IDENTIFY AND MEET A MARKET NEED Entrepreneurship 4/20/2017 6 Entrepreneurship Class - Mr. Sherpinsky Council Rock School District IDENTIFY AND MEET A MARKET NEED Chapter 6

Lesson 6.1 The Value Of Market Research GOALS Identify a target market by understanding your customers. Research your market using primary and secondary data.

Ideas in Action: A Wormy Idea

What Do You Know? Do you think it is important to have a thorough knowledge of a product before trying to market it? What type of things do you think Travis had to consider before offering items for sale on the Internet? What do you think of the way Travis pays his friends to work for him? Product knowledge is very important Convince others that products meet needs Develop website Maintained Process all orders Shipping methods Pricing Advantages or not?

Video Moment: Introduction to What a Target Market is! Get Set What do you look for and want to know? Webify How to find information and customers quickly

WHAT IS A TARGET MARKET? Target market is the individuals or companies that are interested in a particular product or service and are willing and able to pay for it. Marketing concept uses the needs of customers as the primary focus during the: planning, production, distribution, and promotion of a product or service.

UNDERSTAND YOUR CUSTOMER Customers are the people who buy the products and services companies offer. Customers buy goods and services to satisfy economic wants and needs. An economic want is an unfilled desire of a customer. An economic need is anything that is required to live.

DEMOGRAPHICS AND PSYCHOGRAPHICS Demographics are data that describe a group of people in terms of their age, marital status, family size, ethnicity, gender, profession, education, and income. Psychographics are data that describe a group of people in terms of their tastes, opinions, personality traits, and lifestyle habits.

IDENTIFY YOUR TARGET MARKET 1. Who are my customers: individuals or companies? 2. If customers are individuals: How old are they? How much money do they earn? Where do they live? How do they spend their time and money? 3. If customers are companies: What industries are they in? Where are those industries located?

continued IDENTIFY YOUR TARGET MARKET 4. What needs or wants will my product or service satisfy? 5. How many potential customers live in the area in which I want to operate? 6. Where do these potential customers currently buy the products or services I want to sell them? 7. What price are they willing to pay for my products or services? 8. What can I do for my customers that other companies are not already doing for them?

THE IMPORTANCE OF A CUSTOMER PROFILE A customer profile is a description of the characteristics of the person or company that is likely to purchase a product or service.

Group Activity (2 Person Teams) Internet Research Can you identify key traits among these specific target markets? DINKS WOOFS SKIPPIES SWAKS SWANKS

TARGET GROUP ATTRIBUTES DINKS More discretionary/disposable income, more wants than needs/status. WOOFS More discretionary income, health conscious, able to travel extensively for longer periods of time, desire to spend time with family/grandchildren. SKIPPIES Desire self-esteem, sense of belonging from keeping up with the latest styles, trends, and technology. SWAKS Convenience and value important because of less discretionary income. SWANKS More discretionary income; desire for companionship; very career oriented.

Video Moment: Markets & You Markets and Doc Loch

MARKET SEGMENTS Groups of customers within a large market who share common characteristics are known as market segments. Segmenting can help you develop a product or service.

Video Moment: Segmenting TD Bank and Target Markets and Market Segmentation

UNDERSTAND THE COMPETITION Knowing about your competition will help you define your target market.

MARKET RESEARCH Market research is a system for collecting, recording, and analyzing information about customers, competitors, goods, and services. Market researchers collect primary and secondary data.

SECONDARY DATA Secondary data is data found in already published sources. Publication by government or community organizations like U.S. Census Bureau, SBA, and Chamber of Commerce Books about specific industries Information on the Web Entrepreneur books and magazines Newspapers and journals

PRIMARY DATA Primary data is information collected for the very first time to fit a specific purpose. Questionnaire or survey Observation Focus groups (Big $$$) Disadvantage of primary data: Expensive & Time-Consuming

Lesson 6.2 How to Perform Market Research GOALS Identify the five steps involved in primary data market research. Design a questionnaire.

Video Moment: Market Research Market Research Made-Easy & MR Analysis

FIVE STEPS OF PRIMARY MARKET RESEARCH Define the Question Step 2 Select a Research Method Step 3 Collect Data Step 4 Analyze Data Step 5 Draw Conclusions Define the question Select a research method Collect data Analyze data Draw conclusions

Define the Question Need to define exactly what you are trying to find out Example: Dog-walking service How many dog owners live in the area How many of them lack the time to walk their dogs How much they might be willing to pay to have someone walk their dogs for them

Select a Research Method Methodology Survey Observation Focus Groups Method you use will depend on what type of information you want to gather

Collect Data Demographic Psychographic Economic trends Industry forecasts Attitudes Strength of feelings Strongly Agree, Somewhat Agree, Somewhat Disagree, Strongly Disagree

DESIGN A SURVEY Length of questionnaire Questions Clear Easy to answer Only important questions

Analyze Data Need to interpret the information you have found Written down so it can be used later Segment the data by various target groups Cross-referencing and cross-tabbing

Draw Conclusions Determine how to use the data Develop a plan of action based on the information found in market research

Classroom Activity: Design a Market Research Project Build a survey! COFFEE 3 Psychographic Questions for your product to determine who would use this product 3 Demographics Questions for the product

Lesson 6.3 IDENTIFY YOUR COMPETITION GOALS Determine your direct and indirect competition. Analyze the strengths and weaknesses of competitors. Establish strategies for maintaining customer loyalty.

DIRECT AND INDIRECT COMPETITION Direct competition is competition from a business that makes most of its money selling the same or similar products or services as another business. Indirect competition is competition from a business that makes only a small amount of money selling the same or similar products or services as another business. Find your direct competition Find your indirect competition

COMPETING WITH LARGE BUSINESSES Large retailers usually are able to keep larger quantities of products in stock. Large retail chains don’t rely on one single product line. Large companies usually have more resources to devote to advertising.

STUDY INDIVIDUAL COMPETITORS Price What do they charge? Location Where are they located? Facility Is their building nice? Accessible? Appealing to customers?

STRATEGIES FOR MAINTAINING CUSTOMER LOYALTY Listen and respond to feedback Other strategies for maintaining loyalty Superior service More convenient hours than other businesses Easy return policies Store-specific credit cards Personal notes or cards Frequent buyer programs

STUDY INDIVIDUAL COMPETITORS Strengths What do they do better? What do they do Best? Weaknesses Any disadvantages with them? Strategy What will you do to attract customers to you How will you get customers to come to you instead of them? Pricing Servicing Unique Offerings Other ideas???

Team Activity: Random Item Activity Thinking Out of the Box Create Something Out of Nothing Brainstorm ideas for our potential coffee cafe and develop four (4) well flushed out ideas/concepts for bringing customers into your coffee café with your major coffee competitor being WAWA!

Review Review pages 148, 149, 150 Case Study, page 152

Everything Mentioned will be on the quiz!!! Review: Quiz Chapter 6 Everything Mentioned will be on the quiz!!!

WHAT IS A TARGET MARKET? Target market is the individuals or companies that are interested in a particular product or service and are willing and able to pay for it. Marketing concept uses the needs of customers as the primary focus during the: planning, production, distribution, and promotion of a product or service.

DEMOGRAPHICS AND PSYCHOGRAPHICS Demographics data that describe a group of people in terms of their age, marital status, family size, ethnicity, gender, profession, education, and income. Psychographics: data that describe a group of people in terms of their tastes, opinions, personality traits, and lifestyle habits.

FIVE STEPS OF PRIMARY MARKET RESEARCH Define the Question Step 2 Select a Research Method Step 3 Collect Data Step 4 Analyze Data Step 5 Draw Conclusions Define the question Select a research method Collect data Analyze data Draw conclusions

MARKET RESEARCH Market research is a system for collecting, recording, and analyzing information about customers, competitors, goods, and services. Market researchers collect primary and secondary data.

PRIMARY DATA Primary data is information collected for the very first time to fit a specific purpose. Questionnaire or survey Observation Focus groups (Big $$$) Disadvantage of primary data: Expensive & Time-Consuming

SECONDARY DATA Secondary data is data found in already published sources. Publication by government or community organizations like U.S. Census Bureau, SBA, and Chamber of Commerce Books about specific industries Information on the Web Entrepreneur books and magazines Newspapers and journals

THE IMPORTANCE OF A CUSTOMER PROFILE A customer profile is a description of the characteristics of the person or company that is likely to purchase a product or service.

DIRECT AND INDIRECT COMPETITION Direct competition is competition from a business that makes most of its money selling the same or similar products or services as another business. Indirect competition is competition from a business that makes only a small amount of money selling the same or similar products or services as another business. Find your direct competition Find your indirect competition

UNDERSTAND YOUR CUSTOMER Customers are the people who buy the products and services companies offer. Customers buy goods and services to satisfy economic wants and needs. An economic want is an unfilled desire of a customer. An economic need is anything that is required to live.

Marketing Math: How to Figure! City: Population: 5000 Data: 30% will use our product 4 times each year Each purchase results in $50.00 revenue for us Calculate the potential revenue for 6 months 5000 x 30% = 1500 customers 1500 x 4 =6000 purchase a year 6000 x $50.00 per purchase means we will have a potential of $300,000 in revenue Or does it? $300.000 / 2 = 6 months of revenue $150.000