Lecture 8 Market Research Dr. Hatem Elaydi ECOM 5368 Engineering Management (Entrepreneurship & ework) Islamic University of Gaza Sep 26, 2016

Market research The process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business's target market, the industry as a whole, and the particular competitors you face . Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Why conduct market research The goal of doing market research is to equip yourself with the information you need to make informed business decisions, 4 P's: Product — Improve your product or service based on findings about what your customers really want and need. Price — Set a price based on popular profit margins, competitors' prices, financing options or the price a customer is willing to pay. Placement — Decide where to set up and how to distribute a product. Promotion — Figure out how to best reach particular market segments (teens, families, students, professionals, etc.) in areas of advertising and publicity, social media, and branding. Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Market research can help you Understand your customers and their preferences (4 P's) Profile your customers (location, age, gender, income level, etc.) Create more effective marketing campaigns Find the best business location Identify opportunities to grow and increase profits Recognize changes in demand Offer new products and services for the new demand Find new markets within Recognize and plan for industry and economic shifts Shift inventory, price and staff levels as needed Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Market research can help you Monitor the competition in your market Identify competitors Get information on how your competitors operate Learn how customers compare you with your competitors Mitigate risk in your business decisions Use information, not just intuition, to drive your business decisions Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

When to conduct market research Market research is widely viewed as a component of the planning stage of a business. Indeed, market research is critical for new start-ups and should be a key element of any entrepreneur's business plan. Market research data feeds into a number of areas of the business plan Examples of situations that might call for market research include: New advertising campaigns Opening a new location or changing business locations Increasing production levels Introducing new lines of products or services Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

How to conduct market research Primary research Primary research is original information gathered through your own efforts to respond to a specific question or set of questions. This information is normally gathered through surveys, observation, or experimentation. The following are examples of questions that can be addressed through primary research: Who are my customers and how can I reach them? Customer profiles, Prospective business locations, Marketing strategies Which products and services do buyers need or want? What factors influence the buying decisions of my customers? Price, service, convenience, branding, etc. What prices should I set for my products and services? Customer expectations Who are my competitors, how do they operate and what are their strengths and weaknesses? Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Primary research: surveys Surveys are the most common way to gather primary research. Surveys can be conducted: Through direct mail Over the telephone On the web or via email In person When designing your own research questionnaire, be sure to: Keep it as short and simple as possible Make sure it is visually appealing and easy to read Move from general questions to more specific questions Make sure questions are brief and easily understood Avoid leading questions, questions with ambiguous words, questions that are too difficult to answer Make sure any response scales used are logical with categories that are mutually exclusive Always pre-test your questionnaire to identify potential problems Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Primary research  Constant contact with your customers can provide information on: Customer profiles Goods and services that customers demand Satisfaction with price levels and quality of service Experiences with your competitors Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Secondary research Secondary research exploits existing resources like company records, surveys, research studies and books and applies the information to answer the question at hand Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Secondary research Examples of questions that can be addressed through secondary research: What are the current economic conditions that my business is operating in? Are these conditions changing? What trends are influencing the industry my business operates in? Consumer preferences, Technological shifts, Prices for goods and services What are the demographic characteristics of my customers or where do they live? Populations, age groups, income levels, etc. What is the state of the labor market? How many people have the skills I require? How much should I expect to pay my employees? Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Sources of secondary research a number of quality statistics and analytical resources available : Demographics Get data that sheds light on population characteristics such as location, age, income, education level, and more. Labor and employment data Find statistics and analysis related to the labor force, employment and income from official national & international sources. National economy Get the latest official economic indicators, which shed light on the performance of several segments of the national economy. Industry sector data Find statistics that can help you better understand your industry, and study the latest trends that could impact your business. General research and statistics Other sources: libraries, universities, industry associations and government departments at various levels. Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Analyzing the market Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

What is a market Market are groups of people They are willing to buy They are able to buy They have authority to buy They share a common interest, need or problem They could realize an advantage by buying They can be reached to communicate information about the product Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Analyzing the target market Demographic segmentation Psychographic segmentation Geographgic segmentation Benefit segmentation Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Steps to market segmentation Identify desired customer characteristics Develop market segment profiles Forecast market potential Select specific market segments Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Product life cycle Introduction Growth Maturity Decline Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Consumer buying process Recognition of wants Research Evaluation Decision making Post-purchase evaluation Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Analyzing the competition Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

How to analyze competition Who are your competitors Number of competitors Are competitors profitable Prices charged by competitors Volume of sales in $ Expanding or declining market Competitors’ products Is repeat business obtained How well your business differ from competition Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Make competitors work for you Be knowledgeable Identify competitors’ strengths and weaknesses Anticipate customer objections Observe competition frequently Learn from competitors’ mistakes Improve on competitors’ ideas Never speak ill of competition Be consumer-oriented Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

About the competition My competition do more for me than my friends do. My friends are too polite to point out my weaknesses, but my competitors go to great expense to advertise them. My competitors are efficient, diligent and attentive; they force me to research for ways to improve my products and services. My competitors would take my business away from me if they could; this keeps me alert to hold what I have. If I had no competitors, I would be lazy, incompetent, inattentive; I need the discipline they impose upon me. I salute my competitors; in the final analysis, they have been good to me. Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Analyze the competition Rank competitor Marketing strong points Marketing week points Share Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship

Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship