The Product
The product that has been chosen is soccer shoes. Considering most young people have an affinity towards fashion and wear. The age group between 18 years to 24 years has a large percentile of the demography in college with those in the age bracket of 23years to 24 years have recently began employment. So it’s reasonably logical to target the age group from 18 years to 22 years. The demand for soccer shoes will be quite high in colleges and more males are likely to demand them. To do an effective study and analysis to identify the correct market segment; we will have to study the level of GPA in the presented pivot table analysis. The sample of N =10000 should aid us in finding the correct market segment for soccer shoes since the above hypothesis of the age group of 18 years to 22 years is wide and we only need a more specific answer.
Profit Margin
Assuming the unit cost for producing a soccer shoe is 12 dollars and the shoe company decides to set the sell price at 20 dollars. The profit margin per shoe sold will be got as;
=20-1212*100=66.67%
This is the profit margin. For a shoe company to make this profit margin stand it would really like to be aggressive in its market segment in order to beat the competition.
Demographic Variables
The most demographic variables to consider when selecting your market segment are;
- Age- age is the most important factor in this case since sport shoes are mostly worn by the generation Y. It is quite evident from the pivot chart that most of the active source is in the age group between 20 years to 22 years.
- Income- This come in second because income provide a means of exchange for the consumers to purchase the goods that are the spot shoes. There is quite a number of variability in the level of demand as presented by the GAP percentage in accordance to the income. Age groups of 22 years to 24 years that have income between $40000 and $45000.
- Consumer behavior- youths in college are more likely to buy soccer shoes as an opposed to those in work force.
- Competition- Since it is a likely invested business idea, competition will be stiff and this may drive prices for soccer shoes slightly downwards.
Profit expected here will be given by
This is with the assumption that the entire sample is involved in the purchase. The target market is obviously in the income bracket of $55000 and below. Mostly being the female population.
