LF03 Group 6 Innisfree Cares PDF

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MKTG 1268 - Service Quality New Service Proposal

Done by: LF03 Group 6

Word count: 4,395 Words excluding Executive Summary, Headings, Appendices and References

EXECUTIVE

SUMMARY

Innisfree Cares aims to influence Singaporeans into becoming confident advocates through over-the-edge service and at the same time, gain a competitive edge over competitors. This new service acts as a complement to Innisfree existing offerings to provide customers with organic and affordable skin care products island wide. The target market of 15-25 years old are heavily influenced by the media to portray a certain look and/or image and on top of that, as women grow older, their skin type changes too, leading to troubled skin issues. Thus, many females were left feeling self-conscious and not confident of their appearance and imagery. Therefore, these individuals would want to be able to access to affordable skincare consultation services to find out more about their skin issues and improve on their troubled skin issues which gives Innisfree the opportunity to tap into this market. Furthermore, these working adults are unable to enjoy an extended facial services due to their hectic lifestyle and they sought after affordable and express facial services. Hence, Innisfree Cares meet customers needs by offering a highly personalised facial packages (a basic package, a revitalizing package and a royal package) to meet the various preferences and skin care consultation of every individual based on the first-time free skin care consultation to identify each customer’s skin care so that Innisfree cares is abe to recommend and use the appropriate skin care products for them. This product-line extension offers convenience for customers to book their preferred appointment time slot in-store and from the website and based on the various facial packages, the basic facial package takes up 30 minutes, the revitalizing package takes up 45 minutes and lastly, the royal package takes up 1.5 hours. The facial services are priced competitively with to ensure affordability for customers. Innisfree Cares will be located in 7 of their 11 existing stores in Singapore. These locations are strategically located across the nation; North, South, East, West and Central making it accessible for them to indulge at their most convenience. We will be promoting this innovative service through Innisfree social media platforms, namely Facebook and Instagram, out-of-home advertising, road show events along Orchard road and sales promotion and loyalty programmes.

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Additionally, to ensure that customers receive the highest service standard possible, Innisfree Cares staff will be extensively trained IN swiftly perform facials, having a substantial amount of knowledge about the products and to have at least 2 years experience in performing facial services. Therefore, this will assure customers through delivering top-notch facial services. All in all, Innisfree Cares will be offering a high quality personalised facial service to unleash the inner beauty of women and enable them to achieve the best they can be and feel confident of themselves.

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Introduction and Business Overview 1.1 BACKGROUND OF ORGANISATION SELECTED OR THE NEW BUSINESS ENVISIONED Innisfree is a all-natural cosmetic brand headquartered in Seoul, South Korea and was founded in 2009, operating as a subsidiary of AmorePacific Group. It is also one of the few brands that uses organic ingredients in producing their products with values of Eco-friendliness (packaging), pure ingredients (derived naturally and responsibly), continuous R&D efforts (reliability) with its natural Jeju products. With their mission "Innisfree the pure island where clean nature and healthy beauty coexist in harmony", it provides products ranging from cosmetics to skincare catering to a wide variety of customers who have different skin types at a affordable price range targeting customers mainly age between 15 to 25. Innisfree also have operations in countries such as Hong Kong and Singapore, advertising itself as a natural brand sharing the benefits of nature for healthy beauty through eco-friendly methods leading them to have a total of 11 outlets located in Singapore currently. Additionally, linked to their vision "it shares the benefits of nature from the pristine island of Jeju allowing for vibrant beauty and pursues an eco-friendly green life to preserve the balance of nature", Innisfree continues to innovate with nature to produce better services to fulfil customers expectations.

1.2 INTRODUCTION TO THE PROPOSED NEW SERVICE PRODUCT CONCEPT Innisfree’s current service product concept is categorized under People Processing Service , as the products sold at Innisfree is directed at customers. Customers will have to enter into the physical store to try the testers and eventually purchase the products. Hence, this is a tangible action. The new proposed service concept would be a product line extension that will enhance the overall service experience in Innisfree and add extra value for the customer. The main product line extension will be ‘Innisfree Cares’. This consists of providing different facial services to the target market. There will be 3 different packages; a basic package ($20), a revitalizing package ($35) and a royal package ($50). This new service is an extended add-on service for customers who wants to pamper their skin and get the utmost care. It is also convenient for them as Innisfree stores are located islandwide and they need not travel far, it is also affordable and pocket-friendly. Additionally, this new facial

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service in Innisfree will provide customers with self-confidence as they will leave the facial feeling fresh and invigorated, ready to seize the day. Innisfree has only set foot in Singapore not long ago. Therefore, this new product line extension of providing a customised facial service in-store is a great milestone and will certainly set them apart from other beauty/skincare companies. 1.2a Drivers to the proposed new service product concept The drivers derived are from the survey results conducted in Singapore, among male and females aged 15-25 years old to review what additional services can Innisfree provide for their customers. Based on the results, the option of having facial services was the most popular among our respondents. The presence of social changes with the rise of consumer expectations is transforming the service economy. Time is increasingly a crucial commodity for today's consumer (Boumphrey, 2016) and increasingly more people are willing to pay for ‘hyper-convenience’. Many busy individuals are looking for a quick and affordable facial solutions as good facials are not cheap. It is generally expensive to go for facial services in Singapore as it usually lasts around 60-90 minutes costs as much as $600. Hence, more skin care labels and spas are now offering express facials that take 30 minutes or less to cater to the busy individuals. (Heng, 2017). Innisfree can tap on their present organic and plant-based products to provide an affordable and express facial services for their customers to save time and to enjoy the facial service at a fraction of the regular pricing. As all Innisfree outlets are located strategically in shopping malls, shoppers, young working adults or even students can enjoy a quick facial service while shopping or during lunch-hour. Our target market are heavily influenced by the media to portray a certain look and/or image. Also, as women grow older, their skin type changes too, which leads to troubled skin issues. This leads to many of them feeling self-conscious and unconfident of their appearance and image. (Dunn et al., 2011) Therefore, these individuals would want to be able to access to affordable skincare consultation services to find out more about their skin issues and improve on their troubled skin issues which gives Innisfree the opportunity to tap into this market.

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1.3 POSITIONING The team’s target market for Innisfree’s new service are mainly females aged 15 to 25. Aforementioned, women’s skin type and problem changes. Hence, they may need help with their skin concerns and are usually further influenced by media expectations. As mentioned, facial services are generally expensive and this target market consists of low to mid Income females who prefer cheaper alternatives. Furthermore, they lead a busy lifestyle juggling school and/or work and would greatly appreciate convenience and express services.

Demographic Age

15 to 25

Gender

Females

Income

Low to Mid Income (Students and Young Adults)

Psychographic Attitude

Self Conscious and desire Confidence, view Self Image to be important. Wants to fit in to the societal norms. Price Sensitive due to income level.

Lifestyle

Takes care of their skin despite the busy lifestyle they lead. Live and Time is centered around School or Work.

Behavioral Loyalty and benefit sought

Will remain loyal if service matches up to expectations and achieve the benefit that they sought after; a Clear and Problem Free Skin

Competitor Analysis Innisfree has several direct competitors in this industry; The Face Shop, Skin Food and Etude House and none offer facial services. Innisfree Cares implementation allows for Innisfree to be differentiated from their existing competitors. With this new service, Innisfree Cares will be competing against beauty salons like Sugar K Organic Peel Bar, Freia Aesthetics, Skin Inc. and many others. These Beauty Salons offer express facial services for busy individuals that need a quick fix for their skin

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Being a renowned skin care store and loved by many Singaporean females, this makes Innisfree Cares trustworthy. Furthermore, Innisfree’s products are relatively cheaper compared to salon grade facial products and this creates an advantage for the service as it is priced lower compared to other express facials. Despite this, customers are still able to trust Innisfree’s quality. Not only will Innisfree be providing a service that their current competitors do not provide, they also offer a price advantage over their new competitors. Innisfree Cares is confidence sold like a snack; quick and pocket friendly.

2. Analysis of the new Service Concept Idea and the Marketing Plan 2.1 PRODUCT Innisfree Cares consists of a new range of facial services consists of 3 different tiers for customers to choose from as mentioned; basic, revitalizing and royal package. Each package

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consists of different treatments and it is priced affordably for the target market. For first-time users, there will be a free consultation on top of the various packages for the customers. This will be further elaborated in figure 2.1.1 below.

Figure 2.1.1: Facial Services Package

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Figure 2.1.2: Core, Actual and Augmented Product

New Service Development A product line extension takes place when a brand invents a new product in the same product line of an existing brand. The brand is showcasing the value of the existing product line to let the customers have a variety of choices to choose from. Similarly, Innisfree Cares will be a new concept of having a facial service. As facial services are closely related to the beauty industry, it is an extension to what Innisfree has currently; skincare and makeup products.

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2.2 PRICING Pricing and Revenue Management The Value Based Pricing is the pricing strategy Innisfree Cares will be adopting. The pricing is directed towards bringing value to customers. Pricing set for each package are being considered for the target market, which will be affordable to be purchased. Rate fences and revenue management for maximising revenue will be enforced. Penetration pricing strategies creates Value Based Pricing by focusing the market segments where customers have a high levels of price sensitivity. Presenting benefits recognized as corporation standard with a price that is inexpensive to achieve a rise in sales volume, that build customer value. (Harmon et al., 2004) With this, customers will enjoy the rarity of the service only be found in Innisfree. Furthermore, Innisfree is a well-known brand and customers can experience facial sessions with Innisfree’s products by their aestheticians. Customers can trust Innisfree’s quality despite the price of the packages set at a lower price compared with other facial shops.

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Innisfree Cares will be located in selected stores of Innisfree. Customers can book online or head down to the shop for appointments. Moreover, this service will be located at different areas of several outlets which will be more convenience and time consuming for them, as they do not need to travel far for this service. Customers can get a first hand experience, together with a succinct descriptions of the products introduced by the facial specialist, for a better understanding on the procedures of the facial session by Innisfree. Furthermore, the service is giving a helping hand to customers to present a confident image of themselves to the public, to show how easy it is for them to be beautiful and standing confidently together with Innisfree Cares.

Rate fences are a rate limitation, or terms and conditions that connected to package rates and delivered to customers. Rate fences is used to accord customers to segment themselves to various rate group depending on their needs (Hanks et al., 1992) First visit customers can have a first hand experience by purchasing the package, and becoming a potential buyer of Innisfree. However, they will not invest on a higher price package as they are unsure of the products. Therefore, the Basic package and Revitalizing package will be in their choices. Repurchased customers would try both Revitalizing package and Royal

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package, as they understand how well the products works and would further explore with the facial services. Customers who wish to have a quick facial cleansing and is time consuming will gravitate towards Basic Treatment. Customers who desire to have an ordinary facial service, especially at a lower age group would prefer Revitalizing Treatment, as the price range is lower than the other facial shop. Moreover, Innisfree Cares is targeting young females aged 15-25 that are still studying or has just started working and might not have a high capital to invest on frequent facial services. Royal Treatment is for customers who do are willing to have invest more on the treatment and have a higher budget to purchase this package. Regardless of the rate fence used, it must be clear to both customers and employees, must be easy to enforce, and must make sense to customers. (Kimes, 2010) Each package is being distinguished clearly according to what the package includes. Rate fences are the conditions related with various price category, which is the cause of why customers willing to purchase at various prices. It should be understood by both buyers and sellers, easy to implement and understandable to buyers. With different prices for each segment, customers will be able to select and purchase accordingly, which able to help Innisfree Cares maximize revenue. Physical (product-related) Fences:

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Non-Physical Fences:

2.3 DISTRIBUTING SERVICES Place The nature of interaction is such that customers have to go to Innisfree for the service to be conducted. Hence, to make it convenient for busy individuals, the service will be available in multiple outlets in Singapore as mentioned. Innisfree Cares will launch in 7 of their 11 existing stores in Singapore. These locations are strategically located across the nation in proximity to where customers live, work and shop, making it accessible for them to indulge at their most convenience; North, South, East, West and Central. Two other outlets will be in Malls of Singapore’s Shopping District, Takashimaya S.C and Plaza Singapura. The service being in malls offers customers the convenience of onestop shopping (Wirtz, 2012) with the little time they have on hand, saving time and avoiding the hassle of traveling too far. Face to face consultation and hospitality requires a physical space to deliver the service. Aestheticians will be able to cater to the needs and wants of the customers personally within the four walls of their store with a physical space. The 7 retail service stores are chosen due to its size and capacity of incorporating an area for the new service. Leveraging on Innisfree’s earthly and organic environment, tucked away in a cozy corner, customers of Innisfree Cares are left to experience a comforting and personalized service.

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Time The operation hours for Innisfree Cares varies according to the different outlets. Most open at 10am to 10pm and there are a few that starts operating from 10:30am. Innisfree Cares is available every day of the week, throughout the year. Electronic Channels of Distribution Website Provide information on Innisfree Cares i.e. Facial services, with in-depth description of the different tiers and what they can expect.Information on the direction of the outlets, opening hours, on-going promotions and other basic information will be available. (Information) Book an appointment (Order-Taking) using a pre-existing or new Innisfree Members Account. The Innisfree Members Account allows for customers to check their reservation, make changes, check their reward points and summaries of their purchases. Innisfree Mobile Application Similar to the website but at the convenience of the customer. Furthermore, the application makes things easier for customers as push notification is allowed and customers will get newest Innisfree news and promotions at their fingertips (Information) SMS Service A day before and 30 Minutes before the customer’s appointment, a text message will be sent to the customer to remind them of their reservation.Any changes dues to unforeseen circumstances will also be notified through text to the customer as well as email. (Information) Technology and Software When customers arrive for their first facial, a personal consultation will be provided. The professional will analyze the customer’s skin condition and skin type, enabling them to properly diagnose and treat the skin. Subsequent visits, customer can consult the professional on any other problems they face as well as the progress of their skin condition. (Consultation) Information will be shown on a computer after viewing the skin on a microscopic level and subsequently be on the customer’s Innisfree Members Account, allowing future professionals to check the information and for the customers to purchase the right type of products in Innisfree’s retail store. (Information)

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2.4 PROMOTION AND EDUCATION The main approach for all promotional activities would be to increase the awareness and to induce trial. Through the promotional campaign, the aim would be to build interest in Innisfree Cares to introduce customers to the new service, along with promoting the existing products of Innisfree. Customers must feel assured and have trust in Innisfree in order to patronise. Innisfree Cares will provide reassurance to customers with the quality products used and to familiarize customers with how the new service works in order to reduce any perceived risk or cognitive dissonance. This will be carried out through various promotional efforts. Communication Objectives Innisfree Cares will carry the message of Confidence with Convenience and Affordability. By using organic and natural products, the target market will also be assured that despite paying lower prices, the quality of Innisfree Cares will not be compromised. The purpose of the campaign would be to increase awareness, induce trial and eventually influence customers to stay committed to Innisfree Cares. This will b...