Entrepreneurship

Lecture - 6 Market Research for Entrepreneurs

Market Research?

Market Research  Who your customers and potential customers are  What do they want  Helps you get to know your customers  Through market research business owners ask questions from consumers and listen to their answers  Market research can vary from a simple survey of friends and neighbors, which can be completed in one day, to detailed statistical studies of a large population over a long period of time

Market Research (contd.)  Suppose that you have invented a new type of _____ and you want to sell it in SZABIST, which has above a 1,000 students. One way to research your market would be to survey a random sample of a number of students, by showing them the prototype.  What questions would you ask them?

Types of Market Research  Surveys  General Research (Secondary)  Statistical Research

 Large companies will spend a great deal of time and money on market research in order to get a product “just right”  Ford & Chrysler each spent millions on market research before producing, respectively, the Mustang and the minivan. It was worth millions of dollars to these companies to determine whether the public wanted these vehicles, because producing them was going to cost tens of millions  Both Mustang and the minivan were successful Market Research Successes

 One of the best known examples of market research failure, however, was Ford’s 1956 Edsel.  The car was introduced with great ambitions, but was so poorly made and clumsily designed that very few were purchased.  When the Edsel made its national debut on a live television special, in fact, It wouldn’t start  Two years and $450 million later, Ford finally pulled the plug on Edsel’s manufacturing Market Research Failures

 Say you created a T-Shirt design and silkscreened it on five dozen plain white t-shirts. After six weeks, you managed to sell only six of them and your friends tell you that they would have bought your product if:  The T-Shirt came in red or blue  The shirt was available in a different size  The shirt came in a different style  The shirt was silk-screened with a different design  Example: Threadless.com Scenario – 1

With a little market research, you could have determined your customers’ needs and wishes before you made the shirts. You would have sold many more.

Know Your Competition

 Researching the competition is another important part of market research  Have you found out who else offers your product/service in your area?  Visit your competitors’ stores and websites.  Talk to their customers  Buy something from you competitors, and make sure you get on their mailing lists. This way you will be aware of their sales and other promotions Competition

 Why is your product going to beat the competition?  Remember, to develop a brand, because you have to decide what you want your company’s name to stand for in the customer’s mind  What is your company’s competitive advantage?  How does it distinguish itself from the competition? Post – Competitor Analysis

 Why is your product going to beat the competition?  Remember, to develop a brand, because you have to decide what you want your company’s name to stand for in the customer’s mind  What is your company’s competitive advantage?  How does it distinguish itself from the competition? Post – Competitor Analysis

 Awareness  Information Search  Evaluation of alternatives  Decision to purchase  Evaluation of purchase Analyze the Buying Process

Customer Analysis  Who are your customers (can be of multiple levels)?  What do they want?  Where would they buy it?  How is your product going to satisfy their need?  What price are they willing to pay?  How would you want to position your product/service? Premium / Affordable? Class Assignment (page-1)

Competitor Class Assignment (page-2)

Prepare cut-throat battle for your competitors!