Sun Heat has identified two distinct market segments for marketing their products. The first segment is the "DIY" segment of handy individuals. The second is the "Convenience" segment that will utilize a skilled installer to have the system installed at their home. The solar water heating industry is reasonably diverse. There are some companies that sell kits that must be assembled and then installed by the individual. There are other companies that only sell professional installed systems. Some companies sell solar water heaters specifically for swimming pools, others market their products for households.
Sun Heat has identified two market segments to target.
These people do a lot of repairs and upgrades on their home. They have lots of building and repair skills and like to tackle projects while learning new skills. This customer segment has a variety of motivations for do-it-yourself work. One motivation is saving money. Another is the satisfaction of completing the project on their own. Additionally, customizing the project may be appealing. Some demographic information of this group includes:
This segment is looking for the advantages of a solar based water heating system without the challenge of installation. They appreciate the value of the solar heating system. This group recognizes the environmental and/or economic benefits of solar water heating and will choose a professional installer. Demographic information is as follows:
Sun Heat will be be sold through several channels:
Sun Heat has decided to concentrate on these two market segments for several reasons. One reason is the lack of high quality products currently available to the DIY crowd. Another is the sheer size of the do-it-yourself market. This segment participates within the $23 billion DIY home improvement market and within the last six years has grown at double digit rates largely fueled by the Internet making information available to assist do-it-yourselfers in completing home improvement projects. The increase in size and activity within the available market makes it particularly attractive.
The new wave of environmentalism provides another reason of targeting these two market segments. More and more people want to reduce their negative impact on the environment and solar hot water heating is an easy and economical way to do it.
The industry is composed of many different manufacturers of solar water heating components and systems. Some companies operate serving the industrial market, others serve the residential market. There are several companies that make components they sell to different assemblers. There are other companies that make all the components for their systems in-house. Some solar heating systems are complex using computers to make adjustments such as the angle of the collectors based on the sun's position. Others systems are quite basic. It is interesting to note that almost no one competes within different markets, each company has chosen a different niche and sticks with that one alone. To be noted in section 5.1 is part of Sun Heat's competitive edge, serving two markets. This makes perfect sense since the products for the two markets are quite similar.
Sun Heat has several competitors. Its main competition comes from:
The buying patterns of customers is as follows: