Market Research for a New Business

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This revision presentation provides an overview of the main methods by which a new business can research its target market and gain a better understanding of the needs and wants of target customers.

Published in: Business

Market Research for a New Business

  1. 1. Market Research for a New Business
  2. 2. Why understand customers? Because they are all different
  3. 3. Customers differ in many ways…• The benefits they want• Amount they are able to or willing to pay• Media (e.g. television, newspapers, websites and magazines) they see• Quantities they buy• Time and place that they buy
  4. 4. What a start-up needs to know?• How big is the market? (measured by sales, volume etc)• How fast is the market growing and what is the market growth potential?• Who are the existing competitors and what market shares do they have?• How is the market segmented? (“segments” are the different parts of a larger market – e.g. low price or high quality)• What kind of customers are there in the market? What are their preferences in terms of when and where they buy, what prices they pay and which methods of promotion are effective?
  5. 5. The answer – market research
  6. 6. Primary v Secondary data• Primary data – Data collected first-hand for a specific purpose by the entrepreneur• Secondary data – Data that already exists and which has been collected for a different purpose
  7. 7. Secondary data – main sourcesGoogle A great way of getting quick market research for freeGovernment Provide detailed insights on the economy and ondepartments many industry sectorsTrade associations Most industries have an industry association - they are a great source of market analysisTrade press & Essential reading for an entrepreneur,magazines particularly if he/she has little or no experience of the marketCompetitor websites & Valuable information on marketing activities ofmarketing materials competitorsMarket research Mintel and Keynote produce a wide variety ofreports expensive reports that analyse individual markets
  8. 8. Primary data – why?• Secondary data can provide much information for an entrepreneur, but there will always be gaps• Obtaining formal primary research data is time- consuming & expensive• So primary data is best used by a start-up to fill in the gaps
  9. 9. Primary data – main sources• Observation• Postal surveys• Telephone interviews• Online surveys• Focus groups• Face-to-face surveys• Test marketing• Experiments
  10. 10. Quantitative v QualitativeQuantitative Research Qualitative ResearchConcerned with data and Based on opinions, attitudes,addresses question such as “how beliefs and intentionsmany?”, “how often”, “who?”, Answers questions such as“when?” and “where?” “why”? “Would?”, or “how?”Based on larger samples and is, Aims to understand whytherefore, more statistically valid customers behave in a certainThe main methods of obtaining way or how they may respond toquantitative data are the various a new product or serviceforms of survey – i.e. telephone, Focus groups and interviews arepostal, face-to-face and online. common methods used to collect qualitative data
  11. 11. Remember The entrepreneur can learn much about customers needs simply by chatting tocustomers, rather than buying expensive market research
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