1. Understanding Customer Needs

2. Why understand customers? Because they are all different

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. 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. The answer – market research

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. Secondary data – main sources GoogleA great way of getting quick market research for free Government departments Provide detailed insights on the economy and on many industry sectors Trade associationsMost industries have an industry association - they are a great source of market analysis Trade press & magazines Essential reading for an entrepreneur, particularly if he/she has little or no experience of the market Competitor websites & marketing materials Valuable information on marketing activities of competitors Market research reportsMintel and Keynote produce a wide variety of expensive reports that analyse individual markets

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. Primary data – main sources Observation Postal surveys Telephone interviews Online surveys Focus groups Face-to-face surveys Test marketing Experiments

10. Quantitative v Qualitative Quantitative ResearchQualitative Research Based on opinions, attitudes, beliefs and intentions Answers questions such as “why”? “Would?”, or “how?” Aims to understand why customers behave in a certain way or how they may respond to a new product or service Focus groups and interviews are common methods used to collect qualitative data Concerned with data and addresses question such as “how many?”, “how often”, “who?”, “when?” and “where?” Based on larger samples and is, therefore, more statistically valid The main methods of obtaining quantitative data are the various forms of survey – i.e. telephone, postal, face-to-face and online.

11. Remember The entrepreneur can learn much about customers needs simply by chatting to customers, rather than buying expensive market research

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