Task 6: Quantitative Analysis of the target market

Introduction Bomb.com is an online store focused on being a one-stop shop for all students in Australia. For bomb.com to succeed we have conducted market research into our target market of 18-30 year old students to ensure there is adequate demand in our target market and promising future potential so bomb.com can be profitable, with the potential to expand and grow. Online Shopping Below in Figure 1.1 is a table displaying the first set of data we have found for our market research courtesy of pwc.com. The data has then been used to form a graph posed in Figure 1.2 for a visual representation on how the percentage of online sales has increased dramatically in the last 4years and will continue to do so. As the online market is bomb.coms only focus this increases the viability of the company. Figure 1.1 Year Percentage of total retail sales 2010 4.90% 2011 5.50% 2012 6.30% 2013 7.50% Figure 1.2

Online sales in Australia as a percentage of total retail

8.00% 7.00% % of total retail 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2010 2011 2012 2013

We have conducted a Quantitative Analysis for online shopping in Australia based on the data above to properly analysis the market and receive a more detailed feedback to better understand where the market is heading in the future. Calculations using data: Correlation= 0.98 (High positive correlation) Standard deviation= 1.12% Mean= 6.05% Median= 5.9% Average percentage change per year= 18% Page 1 of 4

As you can see the correlation is positive and average percentage change shows the online market growth currently at 18% per year which is great news for bomb.com and its investors. Below in Figure 1.3 is a graph we have constructed using current data in figure 1.2 and information from our quantitative analysis calculations to calculate expected forecasts for the online shopping market in Australia. Expected forecasts Figure 1.3 *Assuming 18% average increase per year

Expected future online sales as % of total retail

% of online sales of total retail 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

The future expected online sales as percentage of total retail from 2010-2020. Shows there is an adequate demand for online services and a viable option for bomb.coms target market. Population As bomb.com is new to the market, our initial customers will be based in Australia before we go global. As of March 2013 there is estimated to be 23,253,400 million people in Australia, this reflects an increase of 397,400 people since 31 March 2012. This 1.8% in population growth is expected to continue, this increases the target market once again for bomb.com and the future continues to look brighter (Australian Bureau of Statistics, 2013). According to Australian Universities websites latest research there is currently 1,046,788 million students enrolled at universities across Australia. This is bomb.coms initial target market and where we will focus our promotional campaign from day one. As demonstrated by these reliable figures it can be seen that when it comes to numbers for our target market, bomb.com is by no means limited. Below in figure 2.1 is a graph of Australian students by age, as you can see bomb.coms target market of 18-30ys olds is targeting the majority of students which fortunately fall under our market area. A quantitative analysis has also been done on the below data for a better understanding of the market.

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Figure 2.1

Australian students by age

80,000 Population of students 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31-35 36-40 41-45 46-50 51-55 56-60

Quantitative Analysis for Australian students by age: Correlation: -0.84= high negative correlation. Therefore les s students at older ages Mean age= 22 years- bomb.coms target market age group Data is skewed to the right. The graph shows our target market age (late teen to early twenties) in universities has the highest numbers, therefore the best age group in the market to target our products. (Staying the course, 2006). Income Income of the Australian population is an important factor of the market research as this will determine product pricing and have an impact on which suppliers we use. More relevantly it will help bomb.com to focus their target market at the average income earner. Below is figure 2.2 which is the average income per age of part time working Australians, as majority of students are aprt time workers. Figure 2.2

Average income per age (part time)

700 600 500 income 400 300 200 100 0 15-19 20-24 25-34 35-44 45-54 55-59 60-64 65+

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As can be seen above in figure 2.2 the average income of part time workers by age, bomb.coms target markets average weekly income is between $200-$400 dollars of the ages 18-30 in particular. (Australian Statistics, 2013). Conclusion After extensive market research and quantitative analysis calculations into bomb.coms target market of online shoppers, the Australia population, students enrolled and average income of students; it can be foreseen that bomb.com will be successful in surviving its first 3 years as an online Australia company, by turning a profit in the first 12months and the with definite potential of reaching global customers in the next few years.

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