Market Research and Competitive Analysis for Start up Companies

Market Research and Competitive Analysis for Start up Companies Prepared by Tonée Picard for San Jose State University Presented on March 25, 2004

Agenda
Introduction
Tonée Picard and Market Research
Practical techniques vs. “by the book”
Reiterative points about marketing
Definitions and thought processes
Examples of market research presentation
Business plan outline sample
Q&A

Your Presenter Today – Tonée Picard
Professional experience
President, Lighthouse Venture Forum
Education and mentoring organization for technology entrepreneurs and young businesses
VP, Business Development, Thuridion
Responsible for strategy, marketing, business development
Strategist for small growing companies
Organizational Development
Marketing strategy
Business processes
Outsourcing strategies
2 start up companies (Dascom and CREW)
Education
BS/BA, Business and management, University of Phoenix
MBA, Golden Gate University

What is market research
Just a set of activities?
Focused on defined goals
Refines the direction of the 5 P’s
Product, promotion, place and price (and positioning)
View into social processes?
Who, what, when, where and why!
Necessary?
Strategy does not take place in a vacuum
Valued by organizations?
Successful organizations..
Market research supports every department
Yes! The bridge to the customer!

Market Research Fallacies
MR is boring
MR is unnecessary
MR is for analysis geeks
MR is a waste of time and $$
MR is easy…ha!

Intent of market research
What results are you looking for?
Define measurement of market potential
Determination of market characteristics
Market share analysis
Sales analysis
Business trends
Refine opportunities to pursue and “how”
Market segmentation and niche markets
Features and benefits required for market success

Marketing 101 Generic market definition Target Product Market Customer or user need (Niche) Customer type (segmentation) Demographics/ Market size Product or Service + + +

Why do Market Research
Knowledge is King
Learn from others…you will have plenty of your own lessons
Find “strategic” competitive advantages
What are your barriers of entry? What are the competitors?
Develop competitive differential opportunities
Why are you better? How can you be the best?
Understanding of core competencies and core rigidities
Develop pricing models
Targeted alliances/partnerships that extend reach
Create the product roadmap
Features, benefits to fit customer/consumer need
Support the creation of the company/product/service vision
Feed the machine with information
Identify unmet needs
Product extension into current market
Extension into new markets

Market Research is the Critical component to any business plan
Know the self
Know the customer
Know the market
Know the industry
Know the government
OBJECTIVE: To develop an informed business in a vibrant high growth market through strategic competitive advantages

Types of market research
Exploratory research
Review of literature (pubs, online, mags)
Discussion with experts, officials, friends and family
Study of competitors or case studies in similar industries
Descriptive research
Targeted at specific question or hypothesis
Surveys/questionnaires
random sample from a relevant population
Focus groups
Industry or product specific (usually expensive)
Use your network! As a student…ask for help from a targeted CEO
Experimental research
Looking for cause and effect (i.e. pharma research)
Watching a user group “use” the product
Story boarding service offerings/product offerings to group of targeted consumers

Targeted research topics and why?
Advertising research
Motivation research
Ad effectiveness
Business Economics and Corporate research
Forecasting
Business Trends
Pricing studies
Acquisition/merger research
Product research
Product acceptance or potential
Competitive product studies
Testing of existing products
Packaging design, etc.
Sales and Market research
Market potential
Market share analysis
Market characteristics
Sales Analysis
Distribution sales channel studies
Test marketing/focus groups
Promotional research and studies
Financial research
Turnover and ratio analysis (public companies annual reports)

Competitive research
Direct competition – important
Indirect competition – critically important
What to look for..
Map their strategy
Differentiate your offering
Find pricing advantages
Develop barriers to entry
How to fill the “whole” need for customer/consumer
Financial stability
Market share and focus on new markets
where are they going
Take the short and long term view

Short term advantages
Refined tactics for customer reach
Measurement of market potential
Market characteristics
Market share
New product acceptance
Produce evaluation
Improvements
Extensions

Long range advantages
Planning, goal setting, developing strategies
Understanding business trends
Global market opportunities
Forecasting growth
Management uses MR to reduce errors in decision marketing, expand sales and locate new opportunities
Uninformed decisions can be failures
Market research is done so that all marketing efforts can be strategically integrated into the wants and needs of customers.

Gorilla market research
School libraries and Internet
Observation
Customer visits
Listening to tech support calls
Opinions of sales personnel
Networking
Use your gut feelings (intuition)

More expensive options
Scientific methods
Systematic and accurate investigation with objective analysis of results
Goal to reduce uncertainty and risk of error
Research is reliable only if it can be repeated by another with the same results
Surveys
Mail, mall, telephone, focus groups
High priced information 3 rd party market analysis
Gartner group, IDS, Industry specific ($5,000-$100,000)

Primary Market Research
Surveys
Telephone, mail, in-person, (email)
Focus groups
Random sampling of population
Scientific approach for primary market research
Define the problem
Don’t confuse problems w/a symptom
Analyze the situation
What do you already have and what do you need
Use secondary data
Refine the “specific problem”
Attain and interpret the data
Solve the problem

Secondary Market research tools
The internet
Competitive research
White papers
Press releases (statistics”
Industry tradeshows
School databases
Industry analysts
Gartner Group
IDS
Internal records (sales, etc)
Libraries
Government
SIC codes/Industry codes
Demographics
Commercial firms (competitors, partners, “like” companies)
Press releases, conferences, tradeshows
AC Nielsen, Dun and Bradstreet
Trade, professional and business associations

Decisions driven by market research
Overall company vision
Product or service positioning
Product or service innovations/extensions
Investment in marketing at segments of market
Understanding of potential distribution channels
Branding
Credibility
Lock in or switching costs

What are you looking for…
Basic understanding, knowledge, facts, trends
Markets are uncertain – find your niche
Technology is complicated – find your focus
Competitors are moving targets – understand them
Demographics – who, what, when and why
Where you fit in the product/service life cycle
Introduction of new idea, growth market, shakeout (M&A opportunity), mature market (commodity) or declining market
Who are your target markets? The adoption process
Innovators, early adopter, early majority, late majority or laggards (Crossing the chasm…Geoffrey Moore)
Answers will effect your WHOLE marketing strategy…if you don’t understand these concepts and where you fit in…enter at your own risk

SWOT Analysis
Strengths
Your competitive strengths (would include barriers to entry)
Patents, management team, financial resources, market leader, etc.
Weaknesses
Your weaknesses (competitor strengths)
Funding, branding, lack of partners, etc.
Opportunities
Market opportunities
Logical product extensions, high growth market
Threats
Competitive threats
Microsoft is a competitor
Economic, demographic, etc.
Baby boom retirement, interest rates, etc.
Ideas for presentation of information

“ Superior” engineering skills. Traction in distribution channels Barriers to entry - patents. Economy in the technology industry Ability to position company as an “acquisition” candidate. Lack of strategic partnerships with other companies for bundling. Management team has taken companies public Microsoft has low barriers to entry No existing market leader yet. Initially it is a low margin product. Volume and market share are critical. Switching costs (emotional and time) Time to market is critical path to success. High growth market Ability to brand–good product names are taken. Product champions exist; excellent early testimonials. Competition is well funded. Logical product extensions exist. Funding – need asap Ease of use (intuitive GUI). Threats Opportunities Weaknesses Strengths

Competitive Grid ? 80% 10% - 75% 10% - 75% 10%-25% 90%+ Accuracy Free, but painful No Yes Yes No Yes Yes Microsoft No No Yes Yes Yes End User Product ? No No No Yes Adaptive Learning $75,000 + $750/seat ~$4,900 Free Free $39/seat Price Point Yes w/ integration Yes P2P No Yes Enterprise server ? No No Yes Yes Individual client Yes No No No Yes Classify beyond spam ? No No Yes Yes Personalization Banter Brightmail Cloudmark Mail Frontier XZY Inc.

Presentation of Market Research filtering classification rules/signature based machine learning prioritization functionality technology Banter intelliMail Brightmail Vipul’s Razor Inbox Protector McAfee Spamkiller Mail Frontier Cloudmark SpamNet

Viewed as Situation Analysis Know the operating environment!
Strategies/objectives
Financial condition
Market share
Target markets
OT (part of SWOT)
Pain points
Market
Segmentation
Niche (very focused)
Motivations – what will make them buy!
Government/Political
Economy
Funding trends
Environment trends
Social trends
Technology trends
Competitor Customer External forces

Sample Business Plan Outline
Executive summary
Company description
Organizational plan
Outsourcing, in-sourcing
Management
Product
Industry Analysis and Trends
Target Market
Segmentation
Niche
Competition
Competitive Grid
Summary of OT (part of SWOT)
Strategic position and risks
SWOT analysis
Marketing strategy
5 P’s
Financial projections
Important: Market share will feed financial forecast
Potential exhibits
Management bios
Product technology overview
Product timeline (if applicable)
Screen shots (if applicable)
Organizational structure (org chart)
Product pricing
Detail of distribution channels
Detail competitive threats and resolutions
Competitive core competencies
Barriers of entry and detail
Other deals that are critical to your success

General starting points for market research
Business magazines
Business Week
Business 2.0
Fast Company
General business pubs
Wall Street Journal
Red Herring
Economist
Industry trade pubs
PC Week
Info Week
Retail specific
Government pubs
SIC industry codes
Online
Ask Jeeves, Google,
Yahoo! Finance
Ratio analysis and competitive analysis
SJSU libraries
D&B reports

Questions to ask?
Who are your biggest competitors?
Who are your customers?
What does it take to get to your customer?
What does your product/service solve?

Sample of Local Organizations
SVAMA
Silicon Valley American Marketing Association
AMA
American Marketing Association
SVASE
Silicon Valley Association of Start up Entrepreneurs
WITI
Women in Technology International
Churchill Group
Largest Silicon Valley networking organization
SD Forum
Software Developers Forum

Words of wisdom
What counts most is not being right the first time, but how quickly a company can learn and modify its path. Jakki Morr, Marketing of High Technology Products and Innovations
Grey markets are the most important…that area not fully understood must be respected. Prof. Charles White, Golden Gate University
Knowledge is a weapon…use it to win. Unknown
Q & A

Market Research and Competitive Analysis for Start up Companies

by Timothy212

Accessibility

Upload Details

Usage Rights

2 Embeds 9

Statistics