Write an 913 Words Essay on a Beauty Saloon
Answers
In the hair salon industry there are salon services and retail products that make up the output. Because the services generate most of the salon’s business that is what I will consider as the final output. Possible services include haircuts, hair colors, perms, etc.
There are many things that could affect the supply and demand for these services. People's income is a huge factor. When the economy is down and people are making less money or don't have jobs, the "extras" like highlights and hairstyles are going to be less in demand. The tastes and preferences of customers is another thing that impacts the demand for services (Supply and Demand). Perms are no longer in as much demand as they were in the eighties because people's tasteAlmost 50 percent of workers are self-employed and salons average about 150 weekly visits (Beauty Salons). This is why the hair salon industry is an example of monopolistic competition. There are salons all over the place and they each offer services that can be differentiated. Market strategies for hair salons focus on service differentiation (Hair Care). Some salons offer walk in services with no frills for a low price while others offer appointment only luxury services at a higher price point. The success of the salon’s service options relies on the demographics of the area as well as on the competition. If most salons in the area offer luxury services you might have more success offering value based services.
The week 3 readings helped my understanding of my industry because I read about the different market structures. By learning the different market structures I was able to decide which structure my industry best fit in. I learned that in monopolistic competition there is free entry and exit of firms which means that if other firms are making a profit then someone else can open a similar firm offering similar services (Online lectures). Advertising is also necessary to create consumer awareness. My research in week 3 taught me that differentiation of services is very important in monopolistic competition.