Fescue & Sons Yard Care
Market Analysis Summary
Fescue & Sons Yard Care will target rural middle-class families with larger lawns or parcels of property. This population is the most likely to use a lawn care service such as ours, since they often have more acreage than they can easily care for.
Red will be canvassing neighborhoods and posting flyers to develop a clientele. We will also place advertisements in the local rural newspaper to develop visibility for Fescue & Sons Yard Care.
In the second year, Red will expand service beyond the small rural town to the urban area located 15 miles east.
4.1 Market Segmentation
Fescue & Sons Yard Care will be targeting families with annual income over $50,000. The median income of $50,000 and above is targeted because they tend to have more disposable income for the care of their lawn, whereas lower income families will tend to provide their own lawn care.
Over the last three years, the prices for homes in the nearby urban place advertisements have skyrocketed. Many families in our targeted income bracket have chosen to buy larger parcels in the nearby countryside, rather than spending huge amounts on small lots in the city. However, many of them are unprepared for the level of care such large lawns require, and end up with small gardens near the house, and overgrown acreage further away.
By targeting customers with large lawns and parcels of property, we will fill the niche created by urban flight, as well as keep our margins higher than we could with small lawns. Transportation time and costs for all the equipment make it more profitable to do a few large lawns than many smaller ones.
By doing a superb job on these rural lawns in the first year, we hope to build a positive reputation which will carry over with recommendations to co-workers and friends in our customers’ former urban neighborhoods. Since we want to maximize lawn size cared for in both settings, our eventual outreach to urban dwellings will focus on high-end houses and lawns on large, often older, lots.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Rural Family Income Above $50,000||3%||300||309||318||328||338||3.03%|
|City Family Income above $50,000||3%||14,500||15,000||15,450||15,914||16,391||3.11%|
4.2 Target Market Segment Strategy
Initially, we will canvass nearby homes in our rural town. Red will be basing the business out of our home, very close to the target market. Red will start by speaking with his own neighbors. Although some people are put off by solicitors, Red is their neighbor, so they will be more comfortable with him and he will be able to make his sales pitch. We will also put some small signs on our own lawn advertising our service.
Once Red has built up a steady list of customers he will begin to run advertisements in the local paper to gain access in different neighborhoods. In the second year, we will continue running ads and begin outreach to the more affluent city customers with large lawns.
4.3 Service Business Analysis
Fescue & Sons Yard Care will be working in the lawn care industry. The industry includes both residential areas (individual homes) and commercial areas (apartment complexes, business parks, schools, etc.).
The commercial side is generally serviced by larger landscaping services. The residential side is serviced by both landscaping companies and basic lawn care service companies.
The lawn care business is made up of many small companies. This occurs because of the high labor intensity and low start-up costs of the industry. The industry is vulnerable to recession, as lawn care is a luxury. Lastly, the lawn care industry is seasonal, with the high season being spring through fall. There is usually little activity in the winter, but some can be achieved by acquiring a clientele that will utilize monthly maintenance through the winter months.
4.3.1 Competition and Buying Patterns
The lawn care business can be divided into two types, residential and commercial. As a start up or one person business, it is much easier to enter into the residential market compared with the commercial market. The commercial market is dominated by larger, established companies.
Within the residential market, there are two competitors: full-scale landscaping companies and basic lawn care services. The full-scale landscaping companies will generally be handling jobs outside of Fescue & Sons’ range. They are servicing even larger homes that require other landscaping activities that need more equipment and multiple employees. The margins are therefore larger for the full-scale companies because they can charge more for the higher-skilled work. The other competitor is the basic lawn care services, not unlike Fescue & Sons Yard Care. In the residential market, the current competition is underwhelming and often lacks basic quality and professionalism.
The trend with the residential customers is that they are making their purchasing decisions based on referrals and perceived professionalism and quality of service.