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Online E-Business Target Market & Competition Identify Essay

Online E-Business Target Market & Competition Identify Target Market

The target market for the online business is the Do-it-Yourself Arts and Crafts supplies industry, the "Hobby Craft Industry."

Psychology of Target Market (Analysis)

The Hobby Craft market grew 11% in 2011, despite overall stagnation in consumer spending in the same year. (SEC Form S-1, p. 1). The recent expansion of the hobby craft industry has been caused by the recent economic downturn as well as demographic changes in the market. Hobby crafts were previously the exclusive domain of middle-aged and older women. However, young adults, male and female, have taken up hobby crafts such as knitting because of political movements emphasizing sustainable production as well as pop culture trends celebrating, in an ironic manner, vintage or handmade goods with character over mass-produced goods.

The hobby craft market is traditionally perceived as a leisure industry, with the hobby aspect being the main driver of consumer behavior. Hobbyists form the core of the crafts supplies market. Although they are typically restricted to one particular craft, they are likely to experiment as they acquire new skills in their hobby and require depth and variety within the narrow range of supplies that they use. Hobbyists typically possess some skill in making crafts and experience in finding and purchasing the supplies they need.

As a result of the recent economic downturn, the hobby craft market has been enhanced by consumers wishing to save money on desired goods that they would usually purchase from a retailer. Such consumers would substitute self-made crafts for non-necessity or luxury items such as hats, scarves, or jewelry. As they make crafts more out of economic necessity than a natural interest in the craft, they typically...

Such consumers will be concerned with cost and coverage, requiring at least introductory-level supplies in a broad range of particular crafts.
Finally, there are those who have turned their hobby into a business. These people typically start out making crafts for friends and family and later begin to sell such crafts to strangers who have heard of their quality by word-of-mouth. These consumers typically buy in large quantities and know what they are looking for, so they are primarily concerned with cost instead of selection. Because online retail enables fast and simple comparison of prices, these consumers may switch retailers for small price differences.

Part 1: Identify Competition

Michael's Fabrics, Joann's Fabrics, and Hobby Lobby, both their brick-and-mortar and online operations.

Part 1: Psychology of Competition (Analysis)

Michael's Fabrics, Joann's Fabrics, and Hobby Lobby are retail superstore chains which attempt to provide a wide selection of common craft supplies such as fabrics, needles, and threads for knitting. (SEC Form 10-K; SEC Form S-1) In fact, Michael's and Joann's both began as specialty fabrics stores before expanding into other crafts. Thus, as ubiquitous hobby crafts brands which have acquired all major competitors except each other, these companies are leveraging their brand recognition and bargaining power with suppliers to enter the online hobby crafts supplies industry. (SEC Form 10-K p. 5).

Among these three highly similar competitors, there have been only a few subtle attempts at product differentiation, mostly through acquisition of chain stores specializing in other crafts. Jo-Ann Fabrics, for…

Sources used in this document:
Bibliography

SEC Form 10-K 2011 Jo-Ann's Fabrics.

Available at http://www.faqs.org/sec-filings/100415/JO-ANN-STORES-INC_10-K/#b

SEC Form S-1 Michael's Fabrics

http://sec.gov/Archives/edgar/data/740670/000104746912003646/a2208573zs-1.htm
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