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Section II: Market Analysis

Market Analysis Summary:

Any investor or owner will look at a company’s viability in terms of their respective

markets. This enables the investors and/or owners to check for the possibility of how the

customers will react and interact with the business as well as how the business will fare in their

markets. Spoiled Cupcake is not an exception to this. As the integration of technology into

education and society as a whole has increased, there is now more than ever a need for a place

that will be an environment to put reviews. However, in terms of education most of the current

educational software, online sites, and services are made for the students and there is currently

not a review service that focuses solely on the students reviews. Spoiled Cupcake would be the

platform for the students to review services which could then be sold to those businesses, the

ones that create the products used, who would then use that data to better their product.

Target Market:

Spoiled Cupcake will have the ability to reach two markets the education and personal

data market. Based on a study done in 2012, the education market overall is worth, $4.4 trillion

globally and $1.3 trillion in the United States.​1​,​3​ As education is a field that it is constantly on the

rise the market will continue to expand. This is similar to the personal data market. There is not a

definitive market value but, it can be inferred that it is above $426 million because according to a

study done on nine key brokers, they made $426 million from sales alone.​2​ ​In the scenario of

Spoiled Cupcake, money will be made through collecting the reviews from the students on their

educational service of choice and then send that personal data to the developer for two fees:

licensing fee and fee for the cost of the data.

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Market Segmentation Strategy:

Image 1.1: “Global Education Expenditure by Sector 2012” 1​

Image 1.2: “Growth Expected Across Range of Product Services” 6​

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The education market will be broken down into subsets for Spoiled Cupcake. Spoiled

Cupcake will be focusing on the e-learning portion of the education market. E-learning is

learning platforms that are online for students to learn/work with such as Membean and

Pearson’s MyMathlab. The global e-learning market is valued at $91 billion based off a study in

2012.​1​ Based off of the data in Image 1.1, e-learning has a 23% growth rate which in five years

will amount to roughly $2 trillion by 2017, globally.​1​ ​Using Image 1.2, the U.S’s edtech

(education technology) value for K-12 in 2017 is roughly $1.625 billion and looks like it is

projected to grow consistently.​6​ To break down the education market further, Spoiled Cupcake

will be focusing on the grades 9 to 12. Since there is not a set number on the value of the 9 -12

market, inferences will need to be made. In the United States, there are 15.1 million high school

students and the average amount of money per pupil is $10,700 which sums up to at least $161

million.​4​,​5​ This number here does not account for private grants, federal grants, and other factors

that would further inflate the value of the market.

Image 1.3: “Google Revenue (2004-2014)” 8​

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The personal data market is well above $426 million, and is on the rise which can be

validated by the fact that 90% of the world’s data has been generated in the past two years.​8​ This

shows that the personal market is not only growing but has no intentions to stop. Companies

such as Facebook and Google use the personal data they collect to enhance the user's overall

experience and to accurately target certain advertisements to the users. As seen in Image 1.3 this

generates more income for companies like Google who base their revenue on advertisements.

Personal data has a base price of $.0005 but factors based on factors such as where you live,

health conditions, and marital status can raise the price of your personal data to $.26.​10​ Since the

data Spoiled Cupcake collects will be more specific than gender and age, it can be sold for more

than the base price of $.0005.

Geographic:

Spoiled Cupcake intends to spread globally as there is market for it. However, for the

testing phases of Spoiled Cupcake it will start in Southwestern Connecticut with a focus on New

Haven. In Southwestern Connecticut, there are many urban cities such as Bridgeport (the largest

city in Connecticut), Stamford, and New Haven (the second largest city as well as our focus).​9

Surrounding those larger cities are smaller cities and suburban towns.

Demographics:

Spoiled Cupcake will be geared towards high schoolers. This breaks down to, males and

females from a range of ethnicities around the ages of 14 to 18. The end goal for Spoiled

Cupcake is to be used globally so the statistics regarding money will shift. However, as Spoiled

Cupcake will begin its journey in New Haven, the 2009 breakdown is: the gender ratio is 47.8%

for males and 52.2% female and the ethnicity breakdown is roughly 44.2% White, 36.1% Black,
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and 19.7% other.​7​ There are 12,029 individuals between the ages of 15 and 19 (roughly high

school age) in New Haven which accounts for 9.7% of the city’s population.​7

Psychographics:

During the ages of 14 and 18, there is a growing feeling to have your voice and opinions

heard. In addition to that CT law (​General Statutes of Connecticut Title 10-184​) requires students

in this age range to be a school setting unless stated otherwise by their parents (this only applies

for individuals 17 to 18).​13​ Spoiled Cupcake will combine these two aspects of their lives. When

they use Spoiled Cupcake they will be able to voice their opinions on an educational service of

their choosing. In their review they could include their thoughts on the guided user interface

(GUI) or on whether or not they think the color scheme or visuals are too distracting or too

lackluster.

Behavioral:

Humans are attracted to things that are visually appealing as well as interactive.

Teenagers are no exception and this can be seen in their use of their favorite apps. Snapchat,

Instagram, and Spotify are the apps used by teens most often.​11​ ​All of those apps have a few

common factors: they are interactive as well as as visually appealing. Snapchat uses a variety of

eye catching colors to enthrall the user. In addition to that, it has streaks which keeps the user

constantly on the app because if you do not snap someone in 24 hours your streak is lost.

Instagram is also visually appealing and allows you to interact with the app by swiping and

liking. Spotify is overall just simple. The color scheme is green, white, as well as black and the

only thing you need to do is click to have access to your favorite music. Spoiled Cupcake must

draw from these benefits from these apps so that it too is appreciated and well received by the
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intended audience. Even if Spoiled Cupcake does not manage to be favored by everyone, as long

as we fully grasp 20% of the intended populations attention then 80% of our reviews will come

from them.

Marketing Strategies:

In order for Spoiled Cupcake to appeal to its intended population it will have to appeal to

males and females, 14 to 18 year olds, individuals from a range of ethnicities, all while being

interactive and visually appealing. The website will need to clear, concise and simple to use.

There will be other ways to interact with the website such as loyalty points. Every time a user

writes a review, they will receive a point and once a user writes a certain amount of reviews then

they would receive a prize. This will keep the users interested enough to keep coming back to

write reviews.

Spoiled Cupcake will run similarly to Rotten Tomato (an online review service for

movies) in the sense that it will make a portion of its revenue from advertising. Rotten Tomato

has companies such as Universal pay them to advertise their movies on the site.​12​ Spoiled

Cupcake would do the same only with educational services like Pearson or Membean. However,

to start it would have advertisements from other smaller companies and build up to those larger

names. Spoiled Cupcake can also make money by selling the data to the developers of those

services and if it is marketed correctly, by showcasing the datas value to the company, then

money will be made.

Since social media is incredibly relevant today especially with teenagers, it will be

imperative that Spoiled Cupcake will have a social media presence. Instagram, Twitter, and

videos on Youtube will be necessities for Spoiled Cupcake. This way we can reach students and
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the general public on platforms that they are already comfortable with and use consistently. To

further entice students, Spoiled Cupcake will offer unique Snapchat filters as well. Spoiled

Cupcake will also place advertisements on social media sites such as Snapchat and Instagram as

this is where teenagers spend most of their time.

Since Spoiled Cupcake is starting its journey in New Haven, we will start by advertising

our service to the students here. This will be done by emailing the students directly and directing

them to the Spoiled Cupcake website, which can be done through the use of our New Haven

Public School emails. Contact with the 10 New Haven high schools will also be made in hopes

that the school will also influence the students to write a review.
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Works Cited:

1. Strauss, Valerie. “Global Education Market Reaches $4.4 Trillion — and Is Growing.”

The Washington Post​, WP Company, 9 Feb. 2013,

www.washingtonpost.com/news/answer-sheet/wp/2013/02/09/global-education-market-r

eaches-4-4-trillion-and-is-growing/?utm_term=.f8aae7abaed7​.

2. Desjardins, Jeff. “Infographic: How Much Is Your Personal Data Worth?” ​Visual

Capitalist​, 12 Dec. 2016, ​www.visualcapitalist.com/much-personal-data-worth/​.

3. Dunn, Jeff. “Just How Big Is the US Education Market?” ​Daily Genius​, 10 Aug. 2015,

www.dailygenius.com/just-how-big-is-the-us-education-market/​.

4. Brown, Emma. “The States That Spend the Most (and the Least) on Education, in One

Map.” ​The Washington Post​, WP Company, 2 June 2015,

www.washingtonpost.com/news/local/wp/2015/06/02/the-states-that-spend-the-most-and

-the-least-on-education-in-one-map/?utm_term=.ac649f5dd4e4​.

5. “The NCES Fast Facts Tool Provides Quick Answers to Many Education Questions

(National Center for Education Statistics).” ​National Center for Education Statistics

(NCES) Home Page, a Part of the U.S. Department of Education​,

www.nces.ed.gov/fastfacts/display.asp?id=372​.

6. “K-12 Ed-Tech Platform and Tools Market Value to Increase to $1.83 Billion by 2020,

Report Says.” ​Market Brief​, 11 May 2017,

www.marketbrief.edweek.org/marketplace-k-12/k-12-ed-tech-platform-tools-market-valu

e-increase-1-83-billion-2020-report-says/​.
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7. “New Haven School District, CT.” ​New Haven School District, CT (0902790) DP1

General Demographic Characteristics​,

www.proximityone.com/acs/dpct/dp1_0902790.htm​.

8. Cassandra Liem, Georgios Petropoulos. “The Economic Value of Personal Data for

Online Platforms, Firms and Consumers.” ​Bruegel​, 14 Jan. 2016,

www.bruegel.org/2016/01/the-economic-value-of-personal-data-for-online-platforms-fir

ms-and-consumers/​.

9. Hoyt, Joseph Bixby, and Irving J. Stolberg. “Connecticut.” ​Encyclopædia Britannica​,

Encyclopædia Britannica, Inc., 23 Jan. 2017,​ ​www.britannica.com/place/Connecticut​.

10. Steel, Emily, et al. “How Much Is Your Personal Data Worth?” ​— FT.com​, The Financial

Times Limited 2017.12 June 2013​,

www.ig.ft.com/how-much-is-your-personal-data-worth/​.

11. Kosoff, Maya. “Dozens of Teenagers Told Us What's Cool in 2016 - These Are Their

Favorite (and Least Favorite) Apps.” ​Business Insider​, Business Insider, 31 Jan. 2016,

www.businessinsider.com/teens-favorite-apps-in-2016-2016-1

12. Jain, Anshul. ​How Does Metacritic/Rotten Tomatoes Make Money?​ Quora, 9 Apr. 2014,

www.quora.com/How-does-Metacritic-Rotten-Tomatoes-make-money

13. “Connecticut Compulsory Education Laws.” ​Findlaw​,

statelaws.findlaw.com/connecticut-law/connecticut-compulsory-education-laws.html