Transcript Chapter 4
Chapter
4
Identify and Meet a Market Need
4.1 Identify Your Market 4.2 Research the Market 4.3 Know Your Competition
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Ideas in Action
Serving Customers’ Needs
By continually assessing market needs, Brian Hendricks was able to start a variety of PC related companies.
Brian’s recommendations for entrepreneurs focus on the “Five P’s of Entrepreneurship”: Planning Patience Persistence People Profit Chapter 4 Slide 2
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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.
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Terms
target market market segments customer profile demographics psychographics use-based data geographic data Chapter 4 Slide 4
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Target Market
Customers
asset.
are your most important
target market
the individuals or companies that are interested in a particular product or service and willing and able to pay for it. Chapter 4 Slide 5
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Identify Your Target Market
Consider the following information regarding your customers: Who are my customers individuals or companies?
If my 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?
If my customers are companies, what industries are they in? Where are those industries located?
What needs and wants will my product will satisfy?
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Identify Your Target Market
Consider the following information regarding your customers: How many potential customers live in the area in which I want to operate?
Where do these potential custom currently buy the products or services I want to sell them?
What price are they willing to pay for my products or services?
What can I do for my customers that other companies are not already doing for them?
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Chapter 4 Slide 8 What questions should you ask when identifying your target market?
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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.
Segmentation helps you serve your niche efficiently.
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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 Slide 10
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demographics
data that describes a group of people in terms of age marital status family size ethnicity gender profession education income Chapter 4 Slide 11
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psychographics
data that describe a group of people in terms of tastes opinions personality traits lifestyle habits Chapter 4 Slide 12
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use-based 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 Slide 13
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Chapter 4 Slide 14 Name four types of customer data that may be analyzed in developing a customer profile.
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Lesson 4.2
Research the Market Goals
Explain the role of market research.
Identify the six steps involved in market research. Chapter 4 Slide 15
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Terms
market research primary data survey focus group secondary data Chapter 4 Slide 16
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Role of Market Research
market research
a system for collecting, recording, and analyzing information about customers competitors goods services Chapter 4 Slide 17
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Primary Data
primary data
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 Slide 18
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observation determining information by watching customer behavior
focus group
interview with groups of target customers who provide valuable ideas on products or services questions are similar to survey questions group interaction allows for more in-depth discussion Chapter 4 Slide 19
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disadvantages of primary data expensive time consuming Chapter 4 Slide 20
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Secondary Data
secondary data
information found in already-published sources Secondary data can be found in: government publications and websites industry specific books trade publications newspaper articles books about entrepreneurs in similar businesses Chapter 4 Slide 21
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Chapter 4 Slide 22 What types of data do entrepreneurs collect through market research?
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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.
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Chapter 4 Slide 24
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1.
Define the Question Determine exactly what it is you need to know.
2.
Determine the Data Needed Decide what data you need to answer the question.
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3.
Collect the Data Conduct secondary research to help determine the primary data requirements.
Determine the most effective methodology for primary research collection.
Questionnaires should contain only the most pertinent questions. Chapter 4 Slide 26
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4.
Analyze the Data Thoroughly analyze and interpret data.
Write down analysis results for future reference. 5.
Take Action Use your analysis results to develop an action plan.
6.
Evaluate the Results Entrepreneurs must perpetually reassess the effectiveness of their actions.
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Chapter 4 Slide 29 What are the six steps of market research?
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Lesson 4.3
Know Your Competition Goals
Explain the importance of understanding your competition.
Determine types of competition.
Prepare a competitive analysis.
Describe strategies for maintaining customer loyalty.
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Terms
direct competition indirect competition competitive analysis Chapter 4 Slide 31
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Impact of Competition
To remain competitive, you should offer products that are of equal or better quality than the competition and that sell for the same or lower prices.
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Understand the Competition
Determine the ways your competition is not meeting the needs of their customers.
The unmet needs of these customers provides you with an entrepreneurial opportunity.
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Chapter 4 Slide 34 Why is it important for you to understand the competition your business faces?
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Types of Competition
direct competition
originates from a business that makes most of its income by selling the same products or services as you to the same market Chapter 4 Slide 35
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indirect competition
originates from a business that makes only a small amount of money by selling the same products or services as you to the same market Chapter 4 Slide 36
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Large Retailers?
Reasons that large retailers can be a source of strong competition include: they can order and stock large quantities of products the volume discounts they obtain result in lower prices to the consumer Chapter 4 Slide 37
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they have multiple product lines if one product does poorly, there are other products available to generate sales they have larger advertising budgets Chapter 4 Slide 38
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Chapter 4 Slide 39 What is the difference between direct and indirect competition?
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Competitive Analysis
competitive analysis
identifying and examining the characteristics of a competing firm Chapter 4 Slide 40
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Follow these steps to begin your competitive analysis: Make a list of your competitors.
Summarize the products and prices offered by your competitors.
List each competitor’s strengths and weaknesses.
Find out the strategies and objectives of your competitors.
Determine the strength of the market.
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Chapter 4 Slide 42
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Chapter 4 Slide 43 What is the purpose of a competitive analysis?
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Maintaining Customer Loyalty
Listen and Respond to Feedback Perpetually ask for and respond to customers’ needs.
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Other strategies for Maintaining Customer Loyalty superior service convenient hours easy return policies store-specific credit cards personal notes or birthday cards frequent-buyer programs Chapter 4 Slide 45
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Chapter 4 Slide 46 What are some strategies for maintaining customer loyalty?
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PERFORMANCE INDICATORS EVALUATED
Develop a convincing multimedia presentation.
Recognize and respect copyright issues.
Develop and support a theme with a multimedia presentation. Chapter 4 Slide 47
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Make use of and implement innovative technology in a multimedia presentation.
Set priorities and manage time to prepare and present an effective multimedia presentation.
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THINK CRITICALLY
1.
2.
Why must the Super Bowl use a multimedia presentation to attract new corporate sponsors?
What kind of music or visual images would be good for a Super Bowl multimedia presentation? Chapter 4 Slide 49
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3.
4.
Why must the presentation emphasize the potential return on investment for corporate sponsors of the Super Bowl? What is the value of being associated as a financier of the Super Bowl?
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