Free Marketing Dissertations - The Oxygen Bar Which Is The Company Of Interest In This Case Faces The Threat
The oxygen bar which is the company of interest in this case faces the threat of substitutes from many other forms of leisure that are currently established in the target market. Hence the threat of the substitute products is very high.
Another critical element that hinders the business is the bargaining power of the customers and suppliers. Whilst the have the bargaining power over the pricing of the product, the suppliers have the bargaining power on the level of product supply as well as the margin with which the raw materials are sold. Since the oxygen bar is a hygiene factor with products of high quality as ingredients (aroma products, equipments like infuser, concentration unit etc) makes the bargaining power of the suppliers high.
Thus the external factors affecting the oxygen bar in London are the substitute products from the existing players and the bargaining power of the customer and suppliers whilst the new entrants and the competitive rivalry have an impact on the business on a long term basis.
2.0: Market segmentation and consumer profile
2.1: Market segments
The case study on the oxygen bar has revealed that the primary ingredients other than oxygen include the aroma products, which are used in combination with the oxygen for inhaling by the customers. This makes it clear that the market segment can be targeted upon those customers who are interested in aroma therapy and aroma based products like SPA and massage. Since the business is a new venture on its own and potentially targeting upon the customers from other business segments, it is clear that the customers for the oxygen bar are only from the existing competitors like the SPA centres and Aroma therapy centres. Furthermore, another segment of the target market that can be identified is the customers practicing yoga who practice the art of breath control and demand high level of oxygen rich air whilst practicing yoga.
Another interesting factor as identified by Jiju Antony (2002) is the fact that a new entrant in a business sector not only identifies its market segments from the exiting segments of the market but should also embrace its products with the existing set-up of the products in order to effectively improve the business as well as achieve market share. This makes it clear that even though the market segments were identified in the leisure industry it is essential to embrace the products of the oxygen bar to reflect upon the existing market segments whilst embracing its corer product of oxygen rich air.
