Home Plumbing Contractor Free Plumbing and Heating Contractor Business Strategy Questionnaire 4.21 Market Value of Owned Home Nationally by Age Analysis. Questionnaire
What is the significance of having the Market Value of Owned Home by Age analysis for Plumbing and Heating Contractor in a business plan for Central Plumbing & Heating Inc.?
The Market Value of Owned Home by Age analysis tells a small business owner like Felix Gonzalez and the reader of the business plan, what is the value of homes nationally and how they are broken down by age brackets of the homeowner. This is key industry as well as demographic insight for small business owners like Felix Gonzalez. It tells us a great deal about the age of our potential customers and this information is of course critical in creating a strategic marketing plan and out smarting the competition tactically. Another great advantage of this analysis is that it looks at market value of owned home by age range over a period of 10 years and thus business owners like Felix Gonzalez are able to see with clarity what the values of homes for various age brackets used to be at a national level and what they are like today. This kind of perspective is superb for overall strategy development.
In order to conduct this analysis we take in data on the market value of owned homes for 6 categories over a 10 year period for the Plumbing and Heating Contractor. The following are the cateogy classifications used in this analysis:
The average market value of owned home by folks who are less than 25 years old.
What changes can one expect when looking at this analysis and how does that impact a business like Central Plumbing & Heating Inc.?
Over a period of 10 years there can be subtle changes in the market values of owned homes of the American Consumer. In some instances the analysis may also reveal that there are drastic changes within certain age categories. It is critical to analyze this carefully since some of the trends denoted in the past years may actually be a decent harbinger of what is to come in the future. Thus lets say that the market value of owned homes by consumers who were less than 25 years old in the past used to be failry high, but in the recent years we find that the same younger consumer actually owns homes that are not as valuable or have not grown in value as much as other segments, it may indicate that the younger segment of the market is not able to afford better homes because their earnings power has been reduced compared to a decade ago. This would imply that they have lower incomes, probably unsteady employment, making them harder to approve as borrowers when they look to apply for loans.
Besides the changing nature of spending amongst different age groups, this analysis also shows just how the market value of the all homes themselves may be changing
and that of course has tremendous impact on a small business owner like Felix Gonzalez. Lets say you are a looking to target young or new homeowners and you find out that the value of the homes owned by younger folks are simply not increasing as much as they used to in the past, you may have to change your marketing strategy and switch to target an older crowd. This may require you to change your marketing material, come up with a whole new marketing and branding strategy in order to be able to capture the older segment of the market better. Thus instead of targeting magazines and literature that is consumed by younger folks, the business will have to turn to advertising in periodicals that are read by folks in older age brackets. The same works for Television and radio advertising. If your are a roofing contractor or landscaper, you may have to also price your services differenty - a landscaper may offer a lean service consisting of only 4 visits per year instead of 8 to 10 visits to help these younger consumers with their budgets and yet try and capture some business from them.
Which consumers should a business like Central Plumbing & Heating Inc. be looking to target if they have a choice?
More often that not, it is the product or service that a business is offering that determines who the ultimate clientele is going to be in terms of age. For example if you have a small practice as a math tutor for high school math - guess what? - your target market is high school students and their parents and so in this case you really don't have a choice in selecting the age group of your customers that you can market to. On the other hand, in the event you have a product or service that is useful to many age groups like say a collectors shop where all kinds of collectible items are sold from baseball cards to train sets - you will most probably have a target market of consumer of all ages.
In the event you have a broad audience in terms of age, it is always recommended that your marketing should target folks with the deepest pockets and that of course is folks who are earning a good income. Generally speaking people ranging from their late twenties and up to early fifties make the best customers for businesses who rely on the consumer's disposable income - these are the folks who tend to earn decent wages and have the disposable income to make the discretionary and lifestyle purchases they want. Marketers find that folks in age groups below 25 may have the need and desire but may not have the purchasing power and folks above their late fifties tend to start changing the way they consume since they see an upcoming retirement looming on the horizon.
Coming back to age - there are many businesses that have done very well because they have understood the teen market - a market that is known to have very different tastes and preferences from the older market and also whose tastes and preferences change rapidly. A good example of this may be entrepreneurs who were able to capitalize on the hip-hop boom in the early nineties and get involved in creating merchandise like clothes, shoes and even after market automotive accessories that marketed to a young generation of clients that were looking to embrace the hip-hop lifestyle made famous by the music genre.
Understanding market trends and being able to catch a good trend are critical to the success of small businesses and almost every large well known fashion designer started off as a relatively small business that was able to grow incredibly well because they were able to identify and take advantage of trends in the young and fashion conscious segment of the clothing market. Even very large sporting goods companies like Nike and Addidas have learnt the importance of tapping into the younger generation who often spend two or three times more money or a shoe than older consumers.
Is it rare to see consumers older than 55 do a lot of spending?
Not really. Consumers who are older than 55 tend to spend their dollars on industries like health care and retirement services. Thus businesses who benefit from senior and retired folks tend to be retirement communities, assisted living facilities, nursing homes, home health aide services and so on. The entire State of Florida in one sense is a great beneficiary from the retired and senior community consumer given how many relocate and retire there. As sad as it sounds, certain medical practices like oncology also tend to do well in older target market environs since as we get older, our bodies tend to develop more health issues which we did not have to cope with when we were younger!
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