Fishing Supplies and Fly Shop Business Plan

Studies conducted by the U.S. Fish and Wildlife Service show very positive market trends in the nation and in our area.  Fishing industry expenditures increased nationally from $53 billion in 1991 to $70 billion in 2001.  In our state, there was a 6% increase in the number of Anglers who fished in the state, a 55% increase in the number of days that each Angler fished, and an incredible 118% increase in the total dollars spent by Anglers from 1991 – 2001, representing the 2nd largest increase in the nation.  This means that there are more Anglers fishing here, they are staying longer, and they are spending more money while they are here. 

The same USFWS report shows that the same is true for hunting in the state.  229,000 hunters hunted in this state for a total of 2.4 million days.  This includes 59,000 non-resident hunters who hunted for 390,000 days, an average of 6.6 days each.  This is a 46% increase in the number of hunting days in the state, and a 46% increase in the total dollars spent ($206 Million on expenses and equipment) from 1991 – 2001. 

The breakdown of 2001 Hunting and Fishing Statistics looks like this:

Fishing:

Hunting:

Demographics:

Our target customers consist of 6 target groups. The American Sport Fishing Association has conducted studies that show that Anglers are an average age of 42, 70% are married, and 33% have college degrees. In our state, 28% of all Anglers are female, and 97.5% of them are white. Based on these numbers, we have concluded that the best target audience will be out-of-state white males between 35 and 70. We also have smaller target market segments in out-of-state white females between 30 – 50,  in-state single white males between 18 and 25, in-state married white males between 25 and 60, and in-state white females between 25 and 55, as well as large companies with large employee bases. 

4.1 Market Segmentation

Our market segmentation defines the target customer segments most likely to visit the area of our state that we service. This way we can then tailor our advertising specifically to those target segments, thus minimizing advertising expenses and maximizing the effect of investment dollars. 

Primary and secondary segments deal with non-resident Anglers and  Hunters, one female group and one male group. These two segments consist of married men and women between the ages of 35 and 70.  This is the age group that is most likely to have the means to afford the cost of traveling to a different state for fishing or hunting excursions. These segments travel specifically to hunt and fish as their end goal, or enjoy travel as the satisfaction goal and like to include hunting or fishing as enhancement activities. In either case, this group accounts for 33-40% of all fishing/hunting expenditures according to state-gathered statistics. In our state alone, this group spent an estimated $116,800,000 in 2001.

Our third target segment is resident males between the ages of 18 and 25. These males represent the future anglers and hunters, and are key to the future success of the business as well as a source of current revenues. By enticing these males to this area and enriching their experience, we will be more likely to turn them into repeat customers, even introducing their children into the business cycle. This segment has less financial responsibility or encumbrance than segments over 25 years old, and are therefore apt to take more trips and spend more freely. This group spent an estimated $73,777,200 in our state during 2001.

The fourth segment consists of single females 25 to 35 years of age. Females account for 30% of the anglers in our state and, by national average, do not marry until their 30’s. By targeting this segment of 30% of the market, we will earn their business and loyalty before they settle into family lives with incumbent responsibilities that may slow their outdoor activities. Pattern studies indicate that purchasing patterns and business loyalties formed within this segment are the most likely to endure through the life changes of marriage, family and personal maturity. This group makes up about 9% of the Anglers in our state and is responsible for about $16,254,000 spent here in 2001.

The fifth and sixth market segments consist of married residents, both male and female, between the ages of 25 and 60. This group is by far the largest group of hunters and anglers, from the casual to the avid sportspersons.  This group makes up 70% of the Hunters and Anglers in our state and is responsible for $223,224,000 spent in Montana on Fishing and Hunting in 2001. 

The seventh market segment targets large companies. The purpose of this including segment is to gain market share through direct advertising to companies that are large enough to send groups of people on trips as part of their own PR campaign, as company bonuses or as executive gifts. Billions of dollars are spent every year by large companies on advertising, bonus plans, and public relations. Our goal is to tap into this by offering guided trips and lodging (premium service at premium rates), to companies who don’t mind spending the money and can largely write-off the expense.

4.2 Target Market Segment Strategy

Our target market strategy focuses on groups who most closely resemble the average Hunter and Angler, and who have the means and desire to trave, fish and hunt. These are the groups that are most significantly contributing to the state’s revenue figures and are therefore the groups that will most significantly contribute to our revenue figures. 

Our goal is to use the least amount of money on the most effective type of advertising so that we can have as large a return on our advertising investment as possible. To do this we will wage an advertising campaign aimed at all of our targeted segments, using a large percentage of the budget to focus on as large of a percentage of each market as possible, and to use a small amount of the budget to single out certain segments at certain times of the year. 

4.3 Service Business Analysis

Kingfishers will be competing in the Hunting, Fishing, and Lodging industries in our state. The business will provide services specific to certain segments of those industries, and will be doing so in a specific geographic market area.  Though there are dozens of businesses offering similar products and services across the state, we are not in direct competition with all of them.  Direct competition is represented by five other Fly Shops in the market area that service the same waters we do, and as many as 10 businesses that offer lodging in the market area.  There are few businesses offering products for the hunting industry in the area that we service. 

Most of the industry competition that we face lies in the large department stores or chain stores located in the major cities, or “jumping-off points” of Hunters and Anglers.  This is where a majority of resident anglers purchase their equipment and accessories, because this is where they live.  Non-residents, however, tend to have specific destinations and limited time.  This means that they normally travel to where they are going to hunt and fish, and then purchase any gear that they need from the local shops that their guides recommend, or that they have come to know from previous trips or advertising.

4.3.1 Competition and Buying Patterns

Competition varies greatly within the three industries that we conduct business. Discussed below are the general issues germane to competition in those three industries.

Fishing Industry:

The fishing industry is broken up into different categories.  Fly Fishing is by far the most popular fishing sport in our state, and also the category with the most nuances. Catering to these nuances is the key to success in the Fly Fishing business.  It is also an industry in which brand recognition and quality are of the utmost importance. For this reason, chain stores that sell fly-fishing equipment are not strong direct competitors. Chain and department stores do not carry the top-quality brand name equipment and accessories that Fly Shops do, for the most part. The larger stores do not specialize in a sport that requires a major amount of specialization. One of the biggest reasons that chain stores or even bigger department stores can’t compete well with specialty stores, such as fly shops, is that they do not have the staff with the product knowledge, or breadth of knowledge about the sport in general, to adequately sell the products. The vast majority of fly anglers recognize this fact and avoid chain stores for anything but general purchases. Competition in the chain store/department store arena usually revolves around price, convenience and availability.

Competition with other fly shops is a different story. Campaigns in this competition are waged over location, ambiance, advertising, name brands, quality service and relationships. Fly anglers are known to be loyal.  When they find a fly shop that they like they will usually go back year after year. So in competition with other fly shops, the objective is to get the customer into your store and make them want to come back. This is where our “Keys to success” and “Objectives” come in. 

Hunting Industry:

The Hunting industry is different from the Fly Fishing industry in that Hunters have a huge number of stores to choose from to purchase the products that they need.  Most of these stores are located in the major cities and bigger towns. Our objective is not to compete with these stores directly, but to pick up where they leave off. Most hunters will forget something when they leave for a trip, or will lose or break something while they are out. This is the market share that we want to gain. Our location makes us a convenient stop to pick up an item or replace a piece of equipment. More than that, though, because the business is one of the few in the area to offer hunting and fishing Licenses, the Hunters are already coming into the store. This is a perfect opportunity to sell impulse items, or items that someone realizes they forgot or need. 

Lodging Industry:

The Lodging side of the business has few direct competitors. There are several local businesses that offer lodging, but not many target the specific niche that we do.  Most of the lodges are full service luxury-type accommodations that cost $200+ a night. There are several hotels in the area and one right in our town. These, however, are motels in the traditional sense and do not offer the same amenities that our lodging does. There are only 1-2 businesses offering lodging similar to ours and they are 30 to 40 miles away. When looking for lodging, most Anglers and Hunters look for convenience, comfort level, and price in orders that differ depending on the individuals and their particular needs. Our lodging scores high in all of those areas for the angling and hunting markets.