You are the founder of a startup called Welcome Homes. Welcome Homes is trying to make it easier for homebuyers to build a newly constructed home without having to deal with delays and headaches. Their slogan is “Order your dream home, online.” They promise prospective buyers that they can “build the home you want, where you want for a guaranteed, all-in price.” Homes come with select customization options with new homes in the New York metro area starting at $670,000, not including the land the homeowner has to purchase.

The $670,000 model is their smallest and most affordable option, but they have two other options, the most expensive at $880,000 (not including the cost of the land).

While you don’t have a marketing team, you took an Integrated Marketing course in college so you feel confident you can come up with a marketing plan yourself.

You’ve received $1 million in funding from investors to launch this marketing plan.

Figure 1

Target Audience	Audience #1	Audience #2
Segment Size	450,000	125,000
Segment Adoption Percentage	0.25%	1%
Purchase Behavior Purchase Price Purchase Frequency	1 $670,000 1	1 $750,000 1.5
Profit Margin	25%	30%
Fixed Costs	$5,500,000	$4,500,000
Segment Profit	?	?

As part of this plan, identify what characteristics are important for your target audience. What criteria will you use to segment your market? Then, decide how you will position your offering using the 4Ps.

Finally, you’ve narrowed your target market to two potential audiences shown in Figure 1 above. First, you need to do the math to decide if either of these audiences is profitable (you should be able to give me the segment profit). Then, tell me whether you would put all of the $1 million into one audience or how you would split it up between the audiences. Explain your reasoning.

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1 Home buyers who wish to build a new home without having to deal with delays and problems are the t... View the full answer