Market Analysis Summary
We expect sales to increase steadily as consumers find that they can purchase a variety of quality items at bargain prices. We intend to tap into the retail market with pricing that will encourage quantity buying, and our pricing will attract consumers on fixed budgets.
Our target market is the lower income portion of the Bend and Redmond community. This includes working class individuals, the elderly, and students, many of whom are price conscious and looking to find a value for their dollar.
4.1 Market Segmentation
The market analysis pie chart shows potential customers and the company’s target markets. The Dollar Store intends to provide affordable shopping alternatives to working class families with incomes under $25,000, for elderly people on fixed incomes, and also a large student population that tend to be on strict budgets. Bend makes up the largest market segment. We expect this market to grow at a rate of 10% per year. This market constitutes the general public who are looking for affordable merchandise at bargain prices. Redmond constitutes the second largest market with a fast growing retirement community. There are also many bedroom communities that shop in the Bend area that will add to the percentage of consumers.
|YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5|
|Working Class Families||10%||50,000||55,000||60,500||66,550||73,205||10.00%|
4.2 Target Market Segment Strategy
We focus on the price conscious consumer who is looking for value as well as quality. Both the Bend and the Redmond groups will be marketed to as they are isolated populations which do most of their shopping in the greater Bend area. If we can attract and keep these consumers the word will continue to spread about what our store has to offer.
4.3 Industry Analysis
In an ever changing economy the discount store model is becoming more popular with the consumer. Providing a large selection of bargain-priced items is our intended goal.
4.3.1 Competition and Buying Patterns
Consumers demand quality customer service, fair pricing, and a convenient location.
Competition is very tough with customer service and location key components. The selection of merchandise a store provides is also very important.