Is The Brand Too Personalised To Expand?

It was another normal Sunday for me at IIM Lucknow. No classes to attend (a big relief!) and no plans for the day, I was sure that I am going to waste yet another Sunday and regret later. After several attempts, all in vain, I finally decided to go for a haircut. This was a little different as I was going out of campus after a long time.  I generally avoid wasting time going out of campus for a haircut by using the services of our very own BANSI bhaiya, who gives me a bonus head massage with a haircut that just costs 60 bucks). So I decided on Javed Habib saloon in Gomti Nagar. As soon as I entered the saloon, my enterprising aka Marwari mind wanted to know about Javed Habib. I opened up the website only to get surprised to know that not only it is a Company by the name Javed Habib Hair and Beauty Limited (‘JHHBL’) registered in India but it has operations in Singapore and London too.

I was mesmerized to know how a product/service which requires a personalized touch (let’s call it “personalized product or service”) of the provider was doing so well without the personalized touch of the service provider. It is foolish to even hope that Javed Habib will be giving you a haircut (unless you are a celebrity or you have loads of money) but then it was Javed Habib’s hair cutting skills that made this company what it is today. While I was doing some reading on this topic, I happened to come across one interview of JHHBL’s management in the Economic Times. It was the time when JHHBL was hoping to raise INR 60 crores through an IPO. Very similar to my thoughts, ET was also skeptical of the fact that how this company will give value to its shareholders when “the service – haircuts – can’t be mechanised”. Rohit Arora, the executive director of the company mentioned that JHHBL “will have the advantage of transitioning from services to products.” So the key for expansion of a service/product which requires the personalized touch of the provider is the transition into product such that the service/product offers the same experience whether it is being offered in two different geographies (obviously after accounting for the basic differences in the preference of the costumers in the two geographies). Sorted. Transition the personalized product/service into a product and you are ready to make a killing. As easy as it sounds, the more difficult it is to implement. Javed Habib would have to ensure that the hair cutting skills and knowledge that he has are effectively transferred to the franchise owner. Someone who would be visiting say a Patna Javed Habib salon would be expecting the same kind of experience from say a Kanpur Javed Habib Saloon. Here we are not even talking about someone who would have got a haircut from Mr Javed Habib (in the days when he started) and would like to have a similar experience now. Can this person get the same experience? Highly unlikely. Even if Mr Javed Habib would have given his 200% when doing the knowledge transfer to a hair styling artist, that artist cannot provide the same experience to the customer. And that’s where a personalized product or service differs from a standardized product. Starbucks coffee will taste the same in Mumbai or Delhi. However, what may differ is the service in the form of customer handling, delivery time etc. Crumbs Bake Shop, a bakery shop, which started as a small mom-and-pop style bakery in Manhattan, shut its stores in 70 locations! in 2013. One of the reasons that experts quote is its single-handed focus on expansion and consequent failure to maintain the quality.