Business plan for an original high class day spa

1.4 The Structure of the project The report was organized as below: Executive Summary Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: Company Profile and Products & Serv

Ho Chi Minh City, 25 February 2011

Phan Quang Nam

ACKNOWLEDGEMENTS

First of all, I would like to show my gratitude to my Supervisor – Dr Bui Thanh Trang, who helped me a lot with his valuable guidance and excellent suggestions I am also indebt to all lecturers, staffs and my classmates in this Program, all of them supported and encouraged me

a lot during the course

In addition, I would like to express my grateful to Ms Duong Thao Nguyen who helped me a lot to finish this thesis

Finally, I would like to express my deep gratitude to my family and my friends, for their backing and support not only during this course, but also for all thing I do

TABLE OF CONTENT

UNDERTAKINGS

ACKNOWLEDGEMENTS

ACRONYMS

LIST OF FIGURES

LIST OF TABLES

EXECUTIVE SUMMARY……… 1

Chapter 1: INTRODUCTION 3

1.1 Rational of the project 3

1.2 Objectives of the project 3

1.3 Research methodology of the Project 3

1.3.1 Data collection 3

1.3.2 Scope and Limitation 4

1.4 The Structure of the project 4

Chapter 2 LITERATURE REVIEW 5

2.1 Business Plan Theory 5

2.1.1 Market Research 5

2.2 Financial Review: 8

2.2.1 Net Present Value (NPV): 8

2.2.2 Internal Rate of Return (IRR) 9

2.2.3 Payback Period 10

Chapter 3 : COMPANY PROFILE AND PRODUCTS & SERVICES 12

3.1 Company Profile 12

3.1.1 The location of the Spa 13

3.2 Product and Service Description 14

3.2.1 Eco Hot Bed Therapy: 14

3.2.2 Massage combine with Medicinal Herbs 14

3.2.3 Zen and Yoga 15

3.2.4 Vegetarian and Healthy Foods 16

3.3 Sales Literature and Fulfillment 16

3.4 Technology 17

3.5 Future Products and Services 18

Chapter 4: MARKET ANALYSIS 19

4.1 Data collection from Market Research 20

4.1.1 The Clients’ frequencies to using spa services (question 5) 20

4.1.2 Average payment of clients for 1 time in Spa (question 6) 20

4.1.3 The reason why clients using Spa Service (question 12) 21

4.1.4 The information channel (question 16) 21

4.1.5 Criteria to choose a spa (question 15) 22

4.2 Market Segmentation 23

4.3 Target Market Segment Strategy 24

4.4 Service Business Analysis 26

4.4.1 Typical Competitors: 27

Chapter 5 : STRATEGY, MANAGEMENT & IMPLEMENTATION 29

5.1 Position Statement and Value Proposition 29

5.2 Marketing Strategy 29

5.2.1 Promotion Strategy 30

5.2.2 Pricing Strategy 31

5.3 Management and Human Resources 33

5.4 Milestones 35

Chapter 6: FINANCIAL PLAN 36

6.1 Initial investment 36

6.1.1 Initial Investment Expenditures 36

6.1.2 Depreciation Calculation 37

6.2 Revenue and Profit & Loss Analysis 38

6.2.1 Revenue Analysis 38

6.2.2 Expenditure Analysis 40

6.2.3 Profit & Loss (P&L) Analysis 40

6.2.4 Break-even Point Analysis 42

6.3 Key Performance Indicator (KPI) Analysis 42

6.3.1 Net Present Value (NPV) Analysis 42

6.3.2 Internal Rate of Return (IRR) Analysis 43

6.3.3 Payback Period Analysis 44

6.4 Risk Management Analysis 44

Chapter 7 : CONCLUSION AND RECOMMENDATION 46

7.1 Conclusion 46

7.2 Recommendation 46

REFERENCES APPENDIX 1: QUESTIONNAIRE APPENDIX 2: RESULTS OF SURVEY

ACRONYMS

EBITDA Earning before Income tax, Depreciation and Amortization

Vietcombank Joint Stock Commercial Bank for Foreign Trade of Vietnam

LIST OF FIGURES

Figure 2-1: Typical Business Plan Model 5

Figure 2-2: Market Research Methodologies 6

Figure 4-1: Clients’ Frequencies to using Spa Service 20

Figure 4-2: Average payment of clients for 1 time in Spa (Unit:VND 1,000) 21

Figure 4-3: The reason why clients using Spa Service 21

Figure 4-4: The information channel 22

Figure 6-1: Revenue in period of 10 years (Unit VND 1,000) 39

Figure 6-2: Net income in period of 10 years (VND 1,000) 41

LIST OF TABLES

Table 3-1: Shareholder’s Capital Contribution (Unit: VND) 113

Table 4-1: Criteria to choose a spa 22

Table 5-1: The Service Prices List (Unit: VND 1,000) 31

Table 5-2: Salary Budget per month (Unit: VND 1000) 334

Table 5-3: Master Plan for Implementation 34

Table 6-1: Initial Investment Expenditure (Unit: VND 1,000) 365

Table 6-2: Revenue in 10 years (Unit: VND 1,000) 398

Table 6-3: Expenditures (Unit: VND 1,000) 409

Table 6-4: P&L in 1st financial year (Unit: VND 1,000) 409

Table 6-5: P&L in 2nd financial year (Unit: VND 1,000) 40

Table 6-6: Net Income in 10 years (Unit: VND 1,000) 40

Table 6-7: The Cash Flow in 10 years (Unit: VND 1,000) 42

Table 6-8: The NPV of the project (VND 1,000) 42

Table 6-9: IRR Calculation (Unit: VND 1,000) 444

EXECUTIVE SUMMARY

This business plan has been developed to build an original high class Day Spa in the centre area of HCMC in the life circle of 10 years, this business will be set up as a partnership between 4 women: Mrs Hang, Mrs Ngan, Mrs Hanh and Mrs Mai Moreover, this business plan helps to give the owners a clear prospect about the business they want to get

in as well as keep it on track both in the implementation and operation procedure

Products and Services

This Day Spa offers the full range of spa’s services combine with holding Zen & Yoga class as well as providing the healthy & vegetarian foods, too The spa services include the ordinary service such as massage, herbal bathing, skin care services etc., and combine with the extraordinary service which appears in the first time at HCMC: the anti-oxidant Eco Hot Bed Beside, all the raw materials using in this spa are eco-friendly products which is good for health and environment

Competitive Edge

Our competitive edge are unique original services/products within relax/peaceful atmosphere, our location in a luxury urban area is another advantage With the services/products which never appear in other spas in HCMC before (anti- oxidant Eco Hot Bed, Zen, Yoga and Vegetarian food), we hope it will create a new concept of Day Spa which effect strongly to the way community identify and enjoy spa services Moreover, our employees (Receptionist, Massage Therapist) will be trained in a special course in order to make them become the most professionalism employees in their field

Financial Review

We forecast to achieve the sustainable sale revenue as well as healthy net profit from the

second financial year Some key performance indicators are shown as below:

NPV of the project = VND 4,477,028,000 (discount rate refer to current long-term

saving rate of Vietcombank which is 12% per year)

IRR of the project = 29.09%

Payback Period = 3.6 years

1 Mission

We will build a spa which offers clients an unique mod of relaxation and fulfillment, our philosophy is that try to help people feel relax, comfortable and happy thus they will have more energy to work harder and concentrate better In general, we try to contribute our self to make a better environment for our community of working and living We position our spa as a top spa in the district 1 and district 3 areas with luxury products and services Considering that none of other spas provide exactly the same services/products as we offer,

we will be able to offer our services to the portion of central population not currently being served

2 Objectives

- Achieve sustainable sale revenue and health net income from second financial year

- Achieve the break even point (about average 17 clients/day) beginning at month 4 from Grand Opening day

- Achieve the stable mode of operation (about average 25 clients/day) beginning at month

7 from Grand Opening day

- Clients return rate of 80% at the end of first financial year

Chapter 1 INTRODUCTION1.1 Rational of the project

Nowadays, Viet Nam is considered as one of the most rapid growth market over the world with many opportunities and challenges, either Everyday, there are hundreds of businesses registered in Planning & Investment Departments The process of registering a new business now is more and more easy thus anybody with a great idea can open a business very quickly Some people take action to start up their business without any market analytical and business plan, they just believe that a “good idea” can ensure for them the success in business Other people prefer to build a business plan before doing any action

Of course the chance to be success of the people who prefer to prepare a business plan is higher than the people who don’t plan anything In general, the business plan help people who intend to run a business an overview of the market which they want to get in and the scenarios they may face off It is also a good tool to control the risk in their future business

1.2 Objectives of the project

This project expressed as a business plan to open an original high class Day Spa where offers the basic services such as massages, herbal bathing combine with extraordinary services such as Eco Hot Bed, Zen & Yoga classes Firstly, I do data collection job though Interview & Observation as well as a questionnaire survey Once I got the results from my data collection job, I will analyze the data collection results then making the business plan

to become a clear prospect through a process to developing the project from the original idea to market situation then financial plan and action plan

1.3 Research methodology of the Project

1.3.1 Data collection

Qualitative Research (Interview & Observation)

Before going to the quantitative research step which include design and release the questionnaire to people in order to identifying the demand and critical factors of spa industry, I’ve made some interviews with potential customers, the Spa’s owners, the

architecture, landlords etc., to take an overview of the prospect of this industry as well as some critical information such as house rental fee range, average salary for employees, the trend of the market etc.,

Questionnaire (Quantitative Research)

After finishing the Qualitative Research (Interview and Observation), I go to the next step

of Quantitative Research The first job of this step is designing the Questionnaire in order

to collect the data which help to verify the true demand and critical factors of the exist market of this industry There are about 230 questionnaires were sent out to the people whom were the suitable objects for the research such as office employees, the residences who live in central area etc., and finally got 148 completed feedbacks as description in Appendix 1 and Appendix 2

1.3.2 Scope and Limitation

This research focuses to study about the behavior of customers who are the potential client

of Spa’s service, especially verifying how they tend to enjoy the new special kind of Spa The data research will be mainly made by the people who are living or working in the radius 4km from the potential location where we intend to settle our store This study made for feasibility assessment of business in high class Spa Industry only, not for any other kind of industry

1.4 The Structure of the project

The report was organized as below:

Executive Summary

Chapter 1: Introduction

Chapter 2: Literature Review

Chapter 3: Company Profile and Products & Services

Chapter 4: Market Analysis

Chapter 5: Strategy, Management and Implementation

Chapter 6: Financial Plan

Chapter 7: Conclusion and Recommendation

Chapter 2 LITERATURE REVIEW

In this Chapter, I will review the Theories in the course which relate to the content of this Project

2.1 Business Plan Theory

According to Dr Francois Faelli (lecturer in Entrepreneur subject), it is very important to got an idea about a standard model when starting up a business and the figure below is one

of standard model of Business Plan

Figure 2-1: Typical Business Plan Model

(Source : Dr François Faelli’s lecture note)

sch e m e

M ile st on e s

St a ge s

Risk a na ly sis Pla n B

Figure 2-2: Market Research Methodologies

(Source: Dr Francoise Faelli’s lecture note)

There are usually two steps to your market research First step is validation study (Macro level), in this step, the main job is assessing the opportunity and check if what you believe….is true The second step is depth study (Micro level), in this step, the main job is preparing benchmarks for strategy definition and action plan

There are 4 basic techniques in Market Research: Desk Research, Field Observations, Qualitative Study and Quantitative study / Poll

Industry Analysts

+ Specialized press

Interviews with customers / Focus Groups / Pools

+ Observation

Interviews with experts + Observation

- General information about market : size, growth rate, segmentation, maturity…

- Identification of main actors and opinion leaders

- Economy of the industry : profitability components, profit margins,

- Identification of competitors

- State of the art and perspectives

b Observation [2]

What do we mean?

- Go into the field, observe, follow or act like a customer, ask for offers,

- E.g Mistery shopping

Outcomes

- Understanding of customers expectations

- More information about competitors: precise proposals, sales processes…

c Qualitative Study [3]

What does this imply?

- One to one in-depth interviews with potential customers, competitors, specialists, opinion leaders,…

Typical interview guide

- Introduction of the interviewer and goals of the interview

- General question to warm-up the interviewee and create confidence

- Qualification question to position the interviewee and secure he/she has the right profile

- Specific questions to get his/her opinion on key issues

- Summary and validation of it by the interviewee

- Collect personal information if further details are needed

This is not a sales exercise!

Outcomes = what you need !

d Quantitative Study/Poll [4]

What it takes

- Analysis of a representative sample of the market by inquiries

8 Interviews: face-to-face, phone,…

8 Forms: mail, web, …

Outcomes

- Measures

No really adapted to SMEs

- Very demanding from a methodology point of view (need expert advises)

- Quite expensive

- More required for B2C than for B2B

2.2 Financial Review:

2.2.1 Net Present Value (NPV) [5]

In finance, the net present value (NPV) or net present worth (NPW) [1] of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs)

of the individual cash flows In the case when all future cash flows are incoming (such as coupons and principal of a bond) and the only outflow of cash is the purchase price, the NPV is simply the PV of future cash flows minus the purchase price (which is its own PV) NPV is a central tool in discounted cash flow (DCF) analysis, and is a standard method for using the time value of money to appraise long-term projects Used for capital budgeting, and widely throughout economics, finance, and accounting, it measures the excess or shortfall of cash flows, in present value terms, once financing charges are met The NPV of a sequence of cash flows takes as input the cash flows and a discount rate or discount curve and outputs a price; the converse process in DCF analysis - taking a sequence of cash flows and a price as input and inferring as output a discount rate (the discount rate which would yield the given price as NPV) - is called the yield, and is more widely used in bond trading

Each cash inflow/outflow is discounted back to its present value (PV) Then they are summed Therefore NPV is the sum of all terms,

where

t - the time of the cash flow

i - the discount rate (the rate of return that could be earned on an investment in the financial markets with similar risk.)

R t - the net cash flow (the amount of cash, inflow minus outflow) at time t

For educational purposes, R 0 is commonly placed to the left of the sum to emphasize its role as (minus) the investment The result of this formula if multiplied with the Annual Net cash in-flows and reduced by Initial Cash outlay will be the present value but in case where the cash flows are not equal in amount then the previous formula will be used to determine the present value of each cash flow separately Any cash flow within 12 months will not be discounted for NPV purpose

2.2.2 Internal Rate of Return (IRR) [6]

The internal rate of return on an investment or project is the "annualized effective compounded return rate" or discount rate that makes the net present value (NPV) of all cash flows (both positive and negative) from a particular investment equal to zero

In more specific terms, the IRR of an investment is the interest rate at which the net present value of costs (negative cash flows) of the investment equals the net present value of the benefits (positive cash flows) of the investment

Internal rates of return are commonly used to evaluate the desirability of investments or projects The higher a project's internal rate of return, the more desirable it is to undertake the project Assuming all projects require the same amount of up-front investment, the project with the highest IRR would be considered the best and undertaken first A firm (or individual) should, in theory, undertake all projects or investments available with IRRs that exceed the cost of capital Investment may be limited by availability of funds to the firm and/or by the firm's capacity or ability to manage numerous projects

Given a collection of pairs (time, cash flow) involved in a project, the internal rate of return follows from the net present value as a function of the rate of return A rate of return for which this function is zero is an internal rate of return

Given the (period, cash flow) pairs (n, C n ) where n is a positive integer, the total number of periods N, and the net present value NPV, the internal rate of return is given by r in:

Note that the period is usually given in years, but the calculation may be made simpler if r

is calculated using the period in which the majority of the problem is defined (e.g., using months if most of the cash flows occur at monthly intervals) and converted to a yearly period thereafter

Note that any fixed time can be used in place of the present (e.g., the end of one interval of

an annuity), the value obtained is zero if and only if the NPV is zero

In the case that the cash flows are random variables, such as in the case of a life annuity, the expected values are put into the above formula

Often, the value of r cannot be found analytically In this case, numerical methods or graphical methods must be used

2.2.3 Payback Period [7]

Payback period in capital budgeting refers to the period of time required for the return on

an investment to "repay" the sum of the original investment For example, a $1000 investment which returned $500 per year would have a two year payback period The time value of money is not taken into account Payback period intuitively measures how long something takes to "pay for itself." All else being equal, shorter payback periods are preferable to longer payback periods Payback period is widely used because of its ease of use despite recognized limitations, described below

The term is also widely used in other types of investment areas, often with respect to energy efficiency technologies, maintenance, upgrades, or other changes For example, a compact fluorescent light bulb may be described as having a payback period of a certain number of years or operating hours, assuming certain costs Here, the return to the investment consists of reduced operating costs Although primarily a financial term, the concept of a payback period is occasionally extended to other uses, such as energy payback period (the period of time over which the energy savings of a project equal the amount of energy expended since project inception); these other terms may not be standardized or widely used

Payback period as a tool of analysis is often used because it is easy to apply and easy to understand for most individuals, regardless of academic training or field of endeavour When used carefully or to compare similar investments, it can be quite useful As a stand- alone tool to compare an investment to "doing nothing," payback period has no explicit criteria for decision-making (except, perhaps, that the payback period should be less than infinity)

The payback period is considered a method of analysis with serious limitations and qualifications for its use, because it does not account for the time value of money, risk,

financing or other important considerations, such as the opportunity cost Whilst the time value of money can be rectified by applying a weighted average cost of capital discount, it

is generally agreed that this tool for investment decisions should not be used in isolation Alternative measures of "return" preferred by economists are net present value and internal rate of return An implicit assumption in the use of payback period is that returns

to the investment continue after the payback period Payback period does not specify any required comparison to other investments or even to not making an investment

Chapter 3 COMPANY PROFILE AND PRODUCTS & SERVICES

This Day Spa is a new type of spa which offering customers a unique combination of several products and services such as Therapeutic Massage, Medicinal Herbs Bathing and especially anti-oxidant Eco Hot Bed, Vegetarian Foods, all in one beautifully serene setting Beside, we also offer the training courses of Zen & Yoga with the professional trainer Guidance and consultation will be provided on all service and product if needed In general, we guarantee to offer the professional services and products to take care not only your body, but also your mind, too

Mrs Hanh was a High School Teacher, majoring in Mathematical After that she switched

to financial field and become the Finance Director of Satec – a Sea Transport Corporation Now she is a member of Board of Management as well as a Deputy General Director of Giang Dien joint stock Company, which is a 120 hectare famous eco-friendly tourist base

in Dong Nai province

Mrs Ngan has graduated as a Ph.D of Psychology from an Russian University and has taught at Educational Management School in HCMC

Mrs Mai is a M.A, majoring in Business Law, she is now teaching as a lecturer in some business schools, too

The table below descripts the ratio of capital contribution of each Shareholder:

Table 3-1: Shareholder’s Capital Contribution (Unit: VND)

Shareholder's name Capital Contribution No of share Ratio

(Source: author’s collection)

The total Capital for this project is VND 5,500,000,000 which is divided into 55,000

shares (par value VND 100,000 for each share)

3.1.1 The location of the Spa

Our target location is a villa or big house with the using-area about 450-500 m2 in the center of the city (district 1 or district 3) and the rental fee from USD 4,000 – 4,500 per month The first potential location is a house on Pham Ngoc Thach st, district 3, this house has a total using-area about 400 m2 and the landlord quote the price of USD 4,000 rental fee per month The second potential location is a villa in a big alley (about 6 meter width)

on Nguyen Van Thu st, Dakao ward, district 1 This villa has 3 levels building with total using-area about 450 m2 within a land precinct of about 250 m2, the landlord quote the price about 90 million VND rental fee per month

After considering carefully, we decide to choose the villa on Nguyen Van Thu street although the rental fee is more expensive compare to the house on Pham Ngoc Thach street The reason why we choose this villa is its current condition is quite good and more proper to design our spa thus we will save much money in decoration & construction Moreover, this villa locates in a luxury urban area which is suit with our criteria We have signed the Memorandum of Understanding (MoU) with the landlord in middle of January,

2011 and intend to sign the officially contract in middle of March, 2011 and it will be lasted in 10 years Especially, we achieve the negotiation that the landlord will support us 1

month free of charge from the officially signing date for our preparing in design and

construction, that mean the contract will be sign in middle of March but the rental fee only

be charged from the middle of April

3.2 Product and Service Description

3.2.1 Eco Hot Bed Therapy:

This is a original & unique product which provided by our spa, we define this product as our core product which help to differentiate our spa with all kinds of other spas in Vietnam We import this product which developed by EcoParadise with detail description

as below:

• Ecoparadise Antioxidant Therapy Rooms are specially constructed using building materials imported from Japan • Hot bed materials emit negative ions into the air • Room temperature is set at 42 – 45°C by using hot water circulation Customers will lie on top of the hot bed and absorb the antioxidants via the skin and through breathing The warm temperature is soothing Customers will be able to sweat and detox while relaxing at the same time [8]

Figure 3-1: Eco Hot Bed

( Source: http ://www.ecoparadise.my/therapy.html )

3.2.2 Massage combine with Medicinal Herbs

At our spa, we offer a special massage (Tibetan style) service which combines with Medicinal Herbs to help people relaxing, reduce stress and improve the energy

Tibetan remedial massage is one of the oldest forms of massage found on the earth It is a specialty of Tibetan medicine that specifically addresses the external body It is one of six types of external therapies found in the Gyud-Zhi (Tibetan: rGyud-bzhi – pronounced “jyu shee” in Tibetan), a classic of Tibetan Medicine Sutra (scripture) referred to as the “Four Tantras” in English In the last Tantra (or Fourth Text), in the last section dealing with Accessory Therapies, massage is outlined under the heading of “Wind: Massage with Sesame oil” Massage then is used in combination with different media such as vegetable oil, clarified butter (ghee), etc Adjunctive therapies address specific problems Fomentation (swedana or herbal steam) addresses the Phlegm (Kapha) diseases, massage the Wind (Vata) diseases and hydro-therapy the Bile (Pitta).[9]

In addition, we also provide foot massage service and Japanese massage style (Shiatsu) which is very popular in Vietnam Medicinal Herbs Bathing in traditional Japanese bath tub is our another original service

3.2.3 Zen and Yoga

One key point make us different from other spas is Zen and Yoga The spa is filled up totally by “Zen” atmosphere which makes you feel relaxed and separated with the external world At our spa, we will hold Yoga and Zen classes in Tibetan style

Tibetan Yoga comprises of 5 simple, yet dynamic yogic exercises called 5 Tibetan Rites, meditation, praanayam and positive thinking The Five Tibetan Rites is a yoga routine based on a ritual of exercises done by the Tibetan Lamas, which helped them to live very long and healthy life and to stay ever young (They were developed over centuries in the monasteries of Tibet In 1930 a retired British army officer, who learnt these from the Lamas, brought them to the west) They are now practiced around the world and are said

to prevent aging The entire routine can be completed in less than 20 minutes An important part of the Tibetan exercises is a conscious synchronization of breathing while performing physical activity They balance the 7 chakras & regulate the hormonal output They effect our digestive system, cardio vascular system, nervous system and respiratory system These low profile yogic secrets of the Lamas will unearth all the energies and an awesome power lying dormant within you, aligning it with the cosmic energy to give you

the best of both mind & body. [10]

In order to make an unusual way to approach for a new method of training, we design a special program which combines Yoga and Zen in one combo People know about the great benefit of Zen but the way to practice is not easy for almost people because it is very difficult to learn how to keep quiet in mind Normally, it is hard to separate your soul from many interactions which come from outside

Therefore, at our spa, we have an idea to use Yoga as a warming-up process which help your body & mind relax and it will be the middle step to practice Zen Zen combine with Yoga, this is a harmonic combination between dynamic and static, Yin and Yang to bring into play that two techniques simultaneously in order to training both your body & mind

3.2.4 Vegetarian and Healthy Foods

Our spa also serve customer vegetarian and healthy meals in our small restaurant We offer vegetarian and healthy foods as a final part to complete the total process of Rejuvenation for your body & mind In fact, eating vegetarian food is a method to “clean-up” your body therefore your mind will be more perspicacious Vegetarian food at our spa is not only mentioned about “food”, but also a method which help to cure your body and mind through anti-oxidant products

3.3 Sales Literature and Fulfillment

In order to serve the marketing work, we have a plan to design and printing some documents such as name cards, brochures in which introducing detail and briefly about the spa Especially, those documents will emphasize about our core products & services which customer cannot find in other spas such as Eco Hot Bed, Tibetan massage, Zen & Yoga

Other important tools for marketing and advertisement are logo and slogan, now our slogan

is “A new way filtering your body & mind” We will also push information about the spa via website as a e-marketing tool to introduce the spa to internet – community, especially through the social network such as Facebook, Twitter etc.,

Our message is we sell ourselves as a naturally way to rejuvenate customer’s life

3.4 Technology

The typical Technology which applied in our spa is the anti-oxidant technology developed

by Mr Shinichi Aida, architecture from Japan He has determined that the biological solution is so powerful that a number of problems associated with newly built houses & buildings can be solved, including sick-building syndrome, energy saving of air-conditioning, electrification prevention, dust prevention & insect evading effects Moreover, the anti-oxidant technology can help people to improve their health, curing and preventing some syndromes, especially cancer syndrome as description below:

Antioxidants are substances that may protect cells from the damage caused by unstable molecules known as free radicals Free radical damage may lead to cancer Antioxidants interact with and stabilize free radicals and may prevent some of the damage free radicals might otherwise cause Considerable laboratory evidence from chemical, cell culture, and animal studies indicates that antioxidants may slow or possibly prevent the development of cancer However, information from recent clinical trials is less clear In recent years, large-scale, randomize clinical trial, reached inconsistent conclusions

Antioxidants neutralize free radicals as the natural by-product of normal cell processes Free radicals are molecules with incomplete electron shells which make them more chemically reactive than those with complete electron shells Exposure to various environmental factors, including tobacco smoke and radiation, can also lead to free radical formation In humans, the most common form of free radicals is oxygen When an oxygen molecule (O2) becomes electrically charged or “radicalized” it tries to steal electrons from other molecules, causing damage to the DNA and other molecules Over time, such damage may become irreversible and lead to disease including cancer Antioxidants are often described as “mopping up” free radicals, meaning they neutralize the electrical charge and prevent the free radical from taking electrons from other molecules. [11]

For those reasons, we build the Spa with the anti-oxidant material in order to make a clean

& healthy environment for customers when they come to our spa

3.5 Future Products and Services

After developing those products & services as listed above, we plan to add some new products and services The first thing we want to add is massage service, we intend to supplement Swedish massage thus customers will have many choices when they come to

us Especially, we intend to design a special combo which combines Tibetan style, Japanese style or Swedish style in one package

Chapter 4 MARKET ANALYSIS

There is a common sense that people tend to love pampering themselves, especially people who have luxury money in hand It is also true with the people who have achieved a modicum level of professional success HCMC always be considered as the biggest city in Vietnam with the huge market of all type of industries and it named as the best city to live and do business in this country Moreover, district 1 and district 3 normally considered as a centre area of HCMC where concentrate almost the offices of Vietnamese and Foreign companies who currently run business in Vietnam That creates this area to be a community of wealth, mobility and growth

There are many competitors operating in this industry in HCMC but our style is much different from other spas Normally, all Day Spa and Massage House provide 2 kinds of basic services: Massage and Sauna, Steam Bath and just very few place offers the special massage which combine with acupressure In our spa, we design a professional acupressure Massage service with Tibetan and Japanese style which can improve customer health and cure some diseases That is a typical point to distinguish us from the others

At our place, we don’t have sauna and steam bath service but we provide another one which is quite the same concept but different way from sauna: Eco Hot Bed Eco Hot Bed

is a modern therapy which applies the anti-oxidant technology helping to improve human health and cure some diseases and syndromes, especially to prevent the cancer syndrome

We define Eco Hot Bed as core product to compare with other competitions This product

is only provided by us in HCMC

Finally, at our spa, we hold Yoga & Zen courses which never hold in any spas before Not only the course, we also make a luxury environment where filled up the Zen atmosphere in order to help customer feel peace and relax when they come to us In addition, we set up a small vegetarian and healthy restaurant as a final step co complete our philosophy “A new way filtering your body & mind”

4.1 Data collection from Market Research

This survey targets to those who are living/working within HCMC area, total 230 questionnaires sent out and got the completed feedbacks of 148 and here below are some key results:

4.1.1 The Clients’ frequencies to using spa services (question 5)

Figure 4-1: Clients’ Frequencies to using Spa Service

Clients' frequencies using Spa service

≥ 2 times/week

26%

2 times/month35%

1 time/month22%

Others13%

≥ 2 times/week 1 time/week 2 times/month 1 time/month Others

(Source: Author’s survey)

The survey’s result as figure above shows that 87% of people in survey come to spa at least 1 time/month and the average frequencies for 1 client is about 2.3 times/month

4.1.2 Average payment of clients for 1 time in Spa (question 6)

Look at the table below we see that the 58% of people in survey pay lower than VND 300,000 for 1 time in Spa and 42% be ready to pay VND 550,000 or more for 1 time in Spa and they are mentioned as clients for high class spa segment which is also our targeted

customers

Figure 4-2: Average payment of clients for 1 time in Spa (Unit:VND 1,000)

Average payment of clients for 1 time in Spa

Up to 150,000 19%

Up to 300,000 39%

Up to 550,000

22%

Up to 800,000 15%

Up to 1,200,000

or more 5%

Up to 150,000 Up to 300,000 Up to 550,000

Up to 800,000 Up to 1,200,000 or more

(Source: Author’s survey)

4.1.3 The reason why clients using Spa Service (question 12)

Figure 4-3: The reason why clients using Spa Service

The reasons why clients using Spa Service

Relax/Enjoy28%

Health care25%

Sick/Injuries Recover11%

Others7%

Beauty/Rejuvenation29%

Sick/Injuries Recover Others

(Source: Author’s survey)