Marketing Fundamentals Report 1 PDF

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Marketing Fundamentals Report 1 - STDP REPORT
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Furbo Market Report (STDP)

Table of Contents 1. Background 2. Segmentation 3. Target Markets 4. Differentiation and Positioning 5. Conclusion 6. Reference List

1. Background Research suggests that pets alleviate a person’s loneliness (Carver, 2020). This accounts for the surge in pet adoptions when the COVID pandemic surfaced (Boseley and Wahlquist, 2020). However, as people are returning back to their normal routines, pets are being left behind. This separation has caused behavioural and psychological issues for pets and their owners (Teller,2020; Wells, 2020). Furbo Dog Nanny (Furbo) is a monitoring and nanny system and is part of the pet industry. Over 60% of Australians have pets. The trend towards pet humanisation has caused growth in this industry and increased competition. Furbo is designed to keep dogs safe and supported in their homes, providing real-time mobile alerts via video and audio, a treats delivery system, and cloud recording. Furbo’s advanced features enable pet owners to know what their pets are up to. Furbo provides a feeling of connection between pets and their owners when they are separated.

2. Segmentation Furbo intends to expand its operations due to the increased demand for pet monitoring services. The market segmentation table illustrates how the market can be segmented into smaller pieces.

Older Age

Geographic 

Density



City size

Demographic 

Generation



Occupation

Middle Aged

Young Aged

Professional

Students

Urban

Urban

Urban

>5 Million

>5 Million

>5 Million

Baby Boomers

Millennials (1981-

Generation Z

(1946 - 1964)

1996)

( 1997 & after)

Semi-Retired

Professionals

Students

Strongly Attached

Strongly Attached

Strongly Attached

Pet-Parents

Pet-Parents

Pet-Parents

Medium

Heavy

Medium

Occasional

Intensive

Regular

Psychographic 

attachment to their dogs



Personality

Behavioural 

Usage rate



Usage Situation

The market is divided by demographic variables based on the consumer’s generation and occupation. Individuals who have stable occupations will have higher incomes as compared to those who primarily do not work. Furbo’s prices may cause some middle-income groups to hesitate in installing this system (www.grandviewresearch.com, 2019). Pet ownership has increased in households with incomes over $75,000 and decreased in households with incomes below $50,000. (Woodruff, n.d.). Thus, it would be beneficial for Furbo to target individuals with higher incomes as those groups are more likely to spend money on products for their pets. Consumer needs and wants also vary across generations. Millennials and baby boomers constitute the majority of pet owners. Millennials in particular are said to constitute the main consumer segment compared to older age groups and have a higher propensity to buy pet products (Prnewswire.com, 2019). Therefore, Furbo should target millennials.

Geographic variables like density and city size indicate if Furbo would be successful. Consumers in urban cities with large populations e.g Sydney are more viable for Furbo to target. Consumers residing in urban areas would be more likely to encounter the advertisements due to the higher internet coverage ((Boase, 2010)). Consumers in urban geographics are more likely to work longer hours ((Ago et al., 2017)), therefore they are separated from their pets and homes for longer periods. A larger city population will also enable Furbo to reach more consumers and popularise Furbo. Thus, Furbo should target consumers in large urban cities. Psychographic segmentation divides consumers based on their personality and attachment to their pets. Furbo would benefit from targeting consumers who are strongly attached to their pets as they are more likely to spend money on pet products (Woodruff, 2019). Personalities of consumers are another way to segment consumers. Consumers are segmented into dog owners, parents, or people illustrating how they identify themselves. Furbo should target pet parents as they anthropomorphize their dogs and are more likely to spend money on products for their pets.

Behavioural variables e.g user rate and situation divide consumers into how often and heavily they would use Furbo. Companies target one heavy user rather than many light users, as heavy users make up a small segment of the market but constitute a higher proportion of the total buying rate. (Kelley, Hyde, and Bruwer, 2015). Furbo should also target consumers who are intensive users of the product as they would constitute a higher proportion of buyers.

3. Target Market

Furbo should target middle-aged professionals (MAPs) as they are more likely to have professional jobs and a stronger attachment with their pets. Households with higher incomes are more likely to spend money on pet products and the MAPs will likely have higher incomes. MAPs are millennials and Furbo should target them as they constitute 62% of pet owners and research stipulates that millennials spend more on pet products as compared to older pet owners (Sprinkle, 2016). This means they will constitute a higher proportion of the buying rate for Furbo as compared to other consumer segments.

MAPs reside in large urban cities where more people are resuming their pre-COVID lives. Thus, their pets are being left behind. Thus, these consumers would constitute a higher buying rate for Furbo. MAPs work full time in urban cities and are expected to work longer hours (Ago et al., 2017) so they are separated from their pets for longer. Thus, they would be more likely to use this product and Furbo should target MAPs.

MAPs are highly attached to their pets and identify themselves as pet parents. Studies indicate that owners who consider their dogs as the family spend more money on products for the. Pet owner’s consumer behaviors regarding pet products correlate with if they identify as pet owners or parents (Boya, Dotson, and Hyatt, 2014). Therefore, Furbo should target MAPs as they will constitute a large proportion of their buying rate. MAPs also are heavy users with intensive engagement with pet monitoring products. Furbo should target such consumers as they will make up a higher percentage of the buying rate for Furbo’s products.

Consumer Profile The middle-aged professional lives in a large urban city and is a millennial (aged 25 to 45 years old). They are individuals who are strongly attached to their pets and consider themselves as ‘Pet Parents’, considering their pets as their children or family members. These consumers will have heavy and intensive usage of Furbo’s products.

4. Differentiation and Positioning Having targeted MAPs, Furbo should now aim to differentiate based on their vast range of features and from competing pet monitoring companies, while also implementing a coherent position in the minds of the target market. Furbo’s competitive advantages are its extensive range of features, brand image, customer service, and easy-to-use technology. However, to create superior customer value, Furbo should focus on these advantages: 1. Innovative features and technology and (product differentiation) 2. Quality service (service differentiation)

Product differentiation is “meeting human wants more accurately than the competition” (Dickson and Ginter, 1987). Furbo should advertise their broad range of features to the consumers, differentiating based on their product. These features include their real-time crying, barking, howling and emergency alerts, cloud storage, doggie diaries, and treat delivery system. (shopau.furbo.com, n.d.). This will result in an increased demand for Furbo’s product and enable there to be higher price levels compared to competitors. Service differentiation helps build brand differentiation and shapes the brand’s performance (Davcik and Sharma, 2015). The quality of service has been identified as a major differentiator and source of competitive advantage as companies compete basically on the premise of quality (Anabila, 2019). The differentiated advantage provided by the company, like, service and quality creates a brand image that can earn a 10-20 % price premium (more than the benchmark price). Thus, Furbo should differentiate based on their services and focus on the maintenance/repair (warranty) and customer training and consultations of their product to gain a competitive advantage.

Furbo’s Positioning Statement: For middle-aged professionals who are trying to balance their professional life with their responsibilities as a dog parent, the Furbo Nanny Camera is the ultimate pet monitoring system that has unparalleled innovative features with impeccable service quality.

Furbo has the highest range of features in comparison to PetCube and Pawbo life, which include the real-time barking alerts connected with message alerts, distinguishing between various barks, as well as a training option. PetCube has fewer features but higher quality features (extensive microphone and speaker). Pawbo only has the basic features of a pet monitoring system, unlike Furbo and PetCube’s which have several additional functions. Furbo Dog Camera has a lifetime warranty, with a 30-day return guarantee. PetCube and Pawbo have a 1-year warranty, placing them lower on the service quality scale than Furbo.

5. Conclusion This report provided an overview of the pet industry; the major competitions for Furbo were PetCube and Pawbo. The trend of humanising pets, especially dogs has caused there to be growth in the pet industry and the sale of pet products. Furbo should target the middle-aged professional segment and position themselves as having unparalleled innovative features with impeccable service quality. They should differentiate themselves from PetCube and Pawbo through their product and service quality.

6. Reference list

Ago, T., Morita, T., Tabuchi, T. and Yamamoto, K. (2017). Elastic labor supply and agglomeration. Journal of Regional Science, 58(2), pp.350–362. Anabila, P. (2019). Service quality: A subliminal pathway to service differentiation and competitive advantage in private healthcare marketing in Ghana. Health Marketing Quarterly, 36(2), pp.136–151. Boase, J. (2010). The Consequences of Personal Networks for Internet Use in Rural Areas. American Behavioral Scientist, 53(9), pp.1257–1267. Boseley, M. and Wahlquist, C. (2020). Doggone: rescue pet shelters emptied by surge in demand during pandemic. [online] The Guardian. Available at: https://www.theguardian.com/world/2020/aug/16/dog-gone-eescue-pet-shelters-emptied-bysurge-in-demand-during-pandemic [Accessed 21 Mar. 2021]. Boya, U.O., Dotson, M.J. and Hyatt, E.M. (2014). A comparison of dog food choice criteria across dog owner segments: an exploratory study. International Journal of Consumer Studies, 39(1), pp.74–82. Carver, L.F. (2020). How the coronavirus pet adoption boom is reducing stress. [online] The Conversation. Available at: https://theconversation.com/how-the-coronavirus-pet-adoptionboom-is-reducing-stress-138074 [Accessed 21 Mar. 2021]. Charlton, A. (2020). The best pet camera in 2021: talk and play with your dog or cat when away from home. [online] digitalcameraworld. Available at: https://www.digitalcameraworld.com/au/buying-guides/best-pet-camera [Accessed 19 Mar. 2021]. Davcik, N.S. and Sharma, P. (2015). Impact of product differentiation, marketing investments and brand equity on pricing strategies. European Journal of Marketing, 49(5/6), pp.760–781. Dickson, P.R. and Ginter, J.L. (1987). Market Segmentation, Product Differentiation, and Marketing Strategy. Journal of Marketing, 51(2), p.1. Kelley, K., Hyde, J. and Bruwer, J. (2015). Usage rate segmentation: enriching the US wine market profile. [online] International Journal of Wine Research. Available at:

https://www.dovepress.com/usage-rate-segmentation-enriching-the-us-wine-market-profilepeer-reviewed-article-IJWR [Accessed 14 Mar. 2021]. Marketing91. (2015). Service differentiation - 7 ways to Differentiate services from Competitors. [online] Available at: https://www.marketing91.com/service-differentiation [Accessed 19 Mar. 2021]. Prnewswire.com. (2019). Baby Boomers and Millennials are Redefining Modern Pet Ownership Trends, reports Packaged Facts. [online] Available at: https://www.prnewswire.com/news-releases/baby-boomers-and-millennials-are-redefiningmodern-pet-ownership-trends-reports-packaged-facts-300963558.html [Accessed 14 Mar. 2021]. shopau.furbo.com. (n.d.). Furbo Dog Nanny | Furbo Australia. [online] Available at: https://shopau.furbo.com/pages/furbo-dog-nanny [Accessed 19 Mar. 2021]. Sprinkle, D. (2016). How millennial pet owners are changing the industry. [online] www.petfoodindustry.com. Available at: https://www.petfoodindustry.com/articles/5689-howmillennial-pet-owners-are-changing-the-industry?v=preview [Accessed 11 Mar. 2021]. Teller, L.M. (2020). How to help dogs and cats manage separation anxiety when their humans return to work. [online] The Conversation. Available at: https://theconversation.com/how-to-help-dogs-and-cats-manage-separation-anxiety-whentheir-humans-return-to-work-148301 [Accessed 21 Mar. 2021]. Wells, K. (2020). How to Help Your Pet With Post-Quarantine Separation Anxiety. The New York Times. [online] 8 Aug. Available at: https://www.nytimes.com/2020/08/08/smarterliving/wirecutter/pets-quarantine-separation-anxiety.html [Accessed 21 Mar. 2021].

Wired. (2020). Keep an Eye on Fido From Afar With These Pet Cameras. [online] Available at: https://www.wired.com/story/best-pet-cameras/ [Accessed 19 Mar. 2021]. Woodruff. (2019). Using Psychographic Segmentation to Reach Pet Owners | Part 2. [online] Available at: https://www.wearewoodruff.com/blog/pets/psychographic-segmentation-petowners-2/ [Accessed 11 Mar. 2021].

www.grandviewresearch.com. (2019). Pet Monitoring Camera Market Size, Share | Industry Report, 2019-2025. [online] Available at: https://www.grandviewresearch.com/industryanalysis/pet-monitoring-camera-market [Accessed 19 Mar. 2021]....