1. Marketing of Services
Strategic Services Marketing Plan
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Word count: 2977
1. Introduction
“Spa” is defined by the International Spa Association (ISPA) as visit and stay
in tourist establishment with presence of wholesome water resources or
places devoted to overall well-being through a range of professional services,
which contributes to the recovery of the intellectual and physical strengths of
individuals (Alexova & Jordanov, 2013). This report is aimed at developing a
strategic services marketing plan for the further development from 2014 to
2015 of Owl House Day Spa in Nottingham.

2. 2. Marketing Analysis
2.1 Environment Analysis
As shown in the appendix of environment analysis, economics, organizational,
competitive and regulatory factors are relatively important in comparison with
other factors for spa industry.
2.1.1 Economics
Firstly, economic development has significant influence on the leisure and
hospitality industry including spa industry. Increase in disposal income has
contributed to strong demand for spas over several years during economic
boom (Thorsteinsdottir, 2005). However, impacted by the economic downturn,
Accantia Health & Beauty was axing the flagship Simple Spa based in London
Covent Garden, while the premium brand Simple Therapy which was
introduced particularly for the spa could also be scrapped. It is said that the
business is more vulnerable to the tough economic conditions because of its
high overhead costs and its dependence on discretionary consumer spend
(Jack, 2008).
2.1.2 Organizational
Secondly, a spa should be well organized holistically in order to enhance
efficiency and profitability. The president of Beautiful Forever Medical Spa,
Cheryl Whitman said that it is important to create a unique concept and brand
to establish a medical spa while preventing from steep learning curves and
awful decisions (LoBuono, 2006). In the light of LoBuono (2006), it is also
important for a medical spa to keep abreast of industry trends and to set aside
sufficient funds to marketing and promote the business with effectiveness.
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2.1.3 Competition
Moreover, competition in spa industry is increasing because of the emergence
of various types of spas. The traditional European spa faces tough
competition with Asian-based companies which better meet the demands for
spiritual well-being of the modern spa consumer, and have obtained
competitive edge in the European spa market (Thorsteinsdottir, 2005).
LoBuono (2006) advised that spa owners should have knowledge about how
much the competition is charging before cultivating a pricing structure for their
products and services.

3. 2.1.4 Regulatory
Additionally, increasing effort has been put on the regulations for spa industry.
Thorsteinsdottir (2005) pointed out that spa operations and standards lack of
rules and regulations. The Spa Business Association in the UK emphasizes
that spa industry regulation and presentation is necessary for European spas
to increase market share and improve facilities and services, with the steady
increase in health concerning tourism and tremendous interest from banks
and investors attracted to spas. Moreover, in order to achieve more
transparency in the market, the European Spa Association proposed the
adoption of certificates according to ISO 9000/2000 standards and a ranking
system (Thorsteinsdottir, 2005).
2.2 Porter’s five forces
The major threats that impacting Owl House Day Spa consists of the
bargaining power of supplier and threat of substitute products or services. As
explained in the strategic options section, Owl House is to form a partnership
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with a big Chinese manufacturer of materials for hot springs, it is relatively
difficult to bargain the price for importing the ingredients, since the supplier
has a large market in China. Furthermore, substitute products including the
services better match the need of modern customers provided by Asian-based
companies mentioned above also cause an enormous threat to Owl House
Spa.
2.3 Segmentation

4. Owl House Day Spa is currently targeting comprehensive segments range
from 9 to 16-year-old girl to the well-paid working class who undertake great
pressure at work, the pregnant women and the couples who are getting
married. The detailed analysis of each segment is shown in the appendix of
segmentation analysis.
2.4 SWOT Analysis
2.4.1 Strengths
The most mentionable strength of Owl House Day Spa is its wide range of
packages and treatments provided for different segments mentioned above.
In addition to the signature packages with various essential oil, there are spa
packages called “Blooming Mummy” and “Suave & Sophisticated” provided
for pregnant women and men respectively. Particularly, Owl House have
created a range of packages specifically for the bride, groom and even their
parents, bridesmaids and ushers to make them feel refreshed physically and
mentally. These are currently not available in most spas, making Owl House
more distinguished and setting itself apart from the competitors. Also,
packages for two thoughtfully allow customers enjoy the relaxing moment with
their close friends or partner. Moreover, all of the packages include delicious
picnic lunch or afternoon tea. What’s more, customers can hold parties to
celebrate special occasions in Owl House (Owl House Day Spa, 2014).
2.4.2 Weaknesses
Nevertheless, there still exists weakness of Owl House Day Spa. There is
only one hot tub which can accommodate 8 people, thus it is highly possible
to cause inconvenience during peak when many customers want to use the
hot tub in the meantime. Additionally, the hot tub contains nothing but hot
water, which can be mundane since customers can do this in their home.
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2.4.3 Opportunities
Opportunities for Owl House Day Spa are sufficient according to the analysis.
First, an increasing number of consumers nowadays pay much attention to
their health and living standard, they visit spas with the purpose of beauty,
relaxation and leisure (Thorsteinsdottir, 2005). Next, more entrepreneurs and
investors invest in the product and technology innovations for newly built
facilities of spas around the world, so the assortment of specialized services

5. for medical spa has improved (Alexova & Jordanov, 2013). More importantly,
the spa industry takes the lead within the leisure and hospitality industry
(Thorsteinsdottir, 2005), which is also an opportunity for spas to maintain and
increase the profitability.
2.4.4 Threats
However, European spas are faced with the threat of the invasion of Asian-
based companies which has gained competitive edge by meeting the needs
of modern spa consumers.
3. Marketing Objectives
Since the hot tub is limited as well as plain and mundane with solely hot
water, which is mentioned in the SWOT analysis above, the objective of this
marketing plan is to enhance the service and gain more market share by
attracting more customers, with the shortlisted idea of providing customers
with a number of “Rejuvenate Hot Tub” with a variety of natural materials
which are beneficial for beauty appearance and body health, making it similar
to the hot springs in Chinese separately with assorted ingredients contributing
to various enhancements for body. For example, the hot tub with milk
substance can help generate sparkling while with rose essence is helpful for
moisturizing the skin. Particularly, natural ingredients of Chinese herbal
medicine which helps to prevent against ageing by enhancing the function of
inside body will be introduced to the spa.
Such natural ingredients which are beneficial for body health and add to the
functional virtue of the “Rejuvenate Hot Tub” will be creating more benefits for
customers with enhancement of service, and Owl House Day Spa is likely to
attract more customers who emphasize on maintenance and wellbeing. This
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objective manifests the variability of services by satisfying the specific needs
of customers for a healthier body and vigorous appearance.

6. 4. Strategic Options
Applying the Ansoff’s matrix, Owl House Spa is adopting product development
by introducing new product, the “Rejuvenate Hot Tub” to existing market,
which is mainly composed of customers who attach great importance to
maintenance and their body health. To acquire high quality natural ingredients
used to add to the function of hot tub, Owl House is to form a partnership with
a reputed Chinese manufacturer producing a wide range of ingredients for hot
springs, to import the best ingredients for upgrading the effective function of
hot tub, so as to create superior value for current customers and attract more
customers with positive word-of-mouth.
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5. Service Encounter

7. Service encounter refers to a period of time during which a customer directly
interacts with a service (Shostack, 1985). The type of service encounter
offered by Owl House Day Spa is high-involvement personal services, since
the service is performed directly on the customers with tangible facilities.
This report adopts Servicescape to analyze the service provided by Owl
House Day Spa. Servicescape is defined by Booms and Bitner (1981) as the
environment in which the service is assembled and in which seller and
customer interact, combined with tangible commodities that facilitate
performance or communication of the service.
First, the Owl House Day Spa is located deep in the heart of the English
countryside, shielded from the outside world (Owl House Day Spa, 2014),
creating a peaceful and relaxing environment for customers to enjoy a good
time, which is likely to attract the target customers like the working class to the
quiet place to temporarily escape from the stressful environment and alleviate
the pressure. The treatment rooms equipped with beautiful chic furniture and
dusky pastel shades add to the rustic charm of the Owl House Spa stable
(Owl
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8. House Day Spa, 2014), creating a sense of luxury and exquisiteness.
Furthermore, the wide range of delicious food offered at Owl House Spa
encourages customers for further exploration. The ambience of Owl House
such as welcoming and relaxing lighting, elaborate colourful decoration,
fragrant and refreshing smell of the essential oil and massage cream,
contribute to the servicescape and encourage repeat purchase. In addition,
during the service process, staff of Owl House provide delicate service like
massage and guidance for customers with professional skills.
6. Marketing Tactics
6.1 People
People planning assumes much greater significance within the service sector.
This is particularly true in those services where staff have a high level of
contact with customers (Adrian Palmer, 2011). Staff of the Owl House Spa are
trained to be professionals on serving customers with courteous and
passionate attitude, as well as expert knowledge in maintenance and health
care. In the case of confrontation with the customers’ complaints, employees
should take the customers’ disappointment seriously and patiently, and come
up with the most efficient and effective solution to win back customers’ trust
and even gain customer loyalty with sincere compensation.
6.2 Processes
Gronroos (2001) stated that “a service firm has no products, only interactive
processes”, which has emphasizes the importance of process to a service
sector. All services provided in Owl House Spa should be explicitly clarified so
that everyone knows what should be done and how to get things done well.
Processes of the service provided should be flow and efficient. Efforts should
be made to avoid keeping customers waiting for a long time and to serve
customers the way they want at right time.
6.3 Physical Evidence
In the light of Adrian Palmer (2011), the intangible nature of a service
leaves potential customers unable to judge a service before making
consumption, which increases the perceived riskiness of a purchase
decision. To reduce the level of perceived risk, tangible evidence of the
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9. service like brochures describing the ideal environment and details of
services provided by Owl House Spa are available to customers.
Brochures of electronic version will be emailed to customers to inform
the latest events of Owl House. To create pleasant appearance, all of
the staff in Owl House dress in neat and tidy working suit. Also, the
exquisite furniture helps to create a relaxing and welcoming
environment to cater the customer.
7. Industrialization
There are a number of forms of the industrialization of service process:
simplifying the range of services available; providing ‘scripts’ for role
performance; tightly specifying operating procedures; replacing human inputs
with machine-based inputs. In order to realize industrialization, service
providers use online environments to reduce the cost of their dealings with
customers, and to improve the quality, consistency and scope of the service
provided. The Internet has been widely utilized by many organizations for
enhancing the efficiency and effectiveness of service delivery (Adrian Palmer,
2011). The form of replacing human inputs with machine-based inputs is
advised in this report. Like many other organizations, Owl House Spa can
conduct online service like online booking rather than telephone personnel to
enhance efficiency and reduce cost. It is also important to make good use of
the social media like Facebook, Twitter and Youtube to make promotions, so
as to efficiently acquire broader public knowledge with lower cost.
8. Employees, Intermediaries and Partnerships
Internal marketing refers to the means of applying the philosophy and
practices of marketing to people who serve the external customers so that the
best possible people can be employed and retained and they will do the best
possible work (Berry, 1980).
Employees with more patience and more knowledge regarding spa industry
including maintenance and health caring should be selected. Once recruited,
employees should be trained as professional spa caretakers to ensure high
quality service. A series of training programs are to equip employees with
professional knowledge and skills of offering spa service. It is also of
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10. importance to empower employees, so that they will have a stronger sense of
membership of the company. Employees of Owl House are empowered to
offer customers discount up to a certain percentage. Also, an amount of fund
is distributed to the employees to help customers solve problem in urgent
condition.
There will be assessment each quarter for the employees, the staff of Owl
House will be assessed according to their performance at work as a whole.
Evaluation for the staff encompasses the following major aspects: punctuality
and attendance; working attitude towards their job and the customers; the
efficiency and effectiveness of guidance and resolutions provided for the
customers; their level of professional skills; the frequency of complaints from
customers. The top three assessed employees will be offered an amount of
allowance as rewards, which is 8%, 9% and 10% of their salary respectively
according to their rankP13219249
. Moreover, those who are specifically praised by
customers for high quality service like professional skills or passionate attitude
will be provided with a free package of Owl House Spa. Such stimulating
rewards are likely to give employees more motivation towards their work, so
that they will make greater efforts to enhance their performance.
9. Branding and Innovation
According to Adrian Palmer (2011), as services organizations grow, their
brand may become their greatest asset. The reputation encapsulated by a
brand may be critical in recruiting new customers, and retaining existing ones.
The author of this marketing plan advises Owl House Day Spa to adopt
individual service branding, where each product or group of products has a
separate brand identity (Adrian Palmer, 2011). The reasoning is that individual
brands are more likely to be used by companies that have separate operating
units serving quite distinct market segments (Adrian Palmer, 2011), which is
the case of the Owl House Day Spa with distinct target market composed of
segments ranging from young girls to middle-aged working class and the like,
as mentioned above.
Positioning strategy sets a brand apart from competing brands in order to give
the owner of the brand a competitive edge in the market, by going to the heart
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11. of what a brand stands for, comprising both the functional and emotional
elements. The two basic dimensions of positioning strategy consist of the
level of service quality provided to customers and the price that is charged
(Adrian Palmer, 2011). Owl House Day Spa adopts high quality/high price
position, lying in the “premier sector”. The price charged by Owl House is
high, which is comparable with the high quality service it provides to customer.
10. Quality
SERVQUAL will be adopted to evaluate the service quality provided by Owl
House Spa. Attributes of SERVQUAL including reliability, assurance,
tangibles, empathy and responsiveness will all be evaluated.
10.1 Reliability
Staff of Owl House Day Spa should provide customers with the service that
are included on the lists of packages. Any problems regarding the service that
customers encounter during the process should be handled efficiently and
effectively by staff. It is also important to avoid keeping customer from waiting
for a long time for acquiring the service and satisfy customers’ needs
promptly.
10.2 Assurance
Most importantly, employees should be enthusiastic and courteous towards
the customers they serve with passion and patience. Employees are
supposed to have sufficient knowledge to give professional advice and
guidance to customers’ questions, so as to gain trust and confidence from
customers.
10.3 Tangibles
Visually appealing facilities and materials associated with the relaxing and
luxurious service of spa, like the exquisite furniture with delightful and
welcoming color and cosmetics of various popular brands should be neatly
displayed in Owl House and renewed regularly. Also, employees should all
dress in smart and neat suit to give out professional impression.
10.4 Empathy
Employees should understand and satisfy the needs of customers with caring
mind. Sufficient personal attention should be given to customers by

12. employees to make sure that customers have acquired what they want from
the service
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provided in Owl House Spa. To be thoughtful, the time of service offering is
dependent on customers’ convenience.
10.5 Responsiveness
Customers are supposed to be kept informed about when services will be
performed. Employees are supposed to be always willing and ready to
respond to customers’ requests, and offer service to customers promptly
according the time of service performance informed to customers without
procrastination.
11. Evaluation and Control
Measurement progress will be taken during the implementation of the service
improvement. After the “Rejuvenate Hot Tub” has been introduced to the
market, the change in the number of customer will be recorded every quarter,
in order to evaluate the level of achievement. Moreover, the opinions of the
customers towards the “Rejuvenate Hot Tub” will be carefully taken into
account to decide which areas need to be improved or addressed. Viewpoints
of the customers toward the Owl House will be collected by means of
questionnaires and face-to-face conversation and will be considered in further
improvement to best satisfy customers’ needs in the future.
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Reference
Adrian Palmer (2011). Services Marketing. 6th ed. New York: McGraw-Hill
Education (UK) Limited. p264-266

13. Alexova, D. & Jordanov, J. (2013), "Sector Policy for Health and Medical Spa
Tourism in Republic of Bulgaria", Business Management and Strategy, vol. 4,
no. 2, pp. 29-41.
Berry, L.L. (1980) ‘Service marketing is different’, Business, 30(3), 24-9.
Booms, B.H. and Bitner, M.J. (1981), ‘Marketing strategies and organization
structures for service firms’, in J. Donnelly and W.R. George (eds), Marketing
of Services, American Marketing Association, Chicago, IL.
Gronroos, C. (2001) ‘Guru’s view: the perceived service quality concept - a
mistake?’, Managing Service Quality, 11 (3), 150-2.
Jack, L (2008), 'Simple closes flagship spa as economy bites', Marketing
Week (01419285), 31, 25, p. 4, Business Source Complete, EBSCOhost,
viewed 11 March 2014.
LoBuono, C (2006), 'Pointers to remember before opening a spa. (cover
story)', Cosmetic Surgery Times, 9, 7, p. 20, Business Source Complete,
EBSCOhost, viewed 11 March 2014.
Prior, M (2004), 'Safety Concerns Prompt Spa Licensing System', WWD:
Women's Wear Daily, 188, 49, p. 8, Business Source Complete, EBSCOhost,
viewed 11 March 2014.
Shostack, G.L. (1985) ‘Planning the service encounter’, in J.A. Czepiel, M.R.
Solomon and C.F. Suprenant (eds), The Service Encounter, Lexington Books,
Lexington, MA.
Thorsteinsdottir, K (2005), 'The state of the European hotel spa sector',
Journal Of Retail & Leisure Property, 4, 3, pp. 272-277, Business Source
Complete, EBSCOhost, viewed 12 March 2014.
Owl House Day Spa (2014), available from http://www.owlhousedayspa.co.uk/packages-
and-treatments/, assessed on 13/03/2014
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Appendices
Appendix 1 PRESTCOM Analysis
Rank Weight Factor Justification

14. Economics
1
50% Increased income
Economic development significantly impacts the leisure and
hospitality industry. Increase in disposal income contributes to
strong demand for spas.
50% Economic downturn
The business is vulnerable to the tough economic conditions due
to its high overhead costs and its dependence on discretionary
consumer expenditure (Jack, 2008). Economic downturn has
seriously attacked the spa business.
Organizational
1
70% Branding
It is important to create a unique concept and brand to establish
a medical spa while preventing from steep learning curves and
awful decisions.
30% Promotion
It is also important for a medical spa to keep abreast of industry
trends and to set aside sufficient funds to market and promote
the business with effectiveness (LoBuono, 2006).
Competitive
2
60%
Competition from
Asian-based
companies
The traditional European spa faces tough competition with Asian-
based companies which better meet the demands for spiritual
well-being of the modern spa consumer, and have gained
competitive position in the European spa market
(Thorsteinsdottir, 2005).
40% Pricing decisions
Spa owners should have understanding about how much the
competition is charging before cultivating a pricing structure for
their products and services (LoBuono, 2006).
Regulatory
2
50%
Emphasis on
regulation
The Spa Business Association in the UK emphasizes that spa
industry regulation and presentation is necessary for European
spas to increase market share and improve facilities and
services.
50% Policy for
transparency
In order to achieve a higher level of transparency in the market,
the European Spa Association proposed the adoption of
certificates according to ISO 9000/2000 standards and a ranking
system (Thorsteinsdottir, 2005).
Social
3
60% Needs of health care
The spa medical services and programs are transferred into self-
improving specialized form of contemporary tourist service by the
mode of satisfaction of the needs of health care to the “urban
consumers” (Alexova and Jordanov, 2013).
40%
Leisure audience
Modern spas are targeting a larger audience who visit a spa for
beauty, relaxation and leisure purposes (Thorsteinsdottir, 2005).
80% Technology
The product and technology innovations and solutions financed
and implemented in newly built facilities around the world by

15. Technological
3
innovations more perceptive investors and entrepreneurs contribute to the
spread and development of the assortment of specialized tourist
packages for medical spa tourism (Alexova & Jordanov, 2013).
20%
Significance of
website
It is of significance to create an interactive website for a medical
spa business, which is high-end aesthetic (LoBuono, 2006).
Market
4
Advantageous
position
According to International SPA Association (ISPA), the spa
industry has become a major player within the leisure and
hospitality industry, catching up with and even outperforming
other leisure activities in revenues and confronting the challenges
of a weak economy (Thorsteinsdottir, 2005).
Political
5
Encouraging policy
The government encourages the development of leisure industry,
since it has greatly contributed to the increase in economic
development.
Appendix 2
SWOT Analysis
Strengths
- A wide range of packages and
treatments
- Packages designed for specific
segments like pregnant women
and marrying couples.
- High quality food offering
- Parties arrangement
Weaknesses
- Limited number of hot tub can
cause inconvenience during peak
- Lack of attractiveness and
function of hot tub
Opportunities
- More attention paid to living
standard
- Increasing investment in the
product and technology
innovations by entrepreneurs and
investors
- Dominant position within the
leisure and hospitality industry
Threats
- Invasion of Asian-based
companies which are highly
competitive
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16. Appendix 3
Segmentation Analysis
Segments Customer Needs Company Offers
Young girls (9-16 years
old)
Spend leisure time hanging out
with best friends and enjoying
delicious and exquisite looking
food while chatting in elaborately
decorated venues together.
Spa parties for girls with the age
between 9 and 16, who want to be
pampered and enjoy some girly fun
with their best friends (Owl House
Spa, 2014).
Working class
Demand for physical and mental
relaxation with skillful massage in a
relaxing environment after stressful
working for long time, to prevent
from physical sickness.
A wide range of packages and
treatments with essential oils and
massage cream, as well as various
facilities like steamed room and hot
tub.
Pregnant women
Women undertaking pregnancy are
in less comfortable condition
physically and need to be well
taken care of.
The package “Blooming Mummy”
offers tested pregnancy massage
techniques to relieve tension in the
back and alleviate swelling in the
hands and feet.
Marrying couples
Desire for a memorable
wedding with an energetic
condition and vigorous
appearance after a stressful
planning.
“Keep calm and get married”
packages is considerately
designed to provide an ideal break
for the couples and attendants and
ensure everyone feel refreshed
physically and mentally.
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