Market Research for Business Plans

Market Research for Business Plans

Research EdgeMay, 2014

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Some background

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The goal….to maximize your profits

The strategy…to determine your ideal positioning, given

• Your industry’s dynamics• Your competition• Your potential customers

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Research methodologies

Primary - New research to answer a specific question

Secondary – Information previously researched for other

purposes and publicly available.

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Sources of information

ObservationSurveys – mail, phone, online, personal interviewNewsletters and journalsProfessional and trade associationsWebsites, BlogsSocial media platformsMarket research reportsBusiness databases

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Some research tips

Research is a treasure hunt

Who cares?

Use effective techniques http://bit.ly/1pv9HC3

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NAICS codes

The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.

Use for accessing government data and company lists.

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Environmental Scan

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Industry Dynamics

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Industry

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Industry – types of information

Market size ($)

Market share

Recent trends

Growth potential

Stability/volatility

Seasonality

Political/legal

Socio-cultural

Technological development

Global issues

Patents/intellectual property

Environmental issues

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Industry resources - governmental

Industries at a Glance Bureau of Labor Statistics. Industry breakdown, workforce statistics, earnings, etc.Economic Census Census Bureau. Number of establishments, receipts, annual payroll, total employment. Trends over time.County Business Patterns Data available at county and zip code level. number of establishments, employment, payroll

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Industry resources – market reports

Sbdcnet provides free market research for many common small businesses

Check out the Small Business Snapshots and Market Research Links sections

Inconsistent content, but may have Industry Overview, News & Trends, links to industry associations, statistics, customer profiles.

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Industry research – other free sources

Google Scholar – search engine for research documents

Magportal – searchable database of magazine articles

HighWire – free full text scientific articles

Directory of Open Access Journals - scholarly

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Industry resources – fee based reports

• Hoovers• First Research• Avention (formerly One Source)• Marketline (formerly Datamonitor 360)

Some excerpts are free; full reports in $129 - $139 range.

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Industry resources - news

Many free newsletters are available – search for one in your industry

SmartBrief Hundreds of free industry based topics – healthcare, construction, energy/chemicals, education, retail, media, technology, finance, food & beverage, hospitality, etc.

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Industry resources – online search

MY INDUSTRY news OR “market research” OR “industry report” OR overview

MY INDUSTRY forecast OR trends OR projections

MY INDUSTRY association OR “trade group” Many have a Resources section with free information.

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Competition

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Competition - types of information

Strengths

Weaknesses

Market share

How long in business

Product mix

Sales volume

Pricing

Marketing strategy

Distribution channels

Suppliers

Primary clients

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Identify your competitors

Observation

Web search

Yellow pages

Business database

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Database advantages Complete set of businesses

Can target specifically via NAICS codes

Can specify exact geographies – not restricted to locality

Includes “non brick and mortar” types of businesses

Includes wealth of information – number of employees, sales volume, estimate of credit worthiness, corporate affiliations, etc.

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ReferenceUSA via public library

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ReferenceUSA detail

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Research competitors

Company website

Personal visit

Social media pages

Online reviews

Comments in social media

More information on company research

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Other business databases

Free

LA Secretary of State

Manta

CrunchBase (technology)

ThomasNet (suppliers)

Fee

Hoovers (D&B)

InfoUSA

zoominfo

USAData

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Customers

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Target market

The consumers a company wants to sell its products and services to, and to whom it directs its marketing efforts. A target market can be separated from the market as a whole by geography, buying power and demographics, as well as by psychographics. (Investopedia)

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Define your niche

Based on the research of your industry and your competition, where is your advantage? How will you compete? Cheaper, more convenience, additional features, better customer service? Who are the customers in this market? Is the market big enough to allow a profit? Is it the same market as your competitors? How will you stand out? What percentage share would you need to divert? If a different market, is it viable?

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Refining the target market

Business

Type of business

Size (revenue)

# of employees

# of locations

Business structure

Years in business

Individuals

Geographic scope – neighborhood, city, state/region, national

Demographic – age, gender, income, education, occupation, marital/family status, ethnic background

Psychographic – personality, attitudes, values. Lifestyles, interests/hobbies, behavior

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Segmentation

A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Generally three criteria can be used to identify different market segments:

1) Homogeneity (common needs within segment)2) Distinction (unique from other groups)3) Reaction (similar response to market) (Investopedia)

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How to research customers

Primary

Surveys

Blogs, forums

Comments in social media

Competitor websites

Secondary

Market research reports

Suppliers

Industry or trade associations

More information on target markets

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Research Edge is a New Orleans based consulting firm specializing in business research and strategy. We help clients understand their customers, their competition, and the environment in which their business operates so they can make smart decisions.

Cynthia B. Fromherz, Principal

Contact us at: Info@ResearchEdgeConsulting.com