Bizcomm, Inc

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Online Print Shop Business Plan

Market Analysis Summary

The overall market for customer communication products is immense. This business plan has identified over seven million businesses that have a potential need to maintain and/or win customers. In reality, all businesses are in need of a product that will enable them to maintain positive customer relations. Bizcomm has the products necessary for this to happen; whether it is a doctor's office sending reminders to their patients, or a software company sending holiday cards to its clientele, it is imperative for all types of businesses to remain on a personal level with their clients.

4.1 Market Segmentation

Many industries have been heavily marketed in the past by Bizcomm. Some industry sectors, such as insurance companies, and Doctors/Dentists, are targeted with extensive well-established catalogs, making entry by others difficult. The following industry sectors listed under the table heading "Attractive Possibilities" are likely to offer the best opportunity for new territory and market segmentation:

Industry SectorTotal Businesses
Animal Hospitals (Veterinarians)55,455
Beauty Salons (Manicurists)266,275
Caterers44,477
Alternative Medicine133,777
Employment Agencies40,745
Retailers (Furniture and Jewelry)44,352
Health Clubs13,579
Interior Decorators30,519
Marinas (Boat Yards and Dealers)22,915

The "Other" category in the Market Analysis table and chart represents the total businesses that have sales of $1,000,000 or less. It is assumed that the very large businesses either are too difficult to reach effectively by direct mail (owner doesn't see the mail; junk mail is routinely discarded by secretary, etc.), or are so large that they have more sophisticated customer communication products or have their own established printing channels.

Market Analysis
2000 2001 2002 2003 2004
Potential Customers Growth CAGR
Banks, Credit Unions -1% 85,531 84,676 83,829 82,991 82,161 -1.00%
Auto Dealers, Funeral Homes 1% 105,114 106,165 107,227 108,299 109,382 1.00%
Doctors, Dentists 2% 644,232 657,117 670,259 683,664 697,337 2.00%
Travel Agents, Real Estate 0% 215,903 215,903 215,903 215,903 215,903 0.00%
Attractive Possibilities 2% 691,524 705,354 719,461 733,850 748,527 2.00%
Other 3% 5,308,000 5,467,240 5,631,257 5,800,195 5,974,201 3.00%
Total 2.65% 7,050,304 7,236,455 7,427,936 7,624,902 7,827,511 2.65%

4.2 Target Market Segment Strategy

The largest category is the "Other" category which consists of over five million businesses of $1 million or less. These businesses are too difficult to separate and accurately analyze, however, they are all likely to patronize large retailers because of the pricing systems in place there. The customer communication products presently on the shelves of these retailers are limited.

The specialized market sectors such as banks, insurance companies, and auto dealers have all received marketing attention in the past from Bizcomm. Some of these sectors (insurance agencies, dentists, etc.) have been the targets of market segmentation on the part of comprehensive catalogs that try to present themselves as the "super store" to that industry.

The 700,000 businesses listed as "Attractive Possibilities" are in industries that have not received as much attention via direct mail. The businesses mentioned are likely to be owner-run--a business in which the owner is likely to receive the mail.

4.2.1 Market Needs

Needs have changed significantly in recent years. With the era of computer service, not customer service, it is even more important now for a client to receive a man-made token of appreciation. One can never underestimate the value of a Thank You note.People want to feel like their patronage is important to a business; they want to know that there are people behind the automated customer service engines. This is why Bizcomm is essential to all companies. Bizcomm provides businesses with a means to show their appreciation to their customers. There is something about receiving a Thank You note or reminder about a check-up in the mail. It is real, it is tangible, and it cannot be deleted. Bizcomm creates notes that are heartfelt, elegant, and to-the-point. These notes are a sincere way to extend customer service to the human level.

Traditionally, Bizcomm has sent mailers to various industry sectors. Those receiving the mail offer decide they need the product, and will fill out the form and call in an order. Market trends have moved in the following direction:

  1. With the increase in the level of "junk" mail it has become increasing difficult to get noticed in the mail.
  2. Mail costs have increased.
  3. Competition from market segmentation has increased. In the past, customer communication products were only offered to a wide range of businesses (with some specialization/personalization). Now we see the advent of companies segmenting the market by concentrating on one specialized industry. When that happens, (e.g. insurance agencies, dentists, auto dealerships) direct mail companies with limited offerings of a less-specialized nature are put at a disadvantage.
  4. Overall competition has increased.
  5. A growth in the use of the Internet to search for services. With the increase of potential customers resorting to the Internet for their customer communications products, Bizcomm must create an efficient website.

4.2.3 Market Growth

The market for customer base development products is expected to grow. Increased competition for purchasing dollars will fuel this growth. Despite the revolution in technology, the effect of a customer receiving a Thank You note in the mail is still an elegant way to say your patronage is appreciated. Customer loyalty is built this way, and no suitable alternatives are in sight.

4.3 Service Business Analysis

In industries where the product purchased is very similar to products offered by the competition (such as auto insurance, or the booking of an airline ticket), businesses have long recognized the importance of finding economic tools to win and maintain customers. Where a business cannot offer a price savings or some other clearly recognized advantage, customer communication products have proven useful. Below is a list of situations in which a doctor or a dentist might use a customer communication product:

  • Patient Acquisition: To attract a new resident to the practice. From a list of new residents to the town.
  • Welcome Patients: Make a good first-visit impression by sending a warm welcome card.
  • Promotional gifts: Keep patients coming back by sending them home with reminders of the practice (pens, magnets, etc.).
  • Recall Card: After six months, send a recall card.
  • Reminder Notices: To avoid missed appointments.
  • Thanks for Referral: A simple gesture that goes a long way.
  • Reactivate: Be able to know when a customer stops coming and inform them that they are missed.

As simple as it may be, this method of communication has an important effect on the bottom line: People want to give their business to those who appreciate it. Skillful use of these products will bring in business equal to a thousand times their cost.

Traditionally, these business communication products have been offered via direct mail. Bizcomm has been offering these products to a broad spectrum of businesses for years. The products of these companies have been relatively generic. That is to say that the cards have a simple message like "Thank You" which can be used by a long list of businesses. Slits in the cards to hold a business card help to personalize it and adding a company logo (at a slight additional charge) will personalize it further. The degree of success enjoyed by companies selling these products is closely related to their skill at direct mailing. Choosing lists carefully, running purges to eliminate doubles, carefully designing the marketing letter (as well as the envelope), including coupons, samples, design of the order form, etc. are all important factors. Companies that sell these generic products (with some customizing) over a broad spectrum of industries are probably viewed alike by those on the receiving end of the direct mail; according to Bizcomm telemarketers, they often get phoned-in orders with Rockford's product codes.

Another method of selling customer-base management/client communication products is a method used by the specialty catalogues. Instead of taking a shotgun approach (i.e. mass mailings to many industries), they concentrate on one industry. They put together a comprehensive catalog of all products that the industry might need. The catalog will include marketing tools, such as printed brochures. Their offering of client communication post cards will have a marketing theme, as will their letterhead, and presentation folders. Bizcomm will be viewed as being the push cart with only a few products; and it would be very difficult for any competitor to gain entry once a "supermarket" had been established to serve a particular industry's special needs. Therefore, Bizcomm must focus its attention on more profitable market segments.

4.3.1 Main Competitors

The competition for this market is fierce because of customer loyalty. Once a business decides to go with a certain card company, it is extremely difficult for another card company to break in to that business. Therefore, Bizcomm must renew its effort to regain its old clientele from Rockford.

Bizcomm's main competitor is Rockford, this is because their products are virtually identical. Their approach is broad spectrum (as has been Bizcomm's). This is a healthy competition, with equal spoils going to both competitors. Bizcomm has taken an edge over their competitor because of the ability of the company to do its own printing. Rockford cannot make this claim. This enables Bizcomm to promise--and deliver--quick shipments of accurate orders. There is one less step for Bizcomm to go through when processing an order. As a result, there will be fewer mistakes and more responsible customer service.