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The Shipping Centre

Market Analysis Summary

The Shipping Centre has three main customer groups: shipping customers, Mail Box customers, and fax customers.

4.1 Market Segmentation

The Shipping Centre’s customers can be broken down into three main groups:

  • Shipping customers. The shipping customers can be further broken down into customers who have packages ready for shipment, and those that require a packaging service. The typical customer that needs a package shipped is someone who does not have access to ship packages at work and the Post Office is not convenient, or they need to ship via UPS. The other subgroup requires items to be packaged for them. The items are typically unusually sized, or may be quite fragile and they want an expert to package it to absolve them from liability.
  • Mail Box customers. These customers are in need of a private Mail Box for a multitude of reasons including: convenience of location, cost, hours of operation, legality issues, etc.
  • Fax customers. These customers are in need of a fax transmittal service, either to send or receive a fax and do not otherwise have access to a fax machine.
Direct mail and shipping business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Shipping Customers 9% 27,000 29,430 32,079 34,966 38,113 9.00%
P.O. Box Customers 3% 2,547 2,623 2,702 2,783 2,866 2.99%
Fax Customers 6% 8,574 9,088 9,633 10,211 10,824 6.00%
Total 7.97% 38,121 41,141 44,414 47,960 51,803 7.97%

4.2 Target Market Segment Strategy

The Shipping Centre is targeting these customers because they represent a growing portion of the population.

  • Shipping customers. This segment of the population has grown steadily in the last few years in large part due to the Internet. When a customer purchases a product over the Internet and they need to return it for whatever reason, the easiest solution is to drop it off at a store like The Shipping Centre. Another growing segment of these customers is eBay sellers who are shipping out the goods that they are selling. Shipping customers are also mail-order customers who have an item to return back to the catalog company. Lastly, there are people sending packages to whomever. They are typically enticed by a shipping option that is fast and convenient, two things that do not describe the Post Office or a regional UPS shipping center as. Additionally, there are the customers who are in need of packaging for an item. Americans are working increasingly longer hours, and people do not have the time to package things up, this is especially true for weird shaped items or fragile merchandise. To do it right, these things take time–and time is a luxury that people are increasingly unwilling to devote toward packaging, they would rather pay someone to do this.
  • Mail Box customers. This is a segment of customers that is not increasing in significant amounts (although eBay transactions have boosted use in this area), but there are customers that require Mail Boxes and it does not take up much space to offer the service.
  • Fax customers. This segment has a steady demand for fax transmittal services. Although many thought the use of email would reduce the number of transmittals done via the fax, oddly, this has not happened yet.

4.3 Service Business Analysis

Currently there are several different companies that offer a similar service offering to The Shipping Centre. They are typically located in high traffic areas. They provide Mail Box service as well as fax and shipping. These different companies offer a commodity-like service. People tend to make choices based on convenience. Market research indicates that consumers perceive little difference between competitors, and there is little loyalty that customers display toward a specific store other than convenience.