1. Doing Market Research
Chapter 6, Section 1

2. Market Analysis
Markets for products and services are found within and across industries
Industry: collection of businesses that are categorized by a specific business activity, such as transportation, electronics or food services.
Value chains: support a common line of products or services that satisfy market demands
Located within an industry
Include: raw material producers, manufacturers, suppliers, distributors, retailers, & anyone who deals with other businesses in the industry

3. Market Analysis Market: customers for a particular product or service.
Examine the market from two different perspectives
Identify prospective customers and determine their buying habits
Analyze the industry & assess the chances for success within it

4. Industry Factors useful in understanding the nature of an industry
Carrying Capacity: the way to understand the industry’s ability to support new growth.
Uncertainty: the degree of stability or instability in an industry
Complexity: the number and diversity of contacts with which you must deal to do business
Often global, very competitive, and costly to enter
Stage of Life Cycle: include birth, growth, maturity, and decline. Knowing the stage of the industry will allow for a business strategy that is compatible with that life cycle

5. Target Market & Customer
Target Market: a specific group of customers whom a business wishes to reach
Market Segmentation: the process of grouping a market into smaller subgroups defined by specific characteristics.
Market Segments: subgroups of buyers who have similar characteristics
Allows businesses to customize product offerings and create market strategies to specific groups

6. Ways of Segmenting Geographics: based on where they live.
Demographics: personal characteristics of a population. (age, gender, family size, family life cycle, income, occupation, education)
Psychographics: based on social and psychological characteristics. (personality, values, opinions, beliefs, motivations, attitudes, lifestyle elements)
Buying Characteristics: knowledge & experiences with the actual good or service. How and how often customers buy.

7. Guidelines For Segmenting
Should be measurable
How many potential buyers
Should be large enough for a potential profit
Should be reachable
Get information and availability about the product to interested buyers
Deliver the product to the customer. (mail & stores)
Should be responsive
Some indication that people are willing to buy the product or service

8. Conducting Market Research
Market Research: collection and analysis of information aimed at understanding the behavior of customers in a certain market.
Identify the focus of the research
Select the type of research
Exploratory: used when very little is known about the subject
Descriptive: done when you want to determine status.
Creating customer profiles
Historical: studying the past

9. Conducting Market Research
3. Start the research process
Identify your information needs
Obtain secondary resources
Secondary data: information already collected by someone else
Keep questions in mind:
What are the demographics of the customers
What are the psychographics of the customers
How large is the market
Is the market growing
Is the market affected by geography
How can you reach your market
How do your competitors reach the market
What market strategies have been successful within these customers

10. Conducting Market Research
Collect Primary Data: information you collect yourself.
Common methods: interviews, observation, surveys
Questions to keep in mind
What are the demographics
Would potential customers purchase your product or service? Why or Why not?
How much would customers purchase
When would customers purchase
How would customers like to fine the product or service
What is it that customers like about your competitors’ product and services

11. Conducting Market Research
Organize the Data
Categorize data based on questions
Create charts & graphs
Analyze the Data
Ask yourself basic questions
Is there a market for the product or service
How big is the market
Will the industry support such a business
What do substitute products/services reveal about demand for the product/service
What do customers, end users, and intermediaries predict the demand will be