform that would help it in
attracting new customers through recommendations.
3. It can have tie-ups with local physicians who would recommend the spa to their patient who
would require healing therapy.
4. The spa should give special focus on the doctors reputation, well trained staff and the products
used for the spa treatment while advertising itself in different channels.

5.0 REFERENCES
1. http://www.spaassociationofindia.in/
2. http://vibrantayurveda.in
3. http://www.researchandmarkets.com/reports/opportunity_in_the_indian_spa_industry_2015
4. http://www.financialexpress.com/article/fhw/spa-wellness-world/well-ness-equipped/15584/