MARKET RESEARCH

CH. 6: MARKET RESEARCH

A business must satisfy the needs of its customers to succeed

To find out what customers need/wantBusinesses conduct Market Analysis

CH. 6: MARKET RESEARCH

What is a Market? A group of people or companies who have a demand for a product

or service and willing and able to buy it

Target Market A group of customer of interest to you/the business

Focus of your company’s efforts

Need to know as much as possible abut them

CH. 6: MARKET RESEARCH

Market Segments Sub groups of buyers who have similar characteristics

Consumer Markets are segmented as: Geographics – Where consumers live

Demographics – Personal characteristics

Psychographics – Social/Psychological experiences

CH. 6: MARKET RESEARCH

How do we choose a Target Market? Determine how many potential buyers are in your segment

Determine if the segment is reachable

Determine if the segment is responsive

***Multiple Target Markets can be chosen…However, its often best to choose the market with the easiest point of entry. Typically, these customers have a problem that CAN be solved***

CH. 6: MARKET RESEARCH

Research Process Step 1: Identify Information Needs

What kinds of information do you need?

Step 2: Obtain Secondary Resources Information already collected by someone elseEx. US Census, Web Sites, etc.

CH. 6: MARKET RESEARCH

Research ProcessStep 3: Collect Primary Data - Information you collect yourself

ObservationsInterviewsSurveys

In person surveys produce the highest response rates

CH. 6: MARKET RESEARCH

Research Process Step 3: Collect Primary Data (cont.)

Customer demographics

Would potential customers purchase your product/service…why/why not

How much would customers purchase

When would customers purchase

How would customer like to find the product/service

What do customers like about competitors

CH. 6: MARKET RESEARCH

Research ProcessStep 4: Organize Data

Categorize data – By answer/demographic/etc.

Create charts or graphs to depict results

Data will help you refine your market analysis and serve as the basis for the market plan

CH. 6: MARKET RESEARCH

Research ProcessStep 5: Analyze Data

Is there a market for the product/service

How big is the market

Will the industry support the business

Do competitor products reveal anything about the customer demand

What do customers predict the demand will be

MARKETING RESEARCH - SURVEYS

Define Problem When a problem is defined – Objectives can be created to

answer the problemObjectives: Ex. Customer satisfaction / Distance / Etc.

Survey Questions should be based upon your objectivesEx. Determine customer SatisfactionRate your satisfaction with company X on a scale of 1-5

MARKETING RESEARCH - SURVEYS

Validity When a survey measures what it was supposed to Examples?

Reliability Producing nearly identical results in repeated trials Asking the same questions to all respondents

MARKETING RESEARCH - SURVEYS

Types of Questions Forced Choice – Predetermined answers

Open Ended – Respondents construct their own response

Writing Questions Be brief and clear

Use the same rating scale for similar questions

Keep it short so it can be answered quickly

MARKETING RESEARCH - SURVEYS

For Your TWO Business Plan ideas Identify your Problem for each Identify your Objectives 3-5 needed for each

Identify your Questions that will help you answer your objectives

Remember Validity / Reliability

Surveys should be approximately 10 questions 2-3 Questions per Objective

Include ways to identify demographics Gender / Grade / Age / Etc.