Market Analysis Summary
There are thousands of small businesses that are dissatisfied with the choice of inventory control products that are available to them. Most of these businesses exist below the water line for software companies. Selling to a market that can only spend $5,000 on an inventory control solution is considered too small a return for the sales activity.
If a salesperson can spend a day winning a $50,000 contract rather than a $5,000 contact, she will disregard the smaller opportunity. Many sales organizations have overlooked this opportunity. If a cost effective method can be established to attack this market, the sales can be enormous.
It is Crest Systems plan to sell to the VARs that serve the vertical markets as well as the VARs that sell warehouse products and services. Crest Systems will sell the hardware directly to customers when the software is purchased by the vertical VARs’ customer. The company will use this opportunity to build purchasing relationships with businesses with growing inventories.
4.1 Market Segmentation
Crest Systems will focus on two customer groups:
- Warehouse Products and Services VARs: These VARs offer warehouse management hardware and software. Though their primary focus is on larger contracts, an inexpensive product focused on the low end of the market will be attractive if the payoff is large enough. The VARs retain $500 on each product sold. There is no other software product that is focused on our target customers that rewards better for the sale.
- Vertical Market VARs: These VARs traditional don’t sell inventory management products to their customers. Inventory control products are not their focus, rather it is whatever item or product particular to that industry that is used in manufacturing or assembly of their final product. Yet they have thousands of customers. If the payoff is large enough, their access to the market would lead to enormous sales. Like the warehouse product VARs, the vertical market VARs would retain $500 on each product sold.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Warehouse Products VARs||15%||1,400||1,610||1,852||2,130||2,450||15.02%|
|Vertical Market VARs||15%||1,100||1,265||1,455||1,673||1,924||15.00%|