Pegasus Sports

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Inline Skating Products Business Plan

Market Analysis Summary

With 31 million skates sold and no support products available, we have an opportunity to reach a market of approximately 26 million recreational and fitness enthusiasts.

There is now a growing trend towards fitness skating. With this large potential market, our products will be there to address their needs.

4.1 Market Segmentation

With a world skating market of over 31 million and steadily growing (statistics released by the Sporting Goods Manufacturers Association), our niche has been created. Our aim is to expand this market by promoting SkateSailing, a new sport which is popular at both Santa Monica and Venice Beach in California.

The Sporting Goods Manufacturers Association survey indicates that in-line skating now has more participation than football, softball, skiing, and snowboarding combined. The breakdown of participation in in-line skating is as follows: 1+% speed (growing), 8% hockey (declining), 7% extreme/aggressive (declining), 22% fitness (nearly 7 million--the fastest growing), and 61% recreational (first-timers). Our products are targeting the fitness and recreational groups, as they are the fastest growing. These groups are gearing themselves towards health and fitness, and combined, they can easily grow to 85% (or 26 million) of the market in the next five years.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Recreational 10% 18,910,000 20,801,000 22,881,100 25,169,210 27,686,131 10.00%
Fitness 15% 6,820,000 7,843,000 9,019,450 10,372,368 11,928,223 15.00%
Speed 10% 387,500 426,250 468,875 515,763 567,339 10.00%
Hockey -5% 2,480,000 2,356,000 2,238,200 2,126,290 2,019,976 -5.00%
Extreme -10% 2,170,000 1,953,000 1,757,700 1,581,930 1,423,737 -10.00%
Other 10% 232,500 255,750 281,325 309,458 340,404 10.00%
Total 9.13% 31,000,000 33,635,000 36,646,650 40,075,019 43,965,810 9.13%

4.2 Target Market Segment Strategy

Our target market is the recreational skater and the health and fitness enthusiast. This segment can be reached over the Internet and through skate magazine advertising.

We plan on developing the skate shop market through an inexpensive postcard method.

BladeBoots™ and SkateSails are now sold at the two major skate shops in Santa Monica and Venice, California. Surveys indicate that in the fitness and speed market, the average age is 34 years old, breaking down to 48% women, 52% men, an average of 1.8 years of college education, an average household income of $52,600, and 71% skate on four-wheel in-line skates.

4.2.1 Market Needs

We recognize the need for accessories for the growing market of skaters.

  • We promote SkateSailing as a new sport by providing excursions to wide open areas. A major skate company is willing to lend us the new large-wheel skates for our SkateSailing excursions. However, conventional in-line skates will work just as well.
  • Soon we will offer SkateAids. The sheer number of existing skates purchased has created a whole new market for products to help increase the life of skates.

We have learned what skaters need for accessories by interviewing experienced skaters.

A person does not have to make time to exercise if skating becomes a lifestyle and is worked into daily activities. Skating is fun and a great cardiovascular workout at the same time, and this is something everyone is looking for.

We will distinguish ourselves by marketing products not previously available to skaters. The emphasis in the past has been to sell skates and very few replacement parts.

The number of skaters is not restricted to any one single country, continent, or age group, so there is a world market. We have products for virtually every group of skaters.

The fastest growing segment of this sport is the fitness skater. Therefore, our marketing is being directed to service this group. BladeBoots™ will enable them to enter establishments without having to remove their skates. BladeBoots will be aimed at the recreational skater, the largest segment; however SkateAids are great for everyone.

There is one more way the sport of skating will grow, and that is through SkateSailing. This sport is primarily for the medium to advanced skater. The growth potential for this sport is tremendous. The sails we've manufactured so far have ended up in Europe. The same thing happened with windsurfing. It started out here in Santa Monica but did not take off until it had already grown big in Europe. More and more groups are getting together on skate excursions in cities all over the world. For example, San Francisco has night group skating that numbers in the hundreds of people. The market trends are are showing continued growth in all directions of skating.

4.2.3 Market Growth

With the price of skates going down due to competition by so many skate companies, the market has had steady growth throughout the world, with 22.5 million in 1995 to over 31 million in 1997.

By January 2000 we will get the growth statistics for this year; it is estimated to be over 35 million. More and more people are discovering, and in many cases rediscovering, the health benefits and fun of skating.

4.3 Industry Analysis

Skate sales have undergone tremendous growth and distribution throughout the country.

Presently we will concentrate on Internet marketing. This will maximize our profit.

The Internet is probably the best communication medium for skaters all over the world, and we believe this is the best way to retail our products. The sales on the World Wide Web are now over $28 billion, as quoted by Forester Research, on e-commerce.

4.3.1 Distribution Patterns

We plan on shipping our products using express mail at the U.S. Post Office as our way of distribution, because it is the least expensive way; however, some credit companies demand a shipping receipt and those will be handled by established shippers.

We are also in touch with a few foreign distribution companies that have contacted us and are interested in our products.

4.3.2 Industry Participants

The number of skate companies is very large as many shoe companies have joined in; however, the major and biggest companies are Rollerblade®, Roces®, Solomon®, and K2®.

Some companies make skate bags whose price is in the $20 range. None of them address the problem of entrance to areas that will not allow you to enter while wearing skates, and those products are for the most part bulky and impractical to skate with.

4.3.3 Competition and Buying Patterns

Each segment of skating has its own buying patterns depending on its own needs. The pertaining table in the Market Segmentation topic illustrates this.

4.3.4 Main Competitors

Pegasus Sports International is forming its own market. While there are a few companies that do make sails and foils that a few skaters are using, ours is the only one that is truly designed for and by skaters. Our few competitors' sails are not designed for skating, but for windsurfing or for skateboards. In the case of foils, storage and carrying are not practical.

We need the capital to protect our inventions through patent application and trademark registration. Our other products do not have competition at this time.