Week 7 Know your Customer Entrepreneurship Week 7 Know your Customer

The challenge of marketing New ventures face significant marketing challenge that are unique to their small size Large firms have more opportunity to access to markets Marketing strategy focus on identifying customer needs, wants and demands 4 Ps ( product, price, promotions and place)

Look to these websites www.entrepreneurship.org www.marketingpower.com

WHAT IS A BUSINESS MODEL The business model must answer the key question related to your business WHAT IS A BUSINESS MODEL Behind that KEY question is a lineup of other questions: Who's your target customer? What customer problem do you solve? What value do you deliver? How will you reach, acquire, and keep customers? How will you define and differentiate your offering? " " they " " " " " ? How will you generate revenue? How will you generate profit? What's your cost structure? How will you scale?

Business Plan - Part 1 What is the name of the business you would like to start? Describe the product you will sell or the service you will provide. Where will the product be sold or the service provided? How is your business different from existing businesses? Why would customers want your product or service? What problem does it solve? What opportunity does it create? Define their needs in detail. How important will this product or service be to your customers? How much will your product or service cost? Why would customers be willing to pay that?

Customer survey Prepare a customer survey. Describe the customers you will approach to test this business idea. What characteristics make them likely to buy from you (age, income, interests)? Make a list of the questions you will ask them. Discuss this in your tutorial class

Customer survey Assume you want to start a Tourism Business, who will be you customers? What is your package? Who are they?

Ways of gathering customer information Existing Business: Check Sales History Measure Sales trends Monitor competitors Survey existing customers Experiment with product modifications Monitor Changes in the world (PESTLE)

Ways of gathering customer information Lulu HyperMarket: Check Sales History – what products sell well? Measure Sales trends – Which products have increasing sales? Which products are declining in sales? Monitor competitors – What will Carrefour promote? What prices will it charge? Survey existing customers – use satisfaction surveys Experiment with product modifications – Try new brands, new products, and adjust prices Monitor Changes in the world – increasing numbers of children

Ways of gathering customer information New Business – Existing product or service (Small restaurant) Check History – are restaurants in the area opening or closing? Monitor existing competitors – do they have many customers? How big is their menu? What are their prices? Check for new competitors – New restaurants coming to the mall? Survey potential customers Monitor Changes in the world – traffic? roads? New homes? General economic conditions?

Ways of gathering customer information New Business – Existing product or service (Smart phone app) Check History – are similar apps being added to Google Play? Monitor existing competitors – do they have many customers? What are their prices? Survey potential customers – what apps are your friends using? Why? Monitor Changes in the world – are new smart phones about to come out? Will they have new features that might change your app?

Ways of gathering customer information New Business – New product or service “Environmental water bottles” Check History of similar products – sales of reusable bottles? How did similar products do on Kickstarter? Monitor close competitors – success of reusable bottles, location of stores, number of products, prices Check for new competitors with the same idea – Other new bottle designs Survey potential customers – what do your friends think? Monitor Changes in the world that could affect your business – Are people getting more serious about protecting the environment?

Ways of gathering customer information New Business – New product or service Chocolate Manufacture Check History of similar products – sales of sweets? Monitor close competitors – success of sweet shops, location of stores, number of products, prices Check for new competitors with the same idea – Other chocolate makers Survey potential customers – how often do they buy chocolate? How much will they pay? Monitor Changes in the world that could affect your business – More children? More concerns about health?

The Customer Survey Process Describe your product or service Product Images Web site screens Simple Demonstrations Small samples What will you be selling? Where? What will you charge? What do you think will be special about your business?

The Customer Survey Process 2. Carefully select potential customers to Survey Age Gender Location Income Social status Talk to the people most likely to buy your product.

The Customer Survey Process 2. Carefully select potential customers to Survey “Omani Sandals” Age – 16-24 Gender - female Location – Nizwa? Muscat? Salalah? Income – above average Social status – above average

The Customer Survey Process Prepare questions similar to these: Have you used a similar product or service? How satisfied are you with that product or service? How would you compare that product or service to this new product or service? What is most attractive about this new product or service? What concerns do you have about this new product or service? What do you think is a fair price for this product or service? Do you want to buy this product or service now? Would you recommend this product or service to your friends?

Customer Survey Example – Chocolate Business 3. Potential questions Do you often buy chocolate? How satisfied are you with that chocolate? How would you compare this new chocolate to the chocolate you normally buy? What is most attractive about this chocolate? What concerns do you have about this chocolate? What do you think is a fair price for this chocolate? Do you want to buy some chocolate now? Would you recommend this chocolate to your friends?

Customer Survey Example – Online sandal sales 3. Potential questions Do you often buy clothing online? How satisfied are you with that process? How would you compare this web site to the website you normally use? What is most attractive about this website? What concerns do you have about this website? What do you think is a fair price for these sandals? Do you want to buy sandals now? Would you recommend this website to your friends?

Customer Survey Example – Omani Tourist photos 3. Potential questions - exercise How would you describe your business idea? Who are your customers? What questions would you ask them?

Customer Survey Example – Your business 3. Potential questions - exercise How would you describe your business idea? Who are your customers? What questions would you ask them?

Customer Survey Examples Taking notes Customer information – name, age, background Answers to your questions Your reactions. Did the person seem very interested? Only a little? What did you learn from this customer?

Business Plan Assignment Description of your Business What is the name of the business you would like to start? Describe the product you will sell or the service you will provide. Where will the product be sold or the service provided? How is your business different from existing businesses? Description of customer value Why would customers want your product or service? What problem does it solve? What opportunity does it create? Define their needs in detail. How important will this product or service be to your customers? Description of cost How much will your product or service cost? Why would customers be willing to pay that? Customer survey Describe the customers you will approach to test this business idea. What characteristics make them likely to buy from you (age, income, interests)? Make a list of the questions you will ask them.