Market analysis
Vintage Home and Residential Care’s products and services are available in the business-to-consumer (B2C) segment. Specifically, Vintage will target the following segments:
Business-to-Consumer:
1) Individual Seniors who may be ambulatory or non-ambulatory, with mild confusion, depression, and need for social interaction.
2) Senior Couples who may be ambulatory or non-ambulatory, with mild confusion, depression, and need for social interaction
MARKET SEGMENTATION – B2C
MARKET TRENDS & GROWTH PATTERNS2
The total estimated target market is 272,220 elderly people in San Diego. It has grown by 17.34% from 2000 to 2010. The female population over the age of 70 accounts for as much as 58% (157,711) of the total senior population of the region, resulting in being the largest market for residential care facilities. Senior male individuals form the remaining 42% (114,509) of the target market.
The Non-Hispanic white ethnicity group forms more than 70% of the total market segment in San Diego, with the Hispanic community being the second largest contributor followed by Asians and Pacific Islanders. The graph below highlights the population distribution in San Diego based on race and ethnicity:
Even though non-Hispanic whites are the largest contributors to the target market, they have only grown only by 3.54% over the last decade. Meanwhile, the Hispanic community and the Asian community has grown by over 61.74% and 105.85% respectively during the same time and seem to be more promising segments in the future.
With the median income of around $72,000 per annum in San Diego (2009), Vintage’s pricing at $3,500-$5,000 is competitive. The ideal target market would be in a higher income group. Since the middle income group earns an annual income of around $72,000, this target market could still be price sensitive.3
At the expected price point, potential customers would be looking for a service-oriented facility with above standard amenities and excellent support from the care takers. Additionally, a variety of bonus services covered in the base price that normally cost extra would make a difference in the decision making process of the target market.
MARKET SIZE AND POTENTIAL
A typical assisted living facility would include all meals, housekeeping activities as well as day-to-day care taking responsibilities. Having taken care of all these basic needs, an assisted living facility is more affordable when compared to keeping an in-house nurse or healthcare facility.
San Diego is estimated to have around 272,220 residents over the age of 70 years in 2009 – 2010 spread across the region. The current market size has grown at 17.34% over a period of 10 years from 2000 to 2010 and the market is expected to grow at 157% through 2050. The graph below highlights the expected population of residents who are over 70 years of age in the San Diego region:
The non-Hispanic market in the San Diego area will remain the main contributor over the next four decades, however, their growth is projected to slow as compared to Hispanics and Asian and Pacific Islanders.