Lee Valley Segmentation Essay Example

Lee Valley Segmentation Essay Example Lee Valley Segmentation Essay Lee Valley Segmentation Essay Background Lee Valley- - a family-owned concern which has been supplying clients of woodworking and horticulture tools since 1978. Their repute is based on three rules: 1. Customer satisfaction: Any merchandise may be returned within 3 months and no cost to the client ( for cargos within North America. they will return your return package station costs ) . 2. Integrity: Merchandise descriptions are matched with the product- - even if the merchandise is approximately made. they will give you accurate descriptions. 3. Treat the client like a friend. About one tierce of their entire gross revenues volume is in merchandises of their ain design. The huge bulk of these are Veritas ® trade name merchandises made by Veritas Tools Inc. . their fabrication arm. They have a research and development squad of 11 people and 130 more in fabrication. And. to reenforce the portion about listening to clients. they have a figure of clients gaining royalties on merchandises that they manufacture based on designs received from them ( Lee Valley ) . Aim Both woodworking and horticulture must hold a 2. 5 % addition in entire gross revenues in the following financial twelvemonth. To accomplish this end. direction has allocated a budget of $ 500. 000- exclusive of the cost of printing and get offing the catalogues. This budget is intended to fund the prospecting activities of both merchandise lines. Current Situation Analysis Since Lee Valley launched its e-Commerce site in 2000. cyberspace gross revenues have been an increasing per centum of entire gross revenues. When launched. the sitegenerated about 20 % of entire gross revenues. with phone gross revenues being 70 % and gross revenues from mail at 10 % . By 2010. Internet gross revenues have reached 70 % of entire gross revenues. which phone gross revenues at 25 % and mail at 5 % . [ movie ] Fig. 1. Percentage of entire orders generated by e-commerce from Lee Valley Tools Ltd. [ movie ] Fig. 2. Percentage of entire orders generated by e-commerce from Lee Valley Tools Ltd. Harmonizing to the pie charts illustrate above. Internet gross revenues have already dominated the entire gross revenues of Lee Valley since its e-Commerce site launched in 2000. About 70 % of the entire clients obtain their merchandises online in 2010 which means that new market cleavage and publicity which focal point on on-line shopping must be generated to suit the demands of bing clients every bit good as new clients. Customer Segmentation- - who the house will function Geographic Variables In positions of the database surveyed by Euromonitor International in 2012. Home and Garden reveals emerging markets and are turning in popularity. developed states remain. by far. the highest Spenders on horticulture merchandises. Higher degrees of urbanisation and incomes. combined with greater entree to a wider scope of goods and services in metropoliss. are cardinal factors underpinning demand. -All states with per family outgo higher than US $ 1. 000 have more than three quarters of their population. -Economic growing and urbanisation are the chief forces behind the growing in place and garden in developing states. Demographic Variables Harmonizing to the Gardening Market Research. the most popular lawn and garden activities included lawn attention ( 48 % of families ) . turning indoor houseplants ( 31 % of families ) . flower horticulture ( 30 % of families ) . and landscape gardening ( 27 % of families ) . The client profile indicated from Lee Valley shows that the norm gardening purchaser features are as follows: -Age: mean 47 -Gender: 65 % female -Income: mean household income $ 72. 017 -Education: 60 % have a college instruction -68 % are married -82 % are householders Psychographic Variables In general. horticulture partisans besides have their distinguishing life styles and personality traits. such as: -Environmental friendly -Family-oriented -Seeking freedom and relaxation -Living a simple and peaceable life -Retired. bask DIY and private clip -Focus on landscaping Behavioral Variables 1. User position Regular users are those who have their regular agenda for purchase in gardening. most of whom have their ain undertakings. Potential users are people who are meaning to entree to the market but still with different grounds of vacillation or lacking of stimulation. Ex-users are those who used to buy horticulture tools in the yesteryear or 2. Intensity of usage In the Pareto’s Law . 20 % of the clients are heavy users but the staying 80 % are merely light users. That indicates companies should emphasis on the most valuable group of clients who are come from the 20 % . It dosen’t intend the remainder parts are non-essential. Frenquency of order in footings of the clime where the clients live every bit good as the intent of purchase. 3. Innovativeness Since 2000. there has been a double-digit growing in the e-commerce sector ; statistics have shown that more than 80 % of regular online shoppers have used Internet to buy merchandises or services. while 50 % of the on-line population recorded to hold shopped online more than one time. Harmonizing to statistics from Invesp Blog. shoppers by age group is as follows: 18-30 old ages ( 54 % ) . 31-44 old ages ( 68 % ) . 45-54 old ages ( 64 % ) . 55-65 old ages ( 68 % ) . 66 old ages and up ( 48 % ) . Teenss and the immature coevals happen amusement and societal webs online. whereas older coevalss use the cyberspace as a tool for research. shopping and banking. Harmonizing to statistics researched in 2009. Generation X ( internet users ages 33-44 ) continues to take in on-line shopping. Fully 80 % of Generation X cyberspace users buy merchandises online. compared to teenage on-line users between ages of 18-32. the following second best. which constitute 71 % of online shopping sum. However. there is a diminution of cyberspace shopping between the ages 64-72. accounting to 56 % . and 47 % of online users between the age 73 and older. Global E-commerce gross revenues are turning by more than 19 % a twelvemonth and will be of about $ 1. 4 trillion by 2015. Lee Valley has a big Numberss of clients ( 70 % ) telling online. which illustrates that clients with these certain features are the cardinal portion of gardening market. Most people between 35 and 55 old ages have their ain house and garden. 68 % of them are married and they are more willing to populate a high quality of life with their households. They prefer to online shopping because it is more convenient and can salvage most of their clip every bit good as money. Equally far as I am concerned. I suggest Lee Valley to construct up collaborative relationships with transnational cyberspace corporations like eBay to widen their market size. At the same clip. cut the budget on publishing the catalogues and set it to societal media so as to pull more new clients. Meanwhile. trueness plan to go outing clients is besides indispensable. For case. garnering different suggestions from trueness clients and run into their particular demands will non merely increase the order frequence but besides better the client satisfaction. Plants Cited Datagraphics. Home and Garden. Urban Countries Spend the Most in Home and Garden. Euromonitor International. N. d. Web. 21 Sept. 2012. Khalid. How Big is E-commerce Industry. invesp Blog. Web. 21 Sept. 2012. Lee Valley. About Us. Lee Valley A ; Veritas. N. d. Web. 21 Sept. 2012. National Gardening Association. Garden Market Research. National Gardening Association. N. d. Web. 21 Sept. 2012. Pew Research Center. Generations Online in 2009. PewResearchCenter Publications. Pew Research Center. 2009. Web. 21 Sept. 2012.