Market Analysis Summary
Inspect A-bode will be focusing on two general groups of customers. The first group is real estate agents. The strategic relationships with the agents will include an economic incentive for them to give Inspect A-bode referrals. The agents will provide Inspect A-bode with a steady flow of customers as it is in the agent’s best interests for the houses that they are trying to sell to have a complete inspection, ensuring satisfied customers.
Inspect A-bode will also target individual buyers and sellers. For different reasons, both of these groups have something to gain by having an inspection done on the home they are trying to sell/buy. Inspect A-bode will target these groups through focused advertisements providing visibility of Inspect A-bode.
4.1 Market Segmentation
Inspect A-bode’s target can be broken down into three (not mutually exclusive) segments:
- Real estate agents: this group of customers are professional realtors in the area. They are targeted because they will recommend, or require, a home inspection before purchase. Requiring the inspection makes great business sense. It forces latent problems to become apparent, significantly reducing the chance of the customer being dissatisfied. By aligning Inspect A-bode with many different realtors, Inspect A-bode would in essence be spoon fed a constant stream of business. Not only would there be a flow of customers, but they would all be referrals so there would already be the beginning of a trust bond formed as their agent has personally vouched for Inspect A-bode. After the initial relationships are set up, the agents would be a relatively easy group to service or maintain.
- Individual buyers: this group is purchasing inspections to avoid the phenomenon of “caveat emptor” which in Latin means buyer beware. The house buyer is motivated to determine any problems with the house before they purchase it. The knowledge of what is wrong with it is useful because it will provide insight as to whether the asking price is fair and the information could be used as leverage to adjust the price if it wasn’t fair.
- Individual sellers: this group is a smaller segment relative to the other two, but they still will be a consumer of Inspect A-bode’s service. Having an inspection done on the house that they are trying to sell is useful in offering assurances to the buyer regarding the condition of the house.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Real estate agents||9%||1,021||1,113||1,213||1,322||1,441||9.00%|
4.2 Target Market Segment Strategy
Inspect A-bode intends to specifically target all three segments.
- Real Estate Agents: this group will be targeted through the development of strategic alliances with many different realtors. One angle at accomplishing this will be through networking relationships that Selle, Chek’s wife, has established through her ten years as a realtor. Selle is currently a realtor and will naturally suggest her clients use Inspect A-bode. Selle will be working with her colleagues to facilitate their usage of Inspect A-bode.
- Individual buyers: this group will be targeted through an advertising campaign in publications that home buyers are typically reading, as well as in the Yellow Pages. Individual buyers will emphasize that the buyers should be practicing due diligence regarding checking on the condition of their home before they buy.
- Individual sellers: this group would also be targeted through an advertising campaign reinforcing the idea that they will have an easier time selling their home if they have an objective report that details everything important about the condition of the house.
4.3 Service Business Analysis
The home inspection market in Eugene is decent size, about 20 different companies. Most companies are small outfits and offer a fairly standardized service. The items inspected are similar as well as the price, typically $200-$400. What differentiates the different companies is the level of experience and professionalism.
4.3.1 Competition and Buying Patterns
There are many different competitors in the home inspection market. At first glance, the service appears to be commodity like. Most people offer the same service offering, the same type of inspections, the same price, etc. However, the level of experience and professionalism of the service provider does indeed differentiate the companies.
The buying patterns regarding the home buyers seems to be based on referrals and advertisements. The home buyer will often ask someone in the industry if they can recommend a home inspector provider. If they do not know anyone to ask they will typically look in the number of local magazines for homes and find an advertisement in there. Lastly, they would also check the Yellow Pages.
Home sellers will either ask their realtor or they will look for some sort of advertisement.
The buying pattern for the realtors is that they typically will know of an inspector that they send their clients to. Because they are in the industry, they typically know people so they will generally not be looking at advertisements to make a decision as to who to recommend.