powerpoint Identify and Meet a Market Need.ppt

LESSONS
ENTREPRENEURSHIP: Ideas in Action © SOUTH-WESTERN PUBLISHING
IDENTIFY AND MEET
A MARKET NEED
6.1 The Value of Market Research
6.2 How to Perform Market Research
6.3 Identify Your Competition

Chapter 6
Slide 2
Lesson 6.1
THE VALUE OF MARKET RESEARCH
Identify a target market by
understanding your
customers.
Research your market using
primary and secondary data.
GOALS

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 CUSTOMER
Customers 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 MARKET
1. Who are my customers: individuals or
companies?
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. If customers are companies:
What industries are they in?
Where are those industries located?

Chapter 6
Slide 7
continued
IDENTIFY YOUR TARGET MARKET
4. What needs or wants will my product or service
satisfy?
5. How many potential customers live in the area in
which I want to operate?
6. Where do these potential customers currently buy
the products or services I want to sell them?
7. What price are they willing to pay for my products
or services?
8. What can I do for my customers that other
companies are not already doing for them?

Chapter 6
Slide 8
Determining your Target Market
Why is it important to determine who
your target market is?
Unless you understand who your target
market is and what types of products or
services they are looking for, you will
probably not be able to satisfy their wants
and needs.

Chapter 6
Slide 9
THE IMPORTANCE OF
A CUSTOMER PROFILE
A 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 10
THE IMPORTANCE OF
A CUSTOMER PROFILE
 The importance of a customer profile will help
you understand how to meet customer
demand. Understanding your competition will
help you identify unmet needs.
 Disadvantage of market segmentation
 You might market to a group who is not interested
in the product or might overlook a segment that
would be very interested in the product.

Chapter 6
Slide 11
MARKET SEGMENTS
Groups of customers within a large
market who share common
characteristics are known as market
segments.

Chapter 6
Slide 12
Mass Marketing
Advantages of Mass Marketing
Easy to prepare advertisements for and
reaches many people
Disadvantages of Mass Marketing
Does not target specific needs of
customers
Is not suitable for all products
Has nothing to make product stand out
from the competition

Chapter 6
Slide 13
UNDERSTAND THE COMPETITION
Knowing about your competition will
help you define your target market.

Chapter 6
Slide 14
MARKET RESEARCH
 Market research is a system for collecting,
recording, and analyzing information about
customers, competitors, goods, and services.
 Market researchers collect primary and
secondary data.
 If conducted properly, market research will
help entrepreneurs understand their target
markets and thus, satisfy the wants and
needs of the customers.

Chapter 6
Slide 15
Limitations of Market Research
Can be costly
Time consuming
Must be carefully analyzed so that
incorrect decisions are not made

Chapter 6
Slide 16
SECONDARY DATA
Secondary data is data found in
already published sources.

Chapter 6
Slide 17
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
Slide 18
Secondary Sources
Information you can find using
secondary sources include information
on:
Demographics
Economic trends
Industry forecasts

Chapter 6
Slide 19
PRIMARY DATA
Primary data is information collected
for the very first time to fit a specific
purpose.
Questionnaire or survey
Observation
Focus groups
Disadvantage of primary data
Time consuming
Expensive

Chapter 6
Slide 20
Difference between Primary and
Secondary market research data
Secondary data is found in published
sources
Primary data is information that is
collected for the first time to fit a specific
purpose

Chapter 6
Slide 21
Chapter 6.1 Assignment
 Notes – Answers for assignments are throughout the
notes, make sure you read them.
 Checkpoint pg 132
 Thinking Critically #1-5 pg 137
ALL DUE AT THE END OF CLASS, THIS IS A TEST
GRADE!!!!!!!!!! Answer in complete sentences

Chapter 6
Slide 22
Lesson 6.2
HOW TO PERFORM
MARKET RESEARCH
Identify the five steps
involved in primary data
market research.
Design a questionnaire.
GOALS

Chapter 6
Slide 23
FIVE STEPS OF
PRIMARY MARKET RESEARCH
Steps involved in conducting a market
research include:
Define Question – know what you want
and find out
Select Method – survey, observation or
focus groups
Collect Data – gather needed information
Analyze Data
Draw Conclusions – a plan of action

Chapter 6
Slide 24
Primary Date
Three ways to collect primary data
include:
Survey
Observation
Focus group
Primary data becomes secondary data
when it is published.

Chapter 6
Slide 25
DESIGN A SURVEY
Length of questionnaire
Questions
Clear
Easy to answer
Only important questions
It is important to define the question you
want your market research to answer
other wise you might conduct research
on the wrong issue.

Chapter 6
Slide 26
Questionnaire
A good questionnaire is:
 Clear
Relevant questions that are easy to answer
People are more inclined to answer
short questionnaires because they
don’t take much time.

Chapter 6
Slide 27
 Notes – Answers for assignments are
throughout the notes, make sure you read
them.
ALL DUE AT THE END OF CLASS, THIS IS A
TEST GRADE!!!!!!!!!! Answer in complete
sentences

Chapter 6
Slide 28
Lesson 6.3
IDENTIFY YOUR COMPETITION
Determine your direct and
indirect competition.
Analyze the strengths and
weaknesses of competitors.
Establish strategies for
maintaining customer loyalty.
GOALS

Chapter 6
Slide 29
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 30
DIRECT AND INDIRECT
COMPETITION
Why should Entrepreneurs analyze both
direct and indirect competitors?
Both direct and indirect might take
customers from them.

Chapter 6
Slide 31
COMPETING WITH
LARGE BUSINESSES
Large 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 32
Retail Businesses
 Ways you could attract customers to retail
businesses may include:
 Extended hours
 Birthday cards
 Frequent buyer programs
 Personal Notes
 Thank you cards
 Store Specific credit cards
 Coupons
 Layaway program

Chapter 6
Slide 33
STUDY INDIVIDUAL COMPETITORS
Price
Location
Facility
Strengths
Weaknesses
Strategy

Chapter 6
Slide 34
Analyzing Competitors
Purpose
To figure out how to get customers to buy
from your business
Why can customer feedback be
considered a type of market research?
It is a valuable type of market research
because it is coming from customers who
care enough about your company and
product to communicate with you.

Chapter 6
Slide 35
STRATEGIES FOR MAINTAINING
CUSTOMER LOYALTY
Listen and respond to feedback
Other strategies for maintaining loyalty
Superior service
More convenient hours than other
businesses
Easy return policies
Store-specific credit cards
Personal notes or cards
Frequent buyer programs

Chapter 6
Slide 36
 Notes – Answers for assignments are
throughout the notes, make sure you read
them.
ALL DUE AT THE END OF CLASS, THIS IS A
TEST GRADE!!!!!!!!!! Answer in complete
sentences

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