Pet World is a medium sized pet store in a busy suburban retail area. Located in an upper-middle class suburb of Paddington, Brisbane; the store location has excellent exposure to pedestrian traffic and the area has plenty of parking available for customers. The business has been operating for 5 years in the same location and has established a good reputation with the local and surrounding suburbs. There are no other retail pet stores in the retail strip; however, there are 3 other pet stores within a 10 km radius, two of which have been operating for longer than 5 years.
Pet World specialises in providing popular breeds of dogs and cats, from purebred to designer breeds. The target market is currently pet owners that live in a 10km radius of the store. There is a large selection of pet food, healthcare products, and a good range of boutique accessories. The largest market segment for Pet World is in pet food sales; with 55% of revenue per year generated from pet food products. Pet World have been able to develop as a market leader in the segment due to a wide range of pet food products available for many stages of a dog’s life, and a variety of cost effective to organic style products. There are no direct competitors in the local area that can compare to the variety they supply; this benefit combined with a loyalty card program, has assisted and continues to maintain a loyal customer base. Sales revenue from healthcare and accessories generates 30% of the businesses revenue per year; this has steadily grown in the last three years as more healthcare products are developed by suppliers. Live sales of dogs and cat generates 15% of the remaining revenue per year with cats making up 40% and dogs making up 60% of this revenue.
Pet World is ready to consider ideas for expanding the business from their current location. The store wants to seek new marketing opportunities to realise the following goals:
1. Increase sales by 10% in the next 12 months
2. Penetrate a new market segment
3. Broaden its product mix
The store is a medium size retail space; the layout has opportunity for improvement to provide additional space for the addition of a new product or service. Research has been completed and two viable opportunities have been identified that could use the space and realise the marketing objectives:
a) Introduce a new market segment of pets i.e. birds, fish or reptiles
b) Offer a Clipping / Grooming service to existing customers
Based on the current market Pet World is operating in, the clipping and grooming service provides an immediate opportunity to offer a new product in an existing market. Pet World will penetrate a new market segment in an accessible market by marketing to their existing base of loyalty card customers. The clipping and grooming segment provides a broad range of products and services for customers, a recent study by the Animal Health Alliance estimated pet clipping a grooming to be worth $305 million per year. The average spend per household in Australia is $100 per year. Similar to consumable products; this market segment offers sustainability through frequent repeat business.
Pet World has a loyalty card customer base