USE TECHNOLOGY

LESSONSLESSONS

ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING

Chapter 6Chapter 6

IDENTIFY AND MEET A MARKET NEED

6.16.1 The Value of Market Research

6.26.2 How to Perform Market Research

6.36.3 Identify Your Competition


Chapter 6

Slide 2

Lesson 6.1THE VALUE OF MARKET RESEARCH

Identify a target market by understanding your customers.

Research your market using primary and secondary data.

GOALSGOALS


Chapter 6

Slide 3

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.


Chapter 6

Slide 4

UNDERSTAND YOUR CUSTOMERCustomers 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.


Chapter 6

Slide 5

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.


Chapter 6

Slide 6

IDENTIFY YOUR TARGET MARKET1.1. Who are my customers: individuals or

companies?2.2. 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?

3.3. If customers are companies: What industries are they in?Where are those industries located?


Chapter 6

Slide 7continued

IDENTIFY YOUR TARGET MARKET4.4. What needs or wants will my product or service

satisfy?5.5. How many potential customers live in the area in

which I want to operate?6.6. Where do these potential customers currently buy

the products or services I want to sell them?

7.7. What price are they willing to pay for my products or services?

8.8. What can I do for my customers that other companies are not already doing for them?


Chapter 6

Slide 8

THE IMPORTANCE OF A CUSTOMER PROFILEA customer profile is a description of

the characteristics of the person or company that is likely to purchase a product or service.


Chapter 6

Slide 9

MARKET SEGMENTSGroups of customers within a large

market who share common characteristics are known as market segments.


Chapter 6

Slide 10

UNDERSTAND THE COMPETITIONKnowing about your competition will

help you define your target market.


Chapter 6

Slide 11

MARKET RESEARCHMarket research is a system for

collecting, recording, and analyzing information about customers, competitors, goods, and services.

Market researchers collect primary and secondary data.


Chapter 6

Slide 12

SECONDARY DATASecondary data is data found in

already published sources.


Chapter 6

Slide 13

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

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PRIMARY DATAPrimary data is information collected

for the very first time to fit a specific purpose.Questionnaire or surveyObservationFocus groups

Disadvantage of primary data


Chapter 6

Slide 15

Lesson 6.2HOW TO PERFORM MARKET RESEARCH

Identify the five steps involved in primary data market research.

Design a questionnaire.

GOALSGOALS


Chapter 6

Slide 16FIVE STEPS OF PRIMARY MARKET RESEARCHDefine the questionSelect a research methodCollect dataAnalyze dataDraw conclusions


Chapter 6

Slide 17

DESIGN A SURVEYLength of questionnaireQuestions

ClearEasy to answerOnly important questions


Chapter 6

Slide 18

Lesson 6.3IDENTIFY YOUR COMPETITION

Determine your direct and indirect competition.

Analyze the strengths and weaknesses of competitors.

Establish strategies for maintaining customer loyalty.

GOALSGOALS


Chapter 6

Slide 19

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


Chapter 6

Slide 20

COMPETING WITH LARGE BUSINESSESLarge 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

Slide 21

STUDY INDIVIDUAL COMPETITORSPriceLocationFacility StrengthsWeaknessesStrategy


Chapter 6

Slide 22STRATEGIES FOR MAINTAINING CUSTOMER LOYALTYListen and respond to feedbackOther strategies for maintaining loyalty

Superior serviceMore convenient hours than other

businessesEasy return policiesStore-specific credit cardsPersonal notes or cardsFrequent buyer programs

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