Sheila in Minnesota

Don ~ Thanks for the insights . . I do appreciate your advice always.

I may be accused of the glass 1/2 full syndrome . . . but even on a perfectly level playing field ~ ~ there will always be the sun in your eyes, the wind against you, or it will be someone else's fault that you lose . . .

Humans suck.


Sheila

(currently in the "ee" status)

fungirlz

Don oh how you speak such truth.. it is so wonderful....

You said........
"So enjoy your "favored status" with Max and California Tan (and the other vendors) while it lasts but don't try to give me "jive" that you have earned it."

I just had this conversation this afternoon with some BIG BOYZ......... seems they are saying the same thing these dayz.. hummmm
Vegas will be interesting..

Shelia did you make your reservations???

Love, Chris



_________________
Christine'
Been along time since I rock and rolled. And I'm goin to Vegas...so Let's roll................. Zepplin Rules Rock..[ This Message was edited by: fungirlz on 2002-05-14 23:26 ]

Sheila in Minnesota

Hey Chris ~ No . . . still am not sure about Vegas . . . pray for sunshine in the State of Minnesota!!!!

And as far as talking with the "Big Boys" . . . there are no such things.

They are boys & boys are dumb ~

Unless of course the boyz you were talking to were at 4 seasons or TW . . . . cause in reality ~ they are the true goo gods.

Don ~ my love . . . . so harsh with Robbie!!

Do you believe that his success is less admirable then a 2 bed sun shak growing to a 6 bed shak???

Whatever you feel about predatory marketing -you have to admire the skill and the obvious end results.

Just like I admire the ruthlessness of ETS when I daydream about what is necessary to succeed . . . I don't have to like it (what they do) but I do have to acknowledge that they are pursuing their goals like sharks to the blood.

If the Anti Tans don't kill us first ~ I feel our demise will be at the hands of those that need the blood.

Even if the current Majors had no need to Revitalize their product lines ~ Big Buying Power will always bring 'sweetheart deals' . . . WE ALL SAY THANKS FOR YOU BUSINESS in one way or another ~ if volume was not the answer . . . Big Dog would have to be put to sleep!

Yes ~ every one better keep their eye on Robbie . . . you need not assimilate to learn a thing or 3

Sheila

Don Smith

Sheila/Christine:

You said "They are boys & boys are dumb" and that is not correct. Boys (and men) are "like they are" because of the TREMENDOUS mental strain caused by TRYING to figure out the so-called (Ha Ha) "weaker sex" in our lives. LOL

I am not being "harsh" with Robbie at all. I respect his success and admire his work ethic. Having said that, I recognize that his "business model" of "giving more for less price" is a predatory business philosophy that makes it possible for him to acquire market share much more quickly in a new market than if he followed an "optimizing profit margins" pricing model.

His $18.88 fee for a month of tanning and a $6.00 upgrade fees on a system that others are charging a $15.00 to $20.00 UPG fee is a "forward pricing" technique. You make less margin today UNLESS you can attract a huge customer base (more than, truth be known, you can service properly if they all try to use what they are paying for) and that customer "base", my friends, comes PRIMARILY at the expense of the "mom and pop" tanning salons in the area. I say "primarily" because I would guess that his pricing strategy does enlarge the base of clients somewhat.

Think of it this way, ladies. IF Robbie came into your market area (and, because of what I am writing, I EXPECT him to come into mine) and offered his predatory pricing, would it QUICKLY hurt you? Of course it would! IF, however, he came into your market and tried to compete with a "traditional" pricing model and had to compete solely on quality and service, would the damage to your business be as fast and as deep? No, it would not.

That, in a nutshell, is why Robbie has "adopted" his strategy. It gets HIM where he wants to be in a given market very quickly. Unfortunately his success comes at your expense.

What ALWAYS happens, his protestations notwithstanding, is that AFTER the predators have "captured" a given market, the PRICES WILL GO UP TO THE LEVEL JUST BELOW WHERE IT WOULD ENCOURAGE NEW SALONS TO OPEN.

Thus, the clients have a "window" whereby they pay less than "fair market" prices but that WILL NOT LAST.

Keep your eyes open because THIS MODEL will increasingly be "playing" at a salon near YOU.

Don

PS: Remember what I said earlier. Small salons CAN compete if they "band together" in a proactive manner.

solarmeter

Funny, the Walmart(s) near me haven't yet raised their prices or reduced their store 'quality', years after they boarded up some smaller competitors (including a Kmart - KM $1.30/share).

But 'little' old Kohls is somehow filling their nearby stores up every day. Maybe they banded with ? to get better wholesale pricing. Meanwhile, Walgreens is chewing up and spitting out CVS & RiteAid like a shark. Wallgreen's simply searched out super locations, built beautiful looking drugstores, put in quality stuff and has the best TV ads. Momentum is theirs today.

To me it seems Walgreen's has 'earned' their position, not been given it. I can remember only a few years ago some of their stores were just so-so.

Speaking of something tied behind your back, there is a radio talk show host who says he operates with half his brain tied behind his back just to be fair. He now has a new competitor, who has to pay stations to carry the program. Is he 'giving away tans' to get some market share? Yeah - but it won't work because the fundamentals are flawed. Walmart, Kohls, Walgreen's etc do not have flawed fundamentals, and have earned staying power.

Do Fabutan, Hollywood Tans, etc have staying power? Time will tell. Is Darque Tan's model different and/or better? Again, time will tell.

Unlike dept stores and drugstores selling mostly products, tanning salons sell mostly service. So good independent ones have a much better chance to succeed along side chains than do pure hardware businesses. But salons do BUY hardware, and re-sell lotions etc, so efforts to self-level that part of the playing field are indeed important.

And now back to mW/cm^2s...

Don Smith

Steve:

You said "Unlike dept stores and drugstores selling mostly products, tanning salons sell mostly service" and this statement is at the "heart" of the, IMHO, "mistake" being made by the business "models" like Robbies.

They are trying to use "product" strategies in a "service" industry and, long term, they just won't succeed.

But, as you mentioned with Walgreen's, you MUST not get complacent if you want to be around five years from now! If you become complacent, you will suffer the consequences.

The best time to "compete" with a "Robbie" type predatory operation is BEFORE they try to come into your town. They are looking for "markets" where the salon owners have not kept "up to date" and those are the markets that they will enter first.

Don

solarmeter

Don - interesting point about complacency.. it even hurt big old Kmart.

As was noted on another thread, location * location * location seems so important as well. Even for where you live, as everyone knows.

Something I've noticed around here about Walgreens: they got out of strip malls and onto street corners, placing the stores on an angle toward the intersection and doing a great job with lighting and parking. They look so inviting in that setting. In many cases they bought an old bank building or gas station (probably for peanuts), tore it down and put up their trademark style building.

I've never seen a tanning salon with such a setting. Maybe there are some, and obviously the lease & build out would cost more than in a strip mall... but I bet they would be a traffic magnet!

Steve

Robbie

Steve,

I have 4 free-standing sites, but most of mine are very visible end-caps ala Blockbuster.

Magnets they are. People who would never enter some of the in-line style operations of today, feel safe and comfortable dealing with a big dependable entity that has serviced a market affordably for years.

Robbie

Robbie

Don,

WOW! Quote: VERY rarely is the "playing field" ever level. Those with an "advantage" try to keep it that way and those who are at a "disadvantage" try to change things. It may not be "right" but that's just the way things work!

What is not right about this? Why shouldn’t those with an advantage work to keep it that way?

The problem with your post is that you use the term “advantage” as would any good Marxist. Not recognizing or acknowledging the “work” required to gain such an advantage, you consistently state that my discounts are not earned. Like all “materialists” you think that success is causeless, accidental, unearned.

Quote: So, Robbie, while your size and visibility gets you the "sweatheart" deals from Max, there is nothing "earned" about them

If you had a customer who only bought packages of $100,000 or more per visit, would you give them a discount. Do you think this a “frenetic” attempt at gaining market share? Do you think Max is losing money on the deals I have earned?

As to your “predatory” crack, this is unwarranted. Tangirl has already posted what it’s like to be a salon owner our market. I’ll go easy on you this time.

As for this one: Quote: Surely you understand that this fact of life will increasingly "alienate" you from mainstream tanning salon owners
I am more concerned “alienating” myself from my customers, not my competition. What are you thinking?

As for salon owners, I believe I have the respect of many, and further, I know I have made many of these some money over the years. I also believe that there are many others, who I don’t know, that have adopted my model and are making money. I am all in favor of this, knowing that I will one day have the opportunity to offer many of these participation in the enormous roll-up that occurs when we take this thing “public”.

Robbie
[ This Message was edited by: Robbie on 2002-05-16 01:48 ]

Robbie

Don,

Could you please post your comments in the general forum "Piles of $$$Money$$$" thread. Your predatory posts are pertinent over there. Thanks,

Robbie[ This Message was edited by: Robbie on 2002-05-16 01:53 ]