Photography Studio Business Plan

Phoebe's Photo Studio

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Market Analysis Summary

4.0 Market Analysis Summary

Families with children are the biggest market for portraits. For the purpose of this analysis, these families are divided into three socio-economic categories:

• College graduates
• High school graduates
• Non-graduates

Families of college graduates are most likely to be professionals and to have the means and the taste for professional portraits. There are nearly 20,000 such families in the metropolitan area.

We will target female professionals and wives of professionals, because women make the majority of purchasing decisions in these families.

The competitive environment is divided between luxury magazine-quality photographers, moderate professional photographers who mostly pose their subjects, and same-day photo studios.

The trend among our targeted consumers is toward more digital photography and more sending of digital images on the Internet. As the world becomes more technical, people need more personal support.

Phoebe's Photo Studio will use a "high-tech, high-touch" approach to reach and retain clients for their ongoing photo needs. We will make it affordable and easy for them to disseminate their photos electronically.

4.1 Market Segmentation

People who who pay for professional photo portraits are generally status-conscious professionals who have children, and so we've segmented the Eugene-Springfield metropolitan area according to the social status of families. We've used education as a measure of social status.

Families of College Graduates

Professionals are, almost by definition, college graduates. They are the ones most likely to have a need for professional photo portraits for career purposes. They are also most likely to have the means and taste to want professional photos for their families, as well.

Families of High School Graduates

People who have not completed college are assumed to be more likely to be employees or be in a trade. While many of them may have the means for professional photos, relatively few will use them. They are more likely to use home-made photographs, except for rare occasions, such as a high school photo or wedding.

Families of Non-High-School Graduates

These are families who are generally without the means to hire professional photographers on a regular basis.

Demographics

The Eugene-Springfield metropolitan area has a total population of 330,527. There are 74,836 families.

Some 25.5 percent of the adult population in the metropolitan area is composed of college graduates, which we will here define as professionals. Some 62 percent of the population is made up of high-school graduates.

The Eugene-Springfield metropolitan area closely conforms to the boundaries of Lane County, Oregon. The office will be located in Eugene, but clients are accessible throughout Lane County through physicians' offices. Most Lane County residents are accustomed to doing occasional business in Eugene.

The following table and graph give the breakdown in demographic terms.

Market Analysis

Market Analysis
		2006	2007	2008	2009	2010
Potential Customers	Growth						CAGR
Families of College Graduates	1%	19,083	19,350	19,621	19,896	20,175	1.40%
Families of High School Graduates	1%	46,398	47,048	47,707	48,375	49,052	1.40%
Families of Non-High-School Graduates	1%	9,355	9,486	9,619	9,754	9,891	1.40%
Total	1.40%	74,836	75,884	76,947	78,025	79,118	1.40%

Market Analysis (Pie)



4.2 Target Market Segment Strategy

Our target market is families of college-educated people who are most likely to be professionals. This is the population most likely to order professional photos on a regular basis, having both the means and the desire for professional quality photographs.

Since women make most of the purchasing decisions in families, our specific target market is middle-aged professional women in the Eugene-Springfield metropolitan area, roughly 19,554 people.

4.2.1 Market Needs

Families have photos taken to preserve memories. Most photos are taken by consumers with their own cameras, which are increasingly digital and are even part of their cell phones. Most of these photos are low quality but no one cares because only the family views them.

Consumers generally engage professional portrait photographers when the photos will be viewed outside the family and when quality matters. Professionals, such as those in our target market, often have business needs for quality photos and have acquired a taste for them. These professionals have families, too. They have the budget and the need to use them for their families because they often entertain at home and their family photos will be on display. Just as they appoint their homes with fine furniture and decorations, the photos on their walls need to exhibit quality.

Specifically, some of their needs include:

• baby pictures
• portraits for home or office
• senior pictures for the high school yearbook
• family pictures to send to family members
• family newsletters
• family, individual or business websites
• portraits for business cards, such as for real estate agents
• portraits for brochures and annual reports

The world has become increasingly digital, but many professional photo studios have made it difficult for people to enter the digital age. The traditional practice of retaining negatives to require clients to return for prints has been carried over to charging high fees for releasing digital files of their portraits.

The need to capture memories lasts for people's entire lives, and business portraits require a regular update. But people generally don't look forward to seeing a photographer. In fact, they find it a burdensome expense, have not established a relationship with a photographer and don't think often about going to one. As a result, a lot of memories are lost and ancient portraits of professionals continue to be hung on walls and portrayed in publications. This makes them appear to be trying to preserve their youth instead of embracing their maturity and experience, and doesn't show them in the best light.

4.2.2 Market Trends

Photography has gone digital. Digital cameras are replacing conventional cameras faster than DVDs are replacing VHS in video stores. Even cell phones have digital cameras on them. The uses of photography have expanded as well because of Web pages on the Internet and email. Digital images are needed for printing uses as well, for such uses as brochures and business cards.

Photo studios have mostly switched to digital format because it also allows for easy processing and manipulation. They have been less amenable to making digital files affordably available to clients, and this is a trend on which we intend to capitalise.

4.2.3 Market Growth

The growth rate used in the table is based on the 1.4 percent growth rate experienced by the Eugene-Springfield area over the past year. This growth is reflected in the accompanying chart and graph.

4.3 Industry Analysis

The competition is divided between luxury magazine-quality photographers, moderate professional photographers who mostly pose their subjects, and same-day photo studios.

Phoebe's Photo Studio is not a luxury, magazine-quality studio, but our service and photo quality is high compared to other moderate professional photographers. Our rates are comparable to theirs, but we add value through personal contact and easy dissemination of digital images.

4.3.1 Industry Participants

Photo studios are run by professional photographers with various levels of education and experience. There is considerable variation in quality and taste according to the ability of the individual photographer. This is a highly individualised, creative process that makes it difficult for large corporations to enter the market or to create "chain stores." The participants are mostly individual photographers.

4.3.2 Distribution Patterns

Photo studios are generally located in commercial areas with high visibility, but many studios are run out of the owner's home. This is possible because so much photography occurs on location: in people's homes or offices and in nature or at social events.

4.3.3 Competition and Buying Patterns

Purchasing decisions generally begin with an urgent need, such as a high-school senior picture or the birth of a baby. Buyers are most likely to seek a professional by referral from someone who has used their services. If this is not available, they are most likely to look in the Yellow Pages, but increasingly online, especially if they are young.

4.3.4 Main Competitors

Competitor X is an award-winning, highly creative photographer with a style that one would expect to find in a national magazine. His prices are the highest in the area, up to £15,000 for a wedding album. His strategy appears to be to capture the high-end market, where a magazine look is a luxury that people can afford.

Competitor Y is a more typical photographer with more staged photographs and wedding packages running up to £5,000. His strategy appears to be to occupy the middle-ground of quality and price where most of the market is likely to be.

Competitor Z offers same-day photos. This is easier to accomplish with digital processing for a studio organised around speed, but quality is necessarily sacrificed. The market for same-day photos doesn't necessarily demand quality. Prices are average. The strategy of this studio appears to be to appeal to convenience and speed.