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Industry Overview
The synthetic human hair industry has become popular over the last decade (20022012). Synthetic hair products have been popularized in African societies by the
adoption of Western trends namely United Kingdom and United States of America. In an attempt to enhance self-image of women, they have noticed that they need longer hair to be deemed as attractive and beautiful to themselves and those around them. This has seen many products come onto the market, from basic wigs to the more modern Brazilian and Indian weaves
Company Description
Lady Rue Hair Products as a fairly new company in the industry seeks to exploit the supply deficiency faced in the industry. Demand of hair products in Johannesburg and South Africa exceeds the current supply available to the country. As a company we will mainly focus on the supply of hair products namely Brazilian, Virgin Indian Remy and Peruvian Hair. Hair products will be procured via import from Guangzhou, China; we have been able to locate a secure and reliable producer of the product. This will be the stepping for the company, as we plan on diversifying to broaden the income base available to us.
Products
Product Description
We look to import Virgin Indian Remy synthetic hair. This type of hair is less popular at the moment because of the price that it is offered on the market.
Unique Features
Virgin Indian Remy can be curled, washed, ironed and re-used as long as it is kept in good condition. We plan on offering this product at prices lower than the current market prices, so as to allow for market penetration which will allow us to win much needed market share and customers.
The Market
Industry Analysis
The synthetic human hair industry is a market that yet to be fully exploited in South Africa. At the moment there are a few companies selling the products that we offer. And they sale at exorbitant prices as they are the sole providers of the products.
Market Analysis
Women in Johannesburg are always looking to be part of the next biggest trend. They tend to be oriented to trending looks, and this weakness is what we seek to exploit. Many women would love to have a nice weave on their heads, but due to the fact that those that are able to provide high quality weaves charge exorbitant prices for their products, many women have not been able to afford themselves a better look.
Competitor Analysis
Companies that are currently operating in the same industry are few, and they are hardly able to keep their more affluent customers satisfied. Our competitors are currently charging unjustified inflated prices.
Targeting Strategy
As a company we will mainly target females who are in universities in and around Johannesburg. There are 13 Universities that are in our scope. We are looking at finding brand and product ambassadors at each of these universities which will allow for the decentralization of our marketing systems.
Positioning Strategy
We plan on making our potential customers aware that the products that we offer are products meant for the high class and affluent people of Johannesburg, meaning that we will be offering high quality products at prices that are affordable to more people than previously perceived. Our products will be available to those in Monash area and Ruimsig, but we will not go out of our way to provide customers in areas such as Braamfontien.
Pricing Strategy
Currently there is high demand for the product that we planning on offering in the market, however sales are low because of inflated prices. We plan on selling our products for prices that are below our competitors prices, but enough to make us a profit. We plan on placing a 200% mark-up on products. The cheap prices that we will be procuring the product at will allow for us to place such a high markup on products and for our products to be still affordable to customers.
Sales Strategy
We will be selling our products from a centralized and pre-determined location. Buyers of products will have to make a deposit to a company account before the product is dispatched to their destination.
BUYING PRICE
INDIAN HUMAN WEFT HAIR
Product 16" 18" 20" 22" 24" 26" 28" Actual Price US$ 32.00 38.69 41.60 45.76 50.35 60.32 64.48 Actual Price Rands @8.6 275.20 332.73 357.76 393.54 433.01 518.75 554.53 200% Markup 550.40 998.20 1073.28 1180.61 1299.03 1556.26 1663.58 Selling Price 825.60 1330.94 1431.04 1574.14 1732.04 2075.01 2218.11
PROJECTED COSTS
INDIAN HAIR TO BE PURCHASED
PRODUC T 18 22 24 PRICE 38.69 45.76 50.35 QUANTITY 3 2 2 TOTAL 116.07 91.52 100.7
PURCHASING TOTAL
690.88
PROJECTED PROFITS After the sales of both product lines these are the projected profits after placing a 200% markup on all products. PRODU CT 18 20 24 PRODU CT 18 22 24 PRICE 116.07 137.28 151.05 PRICE 116.88 162.87 171.21 QUANTITY 3 2 3 QUANTITY 3 2 2 TOTAL 348.21 274.56 453.15 TOTAL 350.64 325.74 342.42
2094.72 16757.76