Identify and Meet a Market Need 4 Identify and Meet a Market Need 4.1 Identify Your Market 4.2 Research the Market 4.3 Know Your Competition

Ideas in Action Serving Customers’ Needs By continually assessing market needs, Brian Hendricks was able to start a variety of PC related companies. Brian’s recommendations for entrepreneurs focus on the “Five P’s of Entrepreneurship”: Planning Patience Persistence People Profit Chapter 4

Lesson 4.1 Identify Your Market Goals Identify a target market by analyzing the needs of customers. Explain how market segmentation can help an entrepreneur analyze a target market. Chapter 4

Terms target market market segments customer profile demographics psychographics use-based data geographic data Chapter 4

Target Market Customers are your most important asset. target market the individuals or companies that are interested in a particular product or service Chapter 4

Identify Your Target Market Consider the following information regarding your customers: individuals or companies? age and income? industries customers are in? needs and wants my product will satisfy? number of potential customers? competitive environment? pricing of product or service? what is unique about my offering? Chapter 4

What questions should you ask when identifying your target market? Chapter 4

Market Segments market segments groups of customers within a large market who share common characteristics Most products and services appeal to a small portion of the population. Segmentation helps you serve your niche efficiently. Chapter 4

Customer Profile customer profile a description of the characteristics of the person or company that is likely to purchase a product or service Chapter 4

demographics data that describes a group of people in terms of age marital status family size ethnicity gender profession education income Chapter 4

psychographics data that describe a group of people in terms of tastes opinions personality traits lifestyle habits Chapter 4

use-based data geographic data data that helps you determine how often potential customers use a particular service geographic data data that helps you determine where your potential customers live how far customers will travel to do business with you Chapter 4

Name four types of customer data that may be analyzed in developing a customer profile. Chapter 4

Lesson 4.2 Research the Market Goals Explain the role of market research. Identify the six steps involved in market research. Chapter 4

Terms market research primary data survey focus group secondary data Chapter 4

Role of Market Research a system for collecting, recording, and analyzing information about customers competitors goods services Chapter 4

Primary Data primary data survey information collected for the very first time to fit a specific purpose survey a list of questions you ask your customers to determine demographic information psychographic information Chapter 4

observation focus group determining information by watching customer behavior focus group an in-depth interview with a group of target customers questions are similar to survey questions group interaction allows for more in-depth discussion Chapter 4

disadvantages of primary data expensive time consuming Chapter 4

Secondary Data secondary data Secondary data can be found in: information found in already-published sources Secondary data can be found in: government publications and websites industry specific books trade publications newspaper articles books about entrepreneurs in similar businesses Chapter 4

What types of data do entrepreneurs collect through market research? Chapter 4

Six Steps of Market Research Although primary data collection is time consuming and expensive, it will tell you exactly what you want to know. Primary data can uncover information that is often not available through secondary sources. Chapter 4

Chapter 4

Determine the Data Needed Define the Question Determine exactly what it is you need to know. Determine the Data Needed Decide what data you need to answer the question. Chapter 4

Collect the Data Conduct secondary research to help determine the primary data requirements. Determine the most effective methodology for primary research collection. Questionnaires should contain only the most pertinent questions. Chapter 4

Chapter 4

Analyze the Data Take Action Evaluate the Results Thoroughly analyze and interpret data. Write down analysis results for future reference. Take Action Use your analysis results to develop an action plan. Evaluate the Results Entrepreneurs must perpetually reassess the effectiveness of their actions. Chapter 4

What are the six steps of market research? Chapter 4

Lesson 4.3 Know Your Competition Goals Explain the importance of understanding your competition. Determine types of competition. Prepare a competitive analysis. Describe strategies for maintaining customer loyalty. Chapter 4

Terms direct competition indirect competition competitive analysis Chapter 4

Impact of Competition To remain competitive, you should offer products that are of equal or better quality than the competition and that sell for the same or lower prices. Chapter 4

Understand the Competition Determine the ways your competition is not meeting the needs of their customers. The unmet needs of these customers provides you with an entrepreneurial opportunity. Chapter 4

Why is it important for you to understand the competition your business faces? Chapter 4

Types of Competition direct competition originates from a business that makes most of its income by selling the same products or services as you to the same market Chapter 4

indirect competition originates from a business that makes only a small amount of money by selling the same products or services as you to the same market Chapter 4

Large Retailers? Reasons that large retailers can be a source of strong competition include: they can order and stock large quantities of products the volume discounts they obtain result in lower prices to the consumer Chapter 4

they have multiple product lines if one product does poorly, there are other products available to generate sales they have larger advertising budgets Chapter 4

What is the difference between direct and indirect competition? Chapter 4

Competitive Analysis competitive analysis identifying and examining the characteristics of a competing firm Chapter 4

Follow these steps to begin your competitive analysis: Make a list of your competitors. Summarize the products and prices offered by your competitors. List each competitor’s strengths and weaknesses. Find out the strategies and objectives of your competitors. Determine the strength of the market. Chapter 4

Chapter 4

What is the purpose of a competitive analysis? Chapter 4

Maintaining Customer Loyalty Listen and Respond to Feedback Perpetually ask for and respond to customers’ needs. Chapter 4

Other strategies for Maintaining Customer Loyalty superior service convenient hours easy return policies store-specific credit cards personal notes or birthday cards frequent-buyer programs Chapter 4

What are some strategies for maintaining customer loyalty? Chapter 4

PERFORMANCE INDICATORS EVALUATED Develop a convincing multimedia presentation. Recognize and respect copyright issues. Develop and support a theme with a multimedia presentation. Chapter 4

Make use of and implement innovative technology in a multimedia presentation. Set priorities and manage time to prepare and present an effective multimedia presentation. Chapter 4

THINK CRITICALLY Why must the Super Bowl use a multimedia presentation to attract new corporate sponsors? What kind of music or visual images would be good for a Super Bowl multimedia presentation? Chapter 4

Why must the presentation emphasize the potential return on investment for corporate sponsors of the Super Bowl? What is the value of being associated as a financier of the Super Bowl? Chapter 4