ABSTRACT
Rampant commoditization has rendered traditional sources of differentiation weaker in the face of rising competition for beauty services in the organised sector. This paper explores the adoption of Ingredient Branding by organised beauty service providers for differentiating themselves against the competition. The study was conducted in a mixed-method mode, using personal interviews, and online surveys conducted in two stages. EFA and CFA were conducted to extract factors and test the hypotheses. It was found that the presence of an ingredient brand in a beauty service creates an impression of a positive experience for customers. A study of individual ingredients showed that in-house beauticians and the cosmetics used during the beauty service are the two most critical ingredients of beauty service. These insights can help organised beauty service businesses to create differentiation against competitors with the help of ingredient branding. The paper concludes with a discussion on the possible approaches to pick up the right ingredient brand for an organised beauty service business.
ABSTRACT
Purpose>Combining a conceptual framework with empirical evidence, this study aims to offer insights into why small and medium-sized enterprises (SMEs) in the business-to-business beauty sector switch suppliers, due to pricing considerations.Design/methodology/approach>Data gathered from 475 telephone surveys of Spanish hairdressers provide the input for discrete choice models for testing the proposed hypotheses.Findings>The SMEs that change suppliers tend to be sensitive to promotions, express less satisfaction with a current supplier’s offerings and serve fewer customers who buy professional products for their in-home use. If SMEs are satisfied with the supplier’s services though, they are less likely to change and more prone to negotiate with that supplier.Research limitations/implications>This study does not address why dissatisfied SMEs might remain with their current suppliers. Further research might replicate this study using additional pricing data from suppliers.Practical implications>Suppliers in business-to-business (B2B) sectors can leverage these findings to allocate their marketing budgets optimally and establish service strategies that will enable them to retain buyers and reduce their switching risk.Originality/value>As an extension of extant literature, this study specifies switching drivers for SMEs in the B2B beauty sector. The findings should apply throughout this worldwide service sector, as well as to similar markets such as health, beauty and personal care and well-being services.