Chapter 6

IDENTIFY AND
MEET
A MARKET NEED
6.1 THE VALUE OF MARKET RESEARCH

6.2 HOW TO PERFORM MARKET

RESEARCH

6.3 IDENTIFY YOUR COMPETITION

Chapter 6

THE VALUE OF MARKET RESEARCH

GOALS
• Identify a target market by
understanding your customers.
• Research your market using primary
and secondary data.
Chapter 6

WHAT IS A TARGET MARKET?

• The target market is the individuals or companies that are

interested in a particular product or service and are willing
and able to pay for it.
• The marketing concept uses the needs of customers as the
primary focus during the planning, production, distribution,
and promotion of a product or service.
Chapter 6

UNDERSTAND YOUR CUSTOMER

• Customers are the people who buy the products and services
companies offer.
• Customers buy goods and services to satisfy economic wants
and needs.
• An economic want is an unfilled desire of a customer.
• An economic need is anything that is required to live.
Chapter 6

DEMOGRAPHICS AND PSYCHOGRAPHICS

• Demographics are data that describe a group of people in

terms of their age, marital status, family size, ethnicity,
gender, profession, education, and income.
• Psychographics are data that describe a group of people in
terms of their tastes, opinions, personality traits, and lifestyle
habits.
 Chapter 6

IDENTIFY YOUR TARGET MARKET

1. Who are my customers: individuals or companies?

2. If customers are individuals:
How old are they?
How much money do they earn?
Where do they live?
How do they spend their time and money?
 Chapter 6

CONTINUED
IDENTIFY YOUR TARGET MARKET

3. If customers are companies:

What industries are they in?
Where are those industries located?
4. What needs or wants will my product or service satisfy?
5. How many potential customers live in the area in which I
want to operate?
CONTINUED
IDENTIFY YOUR TARGET MARKET

6. What price are they willing to pay for my products or

services?
7. What can I do for my customers that other companies are not
already doing for them?
 Chapter 6

THE IMPORTANCE OF A CUSTOMER PROFILE

• A customer profile is a description of the

characteristics of the person or company that is likely to
purchase a product or service.
Chapter 6

MARKET SEGMENTS

• Groups of customers within a large market who share

common characteristics are known as market
segments.
Chapter 6

UNDERSTAND THE COMPETITION

• Knowing about your competition will help you

define your target market.
Chapter 6

MARKET RESEARCH

• Market research is a system for collecting,

recording, and analyzing information about
customers, competitors, goods, and services.
• Market researchers collect primary and secondary
data.
Chapter 6

SECONDARY DATA

• Secondary data is data found in already

published sources.
Chapter 6

PLACES TO FIND SECONDARY DATA

• Publications issued by government and community

organizations, such as the U.S. Census Bureau, the
Small Business Administration, and Chamber of
Commerce
• Books about specific industries
PLACES TO FIND SECONDARY DATA (CONT.)

• Information on web sites for government and businesses

• Books about other entrepreneurs who set up similar businesses
• Specialized magazines and journals devoted to particular fields
• Newspaper articles and statistics
 Chapter 6

PRIMARY DATA

• Primary data is information collected for the very first time

to fit a specific purpose.
• Questionnaire or survey
• Observation
• Focus groups
• Disadvantage of primary data
 HOW TO PERFORM
MARKET RESEARCH

GOALS • Identify the five steps

involved in primary data
market research.
• Design a questionnaire.
Chapter 6

FIVE STEPS OF
PRIMARY MARKET RESEARCH

• Define the question

• Select a research method
• Collect data
• Analyze data
• Draw conclusions
Chapter 6

DESIGN A SURVEY

• Length of questionnaire
• Questions
• Clear
• Easy to answer
• Only important questions
Chapter 6
LESSON 6.3
IDENTIFY YOUR COMPETITION

• Determine your direct and indirect

GOALS competition.
• Analyze the strengths and weaknesses
of competitors.
• Establish strategies for maintaining
customer loyalty.
 Chapter 6

DIRECT AND INDIRECT COMPETITION

• Direct competition is competition from a business that makes most of its

money selling the same or similar products or services as another business.
• Indirect competition is competition from a business that makes only a
small amount of money selling the same or similar products or services as
another business.
• Find your direct competition
• Find your indirect competition
Chapter 6

STUDY INDIVIDUAL COMPETITORS

• Price
• Location
• Facility
• Strengths
• Weaknesses
• Strategy
 Chapter 6

STRATEGIES FOR MAINTAINING CUSTOMER

LOYALTY
• Listen and respond to feedback
• Other strategies for maintaining loyalty
• Superior service
• Offer discounts
• Easy return policies
• Create a point system
• Ask for feedback
• Encourage referral