limited scope sample home improvement marketing research © 2007 edge media
TRANSCRIPT
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Limited Scope Sample
Home ImprovementMarketing Research
© 2007 Edge Media
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National Research Who is the Customer?
• Age - A 2005 study by Scarborough Research determined that homeowners in their 30s are 19% more likely than all homeowners to have completed some sort of remodeling project the last year, while homeowners in their 40s are 14% more likely and those in the 18-29 age bracket are 12% more likely.Scarborough Research, 2005
• Gender - According to a 2006 online survey conducted by ServiceMagic, only 8% of female homeowners saw men as the primary decisionmaker regarding home improvement projects, while 30% of male homeowners saw themselves as the primary decisionmaker. In contrast, 25% of females cited women as the primary decisionmaker, compared to 8% of men who saw women as the person responsible for home improvement decisions. Sixty-five percent of the homeowners said they make home improvement decisions in conjunction with their significant other. Among contractors who responded to the same question, just 28% agreed that couples make decisions as a team. Fifty-five percent of the contractors believe the female head of the household is the primary decisionmaker, while only 17% cited men. Home Channel News, 2006
• Home Ownership - According to a report by the Joint Center for Housing Studies of Harvard University, the share of home improvement expenditures based on how long consumers have lived in their current homes: 0-2 years, 14%; 3-5 years, 21%; 6-10 years, 25%; more than 10 years, 40%.Harvard University, 2005
• Home Value – A study by the Joint Center for Housing Studies of Harvard University calculated the share of remodeling expenditures in the U.S., based on the value of the country’s homes: Under $150,000 49%; $150-250,000, 29%; $250 - $400,000, 14%; $400,000+, 8%
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National Research Why Does the Customer Buy?
• Recent national surveys commissioned by Minwax and Ace Hardware found that up to 83% of homeowners say they remodel at least in part to enhance their property values.USA Today, 2005
• Most important influences in making a decision when hiring a remodeling professional (multiple answers): Trustworthiness, 79%; service and dependability, 75%; capabilities, 73%; schedule accommodation, 72%; best size for the type of job, 71%.National Association of the Remodeling Industry, 2004
• According to a survey by the National Association of the Remodeling Industry, primary reasons that people remodel their homes (more than one answer possible): Update their homes to their taste or the latest trends, 79%; address the changing needs of their family, 62%; increase their home's market value, 47%; address the needs of a home business or one's professional work, 10%.NARI, 2004
• Sources for consumers' home improvement ideas (more than one answer possible): Personal ideas, 53%; newspapers and magazines, 49%; catalogs mailed to their homes, 24%; sales help in home improvement stores, 22%.American Express Retail Index, 2003
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National Research Customer Spending Patterns
• Based on a survey by Scarborough Research, types of home improvement projects undertaken by homeowners in 2004 (multiple answers): Interior paint or wallpaper, 35%; landscaping, 30%; carpeting or floor covering, 18%; exterior paint or siding, 15%; remodeled bathroom, 14%; remodeled kitchen, 10%; heating or air conditioning, 9%; replaced windows, 8%; any addition, 4%; installed home security system, 2%; installed pool or spa, 2%.Scarborough Research, 2005
• Types of home improvements made to owner-occupied properties that accounted for the most spending in 2003 (totals in billions): Room additions, $12.342; bathroom remodeling, $11.048; interior restructuring, $8.862; painting and papering, $7.167; kitchen remodeling, $6.609; finishing space, $5.060; heating/cooling replacement, $5.684; roofing replacement, $4.446; window replacement, $4.227; patio additions/alterations, $3.083; deck and porch additions, $2.798; driveway/walkway additions/alterations, $2.757; roofing maintenance/repairs, $2.662; plumbing replacements, $2.286; detached building additions/alterations, $2.269; fence additions/alterations, $2.203.U.S. Census Bureau, 2004
• Sunroom additions rank in the top 7 home improvement projects, according to a recent Remodeler Council report. It adds more space to the home and increases the homes’ curb appeal on resale, helping the sunroom to return what realtors estimate as 70-100% of its original investment value, depending on location and other factors.
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Business Trends
• According to research by the National Association of Home Builders, Americans spent an estimated $210 billion on home remodeling projects in 2005, 5.8% higher than the previous year. The NAHB forecasts a 13.2% jump in spending on remodeling for 2006, which would be the largest increase in more than 10 years. Home Channel News, 2006
• The Home Improvement Research Institute estimates sales of home improvement products reached $271.4 billion in 2004, a 12.8% increase over the 2003 figure of $240.6 billion. Between 2005 and 2009, the HIRI projects an annual growth rate for the industry at 3.9%. Home improvement spending is predicted to rise to $280.9 billion in 2005, and reach $329.1 billion by 2009.Home Improvement Research Institute, 2005
• According to a 2004 survey of recent homebuyers, commissioned by the Home Improvement Research Institute, contractors are involved in about one-third of projects done to newly-purchased homes, and nearly one-half of the projects completed in previous homes prior to sale.HIRI, 2004
• Based on a survey commissioned by the National Association of the Remodeling Industry, consumers are much more likely to hire a professional remodeler for certain types of jobs, including new additions, roofs or siding projects. On the other hand, decks, bathrooms and basements are more likely to be tackled by do-it-yourselfers.NARI, 2004
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Summary of National Research
• Primary age cells: 30–50 years of age 33% more likely to remodel
• Gender: Female is the decision-maker
• Home ownership: 86% of remodeling is done by people who have lived in their homes 3 or more years
• 51% of all remodeling is done on homes with a value of $150,000 or more.
• Home improvement category is projected to experience significant, continuous growth.
• Contractors are valued for their trustworthiness and ability.
• Primary reasons for home improvement include increasing the value of the home and accommodating family needs/lifestyle.
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Phoenix Market Research Age Demographics
Customer by Age Cells
17%
21%
13%
20%
22%25-3435-4445-5455-6465+
All local research sourced to Scarborough
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Phoenix Market ResearchIncome of Customer
Customer by Income Level
32%
19%
13%
8% 1%
$50-74.9K$75-99.9K$100-$149.9k$150-249.9K$250K+
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Phoenix Market Research
Customer by Home Value
16%1%
9%
6%14%
11%
11% $150-199.9K$200-249.9K$250-299.9K$300-349K$350-499.9K$500-999K$1M+
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Phoenix Market ResearchCross Tabulation of Customer by Age/Home Value
Qualified Customer Home Value $150K+
13862
9163
15220
2843
18068
0
5000
10000
15000
20000
25-3435-4445-5455-6465+
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Phoenix Market ResearchGender of Decision Maker
Customer by Gender
57% 43%
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0.6
MaleFemale
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Phoenix Market Research SummaryDefining Target Demographics
Gender: Male 57% & Female 43% added rooms or remodeled last year
Age: Two primary cells – 25-34, 35-64
Household income: 41% of all who added a room last year had a household income of $75,000 or more.
Home value: 68% of all who added a room last year had a home value of $150,000 or more
T1 Target = Adults 25-54, HHI $75K+, Home value $150K+
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Media Usage Habits for Target Qualified by $75K+ HHI, $150K+ Home Value
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Radio TV Print
25-3435-64
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Internet Usage by Age
0
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25-3435-4445-5455-6465+
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The Necessity of Using the Web in the Marketing Mix
• Pew Internet reports that 38 million Americans use search engines every day to research goods and services.
• One fifth of internet users will use a search engine four times or more per day.
• 67% of U.S. adults who research online before making a purchase decision use search engines as a research tool.
• 40% of those conducting online research go to search engines first. Nearly equal percentages of respondents who use search engines to research products online use them to find a web site from which to buy (54%) or investigate where to purchase their desired product (53%).
• Metro Phoenix ranks 11th in the U.S. for internet access, with 1.8 million adults online.
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Marketing Overview
• Strategy & execution• Begin with 35-64 age cell for conservative approach in line with historical track record of company.
• Media usage shows radio at 50%, television at 57%, and print media at 30% for this demo
• Internet usage is at 71.5% average for this age demographic, and increases as household income increases.
• Recommendation: The nature of the product lends itself to visual appeal. Television and internet should be the first marketing tools used, with radio following and then print.
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Media Comparison Chart
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Internet Marketing
• Natural Search– Search engine optimization is necessary to increase the number of visitors to the site that come as a result of search engines
– Initial optimization of site while being built
– Ongoing optimization of site per month• Paid Internet Advertising
– Google PPC local campaign – AZ Central online advertising
• AZ’s most visited local website• 44% have HHI $75K+, 60% are age 35+• Can target by age/zip code• $22 per 1,000 impressions