Market Research

1. Market Research System for collecting, recording, analyzing information about customers, competitors, goods, and services

2. Role of Market Research • Find out about your customers • Determine wants and needs • Decide how much they are willing to pay • Determine market strategies • Better than acting on hunches • Investors and lenders will appreciate solid information

3. Primary Data • Information collected for the very first time • Used to identify and understand the target market • Provides the most up-to-date and useful information • Collecting this data can be time consuming and expensive

4. Primary Data Sources • Survey- list of questions used to find demographic and psychographic information • Mail, phone, Internet, in person • Observation – watch potential customers • Count people in line at a competitor • Focus Group – in-depth interviews with small numbers of people • Led by a mediator and recorded • Retail store scanners

5. Secondary Data • Information found in already published sources • Population, family size, household income, economic trends, industry forecasts

6. Secondary Data Sources • Government and community organization publications • US Census Bureau • Small Business Administration • Chamber of Commerce • Industry Books • Trade magazines and journals • Newspaper articles and statistics

7. Business Plan Market Research • Industry Research • What is your Industry? • The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. • http://www.census.gov/eos/www/naics/

8. Business Plan Market Research • http://www.census.gov/econ/index.html • Business and Industry Data by Sector • Star Cleaners will be in 81-other services

9. Geographic Distribution, For Example • http://www.census.gov/econ/industry/geo/g81.htm

10. Industry “Map” • http://smpbff1.dsd.census.gov/TheDataWeb_HotReport/servlet/HotReportEngineServlet?emailname=vh@boc&filename=rcp1.hrml&20071127090603.Var.NAICS2002=81&forward=20071127090603.Var.NAICS2002

11. Market Research Steps: Collecting Primary Data • Define the Question • Who would be most likely to use a dog walking service? • Determine the Data Needed • Does not need to know how many families live in the area, but does need to know how many people own dogs who are not able to walk them regularly • Collect the Data • Survey, observe, focus group

12. Continued…Market Research Steps: Collecting Primary Data 4. Analyze the Data • Interpret your findings 5. Take Action • If results show that people in the grocery store at 5pm fit your target market, then make a flyer to hand out in the parking lot at 5pm. 6. Evaluate the Results • Check the results of the flyer…did it work? • Need to be able to track the results

13. Example Question: Who will be most likely to use a dog walking service? Decide how to find the answer: I do not need to know how many families live in the area, but I do need to know how many people own dogs who are not able to walk them regularly A survey will allow me to ask specific questions like “Do you own a dog?” and “Do you have time to walk your dog daily?” Observation will allow me to see if people are already walking their dogs in my neighborhood. Interpret your findings and take action: If results show that there are people in my neighborhood that have dogs and have no time to walk them, I will know that there is a need. If results of the survey also show that these people shop for groceries after work, I could distribute flyers at 5pm at the local grocery to get new customers. Evaluate the Results: Check the results of the flyer…did it work? I asked new customers how they heard about my business. If they said “the flyer,” I knew that the marketing effort worked.