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Grassroots Wireless

Market Analysis Summary

Within the last three years there has been a proliferation of broadband Internet connections. With so many people enjoying fast connections at work, they are no longer willing to deal with a dial-up connection at home. With the advent of Wi-fi technology, customers can now enjoy a fast connection without having to lay expensive cables since the signal is sent via radio waves. The targeted market segments are: students, professionals, techies.

4.1 Market Segmentation

The market can be segmented into three distinct groups:

  • Students: these are people currently in academia and are accustomed to fast connections and are willing to pay for it. This group uses the Internet the most, whether they are trading MP3s or downloading videos.
  • Professionals: this group conducts a fair amount of business over the Internet, whether banking, e-commerce, or communications.
  • Techies: this group embraces technology as they enjoy challenging themselves with technology and the complexity it brings.

Other than the students, Grassroots’ customers are fairly affluent (household income of >$50,000) and spend their money on technology offerings, whether it is digital cable, cellular service, or broadband Internet connections. The target customers are also generally well educated with 65% having a college degree and 20% having a graduate degree. Combining several demographic factors, Grassroots arrives at the following primary customer profile:

  • Spends 10 hours a week on the Internet away from home.
  • Has purchased something from a website at least once within the last two months.
  • Educated with at least some course work for an undergraduate degree.
  • Household income of at least $50,000.
Internet isp wireless business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Students 9% 54,000 58,860 64,157 69,931 76,225 9.00%
Professionals 8% 34,000 36,720 39,658 42,831 46,257 8.00%
Techies 11% 10,000 11,100 12,321 13,676 15,180 11.00%
Total 8.87% 98,000 106,680 116,136 126,438 137,662 8.87%

4.2 Target Market Segment Strategy

Grassroots has chosen the three aforementioned target markets due to their adoption of broadband Internet technology. It is these three groups that are most likely to use a fast connection and the most willing to pay a premium for the connection.

4.3 Service Business Analysis

There are three main participants within the consumer broadband Internet market.

  • DSL (digital subscriber line). A connection that utilizes the copper phone lines as the method of transmission.
  • Cable. A connection that uses cable TV wiring for transmission.
  • Satellite connections. These use satellites, in orbit to provide “cable” TV as well as Internet connections to residential and remote consumers.

4.3.1 Competition and Buying Patterns

As mentioned in the previous section, DSL, cable, and satellite access are the competitors in the broadband market. Consumer buying patterns are based on two factors:

  • Availability: not every type of broadband connection is available to every consumer. Consumers often pick service providers based on what is available to them.
  • Convenience: this is often based on where the outlet cords are based in the house, whether the computer will be located closer to the cable TV or nearer to a phone jack.