Market Research Discovering how good your idea is

MARKET RESEARCH Market Research is conducted to demonstrate the level of demand for your product Primary vs. Secondary research Citing your research Asking for Help

Primary Research Involves the potential business owner surveying their potential customers for their use, or potential use of the product / service. “What are you doing now?” is a much better indicator of future buying patterns than “What are planning on doing next year?”

Secondary Research Taking market research that has already been conducted, and applying it to your business. Since secondary research is generated for general applications, you often have to make assumptions on how the secondary research applies to the specific market you are researching. What are some forms of secondary research you can engage in?

Citations APA Format Citations in text and Reference List

Getting Help Garth Homer I will be happy to meet with you or your group. You may contact me at or give me a call at Your entrepreneurship professors Buad 293 Labs

GETTING STARTED What is your business concept and how does it make money? Will someone actually pay for this product or service? Get your NAICS code (under Products & Services) Use your NAICS code to access industry trends via a business database (e.g., Business Source Premier) Cite the article, not the database What is this telling you? Success of your idea (business proposal) Industry overview (business plan, section B) Competitors Hoover’s Company Profile

Market Potential How large is your market? What is your potential market size? Sales Forecasting. Top-Down Approach. Estimate Market Size and your potential share of the market Family expenditure data (financial data)

Market Potential of Pets # of $ spent on food in BC X # of households in my trading area (local health area) = $486 X 76, 903 (2009 households in Central Okanagan) = $37, 374, 858 Market size for pet related expenses In Central Okanagan

Market Potential TableBase (under statistical tools) Types of pet ownership Pet supply sales by product/service category Who spends on pets Spending on pets

Market Potential Performance Plus (financial info) Build your own profile An online performance benchmarking tool Compliment this top-down approach with a bottom up forecasting approach

Chapter Who will you sell to? Three types of customers: 1. Primary - 1. Primary - The primary or target customer is most likely to buy your product or service and could be a heavy user. 2.Secondary - 2.Secondary - The secondary customer has a possibility of buying your product or service but needs convincing. 3.Referral – 3.Referral – The market segment who will refer potential customers to you. Remember to differentiate between “End User” and “User that Pays”

Chapter Two Types of Customer Profiles 1.Business to Consumer (B2C) or End-User Profile  If your Target market is the consumer or end-user, your customer profile will likely require demographics or psychographics. 2. Business-to-Business (B2B) Profile  Many small businesses offer their services or products, often on a contract basis, to other businesses.  These supply chain companies need a customer profile that is based on business or company-type information.

Chapter Demographics and Psychographics  Age  Sex  Family Status  Age of Children  Education  Residence DEMOGRAPHICSPSYCHOGRAPHICS  Where they eat  Where they shop  Sporting activities they engage in  Entertainment activities they engage in  How socially and physically active they are  Whether they travel for business or fun  Demographics involves key personal characteristics of a group of people. These characteristics include:  Psychographics is the process of segmenting the population by lifestyles and values. These may include:

B2B Demographic & Psychographic Profile What are demographic characteristics of B2B? Size of business (revenues, employees) Type of business (industrial or consumer products/services) Type of employees (gender, ethnicity, education levels) Type of business ownership Account size Years in business Location Credit risk (see pages 87-88) What are psychological characteristics of B2C? Culture Leadership Company activities Community Involvement

Profiling your Customer Industry information (articles) Statistical Information (Tablebase) Community Profiles (Location) Economic Profile (Markets)

Friday Lab Get Your NAICS code Search for industry data (products & services). What is happening in my industry? Research market potential (financial and statistical data). What are the market strengths of my idea? Who am I going to sell my idea to? Profile your target market (primary, secondary and referral)

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