Market Research

Listen To The Consumer Your market consists of potential customers for your product or service. Market research is how you find out who these customers are and what they need. Business owners ask consumers questions Listen carefully to their answers You want to get into your customers’ head and find out what they really think about: Your product Your logo The name of your business Your prices Your location Your promotional offers

SWOT Analysis Strengths Weaknesses Opportunities Threats Good marketing relies on good plans Conduct a SWOT Analysis An assessment that lists and analyzes the company’s strengths and weaknesses. Also includes the opportunities and the threats that surround it. SWOT – Strengths, Weaknesses, Opportunities and Threats Listing of everything that can foster the success and what can make it fail. Strengths Weaknesses Opportunities Threats

SWOT Analysis This internal and external awareness will help a business identify weaknesses and prepare to handle threats Competition Changing marketplace An accurate analysis also will help a company be more competitive because it provides guidance and direction. Allows a company to develop strategies around the SWOT analysis

Identifying and Analyzing Markets Businesses look for ways to connect with current and potential customers. The surest way is to know these people well Where they live Their income level Age Ethnic background Activities Values What interests them When a company looks at its customers this way, it can identify groups of people who have many things in common

Identifying and Analyzing Markets Marketers analyze groups of customers to see if any of them can be further broken down into smaller, more precise clusters The process of classifying people who form a given market into even smaller groups is called market segmentation. Marketers ask, “Which of these segments should we target?” Usually too costly to target all the potential target market Important to identify those markets in which the company has an advantage that enables it to survive against its competition over a long period of time Marketers call this a situation a sustainable competitive advantage

Your Research Method Is Important The method you use may affect the answers you get Some may be less honest when you interview them face-to-face May create embarrassment for some Handing out surveys creates anonymity

Research The Market Before Opening Your Business Don’t begin until you have researched your market thoroughly Be open to criticism Not always pleasant to hear, but can be valuable Can help fine tune your business

Researching Your Market Segment Once you have chosen your market segment, you can design a survey and begin market research. Some questions to ask: Would you buy this product or service? How much would you be willing to pay for it? Where would you buy it? How would you improve it? Who are my closest competitors? Is my product/service worse or better than those of my competitors?

Who Is In Your Market Segment? Who is your market? Everyone in the school? Friends? Family members? Neighbors? People online? Which segment of your market should you target? Refer to your marketing vision What is the chief benefit you want to show your customers? Which customers in your market would be most interested in this benefit?

Who Is In Your Market Segment? A market segment is composed of consumers who have a similar response to a certain type of marketing. For example: In the cosmetics industry: One segment responds positively to luxuriously packaged, expensive products One segment is most responsive to products that claim to make customers look younger Another wants low prices A company that recognizes these segments and chooses one or two to market will be more successful that one that tries to sell cosmetics to every single woman in the country.

Target Market Demographics Facts about groups of people are called demographics. Information is found Internet research Magazine Articles Business Library

Demographics Demographics refer to statistics that describe a population in terms of personal characteristics Age Gender Income level Marital status Ethnic background Education occupation

Demographics Age Gender Income Marital Status Ethnic Background Marketers can easily use age to segment the market by creating age ranges. Gender Gender helps to create market segments as well. Income Marketers want to know how much money they have to spend on different products Look for two types of income Disposable Money left after taking out taxes Discretionary Money left after paying for basic living necessities (food, shelter, clothing) Marital Status Ethnic Background

Geographics Geographics refers to segmentation of the market based on where people live. Relates closely to demographics because of the similarity among people who live in a certain area To segment a market geographically, you can refer to local, regional, national, or even global markets

Psychographics Psychographics involves grouping people with similar lifestyles, as well as shared attitudes, values, and opinions. Consumer lifestyles include how people spend their time and money Attitudes, values, and opinions require special research to learn more about a group’s personality traits and motivation Activities A good way to get a feel for market segmentation by activities is to visit the magazine section of a bookstore. For each interest group and activity, you will find at least one related magazine, which represents a market segment. Attitudes Consumers’ attitudes, such as taking responsibility for one’s health, eating healthier, and becoming physically fit, are trend-setting issues for marketers in the twenty first century Personality & Values More advanced study of psychographics includes the study of personality characteristics and values.

Behavioral Segmenting the market based on product related behavior involves looking at the benefits desired by consumers, shopping patterns, and usage rate. How Marketers Use Consumers’ Behavioral Patterns Study shopping patterns to determine usage rates Companies classify their customers according to the percentage of sales each group generates Apply 80/20 rule – 80% of a company’s sales are generated by 20% of its loyal customers

Types of Market Research General Research Check libraries, city agencies, and other resources for information Research competition in the area What are they selling? What are the challenges? What has been successful?

Types of Market Research Statistical Research Statistics are facts collected, analyzed and presented as numbers. Age Annual income Ethnic or religious background Gender Geographic location Interests Occupation Types of dwelling (house or apartment) Examples: In our class we have 17 males and 11 female. This means that 61% of the class are male and 39% of the class are female.

Types of Market Research Industry Research Search the Internet Look for recent articles on trends in the industry and its major players by using an Internet search engine. Look on your competitors’ web sites to find their annual reports. These are likely to have valuable industry information. Visit the Internet Public Library at http://www.ipl.org/div/subject/browse/bus82.00.00/ Interviews Interview an executive about the industry and trends Local Small Business Administration (SBA) office Local Chamber of Commerce Business schools at local colleges Libraries Career centers

Dealing With Criticism Criticism can be difficult to hear – particularly when its about your business. Don’t take criticism personally. Keep an open mind. Use active listening techniques Ask clarifying questions Paraphrase the criticism Be open to advice Ask the critic what solution they may offer Stay calm and listen for helpful information

Do You Know Ten People Who Love Your Product? Not everyone has to like your product. Important for SOME to love it. Example: Not everyone loves hip hop clothing, but Daymond John knew some that loved it. He created FUBU clothing line and turned into a $350 million business.

Make Market Research Ongoing Market research is not something you do only once. Tastes and desires change as new ideas and products come out. Continue to survey as you operate your business Keeps you current with their needs and how they feel about your product.

Market Research Avoids Costly Mistakes Ask customers what they want Determine needs and wishes regarding the Four Ps. Product Place Price Promotion