As part of a Product Development class, we explored what gaps there are in the market that we could fill. This is the second of three presentations to convince stakeholders of the lucrative nature of our plan.

2. Target Segment RecapYuppies
MiddleAgers
25-35 y.
Single
First
own
kitchen
35-55 y.
Family
Long-term
oriented
Both segments are
attractive because they ...
● Have enough buying
power.
● Have the motivation
to buy a new house
or redecorate a
house.
● Are used to buying
online.

3. Estimating Digital Buyer Penetration for out Target Segment
● Baby boomers: born 1946 to 1964
● Generation X: born 1965 to 1980
● Millennials: born 1981 to 1997
● Gen Z: born 1997 to the present day
The average rounded
sum is 78%

4. Target Segment
According to the US Census Bureau, the age bracket between 25 and 55 years consist of
128,333,356 people.
Given that the average digital buyer penetration is 78% our target market consists of
100,100,018 potential customers ranging between 25-55 years in age.
According to a report by the Joint Center for Housing Studies at Harvard University, 22
million homeowners undertook at least one major home improvement project in the US in
2017.
Of those major home improvements, roughly 2 million were kitchens being remodeled in
2017, costing on average 140 % more than 1995. Hence, there is huge market potential for
affordable kitchens.
Sources: US Census, Joint Center for Housing Studies at Harvard University

5. Size of online kitchen market in the US
Total annual sales of the
US furniture market in
2016: $ 111.5 bn
Total annual sales of
kitchen furniture in the US
in 2016: $ 28.3 bn
= 25.4%
Share of kitchen
furniture on the total
US furniture market $ 50.1 bn
Annual e-commerce
consumer spending
on furniture in 2018
Annual market size
of the online kitchen
furniture market in
the US
$ 12.7 bn
KitchenfurnitureAppliances
Consumer spent on
major home
appliances online
$ 4.0 bn
Market size:
$ 16.7 bn
Future trend:
Note: For sources and further explanations see appendix

6. Market Share
Fixed Costs:
Dollar Margin Per Unit:
Average selling price per kitchen: $16,000
Percent margin: 20%
Dollar margin per unit: $3,200
BEV: $930,000/$3,200
290.63 Kitchens
BEV Share of Market: 290.63/1,400,000
=.02076%
Aim to achieve a 20% profit:
.02075% * 1.2 = .02491%
*compared to IKEA at 13%
Market share for the first year:
.02491%
IKEA: https://www.statista.com/statistics/255583/leading-5-selling-countries-of-ikea-products/

7. Rate of Adoption
The speed of technological adoption is rising:
● In the age of the internet, newly
commercialized technologies get adopted
by consumers at a faster rate than ever
before.
● Ideas and products can spread so fast
because of how easily accessible and
affordable new technology has become.
● According to YouGov.com VR adoption has
grown to 11% among all US adults
(November 2018; up from 7% in August
2017).
● Therefore, we anticipate that we will start
off in the Early Adopters segment within
our first quarter and move into the Early
Majority for several years to come.
Graph:https://www.interaction-design.org/literature/article/understandi
ng-early-adopters-and-customer-adoption-patterns

8. Appendix

9. Online Sources for Numbers
Office space: 8300 square feet in Gainesville
https://www.loopnet.com/Listing/3515-NW-98th-St-Gainesville-FL/6509715/
Shipping cost for a 10x10 feet kitchen shipping crate
https://kitchencabinetkings.com/10-by-10-shipping-rates.html
Cost per kitchen on average: $ 16,600 USD
https://homeguide.com/costs/kitchen-remodel-cost
Average retail margins: 30-50% for furniture
https://www.allianceexperts.com/en/knowledge/what-is-a-reasonable-margin-for-your-distributor/

10. Additional Online Sources
Smart kitchen market revenue worldwide from 2017 to 2027 (in billion U.S. dollars)
https://www.statista.com/statistics/1015395/worldwide-smart-kitchen-market-revenue/
Market value of consumer appliances in the United States from 2015 to 2020 (in million U.S. dollars)*
https://www.statista.com/statistics/491261/consumer-appliances-united-states-market-value/
US Census Bureau population numbers:
https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_17_1YR_S020
1&prodType=table

11. Salary of a Sales Representative
The average salary of a sales representative in
Florida is $54,237 as of October 30, 2019.
The salary ranges typically between $45,299 and
$64,078. Salaries can vary widely depending on
the city and many other important factors,
including education, certifications, additional
skills, the number of years in profession.
https://www.salary.com/research/salary/bench
mark/sales-representative-i-salary/fl

12. Revenue in the Kitchen Furniture market (in
USD million)
Source: Statista

13. Total and e-commerce value of retail sales in the US
in 2016, by business (in USD million)
Source: Statista

14. Annual online consumer spending on selected
categories in the US in 2018 (in USD billions)
Source: Statista

15. In 2016 consumers spent $4.0 billion
on major home appliance online
purchases, a 38 percent increase from
2015 sales, according to NPD’s
receipt mining service, Checkout
TrackingSM.
Online Major Home Appliance Sales Performance by Category in 2016
(USD millions)
Source: npd.com

16. US Furniture & home furnishings sales as percentage of total retail
e-commerce sales
Source: Statista