1. What
Is
Market
SECTION
Research?
OBJECTIVES
l Explain why market research is important
l Consider important factors when targeting a market
l Identify market research methods
Entrepreneurship: Owning Your Future, 11th ed.
© 2010 Pearson Higher Education, 1
Steve Mariotti
Upper Saddle River, NJ 07458. • All Rights Reserved.

2. Why
Is
Market
Research
Important?
Market
research
is
an
organized
way
to
gather
and
analyze
information
needed
to
make
business
decisions.
— A market is a group of potential customers—people or
businesses—who are willing and able to purchase a
particular product or service.
· Business Environment. The business environment refers to
any social, economic, or political factors that could impact your
business.
· Customers. These can be individual consumers or businesses.
· Competition. Competitors offer a product or service similar to
yours or one that fills the same customer need or want.
Entrepreneurship: Owning Your Future, 11th ed.
© 2010 Pearson Higher Education, 2
Steve Mariotti
Upper Saddle River, NJ 07458. • All Rights Reserved.

3. Targeting
Your
Market
The
limited
number
of
customers
who
are
most
likely
to
buy
the
product
or
service
represents
your
target
market.
— One of the goals of market research is to develop a
customer profile, which is a detailed description of
your target market s characteristics.
· Consumers. A company who sells to individuals is sometimes
referred to as a business-to-consumer (B2C) company.
· Businesses. A company who sells to other companies is
sometimes called a business-to-business (B2B) company.
Entrepreneurship: Owning Your Future, 11th ed.
© 2010 Pearson Higher Education, 3
Steve Mariotti
Upper Saddle River, NJ 07458. • All Rights Reserved.

4. Targeting
Your
Market
— A market segment is a grouping of consumers or
businesses within a particular market that has one or
more things in common.
· Demographics are objective social and economic facts about
people.
· Basing market segments on where consumers live or where
businesses are located is called geographics.
· Psychological characteristics of consumers, such as attitudes,
opinions, beliefs, interests, personality, lifestyle, political
affiliation, and personal preferences, are called
psychographics.
Entrepreneurship: Owning Your Future, 11th ed.
© 2010 Pearson Higher Education, 4
Steve Mariotti
Upper Saddle River, NJ 07458. • All Rights Reserved.

5. Market
Research
Methods
The two basic types of market research are derived from
secondary data and primary data:
— Secondary Data. Existing information that was
previously gathered for a purpose other than the study
at hand is secondary data.
— Examining existing secondary data is useful for doing
general, exploratory researchto learn more about your
area of interest. Sources include:
· Government
· Trade Groups and Journals
· Business Magazines and Reports
· Local Community Resources
Entrepreneurship: Owning Your Future, 11th ed.
© 2010 Pearson Higher Education, 5
Steve Mariotti
Upper Saddle River, NJ 07458. • All Rights Reserved.

6. Market
Research
Methods
— Primary Data. New information that is collected for a
particular purpose is primary data.
— Once you have a better sense of your target market,
you can begin to gather data directly from that potential
group of customers. Some common ways to obtain
such primary data are:
· Interviews/Surveys
· Focus Groups
· Observations
Entrepreneurship: Owning Your Future, 11th ed.
© 2010 Pearson Higher Education, 6
Steve Mariotti
Upper Saddle River, NJ 07458. • All Rights Reserved.