The document summarizes the process of conducting a community market analysis to support economic development efforts. It outlines understanding the market through trade area analysis, demographic and lifestyle analysis, and business and consumer surveys. It also describes analyzing business opportunities by sector and putting the research findings to work through niche development, business retention and recruitment, entrepreneurship support, and benchmarking progress. The overall goal is to provide reliable data and a foundation for strategic economic development.

1. Jessica Beckendorf, Bill Ryan, and Christian Schmieder
Community Research to Support Economic
Development Efforts
Presentation at the Wisconsin Downtown Action Council
Conference, La Crosse, WI October 27, 2016

2. Purpose of a Market Analysis
1. To explore business development ideas with reliable
data that describes the market.
2. To research issues specific to your particular
community.
3. To provide a foundation for economic development
strategies.

3. How do we fill
storefronts
and reuse
downtown
space?

4. Is there
potential for
downtown
housing?

5. How are
consumers
changing?

6. How can we
assess
potential for
businesses
development?

7. What image,
branding and
marketing
opportunities
are there?

8. How can we
retain and
expand
existing
businesses?

9. What are
unique and
realistic
downtown
businesses
ideas?

10. How can the
physical
environment
be improved?

11. What dining
options would
do well
downtown?

12. Outline of the Process
I. Understanding the Market
II. Analysis of Opportunities by Sector
III. Putting Your Research to Work

13. http://fyi.uwex.edu/downtown-market-analysis/

16. I. Understandingthe Market
Trade Area Analysis
Factors to Consider:
• Population
• Proximity of competing
centers
• Local mix of businesses
• Local destination attractions
• Traffic patterns
Tools to Use:
• Focus groups
• Mapping using geographic
features (distances,
highways, drive-times, etc.)
• Mapping using customer
addresses and zip codes
A trade area is the geographic area from which a community
generates the majority of its customers. A community may
have both a convenience and a destination trade area.

17. Establishing Trade Area(s) Using GIS

18. Establishing Trade Area(s) Using GIS

19. Establishing Trade Area(s) Using GIS

20. Establishing Trade Area(s) Using GIS
Larger communities
will have a primary
(convenience) and
secondary (destination)
trade area.

21. I. Understanding the Market
Demographic & Lifestyle Analysis
Demographic Data:
• Population and households
• Housing ownership and value
• Income
• Age, gender and ethnicity
• Educational attainment
• Employment
Lifestyle Data:
• Households in a trade area
are segmented into unique
clusters that describe their
lifestyle, characteristics
• Examine spending propensity
for a variety of goods and
services
Demographic and Lifestyle data can provide insight into local
consumer buying behaviors and preferences. Comparison are
made to state and national averages.

22. Analysis of Demographics Using Tables and Maps

23. Analysis of Lifestyle Data
Households in a trade area can be segmented into
unique clusters that describe their demographic,
lifestyle, media and purchasing characteristics. These
systems help you know the potential customer in your
area including what they buy and how to reach them.
Free zip code data:
• Community Tapestry by ESRI Business Information
Solutions).
http://www.esri.com/data/esri_data/tapestry
• Claritas PRIZM by Nielsen.
http://www.claritas.com/MyBestSegments/Default.jsp

24. I. Understanding the Market
Local and Regional Economic Analysis
• Industry Concentrations and Employers
• Labor Force and Employment Levels
• Entrepreneurial Activity
• Business Climate Analysis
• Real Estate Activity
• Transportation Patterns
• Tourism and Community Attractions
• Quality of Life Measures
Economic data can help describe downtown’s position in the local and
regional economy and identify factors that are of competitive advantage.

26. Research Design
Mail
Surveys
Personal
Interviews
Focus
Groups
Online
Surveys
Intercept
Surveys
Phone
Surveys
OPEN CLOSED

27. Research Design
Question DesignOPEN CLOSED

28. I. Understanding the Market
Business Owners Survey
Purpose of Questions:
• Provides information on
business needs to support
retention and expansion
efforts.
• Allows business community
to share ideas for new
economic activity in the
community.
Possible Methods to Use:
• Written Survey
• Telephone Survey
• Web-Based Survey
• Business Visitations
• Focus Groups
A business owner survey invites business owners to share their
perspectives regarding the current and future economic health
of the business district.

29. Provides Information on:
• Who they are and how to
reach them.
• Where, when and why they
shop for various goods and
services.
• How downtown can be
improved in terms of retail as
well as other uses.
Possible Methods to Use:
• Written Survey
• Telephone Survey
• Web-Based Survey
• Social Media
• Intercept Surveys
• Focus Groups
A survey can help you understand the attitudes and shopping
behaviors and preferences of current and potential consumers
specific to your trade area.
I. Understanding the Market
Consumer Survey

30. Surveys – Download Examples and Templates
Toolbox includes:
• Question-bank to help you
determine what questions are
most relevant to your analysis
• Downloadable survey templates
that can be customized for your
community.
• Examples of surveys that have
been customized and
implemented in various cites.

31. Structure of Sessions:
• 7-10 people with common characteristics (perhaps same
market segment)
• Minimum of three groups
• Conducted by a trained facilitator
• Non-threatening environment
• Used to understand human behavior
• Not used to collect facts
A carefully planned discussion to collect qualitative data about
feelings and perceptions regarding the downtown area.
I. Understanding the Market
Focus Groups

32. Identifying Comparable
Places:
• Similar in Demographics
• Similar in Location
• Similar in Urban and Rural
Characteristics
• Similar Function
Identifying Successful
Districts:
• Knowledge from existing
study group members
• Recognized downtown
successes
• Research websites of
downtown or Main Street
organizations
Examining Similar Cities and their Business Districts is useful in
identifying potential business opportunities and economic
development strategies.
I. Understanding the Market
Peer City Comparisons

33. Tools for estimating demand and supply for selected business
categories. Considers both quantitative and qualitative factors.
Realistic
Business
Opportunities
Demand Supply
Reasonableness
Check
II.Analysis of Opportunities by Sector
Examining Business Opportunities

34. Retail Demand Based Solely on Resident Population
Comparison with Wisconsin cities/villages with 2,500-5,000 Pop. (Average of 60 Downtowns)
NAICS Description Number Sales (000's)
Full-service restaurants 4.57 2,515
Beauty salons 3.52 573
Drinking places (alcoholic beverages) 3.08 784
Gasoline stations 1.72 6,295
Other amusement (bowling, golf, fitness) 1.63 779
Automotive mechanical & electrical repair 1.30 491
Gift, novelty, & souvenir stores 1.08 378
Used merchandise stores 1.08 466
Grocery stores 1.07 8,084
Automotive parts, accessories, & tire stores 1.05 1,032
Appliance, television, & other electronics stores 0.93 1,459
Florists 0.88 210
Barber shops 0.78 71
Sporting goods stores 0.73 348
Pharmacies & drug stores 0.72 1,720

35. Retail Demand Based on Spending of Various Market Segments

36. http://fyi.uwex.edu/innovativedowntownbusinesses//
36
“Reasonableness Check”
• Case studies of downtown retail
and service businesses that:
build on downtown’s character
and
Co-exists with big box stores.
• Searchable by type of business

37. Analysis of Other Property Uses
 Restaurants
 Arts and Entertainment
 Housing
 Office Space
 Lodging
37
Includes techniques for estimating demand and supply for
various downtown uses. To the extent possible, opportunities
are examined in terms of quantitative and qualitative factors

38. Using Your MarketAnalysis
 Niche Development
 Image, Branding, Marketing
 Space Usage
 Business
Retention/Expansion
 Business Recruitment
 Entrepreneurship
 Benchmarking
38
Market analysis findings can provide a solid and objective
foundation for launching economic development strategies for
your district.

39. III. Putting Your Research to work
Niche Development
A niche is a critical mass of businesses serving a common
market segment(s) that is also jointly marketed and
promoted.
• Niche strategies allow a downtown to gain a dominance in
certain business categories
• Niches work well in highly competitive business
environments (market differentiation)
• Niches require cooperation between local businesses
(education about niches)
• Niches can be based on consumer segments or product
segments

40. Reading OH
Pop. 11,000
Suburb of Cincinnati
Niche: Weddings
Focuses on bridal shops
and supporting
businesses such as
florists, photographers,
jewelers, and stationary
stores.

41. III. Putting Your Research to work
Image, Branding, Marketing
Uses market information to learn
about your downtown’s key
consumer groups and how to
reach and serve them better.
1. Define Your Key Markets
Segments and Market
Position
2. Improve the Image and
Develop a Brand for
Downtown
3. Implement Marketing
Programs

42. III. Putting Your Research to work
Space Usage
Successful downtowns create the optimal mix of building and
space uses.
Downtown Business Arrangement
• "A-Street" and "B-Streets"
• Pedestrian interaction.
• Consider auto access.
• Consider walking distance and use of both sides of street
• Street-level and upper-level units.
• Clustering of certain businesses together so that both the
customers and business operators benefit.

43. Compatibility
of Mixed
Uses
Entertainment:
Theaters
Entertainment:
Bars&
Restaurants
Retail:
Comparison
Retail:Specialty
Retail:
Convenience
Hotel
Offices
Residential
Residential       
Offices -      
Hotel       
Retail: Convenience       
Retail: Specialty Stores       
Retail: Comparison       
Entertainment: Bars &
Restaurants
      
Entertainment: Theaters      - 
Level of Market Synergy in Mixed Use Development
 Strong
 Weak or Uncertain
- Neutral, Absence of Synergy
Potential Market Conflict
Source: Real Estate Market Analysis: A Case Study Approach

45. III. Putting Your Research to work
Business Retention/Expansion
Roles of a business retention and expansion team
1. Forming a business retention and expansion team
2. Identifying warning flags
3. Offering individual business assistance
4. Developing business retention and expansion strategies

46. III. Putting Your Research to work
Business Recruitment
The key is to honestly demonstrate that the community is a
profitable place to do business.
• Step 1: Assemble a Team
• Step 2: Create a Supportive Business Environment
• Step 3: Assemble Recruitment and Marketing Materials
• Step 4: Design an Ideal Tenant Mix
• Step 5: Identify Prospective Tenants
• Step 6: Contact Prospective Tenants
• Step 7: Close Deals with Prospects

47. III. Putting Your Research to work
Entrepreneurship
Use your market analysis to support entrepreneurship in
your downtown or business district.
1. Use information from your market analysis to find clues
about prospective entrepreneurs.
2. Use information to examine the strengths and
weaknesses of your district’s infrastructure as it relates
to entrepreneurship.
3. Your market analysis may provide ideas on how to build
connections among entrepreneurs and the community.

48. III. Putting Your Research to work
Benchmarking
Statistical data assembled in your market analysis can be used
to measure progress
• Demographics
• Employment Indicators
• Investment Indicators
• Housing
• Office Space
• Arts and Entertainment
• Lodging
• Retail and Services
• Restaurants
• Transportation and Safety

49. When done, materials to support your business development efforts
49

50. For More Information
University of Wisconsin-Extension
Center for Community Economic Development
610 Langdon Street, Room 329, Madison, WI 53703-1104
bill.ryan@uwex.edu