2 Listen To The ConsumerYour market consists of potential customers for your product or service.Market research is how you find out who these customers are and what they need.Business owners ask consumers questionsListen carefully to their answersYou want to get into your customers’ head and find out what they really think about:Your productYour logoThe name of your businessYour pricesYour locationYour promotional offers
3 SWOT Analysis Strengths Weaknesses Opportunities Threats Good marketing relies on good plansConduct a SWOT AnalysisAn assessment that lists and analyzes the company’s strengths and weaknesses.Also includes the opportunities and the threats that surround it.SWOT – Strengths, Weaknesses, Opportunities and ThreatsListing of everything that can foster the success and what can make it fail.StrengthsWeaknessesOpportunitiesThreats
4 SWOT AnalysisThis internal and external awareness will help a business identify weaknesses and prepare to handle threatsCompetitionChanging marketplaceAn accurate analysis also will help a company be more competitive because it provides guidance and direction.Allows a company to develop strategies around the SWOT analysis
5 Identifying and Analyzing Markets Businesses look for ways to connect with current and potential customers.The surest way is to know these people wellWhere they liveTheir income levelAgeEthnic backgroundActivitiesValuesWhat interests themWhen a company looks at its customers this way, it can identify groups of people who have many things in common
6 Identifying and Analyzing Markets Marketers analyze groups of customers to see if any of them can be further broken down into smaller, more precise clustersThe process of classifying people who form a given market into even smaller groups is called market segmentation.Marketers ask, “Which of these segments should we target?”Usually too costly to target all the potential target marketImportant to identify those markets in which the company has an advantage that enables it to survive against its competition over a long period of timeMarketers call this a situation a sustainable competitive advantage
7 Your Research Method Is Important The method you use may affect the answers you getSome may be less honest when you interview them face-to-faceMay create embarrassment for someHanding out surveys creates anonymity
8 Research The Market Before Opening Your Business Don’t begin until you have researched your market thoroughlyBe open to criticismNot always pleasant to hear, but can be valuableCan help fine tune your business
9 Researching Your Market Segment Once you have chosen your market segment, you can design a survey and begin market research.Some questions to ask:Would you buy this product or service?How much would you be willing to pay for it?Where would you buy it?How would you improve it?Who are my closest competitors?Is my product/service worse or better than those of my competitors?
10 Who Is In Your Market Segment? Who is your market?Everyone in the school?Friends?Family members?Neighbors?People online?Which segment of your market should you target?Refer to your marketing visionWhat is the chief benefit you want to show your customers?Which customers in your market would be most interested in this benefit?
11 Who Is In Your Market Segment? A market segment is composed of consumers who have a similar response to a certain type of marketing.For example:In the cosmetics industry:One segment responds positively to luxuriously packaged, expensive productsOne segment is most responsive to products that claim to make customers look youngerAnother wants low pricesA company that recognizes these segments and chooses one or two to market will be more successful that one that tries to sell cosmetics to every single woman in the country.
12 Target Market Demographics Facts about groups of people are called demographics.Information is foundInternet researchMagazine ArticlesBusiness Library
13 DemographicsDemographics refer to statistics that describe a population in terms of personal characteristicsAgeGenderIncome levelMarital statusEthnic backgroundEducationoccupation
14 Demographics Age Gender Income Marital Status Ethnic Background Marketers can easily use age to segment the market by creating age ranges.GenderGender helps to create market segments as well.IncomeMarketers want to know how much money they have to spend on different productsLook for two types of incomeDisposableMoney left after taking out taxesDiscretionaryMoney left after paying for basic living necessities (food, shelter, clothing)Marital StatusEthnic Background
15 GeographicsGeographics refers to segmentation of the market based on where people live.Relates closely to demographics because of the similarity among people who live in a certain areaTo segment a market geographically, you can refer to local, regional, national, or even global markets
16 PsychographicsPsychographics involves grouping people with similar lifestyles, as well as shared attitudes, values, and opinions.Consumer lifestyles include how people spend their time and moneyAttitudes, values, and opinions require special research to learn more about a group’s personality traits and motivationActivitiesA good way to get a feel for market segmentation by activities is to visit the magazine section of a bookstore. For each interest group and activity, you will find at least one related magazine, which represents a market segment.AttitudesConsumers’ attitudes, such as taking responsibility for one’s health, eating healthier, and becoming physically fit, are trend-setting issues for marketers in the twenty first centuryPersonality & ValuesMore advanced study of psychographics includes the study of personality characteristics and values.
17 BehavioralSegmenting the market based on product related behavior involves looking at the benefits desired by consumers, shopping patterns, and usage rate.How Marketers Use Consumers’ Behavioral PatternsStudy shopping patterns to determine usage ratesCompanies classify their customers according to the percentage of sales each group generatesApply 80/20 rule – 80% of a company’s sales are generated by 20% of its loyal customers
18 Types of Market Research General ResearchCheck libraries, city agencies, and other resources for informationResearch competition in the areaWhat are they selling?What are the challenges?What has been successful?
19 Types of Market Research Statistical ResearchStatistics are facts collected, analyzed and presented as numbers.AgeAnnual incomeEthnic or religious backgroundGenderGeographic locationInterestsOccupationTypes of dwelling (house or apartment)Examples:In our class we have 17 males and 11 female. This means that 61% of the class are male and 39% of the class are female.
20 Types of Market Research Industry ResearchSearch the InternetLook for recent articles on trends in the industry and its major players by using an Internet search engine.Look on your competitors’ web sites to find their annual reports. These are likely to have valuable industry information.Visit the Internet Public Library atInterviewsInterview an executive about the industry and trendsLocal Small Business Administration (SBA) officeLocal Chamber of CommerceBusiness schools at local collegesLibrariesCareer centers
21 Dealing With Criticism Criticism can be difficult to hear – particularly when its about your business.Don’t take criticism personally.Keep an open mind.Use active listening techniquesAsk clarifying questionsParaphrase the criticismBe open to adviceAsk the critic what solution they may offerStay calm and listen for helpful information
22 Do You Know Ten People Who Love Your Product? Not everyone has to like your product.Important for SOME to love it.Example:Not everyone loves hip hop clothing, but Daymond John knew some that loved it. He created FUBU clothing line and turned into a $350 million business.
23 Make Market Research Ongoing Market research is not something you do only once.Tastes and desires change as new ideas and products come out.Continue to survey as you operate your businessKeeps you current with their needs and how they feel about your product.
24 Market Research Avoids Costly Mistakes Ask customers what they wantDetermine needs and wishes regarding the Four Ps.ProductPlacePricePromotion