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  • Published on: 14th September 2019
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Executive Summary

The market assessment evaluated the current market situation and delved into the strengths, weaknesses, opportunities and threats. Key highlights identified from the situation analysis are NAIT's location its greatest asset the proximity to businesses and their employees gives NAIT a sizable pool of students to tap into. The distance from Calgary and SAIT their direct competitor dampens competitive intensity and rivalry among segments.

Weaknesses in current Building Renovation curriculum were identified which can now be addressed. Opportunities were found as 6 major segments were identified, Recent High School Graduates, Aspiring Trade Specialists, DIY Homeowners, Professional Tradesmen Independent Contractors, Residential Renovation Businesses and Commercial Renovation Businesses. Each segments' value drivers were identified and evaluated against the 5 main competitors in the Alberta region including NAIT's that were large enough, had sufficient presence and potential in the Building Renovation Education market to be considered a competitor with NAIT. The competitive analysis allowed us to delve into the competitive landscape and evaluate the intensity and rivalry of competitors evaluate the Barriers to Entry to each segment and identify the competitor that dominates each segment as well as the capabilities required to successfully target each segment.

The market assessment resulted in identifying the top 3 segments that NAIT should pursue; Unemployed Recent High School Graduates, Aspiring Trade Specialists that want to remain relevant in the workplace and Small Commercial Renovation Businesses. These segments fit NAIT's strategic direction, each had growth potential and is in line with current capabilities. Furthermore, NAIT can differentiate itself and course offerings among these segments.

The Unemployed High School Graduate segment should be of interest to NAIT since research indicated that employment rates among high school graduates in Canada is 58.3% if these graduates pursue some post-secondary education their employment rate increases to 58.8% if they attain a post-secondary certificate their employment rate increases by 10% to 68.8%. NAIT can also pursue revenue enhancing project and simultaneously change lives.

All segments detailed in this report can be pursued and would be dependent on a change in NAIT's strategic direction and ability to change key aspects of curriculum, course structure and delivery options.

Introduction

The purpose of this market assessment is to gather data that would examine and evaluate the competitive forces and market viability as it pertains to launching a Building Renovations Specialist program at the Northern Alberta Institute of Technology.

The qualitative study makes use of secondary research sources and examines existing course offerings, program features and value drivers in the market. The report dives further into examining current and potential market segments, overlaying market requirements and the analysis of the competitive landscape within Alberta's Building Renovation programs and industry.

The information herein can be used to align NAIT's strategic approach, gain competitive advantage, increase enrollment in its present Building Renovation curriculum, reverse declining market share, clarify problems and get competitive insight.

Additionally, this document intends to reduce the uncertainty and risks involved in making the decision to launching the Building Renovations Specialist program. As student intake increases NAIT has an opportunity to target new segments that may require new courses or a shift in program strategy. This competitive analysis and market segmentation report offers an in-depth market study and key insights to further research.

The Building Renovations Market

The building renovation services industry in Alberta is divided into commercial and residential, both offer interior and exterior renovations services. Businesses that serve the residential market offer services such as, architectural design, renovation that customizes homes, kitchens, remodeling bathrooms and basements. Exterior renovation as part of the residential renovation process would include building retaining walls, extending floor plans and adding a second story to a home.  

Commercial renovations have two distinct subsections remodeling which transforms an existing building by changing its look layout and functionality. This would normally involve tearing down walls and dramatically changing the layout of the existing space. The reasons for the modification can be to improve personal use, encourage social activity, collaborative efforts or for functionality.

The other aspect of commercial renovation involves restoration, commercial restoration is generally less in-depth or complicated than a remodeling project. It aims to update and upgrade a company's surroundings without making large functional changes. Some reasons for restoration would be;

• Updating to New Standards; For example, if a commercial building is being renovated the owners may wish to update fixtures and fittings.  

• To Increase Market Value; For example, Restoration Renovating before advertising a building for sale.

• To restore functionality; Restoring a space to its former glory.

• Upgrade Curb Appeal and Overall Appearance; Restoration that would spruce up the places' exterior or interior

Market Analysis

Company Overview

NAIT is a polytechnic institute providing students with vocational and applied education as the foundation for outstanding careers. The recent increase in demand for polytechnic education is an indication that Alberta depends on the workforce NAIT educates. The institution receives support from industries, businesses, donors and government, which play a vital role in supporting the institution's track record and success.  

NAIT supplies many qualified applicants to the Alberta workforce and any increases in Alberta's labor market demand for polytechnic graduates, would warrant consequent growth to meet the needs of the economy.

Education applied research and innovation will continue to be key drivers that will help Alberta's economy position itself for growth and sustainability. NAIT can play a pivotal role in helping Alberta diversify its economy.

Demand for programs in Building Renovation education is strong as this industry grows and expands. Especially if NAIT provides support to learners throughout their career by providing courses with convenient and flexible delivery options to meet the needs of students.  Whether it be entry-level students that need an online option, a group of managers that need a workshop or on-site training at a company's place of business. Understanding and meeting the market requirements for key segments would satisfy the needs and wants of the majority in the market.

Situation Analysis Highlights

Research identified 5 major competitors all of whom were considered when evaluating NAIT's internal and external environment. NAIT's greatest strength lies in its location, Edmonton, the engine of Alberta, home to most industries and their employees which is particularly advantageous for NAIT since this results in healthier relationships to the industry and a large pool or potential students that would have interest in apprenticeships, on the job training opportunities and Building and Renovation Courses.

NAITS main weakness is its inability to meet market needs and course requirements of key segments in the Building Renovation education market. For example, the Recent High School Graduate segment has two courses available the Carpenter Apprentice and the Home Renovation Courses, other competitors have managed to develop a Pre-Employment Carpenter program using a curriculum similar to the Carpenter Apprentice and allows graduates to challenge the Carpenter Apprentice first year exam. Another example is the present Blue Seal Certification NAIT's program is generic and does not speak to a specific segment whereas SAIT has 4 Blue Seal certifications dedicated to Construction, Residential Construction and Commercial Construction.  

This market assessment identified 6 opportunities, segments that are sustainable and have growth potential. Research also identified a gender gap in enrollment as roughly 3% of females enroll in the Carpenter Apprentice Programs in Canada. NAIT can develop a marketing campaign specifically to increase female enrollment in Building Renovation courses.

Major threats to NAIT come from the competition, competitors such as SAIT that offer market centric courses specific to industry and individual needs. SAIT's weaknesses is that the institution is located in Calgary a few hours away from Edmonton if SAIT were to establish a campus in Edmonton or locations outside of Calgary this would be a potential threat to NAIT.

SWOT ANALYSIS

Major competitors in the building and renovation training market include:

• Southern Alberta Institute of Technology (SAIT)

• Lethbridge College

• Red Deer College

• Professional Home Builders Institute (PHBI)

• Hazmasters

Strengths

Presence Across the Education Value Chain

Due to NAIT's presence across the education value chain the institution can cross-sell and up-sell Building and Renovation courses to existing students. They can market directly to past students for advanced certification and complete certification in areas of Building Renovation. There is the ability to market directly to 3,600 apprenticeships graduates. They could develop market centric advanced level and Blue Seal certification for their 12,000 apprentices registered in apprenticeship training.  

Existing Course Outlines

NAIT may build upon existing courses to establish a Building and Renovation Specialist program that would satisfy the value driver requirements course content of the segments later detailed in this report. This may be accomplished with little effort as NAIT already has the existing courses in the management, soft skills, finance and marketing that the specific market segments require. It would however require expansion of existing course offerings to tailor it's program to a more domain-centric Building and Renovation training. For example, NAIT can establish courses in job site management and supervision, communication and negotiation with customers and staff, law fundamentals specifically for the Building and Renovation industry. There are also technical areas that need to be developed such as Restoration Renovation courses for Commercial Renovation Business.

Various Course Delivery Options

The market assessment indicated that there is a need for convenience and flexibility relating to delivery methods of course information for key market segments, namely those that would require advanced and Blue Seal certification. Offering courses via online and distance learning  may result in lower direct costs and yield higher profit margins. Aspiring Trade Specialists, Professional Tradesmen, Residential Renovation Businesses and Commercial Renovation Business  tend to prefer course delivered via evening, weekends, online and distance learning as it is convenient for employee and employer, all which NAIT does presently. NAIT also offers corporate training solutions which is a requirement by the Residential Renovation Business and Commercial Renovation segments evaluated in this report.  

Relationship back to industry

As a polytechnic, with access and input to industry advisory boards, NAIT has direct access, or reach, to information about the Building and Renovation Industry from associations and industry leaders. This information may be used to drive and advance its course development strategy, to address specific market segments with knowledge gaps.

Cost Advantages

There are many cost advantages to proprietary know-how. NAIT has been in existence since 1962 and during the period it would have developed many courses and recyclable content to extend product strategy. These courses can be expanded to meet the need of different markets segments, and/or bundled to drive greater revenue at lower costs.

Existing Blue Seal Certification  

Although the present blue seal certification is not Building Renovations domain-centric, and does not seem to target or appeal to a specific segment. This may be advantageous in the certain segments such as Professional Tradesmen. These individuals are professionals in their trade and are very knowledgeable in key technical areas and may not require management courses that overlay the technical aspect with the management aspect. They may be able to do that themselves. The product can be repositioned to experts in the market that already have the technique and industry knowledge and  need to learn a specific skill.

Location

NAIT's location is the institution's greatest asset. Edmonton has many Building and Renovation Businesses and downstream industries along the supply chain that would benefit from courses NAIT offers and the workforce NAIT certifies.  Furthermore, NAIT's distance from Calgary and direct competitor, SAIT dampens the competitive intensity that the institution faces.

Weaknesses

Existing Blue Seal Certification

The present Blue Seal Certification program appears to be generic and does not appear to have a value preposition for individuals in the Building and Renovation Industry. It does not speak to any segment and is not market centric. The evaluation of current Blue Seal certifications from top competitors indicates specific Points of Parity, or courses that must be in the curriculum for the certification to be considered acceptable for example the Master Home Builder and Master Home Renovator certifications offered at PHBI are management certifications. Upon hearing the name of those certifications, one would assume that it is a technical certification but due to the specificity of management and soft skills relating to Building and Home Renovation the courses are classified as a Management Certification.

Inability to Address Market Needs

Presently NAIT offers  only two courses to the  Building and Renovation market. The Carpenter Apprentice and the Home Renovation Courses for DIY Homeowners. Firstly, the Home Renovation courses, although clear what the student would receive upon enrollment the courses are not sequential. It does not seem to be in a language that a potential DIY Homeowner student would understand as there is no mention of do it yourself or save money on renovations. SAIT does a very good job at this and even offers a certificate after completing six (6) out of the seven (7) sequential courses.

As for the Carpenter Apprentice program research indicates that the completion rate is low  for apprenticeships.  The competitive analysis also indicated that institutions have offered the syllabus in the form of pre-employment carpenter which is a 12 to 13-week program in which, upon completion graduates can write the first-year apprenticeship exam. According to SAIT's course website the graduation employment rate for the program is 97% and median salary is $40,000.

Courses that are Canadian Job Grant Applicable

NAIT's Home Renovation courses are comparable in content and hours yet SAIT's makes it clear that the courses are covered by the Canadian Alberta Job Grant. A call was made to NAIT enquiring if the Home Renovation courses are job grant applicable and the person answering was not sure. Additionally, courses should be structured so that enrollees will feel some obligation to keep enrolling for example after completing 6 out of 7 of SAIT's Home Renovation courses students receive a certificate.

Opportunities

New Market Segments

Research into Building and Renovation training identified 6 major segments which are considered profitable and worth pursuing; Recent High School Graduates, DIY Homeowners, Aspiring Trade Specialists, Professional Tradesmen Independent Contractors, Residential Renovation Businesses and Commercial Renovation Businesses.

Changing Market Demographics

The market assessment also indicated that for the Carpenter Apprentice program in Canada roughly 3% of the enrollees are female this is an opportunity for NAIT to implement a diversity and inclusion programs that would increase female enrollment in this program and research into other programs may reveal similar statistics.

There are businesses within Alberta that require onsite training and certification due to their size, they also require workshops, blended learning and flexible course delivery to meet the need of their growing staff. There is opportunity to create curriculums and courses for this segment. The attached dataset that was used in the segmentation analysis lists some of these institutions, their addresses, contact number and revenue.

Specific Home Renovation Courses

There are 3 main types of home renovation projects that are favored by Canadians bathroom, kitchen and windows and doors. There may be an opportunity in establishing a course targeted to DIY Homeowners on replacing windows and doors. Replacing windows and doors is a cost effective and simple renovation project that is not offered at any institution and may have appeal to the DIY Homeowner market.

Increasing Home Renovation Rates

The construction industry grows approximately 0.8% annually and the home renovation segment is very important to its survival. As the sector becomes more competitive companies would have to find new means of differentiating themselves form the competition as well as providing better service and  require their competitive advantage come from aspects of the operations or service delivery. NAIT has an opportunity to develop courses and modify their existing Blue Seal certifications to supply companies with the knowledge and skills required for this.  

Canadian Alberta Job Grant

The job grant makes courses affordable and hence attractive to employers who would benefit from the accolade and increased productivity when employees improve themselves. Indicating the cost of a course after the job grant is applied on the website and in conversations with potential enrollees should considered.  

Slow Pace Industry

Quality standards and specifications change slowly in the Building and Renovations industry, given the relationship NAIT has with the industry and applied research that NAIT does, this change may be led by NAIT enabling them to dominate the industry.

Opportunities outside Alberta

If courses are developed in accordance with the CHBA there may be the opportunity to target segments that are interested in Home Renovation programs that are outside of Alberta.

Opportunity to make a large societal impact

The market assessment indicated that the employment rate for high school graduates is 58.3% attending some form of post-secondary institution increases the employment of the segment to 58.8%. Attaining a certificate or diploma from a post-secondary institution increases it by 10 percentage points to 68.8%. NAIT can impact the quality of life of High School Graduates.

Threats

Presently there are two institutions in Alberta that offer blue seal and advanced certifications specifically for the Building and Renovations market PHBI which focuses solely on Residential Renovation and SAIT which focuses on Residential and Commercial Renovation courses but does not offer Restoration courses as part of their Commercial Renovation program.

Their courses are domain-specific to Building and Renovation and a select few of PHBI's curriculum meets the CHBA National Education Benchmarks for education in the industry. Their courses are offered via many delivery methods to meet the needs of their target market however it is unknown if they have plans of expanding to different locations and segments.

The inability to meet market needs

NAIT's blue seal certification lacks the specificity that the market requires. If a Blue Seal certification is established, NAIT may have some difficulty creating awareness of the benefits without a heavy marketing campaign. Furthermore, establishment of pre-employment programs such as the pre-employment carpenter program mention in the report may cannibalize enrollment in the Carpenter Apprentice program.

Competitors

NAIT's greatest strength is its location, if a major competitor such as SAIT which has greater market share and market centric product offerings establishes locations in Edmonton or close to Edmonton this would result in a reduction in market share. There are also competitors that are specialized in niche areas such as Restoration and Home Renovation namely Hazmasters and PHBI who have already established a name for themselves and are preferred training institutes for members of the segments that NAIT plans to target. There may be difficulty in convincing new markets that NAIT can do a better job.

PEST Analysis

Political

Reduction in federal and provincial funding

Reduction in federal and provincial funding will put higher education institutions at risk however institutions can use the opportunity to restructure to become more sustainable and to diversify their revenue streams to ensure their survival in the long run. For example, NAIT was able to diversify its revenue streams with their Productivity and Innovation Centre which provides a dedicated space for industry Services such as education for productivity, productivity services, business innovation services, product development services and industry-driven research. Conversely, NAIT has several new and preservation capital intensive projects that are planned and ongoing that are critical to operations such as the NAIT Skills Centre, Student Housing projects, Main Campus Space Optimization, Productivity and Innovation Centre (PIC), Capital Maintenance and Rehabilitation. Reduction in funding may delay approval and completion and result in canceled projects.

Economic

Economic Uncertainty

Economic uncertainty or even a downturn in the economy may negatively impact institutional investments. Investment income represents roughly 6.7% of revenue for intuitions in the industry. NAIT'S endowment contributions in 2017 was 1,022M. 200M more the prior year. The institution also invests in a diversified portfolio that will be affected by economic downturns and are also exposed to credit risk.

Lack of Funding

Lack of funding normally results in salary freezes and increased tuition. If institutions resort to increasing tuition to pick up the shortfall this may further depress and cannibalize enrollment. However, there are  opportunities to make changes to policies when the need arises that would dampen the effect of low funding for example, NAIT already has an internationalization strategy in place to increase intake of international students who pay considerably higher tuition rates.

Sociological

Cultural trends

Irresponsible use of social media can damage an institutions reputation. Instances of caught on tape video and campus violence can be detrimental to students and faculty, fortunately policies such as NAIT's new Sexual Violence Prevention and Response policy and procedure provides a mechanism to respond effectively to issues of sexual violence on campus.

Societal Impact of climate change and Energy Outlook

There is expectation from society for being environmentally responsible. This may put added pressure to spend on projects to ensure that institutions are environmentally responsible. Some institutions may be pressured to pursue environmentally responsible projects, for those that do not have the funding, key projects may lose priority.

Fortunately, NAIT structures its applied research capabilities and industry-focused innovation services to align with the industrial value chains of Alberta and of western Canada. For example, NAIT is an institutional partner in the $75 million Future Energy Systems initiative supported by the Canada First Research Excellence Fund.

Student and community engagement with staff

A large percentage of part time students may not receive similar customer service and problem resolution rates as full-time students that are able to communicate with staff during working hours. Institutions now must do what it takes to meet student expectations.

NAIT has 2,900 staff members in addition to its focus on community through outreach and service provisions to underrepresented learner communities in the region. NAIT has enhanced access to and awareness of post-secondary options by placing strategic importance on engaging secondary school students in NAIT programming prior to their completing high school studies.   

Technological Advances

Technological advancement run the risk of increased energy usage and as a result increasing cost, equipment and courses can becoming obsolete for many institutions. NAIT's electricity and gas costs and other direct expenses have increased over the past financial year due mainly to Centre for Applied Technology.

Market Segmentation Overview

Research identified 6 segments that require varying forms and levels of certification, course delivery methods and accreditation in Building Renovation education.

1. Recent High School Graduates

2. DIY Home Owners

3. Aspiring Trade Specialists

4. Professional Tradesmen/ Independent Contractors

5. Residential Renovation Businesses

6. Commercial Renovation Businesses

The 6 segments were chosen based on the listed criteria below;

a) They were large enough to achieve sizable profits

b) Size and growth were easily quantifiable with existing data

c) The segments can be reached through NAIT's existing distribution and promotional activities

d) There is stability and consistency in the demographics hence they would not vanish over time

Recent High School Graduates

Segmenters

Demographics Psychographics Behavioral Attributes Geographic Location

Age 18-24

Gender Male and Female

Employed and Unemployed Personal values and attitudes towards vocational education and renovation courses Enrollment patterns

Alberta

Qualitative Description

Recent high school graduates are individuals between the age of 18-24 that live in Alberta.

Segment Requirements and Value Drivers

Delivery Options Certification Administrative Course Content Cost

Full time, hand on learning Entry level certification Alumni services,

Payment plans,

Accessible locations Apprenticeship

On the job training Reasonably priced

There are approximately 195,904 males and 184,398 females in Alberta between the ages of 18 to 24. The approximate size of the population is 308,309. 58.3% (179,744) may be employed and 128,564 are unemployed.  

The rate of employment for high school graduates in Canada is 58.3% if they attain some amount of post-secondary education their employment rate increases to 58.8%. Attaining a postsecondary certificate or diploma increases their employment rate by 10 percentage points to 68.8%.

The below statistic from Alberta Industry and training statistical profiles report suggests that on average 3,504 new apprentices are registered in the Carpenter Apprentice program annually.

  Year

Apprenticeship 2011 2012 2013 2014 2015 2016 Average

Carpenter 3,923 3,651 3,448 3,525 3,374 3,104 3,504

The statistic below shows Canadian registration in apprenticeship training programs by trade group and gender. Female enrollment in carpenter programs are approximately 3%

Canada - registrations in apprenticeship training programs, by trade group & sex 2015

Number of apprentices registered in apprenticeship training programs across Canada in 2015, by trade group and sex

  Male Female Total

Automotive service 41,019 2,175 43,194

Carpenters 43,887 1,386 45,273

The Addressable Market

Total population between the ages of 18-24 is 308,309

1.14% (3,504) of the population would have some interest in a renovation program

3% (105) may be female

97% (3,399) may be male

58.3% (2,042) may be employed

41.7% (1,462) may be unemployed

The total addressable market is 3,504, 3,399 males 1,982 who are employed 1,417 who are unemployed and 105 females 61 who are employed 44 who are unemployed.

The segment was further subdivided into employed high school graduates which had a total of 2,043 individuals and unemployed high school graduates which had a total of 1,451.

The segment score indicates that the more attractive segment is the unemployed high school graduates

Competitiveness

Ability to Differentiate

NAIT can differentiate itself from the competition in this segment by strategically using it greatest asset, it location and its relationship to industry. NAIT is in Edmonton which is the hub for sectors and downstream industries related to building and renovation, the proximity to and relationship with companies in the area gives NAIT the opportunity for increased apprenticeships and on the job training programs which are both highly valued by recent high school graduates specifically the unemployed segment. Additionally, making the cohort aware of features and benefits of alumni services such as networking would also provide added value and would result in increased employment opportunities which is the main reason for enrollment. The ability to differentiate was higher among the unemployed high school graduates because of opportunity cost they face when making the decision to go back to school.

Competitive intensity

Although the competitive intensity within the industry is high due to four major competitors SAIT, Red Deer College, Lethbridge College and PHBI and the main value driver and market requirement for this segment is certification which is easily provided by all competitors. The degree of competitive intensity is dampened by the distance between colleges. The second most important value driver for this segment is cost, monetary cost and opportunity cost. Members of this segment would prefer to attend a fulltime program since this would ensure that the course is completed within the shortest time possible. Therefore, NAIT's location is advantageous, their distance from Calgary will mean that rent will cost less  for those that would prefer to go to NAIT and it would also be inconvenient for students to commute to Calgary from Edmonton. Furthermore, PHBI has ignored this segment making the competitive intensity even less. NAIT will be able to meet the requirements of both the employed and unemployed high school graduates equally.

Barriers to Entry

Barriers to entry are low for this segment, for NAIT and all competitors as there are already existing courses, apprenticeships and pre-employment courses that they can build upon and there are no regulatory barriers preventing any institution from entering this market. Although the barriers to entry are low for the segment it is somewhat high for the employed high school graduates since the only course NAIT offers is the Carpenter Apprenticeship which is 4-year apprenticeship and Home Renovation Courses which are targeted to DIY Homeowners, contractors and individuals looking for a entry level position at a renovation business. The unemployed high school graduates were scored higher in this segment because they do not have a job. Employed high school graduates on the other hand will have to give up a job, re-enter school then re-enter the job market again they may be interested in a different type of course that specializes in a area renovation or a course that give certification such as the pre-employment carpenter which NAIT does not currently offer.

Market Opportunity

Both segments are large enough to sustain growth. The recent high school graduate segment is large enough to achieve sizable profits. There is also perpetuity in this segments growth due to the source being high school and it is expected to grow with the nation population growth rate of 1.2%. Both segments are equally profitable as they are equally likely to enroll in a renovation program that interests them however, the unemployed high school graduate segment has the potential to get larger as the longer an individual is without work the more difficult it is to get a job.

Attractiveness

The segments can be easily reached through NAIT's existing distribution and promotional activities and can be considered the most stable and consistent segment. The required certifications, curriculum, delivery methods and cost structure are also in line with NAIT's strategic direction making the segment very attractive.

The unemployed high school graduated seems be the most attractive and easier segment for NAIT to go after since their main value driver certification followed cost, and their opportunity cost is low due to being unemployed. This segment is smaller but grows rapidly as many in this segment are not in permanent jobs therefore less resources could be spent on attracting them.

Segment Price Sensitivity

The recent high school graduates are price sensitive as there are not much variation in offerings among competitors as their main value driver is certification and may think little of quality and curriculum of any course they enroll in.

Overall the unemployed high school graduates are more competitive, attractive and there is more opportunity in the segment. The segment map indicates that although both segments are competitive the unemployed high recent high school graduates should be a top priority for NAIT.

DIY Homeowners

Qualitative Description of DIY

Segmenters

Demographics Psychographics Behavioral Attributes Geographic

Age 25-34

Millennial Has some extra personal time Saved for the renovation project Alberta

Segment Requirements

Delivery Options Certification Administrative Course Content Cost

Part-time, hand on learning No certification Payment plans

Accessible locations Relevant content Low price

The DIY Homeowner segment are home owners that would prefer to undertake their home renovation project themselves instead of paying a professional renovator. They are between the age of 25-34 they purchased their home through a mortgage they want to now customize their home and plan on financing their renovation project using their savings.

According to Houzz the reasons behind home renovation for the DIY segment may be a one or a combination of the following

• 39% wanted to do it all along and finally have the time

• 33% wanted to do it all along and finally have the financial means

• 24% purchased home/moved in recently and wanted to customize it

• 18% Adapting to recent changes in family and/or lifestyle

• 18% Addressing recently discovered deterioration/ damage due to age termites, etc.

Acknowledging the above we can make further inferences from the statistics below such as

• The members of the segment have families

• They may have a mortgage  

• They are financing the home renovation project from savings

• They are price sensitive

The home renovation industry seems to be mostly driven by millennials

According to statistics Canada that there are approximately 1,756,610 married couple families in Alberta. For the segmentation we only consider those families that are married as we also assumed that they have mortgages as there is a higher likelihood of mortgages among married couples.

According to statistics Canada the home ownership rate in 2015 was 66.5% a slight decrease from the previous year.

The Addressable Market

There are 1,756,610 families in Alberta

31% are between the age of 25-45

66.5% of them are home owners

18.53% have mortgages

52% of these mortgage owners recently purchased their home and wanted to customize it

74% of them plan to finance their home renovation project from savings

544,549 are between the age of 25-34

362,125 within the 25-34 age group home owners

60,430 have mortgages

31,423 recently purchased a home and wanted to customize it

23,253 of them are financing the purchase from savings

Since existing courses at NAIT relate to Kitchen, bathroom and framing the segment was further sub divided by type of renovation.

Kitchen and bathroom were grouped together as these types of renovation projects require plumbing. Replacing windows and doors are an easy method of giving a home a face lift that is cost effective, does not disrupt living, can be completed on a weekend and does have some savings on the environment as letting light in the home would reduce the electric bill.

The DIY Homeowner segment was divided into two cohorts' windows, doors, bathroom and kitchen. Windows and doors are more competitive and provide more market opportunity because this type of project is easier than bathroom and kitchen. The cost of replacing windows and doors are less, relative to bathroom and kitchen making the course an easy option for anyone that wants to enroll and pursue a project from start to finish.

Competitiveness

Ability to differentiate

NAIT is competitive in this segment because they can provide both segments with their main requirement, a reasonably cost program that can be completed within a short space of time, taught face to face and that guides students on how to complete the entire project.

Competitive Intensity

NAIT is faced with only one competitor for this segment, SAIT and competitive intensity is dampened by the distance between institutions. SAIT's home renovation program offers boosters students are awarded a certificate of completion after completing 6 of the 7 courses offered in the series. The course covers more depth than NAIT and is covered by the Canadian Alberta Job grant. This booster is not relevant to the cohort since they simply want to save on home renovation costs they do not require a certificate and will not be able to access the job grant

Barriers to entry

There are no major barriers to entry except that NAIT does not have a course that specifically targets DIY Homeowners that want to replace windows and doors or renovating a kitchen or bathroom from start to finish. This is not a major barrier as it is much less complicated than plumbing which is currently offered at NAIT. There are also aspects of home renovation that is also taught on other programs that would make expanding into a replacing window course easier.

Market Opportunity

The size and growth potential of this market is high since factors such as population growth and family life cycles play major roles in the segments size and growth.

Profitability

Profitability in terms of the cost to NAIT to start a program is low since existing infrastructure and course curriculums can be used with little modifications. Profitability in terms of what the segment would be willing to pay for the course is low this segment's most valued requirement is cost and for them to invest in a program they must see some ROI.

Attractiveness

The DIY Homeowners are a good fit for NAIT since they already have existing curriculums that can be used, and the millennium generation that is leading the home renovation boom in Canada does not seem to be slowing and appears to be in a stage of growth. Strategically, this may not be a direction that NAIT wants to go into giving how fragmented the DIY market is.

Although the DIY windows and doors segment is highly competitive is should not be a priority due as they may not be willing to pay the price for the required courses.

Price Sensitivity

This segment is very price sensitive as their main market requirement is cost additionally competition for this market comes from free sources such as YouTube.

The market segmentation rankings chart indicates the DIY windows and doors segment NAIT has a greater ability to differentiate, there is less competitive intensity in this segment, less barriers to entry and the segment also has higher growth potential.

The segmentation map indicates that DIY windows and doors segment should be a top priority and it is in a low competitive market.

Aspiring Trade Specialists

Segmenters

Demographics Psychographics Behavioral Attributes Geographic

Occupation: Journeyman Wants to get to the top of their career Likes activities that push their mental and physical limits Alberta

Segment Requirements

Delivery Options Certification Administrative Course Content Cost

Part-time, Online learning, Distance, learning Advanced certification Alumni services Relevant content to job, industry Require value in the form of accreditation

According to the trade secrets 2016 statistical report the table below shows the amount of Completed Apprentices Combined with Individuals Issued Qualification Certificates, and Individuals Issued Occupation Certificates

  Year

Trade 2011 2012 2013 2014 2015 2016 Totals

Cabinet Maker   50   63   34   39   48   30   264

Carpenter  621  575  512  446  435  368   2,957

Plumber   6   14   10   25   21   9   85

Electrician   1,554   1,485   1,363   1,509   1,545   1,641   9,097

Totals   2,231   2,137   1,919   2,019   2,049   2,048   12,403

Presently in Alberta there are approximately 12,403 completed Apprentices that have certification within an area of home renovation. If the segment is further subdivided they can be separated into two classifications.

Aspiring trade specialists in home renovation, these are carpenters recorded by the trade secrets report over the last recorded six years.

 Aspiring trade specialists in specialty trades, apprentices that are plumbers, cabinet makers and electricians, over the last recorded six years

To further segment the market psychographics were used:

Two Psychographic questions where respondents were asked about their career goals

37.76% responded positively to “I Want to Get to The Very Top in My Career” and

83.92% responded positively to it's important to Continue Learn New Things Throughout My Life

Addressable Market

37.76% of carpenters that want to get to the top of their career

37.76% of specialty trade journeymen want to get to the top of their career

83.92% of carpenters that think it is important to continue learning new things throughout their life

83.92% of specialty trade journeymen that think it is important to continue learning new things throughout their life.

Carpenters

2,957 Carpenters; 37.76% wants to be at the top of their career which equates to 1,116, the remaining 1,841 does not wish to be at the top but 83.92% would like to learn new things and be relevant in the workplace which equated to 1,544

Specialty Trade

 9,446 Specialty tradesmen; 37.76% wants to be at the top of their career which equates to 3,556 the remaining 5,890 does not wish to be at the top but 83.92% would like to learn new things and be relevant in the workplace 4,942

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