Market Analysis Summary for the Pet Products & Services Industry According to APPMA, 63% of US households own a pet and 45% of US households own more than one pet. The greatest numbers in pet ownership are dogs (43.5 million) and cats (37.7 million)-- Hey Buddy!’s target market. Most impressive, this demographic represents and supports a 35+ billion dollar industry. Interestingly, although pet ownership has increased by a modest 7% over the past 18 years, pet spending has increased over 300% during that same time period. This is directly attributed to the Humanization of Pets. Humanization of Pets Sales of pet-related products and services are being propelled by an ongoing psychographic trend sometimes referred to as the humanization of pets, whereby pet owners are increasingly treating their pets as full-fledged members of the family. According to the American Animal Hospital Association's 2002 Pet Owner Survey, 60% include their pets in family portraits and nearly 50% plan all or most of their free time around their pets. In addition, 83% of Pet Owners call themselves "Mommy" or "Daddy". Moreover, when it comes to holidays and gift giving, greater than 75% give their pet gifts around celebrations such as Christmas, Thanksgiving, and Halloween. The days of feeding ‘Buddy’ scraps from the table are over! According to MarketResearch.com, the evolving demands of aging boomers and other key pet-owning demographics are transforming this dynamic market into an even hotter one. Industry leaders like PETSMART and PETCO continue to expand and make a wider range of products available to a wider range of consumers. Pet owners are pampering their loved ones with organic foods, spa treatments, yoga, healthcare, luxurious accommodations, high fashion clothing and five-star hotels.

The U.S. Pet Products & Services Industry has been historically fragmented with “Mom & Pop” companies leading the way. However, larger companies are now beginning to recognize the economic potential of the pet industry. According to MarketResearch.com, the explosive growth of the US pet products market has attracted the attention of many new ‘non-traditional’ retailers of pet products. As a result, sales of pet products in many non-traditional retail sectors are outpacing the market as a whole. This trend is expected to continue through the end of the decade, opening up new opportunities for marketers and retailers both inside and outside the usual pet product realm. Listed below are some of the ‘Traditional’ and ‘Non-traditional’ companies diving head-first into the pet industry.

Traditional Pet Companies PETSMART PETCO PETMED EXPRESS IAMS PURINA

Non-Traditional Pet Companies 3M DISNEY DEL MONTE WALMART TARGET SEARS BIG LOTS

Statement of Problem/Need
Because of evolving consumer demand for premium pet products and services, sales growth in non-traditional retail channels, and an influx of powerful new competitors, it is a business imperative that manufacturers and retailers keep their brands at the leading edge of product innovation and quality. In 2006 alone, industry leaders invested upwards of $500 million in national advertising, with virtually all of it encouraging the deep attachment Americans feel for their pets.

The market is growing and evolving. Best in class companies are exploiting every avenue they can find to increase revenue and bolster their brand. Until now, no stone has been left unturned. Companies are marketing through traditional retail channels, wholesale clubs, dollar stores, convenience stores, department stores, home furnishing stores, home improvement stores, sporting goods stores, Internet sites, and catalogues. Vending is the one area that has yet to be utilized.

Market Analysis Summary for the Vending Industry
Vending machines are ubiquitous. As a whole, they represent a US market of over $45 billion dollars. Vending is a long established, multi-billion dollar industry with a proven distribution and branding network. Throughout the world, people are purchasing items such as sushi, blue jeans, eggs, iPods, pharmaceuticals, and DVDs through vending machines.

Market Trends/Growth Areas
“Automated retail is in the midst of an explosion,” says Michael Kasavana, a professor specializing in vending commerce at Michigan State University. The three main sectors of the vending market are refreshment machines, cigarette and tobacco machines, and ‘other vending machines.’ Vending sales from the ‘other’ sector are continuing to benefit from consumer demands for convenience, changing consumer attitudes towards vending purchases, and new technologies that are bolstering consumer confidence and providing convenience. Historically, most consumers have been reluctant to make purchases of more than $1 from vending machines. However, due to new technologies like I-Vend and e-Port payment terminals (credit cards), there is a sense of confidence that it’s secure enough to make a $300 to $400 purchase from a vending machine. Most importantly, vending industry veterans are beginning to embrace the move to more non-traditional product offerings.

Business Participants
The most recognizable companies in the vending business are Coke and Pepsi. Both companies report that their vending operations account for 40% to 50% of their multi-billion dollar sales. Also, like the pet industry, the vending industry is experiencing many new ‘non-traditional’ companies entering the game; companies like McDonald’s, Motorola, and MasterCard.

Statement of Problem/Need
According to MarketResearch.com, the $45 billion vending industry is in the throes of an evolution. Due to changing demographics and consumer demands for options, quality, and convenience, it is a business imperative that vending operators find new and innovative products and locations for their machines. These changes are what drives existing companies to add to their product offerings, and drives new companies to utilize the vending business as a new way of distributing and branding their products and services.

Competitive Opportunity for Hey Buddy! Pet Supply Vending Hey Buddy! is bringing together two very established, dynamic, and evolving markets. With their patented Hey Buddy! distribution and branding systems, Hey Buddy! is uniquely positioned to be the market leader and ‘only’ best in class company in the pet supply vending business. Click on the image to the right for a better view

Strategic Marketing Plan
As each day passes, more and more cities and businesses are becoming 'pet friendly.' This evolving dynamic is what is going to allow Hey Buddy! to become a best in class company. Our plan for seizing this market is simple. We intend to be ubiquitous. There are literally tens of thousands of potential placement locations for Hey Buddy!. Through strategic partnerships and/or franchising, we will have HEY BUDDY! machines located throughout the United States.  Our machines will be found in dog parks, apartments, high-rises, hotels/motels, RV parks, rest stops, veterinary clinics, outdoor cafes, shopping malls, pet adoption centers, and doggie daycare/grooming centers. The opportunities for growth are extraordinary.