1. Entrepreneurship CHAPTER 6 SECTION 1

2.  You cannot satisfy customers if you do not know who they are or what they want.  Industry – businesses that are categorized by a specific business activity  Value chains – support a common line of products or services

3.  The industry is the environment in which your business will operate.  Four factors useful in understanding the nature of an industry: 1.Carrying capacity – can it support expansion 2.Uncertainty – stable or unstable 3.Complexity – number and diversity of contacts 4.Stage of life cycle – birth, growth, maturity, decline

4.  Market – people willing and able to purchase a product or service  Target market – particular group of customers that interests a business  Market segmentation – grouping a market into smaller groups defined by specific characteristics

5.  Market segments – subgroups of buyers who have similar characteristics  Ways to segment the market: 1.Demographics – personal characteristics of a population 2.Geographics – where they live 3.Psychographics – social and psychological characteristics 4.Buying behaviors – what do they buy

6.  Industrial markets – buy goods and services for businesses  Used in production of other goods.  Guidelines for segmenting the market: 1.Measurable 2.Potentially profitable 3.Reachable 4.Responsive

7.  Market research – collection of information to understand a particular market  Make sure the information gathered is useful information.  Three ways to structure research: 1.Exploratory research – when you know very little about a subject (use a focus group)

8. 2. Descriptive research – when you want to determine status (questionnaires and interviews) 3. Historical research – study the past  Planning your research: 1.Identify your information needs 2.Obtain secondary resources (secondary data) 3.Collect primary data 4.Organize the data (charts and graphs) 5.Analyze the data