FAR EASTERN UNIVERSITY

Institute of Account Business and Finance

PROPOSED CUSTOMER SERVICE PLAN

In Partial Fulfillment
of the requirements for the
Degree in Business Administration

Members:
Molina, Dexter John
Nevales, Carl Phillip Lynel
Sison, Hilda Marie
Yoshizaki, Kana
 I. EXECUTIVE SUMMARY
This study aims to investigate the overall performance of Davids Salon, focusing on its
service effectivity. Davids Salon is one of the fastest growing salons in the Philippines, giving
their good quality service for an affordable price. The basis for the service effectivity of Davids
Salon is on how they handle customer service.

A. CUSTOMER RELATION
Based on our research findings, we researchers conclude that Davids Salon has a great
quality service when it comes to customer handling. Customer-employee relationship is an
important factor to consider especially on running a service oriented business. Davids Salon
values their employees the same way they value their customers, they give their employees a
respectable amount of independency on deciding for their own. As for example when we
conducted our video presentation, we were asked by a staff that was occupying the counter to
wait for the senior hairdressers decision on whether it was plausible to shoot a video inside the
store.

B. CUSTOMER INTERACTIONS
Customer-employee relationship focus on personalized interaction between employee
and the customers. In Davids Salons case, the staff interacts with their customers in a
personalized manner. For example, they take importance on greeting them with good morning
or Welcome to Davids Salon. They also assist the customers on choosing the type of service
and particular hairstylist they want. Clients are pampered as they are given quality service with
professional care coming from a well-trained team
C. EMPLOYEES
The employees of Davids Salon provide a wide range of services such as hairstyling,
haircut, manicure, pedicure, and waxing, all done by their renowned hairdressers, and manicurist
and pedicurist. The employees also initiate a friendly conversations to set up a relaxing ambiance
which is very welcoming to the customer, which results to customer loyalty.

D. COMPETITORS
Davids Salon has the biggest chain of hair salons in the Philippines, with over 200 branch
nationwide. It is one of the most premium salons in the Philippines alongside major competitors
BENCH FIX Salon, Studio Fix Salon, Toni & Guy, and Hair Shaft Salon. With intense competition
in the market, Davids Salon strive on providing the highest quality of service at prices everyone
can afford.
 II. INDUSTRY BACKGROUND
Fast growing and prolific, the beauty salon industry is built on products and services that
help us look our best. Consumers driven by social media trends have led to the evolution of the
concept of grooming and beauty for both males and females. The beauty salon industry can be
segmented into hair, skin, nail, cosmetics, perfumes and colognes, deodorants, antiperspirant,
feminine cleaning, oral hygiene etc. Skincare has the highest market share. The growth potential
of beauty salons depends on a variety of factors including demographics, population growth, and
latest beauty techniques. The majority of global premium cosmetics sales is concentrated within
the developed markets (mostly the US, Japan, and France) but cosmetic markets of the
developing countries (Brazil, Russia, India, China) have been growing very fast and accounted
for approximately 25% of the market. Small salons contribute heavily to the industry while the 50
largest companies draw just 15% of overall revenue. With a growing market, India is witnessing
increased number of international players. The market which was earlier women-centric has
started concentrating on male grooming as well, resulting in a large number of unisex salons,
opening opportunities for business expansions in the segment. Lakme Beauty Salons, Jawed
Habib Hair & Beauty, and L'oreal are some of the leading players in the market.

The Philippines is one of the largest markets in Southeast Asia with an estimated 103
million people and ruled by a presidential democratic republic. With the 12th largest population
and the 30th largest economy, there is certainly scope for development, as it has grown from being
an agriculture-based toservices-based economy in the early 21st-century.

With the increasing number of trend-savvy consumers, the beauty service industry in the
Philippines continues to boom, opening doors to entrepreneurs who are willing to take the risk.

A. PORTERS FRAMEWORK
Force 1: Threat of New Entry - HIGH
- The threat of new entrants is very high in the Salon industry. There is no large
investment required to build a brand. Apart from setting the location of the salon, a lot
will have to be invested in technology and skilled human resources. There is also the
competitive pressure from existing brands. Small players would not be able to offer as
competitive prices either. Marketing is required to create brand recognition and this
will take both capital and time
Force 2: Buyer Power - HIGH
- The bargaining power of salon industry is high due to a high number of
buyers/customers. Its customers includes people from diferent age, race and status in
life. From children, teens, to young adults and senior citizens. Services are affordable
and dependent on the kind of salon.
Force 3: Threat of Substitution
- The threat of Substitution is high because of DIY (do it yourself). There are products
in the market that offers same as salon service which is easy to use and hassle free.
Force 4: Supplier Power - STRONG
- The bargaining power of suppliers is strong because of their number in the industry.
Suppliers of Salons includes the manufacturers of the products they use (hair dyes,
shampoos, conditioner etc.) These suppliers have control over them. Without the
needed supplies, there is no operation for the salons. Thus, the pricing power of
suppliers are high.
Force 5: Competitive Rivalry - STRONG
- The level of rivalry in this industry is strong because of the number of players in the
market. A lot of salons already established a name in the industry, Also, salons have
been classified to high end, and low end salons. Players often compete in terms of
marketing, price, and service variety. (eg. 38 pesos haircut , 999 rebond, milk rebond,
etc. )

B. PESTEL ANALYSIS

POLITICAL ENVIRONMENT:
Changing government rules and regulations for businesses.
Introduce new instruction programs for beauty field through youth centers.
Government introduces higher taxes for businesses and some taxes for cutouts
and banners.
ECONOMIC ENVIRONMENT:

Increasing cost of cosmetics.

Decreasing personal income of people.
Increasing price of beauty cultural technical instruments
 SOCIAL ENVIRONMENT:

Increasing popularity of different hairstyles

Higher demand for popular trends in salon industry
Increasing popularity in social media
TECHNOLOGY:

Improvisation of web design to entice more potential consumers

Innovating machines used in salons (hot oil treatment, hair straighteners, etc.)
Improvisation of website to promote salon and give opportunities to customers for
appointment through online.
ENVIRONMENT:

Numerous amounts of branches nationwide

Charity works done by Davids Salon- giving free wheelchairs for orphans with
disabilities, and giving them free haircut every 3 months
Implementation of hygiene safety especially to the chemicals in hair solutions used.
LEGAL:

Strict compliance to the consumer laws

Strict compliance to the safety standards
Strict compliance to the labor laws

C. COMPANY BACKGROUND

Davids Salon offers world-class hair dressing, fueled by Filipino passion. With the vision
of bringing Fine European hairdressing to the Philippines, CEO David Charlton and the
Davids Salons brand has made a name for itself offering a wide range of hair and beauty
services to a wide range of customers. It is a name that has been admired and followed
by many Filipinos since its first salon opened in 1989. It is now the biggest chain of salons
in the Philippines, with over 200 branches all over the country.
Davids Salon take pride in providing the highest quality of service at prices
everyone can afford. Davids Salons roster of services include Hair Styling, Hair Color,
Hair and Scalp Treatments , Perming, Relaxing, Rebonding, Make Up, Waxing/Threading,
Nail Care, and Hand and Foot Spas.
A trusted salon brand such as Davids Salon works with different trusted supliers
for hair color, hair care, and other forms of technologies used for hair styling. Among these
suppliers are LOreal, USAs Professional MATRIX, Affinage Infiniti, and Schwarzkopf &
Henkel.
Total customers satisfaction is the goal of Davids Salon. The Davids Salon
Experience is one where customers are given a relaxing ambience, professional
consultations from creative stylists, and personal assistance by store managers and store
assistants
 Clients are pampered as they are given quality service with professional care
coming from a well-trained team. Davids Salon has a solid core business management
team equip themselves with the latest and most innovative European hairdressing
technology, which they generously and systematically pass on to every Davids Salon
stylist.

D. SWOT ANALYSIS

SWOT ANALYSIS
STRENGHTS WEAKNESSES
1. Strong Management 1. Weak Online Presence
2. Excellent Customer Experience 2. Relatively Expensive
3. Recognized Globally 3. Segmented Target Market
4. Largest chain of salon in the country 4. Weak Internet Marketing
5. Customer Loyalty 5. No Online Appointment Facility
6. Accessible 6. Not usually suggested for people saving
7. Strategically located money for other things
8. Strong knowledge on hair beauty
9. Wide Range of Services
10. Strong Brand Name
11. Good image
12. Unique & Reliable Products
13. Presentable Establishments
14. Competitive staff/ workforce

OPPORTUNITY THREATS
1. Latest Hair Trends 1. Intense Competition
2. Innovation 2. Bad Economy
3. Global/ International Expansion 3. Weak Purchasing Power
4. New Technology 4. Inflation
5. New Products 5. Increase on Vanity Tax
6. New Services 6. Change of Taste
7. Online Booking System 7. Substitute Products
8. Social Media Marketing 8. DIY Hair Products
9. Customer loyalty in class C Market 9. Freelance Hair stylists
10. Big Discounts by local competitiors
11. Mature Market
 TOWS ANALYSIS
SO Strategies
S3+ O3 - Establish branch globally. First
around Asia.
S9+S12+S5+S6 - Introduce new range of
services according to benefits
S10+S2+O8- Establish customer loyalty on
social media
S2+S4+O7 - Create online booking system
S9+S12+O4 - Upgrade hair technology,
machines and products
ST Strategies
S14+ T9 - Provide intensive training to staff in
order to become professionals in the hair
salon industry
S14+T9+T7 - Hire industry experts
S10+T6 - Modernize choices
S2+S5+T11 Gain customer loyalty on
younger markets (millennials)
WO Strategies
W1+W4+ O8 - Strengthen online presence by
online marketing (ads on social media)
W2+W3+O9 - Cost reduction
W2+O9 - Low price deals for affordability
W2+O6+O9 - Create promos / service packages
W5+O7 - Create online booking system
WT Strategies
W2+ W6+T2 Maintain affordability of service
W1+T1 Increase online exposure than
competitors
W4 +T8 Increase awareness of the dangers of
DIY products using social media platforms
III. RECOMMENDATION/S

Based on our research, Davids Salon has a great customer service and the way
they handle their job.

All we can recommend is for them to maintain their good quality service on
customer handling to develop customer loyalty. This will result for the regular
customers to regularly seek for the Davids Salon's hairdressers for the quality
grooming that they provide.