Hair Recycling Technologies

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Garden Products Recycling Business Plan

Market Analysis Summary

Customers who will benefit from HRT's products range from amateur plant lovers to professional gardeners. HRT will focus on two market segments in the local area.

Amateur plant lovers consist of hobbyists, houseplant enthusiasts, first-time gardeners, weekend gardeners, and other plant growers. HRT defines this group as amateurs because their goal is to grow plants for the reason of enjoyment or as an entertaining hobby and not for reasons of competition or profit.

Professional gardeners include those who grow plants to be judged in gardening competitions and those who are organic food growers in the organic produce market. Professional gardeners are very serious about their plant-growing methods because they are motivated by goals of winning competitions or earning profits.

These amateur and professional gardeners make up the general customer base of HRT. However, HRT has a more specifically targeted customer in mind. A significant number of these amateurs and professionals are members in one or more of the 150+ organic gardening clubs that have been organized throughout the United States. HRT intends to target its customers as those who would use purely organic plant foods as an aid to their plant growing. The following chart offers a more detailed description of HRT's customers.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Amateur Gardeners 3% 20,000,000 20,500,000 21,012,500 21,537,813 22,076,258 2.50%
Professional Gardeners 2% 4,000,000 4,080,000 4,161,600 4,244,832 4,329,729 2.00%
Other 0% 0 0 0 0 0 0.00%
Total 2.42% 24,000,000 24,580,000 25,174,100 25,782,645 26,405,987 2.42%

5.1 Target Market Segment Strategy

To specifically target our customers, we examined the market trends. Hair Recycling Technologies' products are targeted at the garden and indoor segments with a specific aim at the organic segment. It is estimated that in the next five years, organic gardening products could capture 25 percent of the billion-dollar U.S. lawn and garden market. "Organic gardening is clearly in and chemical addiction is out," says Lucy Warren, a San Diego-based garden historian and industry expert.

To what can we attribute this market growth? Research has shown that people are becoming increasingly aware of the problems that chemicals pose to the foods we eat and to the environment. A recent article states: The bloom clearly is off chemically dependent gardening. A Harris Poll indicates more than 60 percent of America's home gardeners used at least one organic method, such as mulching, composting, or beneficial insects during the last year. And more than a third of gardeners, 37 percent, in the poll said they use primarily organic methods.

The "Gardening in America ‘95" poll, commissioned by the Rodale Press, found that only one in five U.S. gardeners admitted to not having used a single organic method over the last 12 months. The reality is clear: organic is here to stay.

Supporting this is the fact that sales of organic foods have risen dramatically over the past decade, totaling $1.4 billion in 1992, according to the most recent figures. And the organic food market continues to grow at an average rate of 25 percent a year, according to the Organic Food Production Association of North America.

The Encyclopedia of Organic Gardening applauds the use of organics instead of chemicals. It states: The organic school does not accept the use of artificial fertilizers for many reasons...Chemical fertilizers are quick-acting, short-term plant "boosters" and are responsible for:

  • Creating hardpan soil.
  • Destruction of beneficial soil life.
  • Altering vitamin and protein contents of certain crops.
  • Making certain crops more vulnerable to disease.
  • Preventing plants from absorbing some needed minerals.

The following list describes the positive effects of organic fertilizers and the negative effects of chemicals, and thus exhibits the advantages of using organic fertilizers instead of chemicals.

  • Organic Fertilizers: Replenish the soil. Keep soil friable. Promote beneficial soil life. Prevent hardpan soil conditions. Increase crop yields. Maintain a natural balance in the soil. Protect certain crops from disease. Benefit the environment by recycling wastes. Grow larger plants. Are easy to use. Are safe.
  • Chemical Fertilizers: Pollute the nation's lakes, rivers, and streams. Increase the infant mortality rate among female babies. Destroy beneficial soil life, including earthworms. Alter vitamin and protein contents of certain crops. Make certain crops vulnerable to disease. Prevent some plants from absorbing needed minerals. Produce foods that just do not taste as good. Are a leading cause of blindness on the farm. Are corrosive to farm equipment and storage areas. Deteriorate soil friability. Create hardpan soil. Are costly.

Further research indicates that organics are the "up-and-coming" products in the plant food market: "Organic gardeners are the long-term market. Retail sales for gardening centers are flat except for organic supplies and fertilizers," says Mike McGrath, editor-in-chief of Organic Gardening Magazine.

Market trends indicate that the customer needs an organic product that works as well as or better than competitive chemical products. The product should be priced against competing chemical and organic lines and should be easy to use, environmentally safe, and have superior performance. HRT can specifically target customers who are environmentally and health conscious, and also those who just want a product that works better than the rest for a competitive price.

5.2 Industry Analysis

There are a number of companies in the fertilizer market that offer soil enhancers and plant foods. These companies compete mainly on the basis of price, time between applications, and promises of performance. However, market trends indicate that new competition exists between chemical and organic products and the inherent positive and negative effects of these differing formulas in soil enhancers and plant foods. HRT's competition can be divided into two forms: direct and indirect.

5.2.1 Main Competitors

All of the prices are based on cost and a standard markup is used. Hair Recycling Technologies prices will be competitive with other chemical and organic fertilizers.

Plant Foods:

  • Miracle Gro All Purpose $5.93 (48 oz.).
  • Shultz's Starter Plus $6.64 (40 oz.).
  • Plantation Products Potting Mix $7.97 (40 oz.).
  • Organica Plant Growth Activator $18.43 (16 oz.).

Animal Deterrents:

  • Heneder Spray $11.99 (1 qt.).
  • Blood Meal $4.99 (3 lbs.).
  • Hair Today Gone Tomorrow $13.84 (pint).
  • Liquid Fence Animal Repellant $29.95 (32 oz.).
  • Bobex Deer Repellant $19.95 (32 oz.).

5.2.2 Industry Participants

HRT's direct competition is made up of those companies that offer an organic soil enhancer and plant food product. Organics are no longer a niche market. Organic plant foods have developed from a niche market into a dominant sub-market in the plant food and fertilizer market and are strong competition for chemical competitors. Major direct competition includes VPG, makers of Super Bone Meal, and Scott's, makers of Iron Bull. Other direct competition includes the products ZOO-DOO, and POO-PETS.

5.2.3 Distribution Patterns

Indirect competitors are those companies that offer only chemical soil enhancers and plant foods. HRT feels that these companies are an indirect form of competition because though the products they promote attempt to give the same results as our direct competition, they fall far short of current market expectations, and it will only be a matter of time until these companies' products will be out-dated. Even so, HRT does acknowledge that as these companies' products become outdated, many companies will be certain to phase-in their own organic substitutes in place of the chemicals. Major indirect competitors are Grace/Sierra, Stern, and Pursell.

5.2.4 Competition and Buying Patterns

In order to compete in the soil enhancer and plant food market, HRT identified market needs to gain an overall competitive advantage. The following explains our products competitive advantages. Our product is:

  • Organic: To respond to current market trends, HRT is offering an organic product. This includes all of the advantages organics offer over chemicals.
  • More effective between application times: Normal times between applications range from two to four weeks. Our product lasts for many months, thereby saving the customer time and money (no additional expenditure for more product).
  • Recycled: This part of our product has to do with marketing. Recycled products characterize a "caring company" and are more appealing to the customer.
  • A safe and effective pest repellent: Our product would be the only plant food on the market with the added convenience of repelling pests. Most gardeners use separate plant foods and pest repelling methods. Many of the methods used to keep animals away are not only dangerous and life threatening to the animals, but also to any humans that may come in contact with them. These may include chemicals and/or barriers and traps. HRT's product is non-toxic and has the ability to deter animals safely because of the human scent in the hair, animals that are typically found in gardens steer clear!