The

Business
of Beauty
An analysis of the
beauty services
sector
Table of Contents
Executive Summary ................................................................................. Error! Bookmark not defined.
1 Introduction ................................................................................................................................... 3
1.1 Origin of the report ................................................................................................................ 3
1.2 Objectives .............................................................................................................................. 3
1.3 Scope...................................................................................................................................... 4
1.4 Limitations ............................................................................................................................. 4
1.5 Source of Information ............................................................................................................ 4
1.6 Methodology.......................................................................................................................... 5
2 Current Market Situation of the Sector ......................................................................................... 6
2.1 Market share: ......................................................................................................................... 6
2.2 Major players: ....................................................................................................................... 9
3 Sector Analysis ................................................................................................................................ 11
3.1 Service ........................................................................................................................................ 12
3.2 Price ........................................................................................................................................... 13
3.3 Place ........................................................................................................................................... 13
3.4 Promotion .................................................................................................................................. 14
4 Value Chain Analysis .................................................................................................................... 15
5 Start up Requirements ................................................................................................................. 17
5.1 A Brief Overview of Start-up costs ............................................................................................ 18
5.2 Entrance into the industry ........................................................................................................ 18
5.3 Acquiring ideal location and salon space .................................................................................. 19
5.4 Hiring personnel ........................................................................................................................ 20
5.5 Acquiring Salon equipment and Beauty Products ................................................................... 20
5.6 Promotional activities ............................................................................................................. 21
6 Investor’s Strategy......................................................................................................................... 21
7 Future prospects ........................................................................................................................... 24

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List of Illustrations

Tables

Table 1: Profiles of Major Beauty Parlors for Women _______________________________ 9

Table 2: Profile of Major Men's Salon __________________________________________ 10
Table 3: Service Profile of Popular Spas _________________________________________ 11
Table 4: general service offerings of the parlors __________________________________ 12

Figures

Figure 1: Pie chart showing market share of Ladies' Beauty Parlor ____________________ 7
Figure 2: Pie Chart showing market share of Men's Salon ____________________________ 8
Figure 3: Flow diagram for Value Chain Analysis __________________________________ 15

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1 Introduction

The beauty parlor industry or the beauty services sectors is one of the most promising sectors
for a developing country like Bangladesh with an estimated value of around 100 crore taka. It
is an industry with huge employment prospects, with the minimum wage for employees set at
3300 taka, twice the minimum wage of garments employees. It is also at the forefront of
female employments, employing nearly 10000 women. 99 percent of the workforce is female,
a majority of them are of indigenous origin.

With a promising future and steady market growth, the beauty parlor industry is thriving.
What with the entrance of newer and more advanced salons, parlors and spas for all classes of
people, the rate of its growth doesn’t seem to be slowing down in the near future.

In our report, we have focused on mainly the parlors, salons and spas situated in Dhaka city
for our descriptive industry analysis. The particulars of our report, are discussed in greater
detail below.

1.1 Origin of the report

This report titled, “The Business of Beauty” was written and submitted as a course
requirement for the course Business Communication (C102). The course is being undertaken
by students in their first year, final semester, under the BBA (Bachelor of Business
Administration) program of the Institute of Business Administration, University of Dhaka. It
was assigned to us by the course instructor, Assistant professor Muhammad Saif Noman
Khan.

1.2 Objectives

Objectives of the report include both primary and secondary objectives. These
are briefly explained below.

1.2.1 Primary Objective

The primary objective of the report was to accomplish a descriptive analysis
of the Beauty Services Sector in Dhaka city. Our focus was mainly the

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 numerous parlors and the few spas in the metropolitan. The main aim was to
provide information sufficient for decision making of potential investors.
1.2.2 Secondary Objective
The secondary objective was to conduct a consumer survey and to analyze
and include the findings in our report.

1.3 Scope

Our focus was primarily the parlors and spas of Dhaka city. The beauty parlors for
females are predominant in Dhaka city, thus we gathered most of our information
from our interviews at these parlors. The gents’ salons and spas are fewer in number,
but those have also been included in the scope of our report.

1.4 Limitations

The unwillingness of personnel or managers of the beauty parlors and spas to answer
our queries, to sit for an interview or to even provide a general overview of the
current situation of the industry can be stated as the main limitation. But this
limitation was overcome through our persuasive approach.
The second limitation was the dispersed nature of the various parlors, salons and spas
all over the metropolitan. But this was also overcome through our perseverance and
strategic planning.
The lack of secondary data on the beauty services industry is a mention worthy
limitation that we faced.

1.5 Source of Information

Our sources included both primary and secondary sources:

1.5.1 Primary sources
The base of the report I primary data collected by us through our
interviews of concerned personnel at various parlors in Dhaka city.
Another important source was our conducted surveys. The participants

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 included myriads of people from IBA students to Bank workers and
embassy officials.
1.5.2 Secondary Sources
A few articles found on the internet about some well known Bangladeshi
Beauty parlors.

1.6 Methodology

Here, the process we followed for accomplishing this descriptive analysis is written in
step by step format. First we constructed a draft of our table of contents to use as a
base or framework for our report. After doing so, we proceeding with the following:

1.6.1 Searching for Secondary Data

Our first step was to search for secondary data on the beauty services industry
in Dhaka City. We looked through various internship reports in the IBA
library and were unable to find anything related to our topic. Our search on
the internet provided us with some articles from various national dailies.
1.6.2 Taking Interviews
After perusing our secondary data, we then proceeded to take
interviews of personnel in different parlors of Dhaka City. We were
granted access to interview personnel of the following parlors- Alvira
,Hairobics(Gents), Hairobics Bridal, Purple, Sicily, Lee.
1.6.3 Conducting surveys
Two separate surveys were conducted- one for female customers and
one for male customers. The purpose of the surveys was to determine
market share and to understand consumer trends and impressions of the
beauty services sector. (See appendix)
1.6.4 Analyzing collected data
This step consisted of the analysis of the secondary data, primary data
and our findings from our surveys.

1.6.5 Compiling and finishing Report

The last step in our report writing consisted of organization all our
information and analyses and forming them into the final report.

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2 Current Market Situation of the Sector

Caring for one’s look used to be considered as the prerogative of women, that
perception has taken a beating today. In the past five years or so affluent, educated
men have indulged themselves in nurturing their looks. Men are now more conscious
about their looks and attire and are heading towards the parlors that specialize in
men’s grooming. More and more men, especially the younger generation can be seen
mulling over the choices of facials they have, the options that they have with various
types of haircuts.

Male salons are a new pampering and entertaining concept that cater to men’s
haircuts- from conventional to ultra funky, massages, manicures and all other
grooming treatments. Though the trend is a recent one but the number of males
resorting to the expert and caring hands of the beauticians is certainly on the increase.
This is mainly because of the increased proportion of disposable income of
consumers.

The other new addition to the beauty business is spa. Spas in Dhaka cater to the needs
of a selected segment – the upper middle and upper class of the society. Demand for
this special service is on the rise. Some of the well known spas include Spring spa,
Women’s World spa and Harmony spa.

The market share and major players of the beauty business sector is detailed in the rest of the
section.

2.1 Market share:

This section gives information about the market share of the male and beauty
parlor for women. Market share is an important factor in determining the
market size of the sector. There are many beauty parlors for male and female
in the market and the market is projected to grow in size. This is primarily
because the barrier to entry for this sector is quite low. A huge capital
investment is not necessary and there are no strict legalities to enter this sector.

6
However, to survive the competition one must concentrate on providing
differentiated service and thus employs huge finances. Customer preference
generally lies with the parlors which are clean and provide value- for- money
services.

16%
Persona
32%
8% Farzana Shakil
Women's World
8%
La Belle
10% Quebella
26% Others

Figure 1: Pie chart showing market share of Ladies' Beauty Parlor

Beauty Parlors for Women:

Since market research on the beauty business sector has been minimal, there is
no established information of market share of the major players of both female
and male parlors. However, to find the market shares of the prominent female
parlors a survey from a secondary source (detail in methodology section) has
been used. The market share is calculated on the percentage of the responses
of a pool of 50 customers on a question in the questionnaire, which asked
which beauty parlor they visited the most often and the reason for that. The
responses are shown in the above pie chart. From the pie chart it can be
deduced that Persona has the highest share of the market. Farzana Shakil is
following close. The reasons cited by the customers, in the secondary survey,
for the popularity of these parlors were the parlors’ cleanliness, skilled
workforce, quality service and pleasant ambiance. The other parlors cited in
the survey include different small, local parlors like Taniz, Hongkong etc.

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Salons for men:

To find the market share of different salons for men a survey of a pool of 40
male customers has been conducted. Similar to the female parlors, the market
share is calculated on the percentage of the responses of the customers on a
question in the questionnaire, which asked which beauty parlor they visited the
most often and the reason for that.

Menz Planet
10%
Habib's
13%
Persona Adams
32%
Face Wash
18% Hairobics
27%

Figure 2: Pie Chart showing market share of Men's Salon

The results are elaborated in the pie chart above. The parlor with maximum
market share in terms of consumer preference is Persona Adams and Hairobics
stand next. According to the survey price is not a major criteria for selection.
The customers surveyed consider convenient location, skilled barber,
ambiance and cleanliness while judging different salons. The most common
services that the male customers avail are hair cut and shaving. Very few
customers go for facial and other treatments.
Spa:

Although spas have created much hype among the affluent class, the ideal spa
is quite new. There are few players in the field and each is located in different
areas with their own share of the market. Since the use of spas is not as

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 popular as beauty parlors, and its customer segment is quite small. There is no
established market share for this sector of beauty services.

2.2 Major players:

This section gives an overview of the major players in the three categories of
beauty business: female and beauty parlor for men’s and spa.

Beauty parlor for Women:

Although there are many mushroom beauty parlors in the Dhaka city,
depending on customer preference and brand image, there are four major
players of beauty parlor for women. All these parlors have skilled and
professional workforce, planned and spacious outlets, and clean environment
and use the best quality beauty products. The players and their profiles are
elaborated in the table next page:

Table 1: Profiles of Major Beauty Parlors for Women

Major players Profile

Persona • Conveniently located in Dhanmondi with a well
planned, spacious
• Have branches in all major posh areas
• Targets the upper-middle class and upper class segment
• Offers professional service at premium price
• Have plenty of employees to attend each customer
• Uses social cause involvement and massive above the
line activities as advertising tools.
• Promotes beauty products of ‘Nature’s secret’
Farzana Shakil • Located conveniently with branches in Dhanmondi and
Gulshan
• Targets the upper- middle and upper class
• Provides good service at moderate price
• Most popular services provided are bridal make-ups and

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 make-overs

Women’s
world • Conveniently located in many areas with four branches
• Good service
• Reasonable price

Salons for men:

The major players are named with the description of their respective service

profiles in the table below.

Table 2: Profile of Major Men's Salon

Salons for men Service Profile

Persona Adams • Provides wide range of massage services
• Avails beauticians for treatment purposes
• Charge high prices
• Targets the high paid, affluent segment.
Hairobics • Only gent’s salon that provides herbal hair
treatment
• Provides unique services like tattooing, piercing
etc
• Charges premium prices but reasonable according
to the quality of service provided

Face Wash • Specializes in face wash, massage, and bleach

• Attracts metro sexual males
• Have exclusive grooming services

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 Spa:

A few successfully operating spas have been an expansion of some well known

parlors. This in general helped the spa owners to have a good brand image.

Table 3: Service Profile of Popular Spas

Name of spa Service Profile

Harmony Spa • Avails a relaxing and green environment

• Provides skin care facilities
• Charges moderate prices

Spring Spa • Provides high quality service

(Persona) • Charges premium price
• Gives exclusive discounts for regular customers.

Women’s world • Entails services at affordable prices

spa • Avails expert opinion about skin and hair treatment

3 Sector Analysis

This section analyzes the sector of the beauty parlor business using the 4Ps (price, product/
service, place, promotion) of marketing mix. The section examines the activities and
processes involved in the establishment of men and women’s beauty parlor and spas.

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 3.1 Service
Beauty parlors offer a wide assortment of professional services. These services slightly
differ between women and gents beauty parlor. The service offerings can be generally
categorized as following:

Table 4: general service offerings of the parlors

Service Category Service name

Hair Care Hair Styling, Hair treatments, Hair cut and Hair color, Hair
extension, Rebonding.

Body and Skin Care Facial, Fair Polish, Bleach, Massage, waxing, threading

Service Category Service Name

Nail care Manicure, Pedicure

Make-up and others Bridal Makeup, Party Makeup, piercing

Moreover, spas also provide special kind of services as given below:

v Body massages
v Aromatherapy
v Hot stone massage etc

Women’s beauty parlors offer diverse range of services than men’s as beauty salon is a
relatively novel concept among men in Bangladesh. In men’s parlor/salon basic services
such as hair styling, hair cut and some skin care services such as facial are more popular.
Spas are recently emerging, especially as an addition to the big beauty parlors and they
have quite different arrangements. They mostly use natural or herbal ingredients for
beauty care. All parlors offer similar general services. However, some differentiate
themselves by offering unique services. For example, Hairobics provide special herbal
hair treatment for men which according to them, is an exclusive feature. Service
offerings may also vary for different reasons such as:

§ Current trends and fashion: Current trends influence choice of services offered. For
example, during recent years, hair rebonding has become a very popular among young
women.

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 § Parlor location: High end customers look for more exclusive service whereas
customers in less affluent areas may opt for basic services.
§ Customer needs: Customer preferences also play a vital role.

Service environment is also an essential part of the service offerings. Large parlors are
specious and put much emphasis on the overall ambiance of the parlor. Smaller ones also
put effort to attain clean and comfortable working space which is essential for attracting
customers.

3.2 Price

High end and brand beauty parlors charge higher price than non-brand and smaller ones
due brand loyalty and high-cost. However, for smaller parlors such approach is not
viable. So they charge a competitive price. As a result, prices do not vary much for
specific services among beauty parlors. Even, among big parlors prices of basic services
stay more or less the same. However, if a parlor has competitive advantage such as loyal
customer segment, convenient location or skilled stuff it can charge higher prices than
competitors for its services. Most men’s beauty parlors also charge fairly reasonable
price which is attracting new customers.

3.3 Place

Suitable placement or location of a beauty parlor is crucial for its success. It affects other
marketing mix elements- service, price and promotion. There are some factors which
influence placement of parlors. They are given below:

§ Convenience of customers: It has been found out that customers’ preference for
parlors rely majorly on their ease of accessibility. For this reason, most parlors are
situated in or near residential areas as it are easier for the women to go there. It may be
effective to set up parlors in shopping malls like what Persona has done. Best suitable
place are on the main road with spacious parking space and away from traffic prone
areas. Many parlors’ location conform to these criteria. Internal necessities include
elevator service, electricity and water supply, ambiance and pleasant interior.

§ Economic factors: High-end parlors are situated in affluent areas such as Gulshan,
Banani, Baridhara, Dhanmondi where their target customer concentration is present. Also

13
 parlors may consider their target market segment’s economic condition before deciding
their placement.

§ Awareness of customers: Customer awareness and potential customers’ needs also

influence the selection of location. More beauty-conscious customers will be more
attractive market for the beauty parlors.

3.4 Promotion

Significant investment should be allocated for promotional activities. Since the beauty
sector is dominated by the few established players, heavy advertising is required to create
awareness of a business in this competitive sector. Beauty business generally includes the
following advertising tools:

o Magazines: Ice Magazine, Lifestyle, Campaign

o Media: ATN, Channel I,

o Sponsorship: Sponsoring local fashion shows and entertainment

o Make up partner: partnering as the makeover partner for different reality shows.

o Membership cards: Offering membership cards which will allow customers to get
discounts on the services they purchase.

o Leaflets: Distributing leaflets in the targeted areas

o Direct Mail: Sending direct sales email to young customers (D-juice customers)

o Billboards: Advertising in target market

o Seminars: Creating awareness of using natural products.

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4 Value Chain Analysis

Value chain analysis is a helpful way of thinking through ways you can deliver value to your
customers and reviewing ways to maximize the values. It is carried out in two steps. At first
the activities that deliver the final value are identified and then factors that maximize the
values of these activities are analyzed. This is illustrated in the flow diagram below:

Activity analysis Value analysis

Market Study
Marketing Study - Study Effect of Culture
- Study Effect of various media
- Study the Popularity of certain services and analyze the
causes
- Study Current trends
- Study and evaluate Activities of other players
Service design
- provide services that are “in” according to customers’’
perception
- carry out extensive research on best ways to provide the
service
- design services that easily attract people
- find ways to make the service unique relative to other players
Service Costing
- create an appropriate ambience
Evaluate the factors affecting service cost such as:
- training cost of staff
- special equipment
- location of parlor
Procurement Planning - supplier selection
- location
- human resource
- décor
Marketing Design a marketing campaign that stresses on:
- customers
- the benefits of the service
- the values associated with the service
- creating a hype
Customers Deliver the final value to the customers who end the value chain and
provide precious feedback which can be used to make required
Customers changes in the chain and thus provide an even greater value

Figure 3: Flow diagram for Value Chain Analysis

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Market study: An extensive market study should be carried out to assess the current market
structure. This would involve analyzing the factors that affect customer behavior and also the
activities of other players. Consumer behavior is typically affected by culture, values, social
status and education. Most consumers’ needs are shaped by these factors. The media also
plays a vital role in products/services needed by consumers. The satellite channels and
various fashion magazines often control the emergence and dissolution of new trends. A
proper market research should look into all these factors and also into the activities of other
competitors.

Service design: Companies should strive to design services that appeal to the customers’
basic needs and that are perceived by them as the “in” thing. Research should be carried out
to find the best ways to provide the service. For example, massages should be provided only
by trained masseuses. Service designing also includes matching the service with the location.
For example, it would be non-profitable to provide nail art services in a beauty parlor in
Rampura. Another important factor to consider is weigh equipment costs against potential
profitability. In addition to these, it is also extremely important to create the perfect ambience
that goes hand-in-hand with the purpose of the service. For example, the purpose of spas is to
provide ways of relaxation to a client. The ambience and decor of the parlor should be one
that relaxes the clients even before they start receiving the service.

Service costing: The final price of the service is affected by factors such as the novelty of the
service, any special training cost of employees, special equipments and products, the location
of the parlor and other utility costs. For example, Personna charges more for the same
services in its Gulshan branch than it does in the Dhanmondi branch. Reasons may include
the higher rent and utility cost in Gulshan compared to Dhanmondi.

Procurement planning: the first step is to select suppliers. There are two two kinds of
suppliers involved – beauty products and equipments.

i. Equipments: equipments are generally bought from retailers in Elephant Road

and Gulshan. These retailers bring the equipments from manufacturers in
countries like Thailand, China and India. They buy in bulk in order to get
discounts. The discount rates depend on the relationship with the respective
manufacturers. The common equipments used are stem machines, hair iron, hair
dryer, etc.
ii. Cosmetics: cosmetics can be bought in two ways. They can be brought in directly
from abroad or can be bought from local retailers specializing in beauty parlor
products. The special products required in spa services are generally bought
directly from abroad as these products are not easily available in Bangladesh.

The next step is to select the location. Factors that affect location selection are target
customers, rent, parking space, traffic load and surrounding environment. For spa locations,
areas with ample greenery are preferred.

To recruit beauticians there is no formal channel. There are informal agents, network and
connections to get hold of skilled workers. One can also build good relations with the workers
of existing parlors as a client. A higher salary and a little freedom can act as a good incentive
for these workers. Employees are mainly garo girls. One has to also provide accommodation

16
 and transportation costs to them. Hiring trained workers will cut training costs and will also
bring in clients.

Training can be given by professional trainers. Sometimes trainers contact the parlors
themselves. Sometimes the owner brings in foreign technician when new services are
introduced, e.g. hair rebonding. Since spa services are different from other parlor services,
training is specially provided by Thai technicians for a period as long one year.

For administrative posts, advertisements are given in newspapers and job websites.

The last and an extremely important step is to choose the correct décor. For instance, parlor
which is targets mainly teenagers and young people should opt for funky decorations using
bold colors and shapes but such a setup would be inappropriate for a spa center. Spa centers
usually use soft and earthy themes which tend to relax clients. The interior should be spacious
but should also provide adequate privacy to customers at the same time. As designing the
correct décor is crucial, care has to be taken in hiring the interior designer.

Marketing: marketing activities include advertising through billboards, newspapers, lifestyle

magazines and fashion shows. The parlors also sponsor and feature in awareness campaign of
various social issues, like acid violence. Marketing strategies are generally customer-oriented,
relating to traditions and culture. A new entrant should go for aggressive marketing to create
the much-needed hype.

Customers: customers complete the value chain. They are the final recipient of the service -
the final value created by the above-mentioned activities. To ensure complete satisfaction of
the customer, polite behavior is required along with top quality service. The customers are of
utmost importance because they provide valuable feedback about the service which can then
be used to further improve the value chain and thus provide an even greater value the next
time.

5 Start up Requirements

The beauty services industry with its parlors, salons and spas although one of the high earning
industries of Bangladesh has been completely overlooked till now. As people, especially
women, are becoming more and more aware of their appearance, more and more consumers
are rushing to these beauty services rendering entities. Being successful in this industry leads
to huge turnover and future prosperity. Beauty is now a Tk100 crore plus industry, providing
employment for an estimated 100,000 women. The growth of tis industry during such trying
time, with the global recession can seem quite a conundrum, but this is easily solved through
knowledge of the fact that many of the services offered by salons simply cannot be duplicated
at home--or at least not duplicated well. Therefore, setting up a parlor, salon or spa in a

17
developing country like Bangladesh, with its appearance conscious populace will inevitably
lead to huge sales. But setting up a parlor or spa can be a daunting task, what with start up
costs, hiring personnel and buying necessary equipment. According to experts, it can cost
anywhere between 5-10 lakh taka to start a full fledged salon. Deficiencies in the start up
process can leads to major pitfalls in the future. The basic start-up requirements of setting up
a beauty parlor or spa are discussed below.

5.1 A Brief Overview of Start-up costs

Start-up cost for setting up a salon is 5-10 lakh taka and for spas it is roughly around 60 –
50 lakh taka. This includes costs for licenses, trade license, import license, advertising
license etc. these documentation is necessary for the parlor to function as a legal entity.
Many obstacles are met by starters while acquiring these licenses. Insurance fees and
professional fees (fees for lawyers) etc. are also included in the start-up cost.

If the space is rented, the rent accounts for a huge amount of the start-up cost. Small
parlors tend to rent spaces but the high-end ones usually have ownership of a separate
building. initial promotional activities take up a huge share of the startup costs. Without
intensive promotional technique, new parlors will not gain notice of the target
consumers. These costs include costs of advertisements in the newspaper, magazine,
television, billboards, flyers etc.

Other costs include employee training costs, accommodation costs, advance salaries,
transportation costs, leasehold improvement costs etc. the minimum wage for beauty
parlor employees is 3300 taka per month. Depending on the nature of the services
provided, costs of equipments and beauty products can be exceedingly high.

5.2 Entrance into the industry

There are three ways in which a new entrant can enter the current Beauty services
industry:

§ Opening a franchise hair salon, in which money is paid for the privilege of
opening that salon using someone else's established name. This gives the
franchisee instant reputation and promotional resources.
§ One can buy an established salon from someone who is retiring from the
business

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 § The most common option is to establish one’s own salon using one’s own
money and resourcefulness.

5.3 Acquiring ideal location and salon space

If the investment in the parlor is high, the parlor can be set up in posh areas of the
city, near to hubs of urban professionals. These areas in Dhaka City are-Gulshan,
Banani and Dhanmondi. Depending on the nature of the parlor the required space
maybe anywhere from 500 to 2,000 square feet.

From our surveys we have found that location is the most important factor that
customers look at when they choose a beauty parlor. A convenient location is a
top priority of all customers, even before the suitability of price. The best location
would be near main roads and well known establishments, where there is easily
accessibility for customers.

Four separate areas are required: Reception and retail, shampoo, cutting/service,
and storage. The largest of these, of course is the salon services area, which
should take up about 50 percent of the floor space. About 20 percent of the space
should be allotted for retail/reception, 10 percent for the shampoo area, and the
remaining 20 percent for storage and an employee break/lunch room area. The
employee/client restroom and office also should be located in this area.

Improvements may have to be made to the acquired space, such as changing the
interior layout, adding electronic outlets for the equipment, ensuring
uninterrupted water and electricity supply, adding or removing walls to set up
necessary rooms for different service offerings.

For spas, other than the general requirements of parlors, a serene and pure
atmosphere is an absolute must. Spas require more open space than salons. Spas
are usually divided into a series of rooms that are used as changing and showering
facilities, treatment rooms, and consultation rooms. Separate treatment rooms are
needed for wet and dry services.

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5.4 Hiring personnel

In Bangladesh, the required staffs who deal primarily with the services rendered
are usually hired through agents or through other networks. The hired workers at
the parlors are mostly female Mandis from Mymensingh, Tangail, Netrokona,
Sherpur and Sylhet. In men’s salons male workers are hired. In Spas both male
and female workers are hired.

For small parlors, it would be very expensive to provide separate training for their
hired workers. So the small, low investment parlors should try to capture
experienced workers. On the other hand, the high-end parlors in Dhaka city can
afford to provide training for their workers. There are also some institutes in the
city that provide beauty service training, but these are few and far between. For
spa employees, expert training is rendered by Thai technicians for a duration of
more than one year.

Selecting the right employees is of greatest importance for any beauty service
rendering entity. The key to the success of these organizations likes in customer
satisfaction. Happy customers spread their positive and negative opinions of the
parlors or spas to their friends and acquaintances. As such, keeping customers
satisfied is of utmost importance in this industry. The nature of the service also
makes it imperative for the service performer and customer to have a good
relationship. The parlor worker must style according to the customers’ wishes, be
obliging and create goodwill. The parlors workers are at the forefront of creating
an impression of the parlor. Bad workers create a bad impression of the parlor or
spa.

In the salons and spas the following positions are filled in through agents and
direct hiring: Hairstylist/Cosmetologist, Shampoo/Salon Assistant, Manicurist,
Massage Therapist, Electrologist etc. Other important posts include receptionists,
supervisors and Aestheticians.

5.5 Acquiring Salon equipment and Beauty Products

The equipment and the beauty products used also contribute to the overall
impression of the parlors and spas. To attain the clients’ trust, the very best

20
 equipments and beauty products must be used. Most of the equipments are
imported, although there are also local retailers that provide cheaper alternatives.
High-end parlors like Persona, Hairobics either use branded beauty products or
even customized ones prepared by them. The owners of smaller parlors tend to go
abroad to acquire the equipment and beauty products themselves.

The equipment bought will depend on the services offered. Some of the basic
equipment includes washing basin, styling chair, hair driers, supply trolleys and
manicure sets and aprons. Other equipment includes shampoo spray machines;
facial bed, hair steaming machines, and other body/skin care instruments.

Beauty products may include anything from hair color, chemicals, oils, moose,
conditioner and shampoos, moisturizers, crèmes, lotions, foundation bases,
bleach, other exfoliants and herbal products as well.

5.6 Promotional activities

Promotional activities are more important for emerging beauty parlors and spas
than established ones. Without intensive promotional campaigns, potential and
target customers will not be able to know of what the new parlor or spa can
provide. Small parlors can start off with flyers and banners. Bigger ones can
afford to advertise in the popular dailies and magazines. In the initial stages
creating a sound impression of professionalism of the parlor or spa is a must.
Also being able to generate customer satisfaction in the initial stages takes the
parlor a long way in its promotional activities.

6 Investor’s Strategy

Due to the increased demand and quick return on investment, opening a beauty parlor for
ladies is a feasible investment option for an investor. This section projects a possible
investment strategy for an investor using the strength, weakness, opportunity and threat
(SWOT) analysis of the sector.

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Beauty parlor is an emerging sector in Bangladesh. Due to rapid economic growth theliving
standards of average household has improved dramatically, especially in Dhaka city. The
demand for luxury goods and services has increased along with daily spending. More and
more women are now contributing and taking charge of household expenditures.

The women of Dhaka city is now appearing as an untapped market with very high potential.
More sectors are focusing on this market segment which is predicted to grow exponentially
within the next 5- 10 years. Younger women are entering into the professional fields where
appearance as well as qualification is considered vital for their success.

This new market demand has attracted the attention of both local and international investors.
New parlors are opening up all over Dhaka city. The major players are concentrated in
Gulshan and Dhanmondi. Farzana Shakil, Persona, are just a few.

Due to the increased demand and quick return on investment opening a beauty parlor for
ladies is a feasible investment option feasible of beauty parlors for women

New parlors which may try to open the parlors in these locations will inevitably face tough
competitions. It will have to work out new strategies to capture market share from these
competitors. SWOT analysis will give a clear idea of where the parlor stands and which
strategy it should follow.

Strength (S)

• The Parlor should enter the market with a competitive pricing strategy. Charging
comparatively low prices for quality services will help them capture the existing
customers from the big players.

• The parlor will provide herbal products and services. This will result in low cost but
will bring in high profit margin.

• Small but skilled work force will be a valuable asset to the parlor. This will keep
costs low and will provide high quality service to customers.

• Customers will get personalized and exclusive services. The parlor will customize the
services according to their needs. This will bring in high end customers.

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Weakness (W)

• Lack of experience will certainly be a drawback if the new parlor wants to compete
with the established market players. It might face problems during the initial stages of
operation.

• Lack of contacts might also be a problem. The right suppliers and distributors are
essential for its success.

• Since the parlor is new in the market it will have low brand awareness. It will face
difficulty in bringing in new customers.

• Spa services are costly and have low demand.

Opportunities (O)

• The current economic growth is leading to the expansion of the target market of
women. More and more women are becoming beauty conscious and demand for
parlor services are increasing.

• Young teenagers and children are also turning out to be a profitable segment with an
average customer base of two to three thousand customers per month in an average
parlor.

• Herbal products and services are in very high demand compared to the traditional
packages. This is because the customers are becoming more aware of the benefits of
using herbal products as opposed to using chemical products which are harmful and
detrimental to their health in the long run.

Threats (T)

• New parlors will face fierce competition from established competitors. Years of
experience is allowing them to operate at low average costs and make high profits.

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 • Spiraling property prices in posh areas will create huge financial burden to any
organization. Rent prices in areas such as Gulshan and Dhanmondi has doubled in the
last three years.

• Unstable prices of raw materials might also pose a threat to the daily operation of the
parlor.

Table 4: SWOT Analysis

Strength (S) Weakness (W) Opportunity (O) Threat (T)

o Competitive o Lack of o Expansion of o fierce

pricing strategy experience existing target competition
market from existing
o Herbal products o Lack of players
and services contacts o New market
segment o Spiraling
o Small but o low brand property
skilled worker awareness o Demand for prices
force natural
o Spa product o Inflation
o Personalized services
and exclusive
services

7 Future prospects

The beauty services industry of a Bangladesh is huge with an estimated value of Tk. 100
crore. Not just in the metropolitan city, other cities all over Bangladesh are experiencing an
upsurge in the emergence of beauty parlors. With women becoming more and more educated
and joining the national workforce, they have become more confident. This confidence has
led to the awareness of their appearance. This growing trend in awareness is not likely to be
curtailed in the future. As such the customers for beauty parlors will not be decreasing any
time in the near future.

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Strangely, men are also becoming more appearance conscious as well. Hard working males
believe looking their best leads to excelled performance in their workplace. More and more
male office goers believe in pampering themselves at spas after a long week. Other than
availing the general services at the salon for haircuts and shaving, they are also going to
salons for receiving exclusive services such as facials, pedicures and hair treatments.
Therefore, the number of male consumers of the beauty services industry is also increasing.

The increase in both male and female customers will inevitably lead to high sales for beauty
parlors, salons and spas, not just in peak seasons, nut the year round. More and more parlors
and spas will be entering this highly profitable industry, diversifying their service offerings to
keep up with the demand of their target customers.

The future of this industry is not bright just for the sake of the increase in the consumers but
also because of the fact that it is generating more and more employment for the country,
especially for women. Until now, it has provided jobs for 10000 women, whose government
minimum wage set at 3300 taka. Most importantly, it is giving an upper hand to indigenous
workers, who have been overlooked by all industries until now. As more and more women
enter this workforce, bolstered with training and finally experience, they will be able to
sustain their families of at trying times.

Overall, the future of this industry seems nothing short of bright. But there are some
hindrances such as , lack of training institutes, lack of association among the parlors and spas.
The following can leads to an even more profitable future: parlors and salons should target
customers widely, promote themselves extensively, collaborate to form associations that look
after the rights of parlor employees and provide excellent services at premium prices.

From the above, we can clearly state that the beauty services industry of Bangladesh,
especially in Dhaka city will not be shrinking or falling bank in any manner in the near future.

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