Identify and Meet a Market Need 4.1 Identify Your Market 4.2 Research the Market 4.3 Know Your Competition

Lesson 4.1 Identify Your Market Goals Identify a target market by analyzing the needs of customers. Explain how market segmentation can help an entrepreneur analyze a target market. Chapter 4

Vocabulary target market market segments customer profile demographics psychographics use-based data geographic data Chapter 4

Target Market customers target market the people or organizations who buy the products and services companies offer target market the individuals or companies that are interested in buying a particular product or service Chapter 4

Identify Your Target Market Consider the following information regarding your customers: individuals or companies? age, income, place of residence? industries customers are in? needs and wants my product will satisfy? number of potential customers in my area? demand for my product or service? who is the competition? pricing of product or service? what is unique about my offering? Chapter 4

What questions should you ask when identifying your target market? Chapter 1

Market Segments market segments groups of customers within a large market who share common characteristics Most products and services appeal to a small portion of the population. It is important to carefully analyze market data to meet the needs of segments of the market. Chapter 4

Customer Profile customer profile a description of the characteristics of the person or company that is likely to purchase a product or service Chapter 4

demographics data that describes a group of people in terms of age marital status family size ethnicity gender profession education income Chapter 4

psychographics data that describe a group of people in terms of tastes opinions personality traits lifestyle habits Chapter 4

use-based data geographic data data that helps you determine how often potential customers use a particular service geographic data data that helps you determine where your potential customers live how far customers will travel to do business with you Chapter 4

Name four types of customer data that may be analyzed in developing a customer profile. Chapter 1

Lesson 4.2 Research the Market Goals Explain the role of market research. Identify the six steps involved in market research. Explain the role technology plays in marketing research. Chapter 4

Vocabulary market research primary data survey focus group secondary data customer relationship management Chapter 4

Role of Market Research a system for collecting, recording, and analyzing information about customers competitors products services Chapter 4

Primary Data primary data survey information collected for the very first time to fit a specific purpose survey a list of questions you ask your customers to determine demographic information psychographic information Chapter 4

observation focus group determining information by watching customer behavior focus group an in-depth interview with a group of target customers questions are similar to survey questions group interaction allows for more discussion Chapter 4

disadvantages of primary data time-consuming more expensive Chapter 4

Secondary Data secondary data information found in already-published sources Chapter 4

Secondary data can be found in: publications issued by government and community organizations industry specific books government and business websites books about entrepreneurs in similar businesses trade publications newspaper articles and statistics Chapter 1

What types of data can be collected through market research? Chapter 1

Six Steps of Market Research Although primary data collection is time consuming and expensive, it will tell you exactly what you want to know. Primary data can uncover information that is often not available through secondary sources. Chapter 4

Chapter 4

Determine the Data Needed Define the Question Determine exactly what it is you need to know. Determine the Data Needed Decide what data you need to answer the question. Chapter 4

Collect the Data Decide the best way to gather data. People’s opinions can be obtained through focus groups surveys secondary market research demographic data psychographic data economic trends industry forecasts Chapter 4

Analyze the Data Take Action Evaluate the Results Thoroughly analyze and interpret data. Write down analysis results for future reference. Take Action Use your analysis results to develop an action plan. Evaluate the Results Entrepreneurs must regularly evaluate the actions they take as a result of the plan. Chapter 4

What are the six steps of market research? Chapter 1

Technology-Driven Marketing Customer relationship management a business strategy designed to increase profitability and customer satisfaction uses technology to track customer interactions focuses on understanding customers as individuals instead of as part of a group Chapter 1

Interactions with Customers Companies collect data about customers through interactions that occur via phone web salespersons product registration product warranty cards Chapter 1

electronic data transfer touch points places where a customer might have contact with a company discussion with delivery personnel electronic data transfer the movement of data between locations in a structured, computer-retrievable format Chapter 1

Customer Database data warehouse data mining a large computerized database containing all of the information collected in the CRM process data mining finds hidden patterns and relationships in the customer data stored in the data warehouse Chapter 1

What is the goal of CRM? Chapter 1

Lesson 4.3 Know Your Competition Goals Explain the importance of knowing and understanding your competition. Prepare a competitive analysis. Describe strategies for maintaining customer loyalty. Chapter 4

Vocabulary direct competition indirect competition competitive analysis Chapter 4

Impact of Competition You should always watch the competition. Offer products that are of equal or better quality that sell for the same or lower prices. Chapter 4

Understand the Competition New businesses need to identify some special customer need or want that is not being met. Chapter 4

Know the Types of Competition direct competition a business that makes most of its money selling the same or similar products or services to the same market as other businesses Chapter 4

indirect competition a business that makes only a small amount of money selling the same or similar products and services to the same market as other businesses Chapter 4

large retailers Reasons that make it difficult for entrepreneurs to compete with large retailers include: Large retailers can keep larger quantities of products in stock. Large chains do not rely on a single product line. Large companies have a larger advertising budget. Chapter 4

Why is it important to understand the competition your business faces? Chapter 1

Competitive Analysis competitive analysis identifying and examining the characteristics of a competing firm Chapter 4

Follow these steps to begin your competitive analysis: Make a list of your competitors. Summarize the products and prices offered by your competitors. Chapter 4

List each competitor’s strengths and weaknesses. Find out the strategies and objectives of your competitors. Determine the opportunities in the market. Identify threats to your business from the competition. Chapter 4

Chapter 4

What is the purpose of a competitive analysis? Chapter 1

Maintain Customer Loyalty Listen and Respond to Feedback Continually ask for and respond to customers’ needs. Chapter 4

Other strategies for Maintaining Loyalty superior service convenient hours easy return policies store-specific credit cards personal notes or birthday cards frequent-buyer programs Chapter 4

What are some strategies for maintaining customer loyalty? Chapter 1

Performance Competencies Develop the presentation logically and systematically Communicate the design process effectively Chapter 1

Present the tips, techniques, and tools used Demonstrate the ability to make a businesslike presentation Show self-confidence apparent through knowledge of content and articulation of ideas Chapter 4

Give It A Try Document addresses topic and is appropriate for the audience Graphics, text treatment, and special effects show creativity and cohesiveness of design Chapter 1

Selection of fonts and type sizes is appropriate Overall layout and design is creative and appealing Final product indicates a clear thought process and an intended, planned direction with formulation and execution of a firm idea Required information is effectively communicated Chapter 4