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E-commerce Internet Business Plan

Market Analysis Summary

According to the U.S. Census Bureau the population of teens (age 12-17), in 1999 was 23.4 million, which represents 8.6% of the total U.S. population. Teenagers influence $324 billion in spending annually, have $151 billion in disposable income, spend $24 billion annually, and will spend $1.2 billion online by 2002. Teens spend an average of $82 per week on entertainment, fashion, food, and technology. These young people dubbed "Generation Y" dominate almost all facets of popular culture and are the fastest-growing demographic under age 65. 

Specialty youth clothing and products has grown into a billion dollar niche in the clothing industry. The popularity of the Internet with young people has been well documented and has generated the launching of a number of online stores by companies selling to that market segment. Most of these stores have retail outlets in large urban areas that serve as the promotional vehicles for online shopping.

The Internet is an accessible shopping tool for our target population. 64% of teens nationwide use the Net at home. The majority of teens, 55%, consider using the Internet better than watching TV. Families with teens are more likely to have Internet access than other households.

Online shopping by teenagers between 13 to 18 years in age is expected to total about $300 million this year (2000) and is accelerating at about twice the rate of online shopping by adults. By 2003, teenagers are expected to spend $2 billion annually online. By 2004, a clear majority of young consumers will shop online. The top five purchases made by teens [online], based on sales volume, are CDs/cassette tapes, clothing, books, computer software, toys and clothing.

4.1 Market Segmentation

Over the past ten years, there has been a profound change in population dynamics in the U.S. The non-metropolitan population has been growing at almost the same rate as the urban population. The West Coast, Midwest, and the Northeast have the largest growth rate. Today, there are millions of young people who don't live near a large urban center that offers the diversity in clothing products that the youth culture demands. This has created a small market niche for businesses to sell clothing and products to young people who live outside the urban areas. This is particularly true in communities with a major college located in the community.

Currently, only regional malls offer access to the fashion and styles that young people want. Unfortunately, the focus of these mall stores is only on the mainstream of the youth market. Alternative clothing and products are rarely available outside the urban area. This is true because the companies that create the clothing and products are small and sell primarily through urban specialty shops.

FireStarters will capitalize on the following characteristics of Generation Y:

  • Subculture Affiliation: Though rebellious, teens also want to blend in and be accepted by peers. They seek a community of peers to welcome them in, as well as help them stand out.
  • Attitude: Teenagers wear attitude like a uniform to give definition to their identity. This extends to clothing, hair style and the type of music listened to in public. They also react to humor, silliness, and irreverence more easily than to other styles.

It is FireStarters' plan to bring alternative fashion and products to small-town America via the Internet. We will create a business identity that will capitalize on the subculture affiliation and attitude of our target customers.

FireStarters will focus marketing on two type of non-metropolitan communities:

  • Non-metropolitan communities with populations between 100,000 and 150,000 residents.
  • Non-metropolitan communities with a major college and population of at least 80,000.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Communities (100,000 and 150,000) 10% 6,000 6,600 7,260 7,986 8,785 10.00%
Communities/College (>80,000) 10% 3,000 3,300 3,630 3,993 4,392 10.00%
Total 10.00% 9,000 9,900 10,890 11,979 13,177 10.00%