Our biggest savings of the year
Adorable Pet Photography
Market Analysis Summary
Many of today’s white collar professionals, between the ages of 26 and 60, have at least one pet in the household. The pet is treated as a family member; and the owners spend approximately $26 billion annually for gourmet food, cosmetic services, health care, and specialty items (Hunter, 1999). Adorable Pet Photography will reach this audience by targeting clients of these existing markets. We will fill an existing need for the client by specializing in pet photography. Through advertisements in the print media, brochures, and establishing working relationships with pet organizations and pet specialty businesses frequented by our potential client base, we will highlight our quality products and services.
4.1 Market Segmentation
The breakdown for the market for Pet Photography is somewhat diverse, as are the products designed to meet those needs. Individuals, as well as organizations, require the services that we provide. In order to provide the greatest depth, the market segments have been broken down into private organizations and individuals stratified by age groups.
Private Organizations and Businesses:
Private organizations and businesses, such as the American Kennel Club, sponsor specialty pet show events. Championship pet breeders represent the second largest volume in units, but the most exposure to other potential clients, in the pet owner segment. The pet shows will generate documentary photographs for the organizers of the show as well as publicity photographs for the winning pet owners. This category has the potential for tremendous referral and direct sales to pet owners. In addition, the market potential for professional breeders of championship stock for quality studio portraits is high.
The market in this category can be further divided into product lines designed to meet the needs of pet owners:
- Studio and Location Portraits: This category will generate the second-highest level of income for the business; the market segment will be white collar professionals 26-60 years old. Individuals that fall into this age group have at least one pet per household and spend in excess of $25 billion dollars annually on their pets. The studio portraits will capture a lasting memory, and the location portraits will highlight the relationship with the family at home.
- Seasonal Promotions: This category represents the highest level of sales. The product in this category will appeal to the same age group, but focuses on a more candid photograph to capture the pet in a theme setting such as Christmas, Valentine’s Day, or Halloween.
Stock Photography Market:
Copyright of all photographs taken by Adorable Pet Photography will be retained unless the rights are specifically sold to the pet owner and the negatives are released. These photographs will be marketed as stock photography for use on calendars or promotional material. While this represents a small volume in overall sales, it represents a tremendous potential for exposure to new clients.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Individual Pet Owners||15%||2,865||3,295||3,789||4,357||5,011||15.00%|
|Stock Photography Market||10%||250||275||303||333||366||10.00%|
4.2 Target Market Segment Strategy
Our target markets are middle- to upper-middle class families, couples, individuals, or private organizations and businesses. We chose these groups because they are most likely to have pets who would be considered a member of the family, and because they are most able to afford high-quality studio portraits of their pets.
In today’s current environment, pets occupy a prominent place in a family, or as the central focus of attention in a single household. Sales trends for pet-related merchandise have shown substantial annual increases since 1996 (Bunn, 1998). Pet industry sales closely parallel the general trends, such as gourmet foods, high-fashion accessories, and medical and dental needs (Simpson, 1998). Adorable Pet Photography fills a need for capturing a moment in time, or preserving a special relationship and providing loved ones (the human kind) with a high quality portrait of them and their best friend. Considering the rise in income and population, coupled with the increased spending for pet-related items and services, the demand for pet photography services can only increase.
4.2.1 Market Trends
As Americans have enjoyed increased standards of living, they expect to pass this on to their pets. Where consumers used to pick up pet food on their weekly excursion to the grocery store, they now buy gourmet premium foods, which exclude animal by-products and replace them with prime cuts of meats and other high-level ingredients, some of which are sold only through veterinary offices. Dog and cat owners spent $8.7 billion on pet food in 1996, and the market is expected to reach $10.5 billion by 2001 (Bunn, 1998).
In addition to regular meal planning, dog-centric bakeries are now found in major cities that offer the ultimate in guilty canine pleasure, using natural ingredients (no sugar, carob instead of chocolate, etc.) to create food and treats similar to those of their owners (chocolate-flavored croissant-like dog biscuits, for example). One company, Alaska Canine Cookies, went international and reported a 400 percent growth rate in their first year, 1996, and settled into a more manageable 200 percent rate in 1999 (Veltkamp, 1999).
The market trend, as the human element permeates the pet industry, leads to pets not being buried in shoeboxes in the back yard as much as they once were. The trend, since 1996, has been to give an animal a proper funeral. There were 650 pet cemeteries and crematories active in business in 1996, with the cost of a pet burial between $235 to $800 (Powell, 1998). The market segment of pet owners is becoming a more solid profit maker, with the trend towards spending more money on a pet with every passing year.
4.2.2 Market Growth
The number of U.S. households with pets has held steady at approximately 58 million over the past ten years, with an estimated six of ten U.S. households owning a pet in 1996, up from 56 percent in 1988. There were 59.1 million pet cats in 1996, up 3.6 percent, and 59.2 million pet dogs, up less than one percent. However, the amount of money Americans spend on their pets has exploded. In 1993, overall retail sales of pet-related items were approximately $16 billion. By 1997 this number had risen to $22.6 billion, and by 2001, that number is expected to jump to $28.5 billion (Hunter, 1999). Industry experts expect sales to grow steadily for the next five years, from three to 15 percent, according to surveys conducted by the Pet Industry Joint Advisory Council (Powell, 1998). Thus, while there does not seem to be a great increase in people who own pets, the ones that do have them are valuing them more.
The veterinary services market totals $20 billion annually. According to an annual American Animal Hospital Association survey, the average dog owner spends $187 per year on veterinary services alone (Littman, 1998). No longer is the primary care veterinarian handling all of their patient’s needs. Specialty care veterinarians who have additional training, such as surgeons, internal medicine specialists, ophthalmologists, and dermatologists, are in great demand (Tuthill, 1999). Doggie day-care centers are springing up all across the country and carving a niche in the pet-care industry. Busy professionals feel guilty about leaving their best friend alone all day, the animals can romp the day away in a “cage-free” environment. Centers for pampering pets, such as Hollywood Hounds in Los Angeles, feature pet massages, “pawdicures,” and complete make-overs for dogs. They even boast a backyard gazebo for “muttrimonies” and “barkmitzvahs.” While kennels have always been around, modern day dog and cat owners are being more selective for their four-legged loved ones when leaving town for a business trip or vacation. Thus pet sitters, who come into the pet’s home and take care of them while the owner is away, and luxury pet lodging and resorts, which provide themed suites, nature walks, swimming pools, and nutritional/gourmet dinners, are reporting waiting lists (Jan, 1999).
There are 8,500 independent full-service pet stores in the U.S., and 1,150 pet superstores, such as Petsmart™ and Petco™ (Powell, 1998). Thus, this increased importance and love for the family pet has caused existing pet services to flourish and has created entirely new fields of pet care. Scores of entrepreneurs are developing businesses catering to pet owners.
4.2.3 Market Needs
Pets have always been an important part of the American family. However, as the American culture has changed in the last two decades, an even more prominent role for the pet has emerged. In today’s mobile society, people often lose touch with their community, friends, and family, so they draw closer to their pets. As more people put off having children until later in life, pets are increasingly lapping up the luxuries that had once been reserved for human housemates. Making pets into family members is typical of an economy driven by middle-aged professionals with two-income households and fewer, if any, children. These “baby boomers” are now hitting the peak years of 35 to 65. In some cases, the pet alleviates the Empty Nest Syndrome for older married couples. Their animals are not just pets but companions, and many owners consider their pets their children. Society is getting better educated and more accepting of pets across the board, and there is existing research that proves pets are a benefit to one’s health (Palmer, 1998). People are now treating their pets as children, a pampering not seen 20 years ago.
The importance of the family pet is evident, and it calculates into big business. People want to show how much they care. Thus, it only makes sense that this important member of the family should be included in the family portrait, or even have a separate photo shoot of their own. Indeed, with increasing frequency, we now see pictures of pets on employee’s desks in addition to, or instead of, human family members. A photography studio that openly welcomes animals appears to be a viable business unto itself.
4.3 Service Business Analysis
Adorable Pet Photography is in a unique position of competition. We compete against the standard portrait studio that may photograph pets, but only as an adjunct to photographing people. We compete against two other exclusive pet photographers in the Atlanta Metropolitan area, and a host of amateur photographers. The benefits and drawbacks of each of our competitors as compared with the services we offer are hardly a match in quality and price.
Standard Portrait Studios:
- Strengths: Established studio locations and support staff, often with repeat clients. Reputation as reliable and stable business.
- Weaknesses: Often very expensive, with little or no experience in pet photography. Pets are a sideline and not the major focus of the business. Can be inflexible with scheduling and out-of-studio work.
Other Exclusive Pet Photographers:
- Strengths: Have been in the market longer, have established client base and reputation.
- Weaknesses: Array of services is limited, inflexible with schedules, and limited studio capability. Quality of final portrait.
Local Amateur Photographers:
- Strengths: Pricing.
- Weaknesses: Quality of final product, lack of professional photographic equipment and skills.
4.3.1 Business Participants
The portrait photography business is composed of thousands of small, individually-owned studios, and several large franchise operations. Pet portrait photography is a new, but very successful, niche market which is experiencing rapid growth. While this segment of the industry is largely individually owned studios or “on location” photographers who operate without a studio, one company, PetStar™ is offering a franchise operation with instruction and low start-up costs.