Promerit Advertising

Start your own business plan »

Advertising Agency Business Plan

Market Analysis Summary

It was recently reported in an eMarketeer online advertising report that online promotions are very powerful with offline companies, as well as online companies.  Though offline companies are offering promotions that necessitate the customer going to one of the company's stores, consumers feel positive about the online promotions.  This opens up a new avenue for these companies to target customer groups that use computers at work and at home. 

Consumers said they cared mostly about return policies, customer service, and product selection.  A very impressive 94 percent of surveyed users reported they have shopped online before.  About 76 percent of those surveyed said promotions were a positive influence on their buying behavior.  Some 50 percent said online coupons were especially persuasive while 70 percent found offline coupons equally attractive. 

An email campaign can be used to reach target customers no matter how small a company's Internet presence is, as long as the customer wants the product.

4.1 Market Segmentation

There are two distinct customer groups that Promerit Advertising is focused on:

  • Online companies with e-commerce
  • Offline companies
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Online Companies 30% 630,900 820,170 1,066,221 1,386,087 1,801,913 30.00%
Offline Companies 0% 1,500,700 1,500,700 1,500,700 1,500,700 1,500,700 0.00%
Other 0% 0 0 0 0 0 0.00%
Total 11.57% 2,131,600 2,320,870 2,566,921 2,886,787 3,302,613 11.57%

4.2 Service Business Analysis

By any measure, the Internet is one of the fastest-growing commercial phenomena ever witnessed by society. Host computers, or servers, have exploded from 3.2 million in 1994 to roughly 79.2 million as of July 2001. During the same time period, the number of websites roared to more than 6 million from only 3,000.

A key factor in the recent growth of the Internet is the popularity of the sub-$1,000 PC. Rapidly falling component prices have allowed PC manufacturers to pass cost savings on to their customers, resulting in a more attractively priced product. Computers sold at or below the $1,000 level have appealed to first-time PC users and lower income families. Because of the more affordable prices, PC penetration in the United States is now approximately 50%, according to Dataquest, a market research firm based in San Jose, California.

The United States accounts for more than half of the world's total Internet users. When consumers today are asked why they purchased a personal computer, the most common answer is to connect to the Internet to get their email.