Extension

Continuing yesterday's conversation

Geezer - What about Dundas Street then?

Lefty - I take your point Geezer. Sitting there proud as punch under the dental spa and right next door to a rather nice dressmakers. It's not really conforming to type is it? You could say its a bit out on a limb in terms of location and, I have to say, in the market place. Now there was a time you could rely on the lads at Standard Life and RBS for a steady trade, wankers that they are, but, sadly, those days have gone. Between you and me, Geezer, the place just isn't cutting it any more.

What we need to do with this place is a bit of diversification so that we leverage Steamy Leisure's brand equity into an extended product line-up. Essentially, Geezer, we're looking at facials.

Geezer - But L, some of the girls are already doing facials.

Lefty - Not that boy, not that. I mean gentleman's grooming. You've seen Baldy with his GQ and is moisturiser. I mean proper spa treatments for lads with a bit of cash. With extras, of course, but actually switching the sauna on and using it as more than a cupboard for storing the bog rolls. Massages that actually relax and soothe the careworn muscles of a business executive.

Geezer (perplexed) - Oh. Ehm, yeah.

Lefty - You see Geezer it's all about price and how you respond to the additional competitive pressures brought on by fiscal tightening. There are essentially three pricing strategies we can adopt in a recession: skimming, neutral or penetration. Now, it might surprise you learn that I don't fancy penetration because that's a price war - cutting costs to the bone and letting prices be decided by the punters and cheapest scumbags. Not a happy place for anyone to be. No, we want to be skimming - setting higher prices based on value. Instead of basing your prices on the competition, a skimming price comes from enhancing the value your product represents to your customer. You differentiate yourself in terms of a superior value proposition and targeting a more profitable customer base. It just takes a bit of planning, a lot of nerve and a bigger overdraft than the other guys. As the people who've been working on the cheap go to the wall, customers are willing to pay big bucks for what they see as an older but superior product in the context of a dwindling supply. Simples.