IDENTIFY AND MEET A MARKET NEED Entrepreneurship 4/20/2017 Chapter 6 IDENTIFY AND MEET A MARKET NEED 6.1 The Value of Market Research 6.2 How to Perform Market Research 6.3 Identify Your Competition Chapter 6

Lesson 6.1 THE VALUE OF MARKET RESEARCH 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.

Chapter 6 WHAT IS A TARGET MARKET? The 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. The 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 Chapter 6 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 Chapter 6 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 Chapter 6 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 Chapter 6 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?

Determining your Target Market Chapter 6 Determining your Target Market Why is it important to determine who your target market is? Unless you understand who your target market is and what types of products or services they are looking for, you will probably not be able to satisfy their wants and needs.

THE IMPORTANCE OF A CUSTOMER PROFILE Chapter 6 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.

THE IMPORTANCE OF A CUSTOMER PROFILE Chapter 6 THE IMPORTANCE OF A CUSTOMER PROFILE The importance of a customer profile will help you understand how to meet customer demand. Understanding your competition will help you identify unmet needs. Disadvantage of market segmentation You might market to a group who is not interested in the product or might overlook a segment that would be very interested in the product.

Chapter 6 MARKET SEGMENTS Groups of customers within a large market who share common characteristics are known as market segments.

Mass Marketing Advantages of Mass Marketing Chapter 6 Mass Marketing Advantages of Mass Marketing Easy to prepare advertisements for and reaches many people Disadvantages of Mass Marketing Does not target specific needs of customers Is not suitable for all products Has nothing to make product stand out from the competition

UNDERSTAND THE COMPETITION Chapter 6 UNDERSTAND THE COMPETITION Knowing about your competition will help you define your target market.

Chapter 6 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. If conducted properly, market research will help entrepreneurs understand their target markets and thus, satisfy the wants and needs of the customers.

Limitations of Market Research Chapter 6 Limitations of Market Research Can be costly Time consuming Must be carefully analyzed so that incorrect decisions are not made

Chapter 6 SECONDARY DATA Secondary data is data found in already published sources.

PLACES TO FIND SECONDARY DATA Chapter 6 PLACES TO FIND SECONDARY DATA Publications issued by government and community organizations, such as the U.S. Census Bureau, the Small Business Administration, and Chamber of Commerce Books about specific industries Information on web sites for government and businesses Books about other entrepreneurs who set up similar businesses Specialized magazines and journals devoted to particular fields Newspaper articles and statistics

Chapter 6 Secondary Sources Information you can find using secondary sources include information on: Demographics Economic trends Industry forecasts

Chapter 6 PRIMARY DATA Primary data is information collected for the very first time to fit a specific purpose. Questionnaire or survey Observation Focus groups Disadvantage of primary data Time consuming Expensive

Difference between Primary and Secondary market research data Chapter 6 Difference between Primary and Secondary market research data Secondary data is found in published sources Primary data is information that is collected for the first time to fit a specific purpose

Chapter 6 Chapter 6.1 Assignment Notes – Answers for assignments are throughout the notes, make sure you read them. Checkpoint pg 132 Checkpoint pg 133 Checkpoint pg 135 Checkpoint pg 137 Thinking Critically #1-5 pg 137 ALL DUE AT THE END OF CLASS, THIS IS A TEST GRADE!!!!!!!!!! Answer in complete sentences

Lesson 6.2 HOW TO PERFORM MARKET RESEARCH Chapter 6 Lesson 6.2 HOW TO PERFORM MARKET RESEARCH GOALS Identify the five steps involved in primary data market research. Design a questionnaire.

FIVE STEPS OF PRIMARY MARKET RESEARCH Chapter 6 FIVE STEPS OF PRIMARY MARKET RESEARCH Steps involved in conducting a market research include: Define Question – know what you want and find out Select Method – survey, observation or focus groups Collect Data – gather needed information Analyze Data Draw Conclusions – a plan of action

Primary Date Three ways to collect primary data include: Chapter 6 Primary Date Three ways to collect primary data include: Survey Observation Focus group Primary data becomes secondary data when it is published.

DESIGN A SURVEY Length of questionnaire Questions Chapter 6 DESIGN A SURVEY Length of questionnaire Questions Clear Easy to answer Only important questions It is important to define the question you want your market research to answer other wise you might conduct research on the wrong issue.

Questionnaire A good questionnaire is: Chapter 6 Questionnaire A good questionnaire is: Clear Relevant questions that are easy to answer People are more inclined to answer short questionnaires because they don’t take much time.

Chapter 6 Chapter 6.2 Assignment Notes – Answers for assignments are throughout the notes, make sure you read them. Checkpoint pg 139 Checkpoint pg 141 Checkpoint pg 142 Thinking Critically #1-3 pg 142 ALL DUE AT THE END OF CLASS, THIS IS A TEST GRADE!!!!!!!!!! Answer in complete sentences

Lesson 6.3 IDENTIFY YOUR COMPETITION Chapter 6 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 Chapter 6 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

DIRECT AND INDIRECT COMPETITION Chapter 6 DIRECT AND INDIRECT COMPETITION Why should Entrepreneurs analyze both direct and indirect competitors? Both direct and indirect might take customers from them.

COMPETING WITH LARGE BUSINESSES Chapter 6 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.

Chapter 6 Retail Businesses Ways you could attract customers to retail businesses may include: Extended hours Birthday cards Frequent buyer programs Personal Notes Thank you cards Store Specific credit cards Coupons Layaway program

STUDY INDIVIDUAL COMPETITORS Chapter 6 STUDY INDIVIDUAL COMPETITORS Price Location Facility Strengths Weaknesses Strategy

Analyzing Competitors Chapter 6 Analyzing Competitors Purpose To figure out how to get customers to buy from your business Why can customer feedback be considered a type of market research? It is a valuable type of market research because it is coming from customers who care enough about your company and product to communicate with you.

STRATEGIES FOR MAINTAINING CUSTOMER LOYALTY Chapter 6 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

Chapter 6 Chapter 6.3 Assignment Notes – Answers for assignments are throughout the notes, make sure you read them. Checkpoint pg 144 Checkpoint pg 145 Checkpoint pg 147 Thinking Critically #1-3 pg 147 ALL DUE AT THE END OF CLASS, THIS IS A TEST GRADE!!!!!!!!!! Answer in complete sentences