Retail Tennis Shop Business Plan

In order to effectively analyze our markets, it is necessary to look at both the consumer’s needs and the retail and distribution environment in the tennis industry. Much data and information is available in both areas.

Most of the research and statistics included in this plan are from a survey conducted by the National Tennis Foundation called “Tennis Consumer Spending in the U.S.” and additional information is from a database survey of tennis enthusiasts by market called “Tennis in America.”

Over-all consumer spending on tennis equipment and tennis activities exceeds $16 billion annually. $2.3 billion is spent on equipment (primarily rackets), $2.9 billion on other merchandise (court bags, balls, shoes, and apparel), $947 million on accessories, and $10.1 billion is spent in the largest segment of all, playing fees (reserved court time fees, club memberships, and misc. fees).

A gap in available data exists in the area of spending on tennis lessons and instruction. The National Tennis Foundation is in the process of conducting a survey to determine these expenditures. The problem with gathering this data is that much of the spending on tennis lessons with professionals, for example, is cash “off the books.” While no one currently knows the exact level of spending on tennis instruction, everyone agrees that the actual figure may well be in the hundred million dollar range. With more than 20 million tennis enthusiasts that would amount to only $5.00 per tennis player.

4.1 Market Segmentation

Tennis Master’s market segment as a whole is the entire tennis playing population of the U.S., currently more than 20 million tennis enthusiasts and growing by approximately 10% a year. That is, there are two million new tennis enthusiasts in this country each year. This segment alone needs equipment and lessons. However, two million customers is not a sufficient number to sustain Tennis Master’s national expansion plan. We must also be successful in marketing to existing tennis enthusiasts. That will extend our total segment to more than 20 million current potential customers.

The National Tennis Foundation has developed extensive demographic data on buying patterns by sub-dividing tennis related purchases by the segments of occasional, moderate, and avid tennis enthusiasts. The tennis enthusiasts in these three groups have distinctively different needs and buying patterns. This is discussed in more detail in the Market Analysis section 4.3 of this plan.

4.2 Industry Analysis

The tennis industry over-all may be broken down into the following segments of interest to Tennis Master:

1. Tennis Retailers.
2. Tennis Racket Manufacturers (National Brands).
3. Tennis Racket Assemblers (Components) and their suppliers.
4. Tennis Instruction & Training (Indoor).

4.2.1 Industry Participants

In tennis racket manufacturing the “Big 3” are [details omitted], [details omitted], and [details omitted]. These three companies have enjoyed rapid growth, increasing market share, and successful public offerings at the expense of former industry leaders such as Wilson Sporting Goods, [details omitted], and others. These three industry giants now dominate the market with media power and have made the majority of other tennis racket manufacturers only marginally profitable or not profitable at all. The tennis racket manufacturing business is not a good segment to enter–certainly not if the intention is to establish a new name brand racket line.

Thus, Tennis Master brand rackets will not be the center of our marketing focus. Rather, custom-fitting our training clientele will be an add-on or trade-up philosophy. We will also not endeavor to compete with component “discount” racket makers. Our focus will not be on price but on the quality of custom-fitted rackets. The “Tennis Master” name on these rackets will be consistent with our quality image that has already been embedded in our customer by the quality and enjoyment of his training experience.

In component racket assembly there are a multitude of small companies marketing primarily on price to a local customer. Several major suppliers of tennis racket components dominate this market at the wholesale level, the largest being [details omitted]. [Details omitted] also markets via catalogue and lately hasn’t been able to resist the temptation to jump into the retail fray.

In tennis retailing we will not attempt to compete with the retail giants such as [name omitted] and [name omitted]. We cannot match their price on national brands, we cannot match their group purchasing power, and we cannot match their media exposure as it pertains to equipment purchasing. Also, we have no desire to be burdened by the high inventory levels that full line tennis retailing demands.

Tennis instruction and training is dispersed and not always available at the times that customers desire it.

In the training segment Tennis Master seeks to find its niche and to grow to dominate this newly defined market opportunity. There is currently no national indoor tennis training center. What better name than Tennis Master to step in and dominate market share?

4.2.2 Distribution Patterns

Distribution of all of Tennis Master’s product offerings is secondary to our over-all success that will result from effective distribution of our training programs. Thorough data is available on the buying habits of our different classifications of tennis enthusiasts. Most tennis rackets are purchased from the major tennis retailers. Then follows sporting goods stores, courtside pro shops, mass merchants, and catalog/mail order/other as a group. We will not attempt to displace existing consumer buying patterns in these retail segments.

In order to effectively distribute our training programs we will utilize demographic data of tennis enthusiasts by market and sub-data locally to identify the best locations for our retail stores in any market based solely on tennis playing demographics that are readily available. “The Number of Tennis enthusiasts Ranked by [details omitted]” is included in Appendix “D.” Effective distribution of our services will result when we attain a “critical” mass of stores in a given market to cover those areas populated by the proper tennis playing demographics coupled with sufficient media execution.

Finally, our distribution will extend all the way into the individual tennis player’s home via their own copy of the Computer Coach that can be reviewed on an ongoing basis.

The Internet, direct mail, and catalog marketing also offer the means to reach tennis enthusiasts in areas where Tennis Master does not have stores.

Tennis Master has no plans, present or future, to extend the distribution of its rackets into other retail outlets.

International expansion is not discussed within the scope of this initial three year plan. However, tennis is growing faster overseas than it is in the U.S. and our management has long term plans to expand internationally. The name “Tennis Master” will have identifiable meaning to tennis enthusiasts worldwide. Anytown, Washington may truly be said to be one of only a few recognizable tennis capitals around the world.