Market Research

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Market Research

• Discovering how good your idea is

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MARKET RESEARCH

• Market Research is conducted to demonstrate the
  level of demand for your product
• Primary vs. Secondary research
• Citing your research
• Asking for Help

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Primary Research

• Involves the potential business owner surveying
  their potential customers for their use, or
  potential use of the product / service.
•  
• What are you doing now? is a much better
  indicator of future buying patterns than What
  are planning on doing next year?
•  

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Secondary Research

• Taking market research that has already been
  conducted, and applying it to your business.
•  
• Since secondary research is generated for general
  applications, you often have to make assumptions
  on how the secondary research applies to the
  specific market you are researching.
• What are some forms of secondary research you can
  engage in?

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Citations

• APA Format
• Citations in text and Reference List

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Getting Help

• Garth Homer
• I will be happy to meet with you or your group.
  You may contact me at Ghomer_at_okanagan.bc.ca or
  give me a call at 250-762-5445 loc.4624.
• Your entrepreneurship professors
• Buad 293 Labs

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GETTING STARTED

• What is your business concept and how does it
  make money?
• Will someone actually pay for this product or
  service?
• Get your NAICS code (under Products Services)
• Use your NAICS code to access industry trends via
  a business database (e.g., Business Source
  Premier)
• Cite the article, not the database
• What is this telling you?
• Success of your idea (business proposal)
• Industry overview (business plan, section B)
• Competitors
• Hoovers Company Profile

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Market Potential

• How large is your market? What is your potential
  market size?
• Sales Forecasting. Top-Down Approach. Estimate
  Market Size and your potential share of the
  market
• Family expenditure data (financial data)

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Market Potential of Pets

• of spent on food in BC X
• of households in my trading area (local health
  area)
• 486 X 76, 903 (2009 households in Central
  Okanagan) 37, 374, 858
• Market size for pet related expenses
• In Central Okanagan

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Market Potential

• TableBase (under statistical tools)
• Types of pet ownership
• Pet supply sales by product/service category
• Who spends on pets
• Spending on pets

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Market Potential

• Performance Plus (financial info)
• Build your own profile
• An online performance benchmarking tool
• Compliment this top-down approach with a bottom
  up forecasting approach

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Who will you sell to?

• Three types of customers
• 1. Primary - The primary or target customer is
  most likely to buy your product or service and
  could be a heavy user.
• Secondary - The secondary customer has a
  possibility of buying your product or service but
  needs convincing.
• Referral The market segment who will refer
  potential customers to you.
• Remember to differentiate between End
• User and User that Pays

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Two Types of Customer Profiles

• Business to Consumer (B2C) or
• End-User Profile
• If your Target market is the consumer or
  end-user, your customer profile will likely
  require demographics or psychographics.
• 2. Business-to-Business (B2B) Profile
• Many small businesses offer their services or
  products, often on a contract basis, to other
  businesses.
• These supply chain companies need a customer
  profile that is based on business or company-type
  information.

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Demographics and Psychographics
DEMOGRAPHICS
PSYCHOGRAPHICS

• Psychographics is the process of segmenting the
  population by lifestyles and values. These may
  include

• Demographics involves key personal
  characteristics of a group of people. These
  characteristics include

• Where they eat
• Where they shop
• Sporting activities they
• engage in
• Entertainment activities
• they engage in
• How socially and
• physically active they are
• Whether they travel for
• business or fun

• Age
• Sex
• Family Status
• Age of Children
• Education
• Residence

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B2B Demographic Psychographic Profile

• What are demographic characteristics of B2B?
• Size of business (revenues, employees)
• Type of business (industrial or consumer
  products/services)
• Type of employees (gender, ethnicity, education
  levels)
• Type of business ownership
• Account size
• Years in business
• Location
• Credit risk (see pages 87-88)
• What are psychological characteristics of B2C?
• Culture
• Leadership
• Company activities
• Community Involvement

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Profiling your Customer

• Industry information (articles)
• Statistical Information (Tablebase)
• Community Profiles (Location)
• Economic Profile (Markets)

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Friday Lab

• Get Your NAICS code
• Search for industry data (products services).
  What is happening in my industry?
• Research market potential (financial and
  statistical data). What are the market strengths
  of my idea?
• Who am I going to sell my idea to?
• Profile your target market (primary, secondary
  and referral)

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TRANSITIONAL PAGE
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