BetterWorldBooks​

Choosing the right segments

The first variable that should be taken into account in the definition of our target market is the geographical variable. From our analysis and our segmentation, we drew the conclusion that Italy should be excluded from our target market. This decision is based on three main reasons:

•   Low share of online market: with merely 12% of the market share, the online book selling market is lower in Italy than in any other of the analysed country.

•   Low attractiveness of ecological products: in addition to this low percentage of market share, Italian consumers are the least eagers to purchase ecological product. Indeed, only 17% of the population (on average) often buys green products.

•   Strong competition for a relatively small market: finally, even though the competition is also strong in the other countries, the strong competition on a relatively small market are strong barriers to entry.

Amongst the remaining countries (United Kingdom, France and Germany), we decided to exclude the off-line market. This decision is based on three main factors:

•   Sluggish market: the off-line market share is constantly decreasing while the competition is still very strong. In addition, one can note that many companies only active on the off-line market are going bankrupt.

•   Higher cost: from a financial perspective, entering the off-line market entails higher operating costs. Indeed, in order to enter the off-line market, BetterWorldBooks would need to buy or rent shops, higher more employees, etc., which would drastically increase its costs.

•   Online know-how: BetterWorldBooks has, historically, always been (mostly) active online. Therefore, their entire business model is based on low cost and online selling and they do not have any experience in the market of bricks-and-mortar bookshops.

Besides, the remaining countries are quite homogeneous (given the fact that off-line market was taken out) but the segments in those countries are heterogeneous.

From the psychographic perspectives, we decided to target only the average and heavy readers and the ecological buyers. The decision to exclude the small readers from our target market is based on the assumption that the costs of advertising for this category would exceed the benefits. Also, only ecological buyers will be targeted because we believe that BetterWorldBooks should aim at filling an empty gap, i.e. targeting a niche market in order to be able to compete against big companies such as Amazon and offer an added value to its wisely selected customers. From our analysis, we indeed gathered that the market of ecologic books is (almost) inexistent in the European market. Therefore, this seems to be a perfect opportunity for BetterWorldBooks and will give the company a strong position in the European market.

Size of the target market