05 market research a..

Entrepreneurship I

Class #4

Market Researchand

Marketing

9/25/02 2

Market

• Group of potential customers who have purchasing power and unsatisfied needs.

• A new venture will survive only if a market exists

• Market research involves gathering information about a particular market, followed by an analysis of that market

9/25/02 3

Market research

• Analyze the market– understand the nature of the

opportunity

• Segment• Target• Position• Marketing plan

9/25/02 4

Market analysis• Define• Evaluate• Describe:

– size– growth– drivers– trends– players– competition

9/25/02 5

Competitive analysis

• Market share• Strengths/weaknesses• New entrants/mergers• Stable/increasing/decreasing• Barriers to entry for you• Barriers to entry for others

(assuming you are in the market)

9/25/02 6

Segment

• Sub-markets – allow entry best suited to limited

resource base• Various ways of segmenting

market:– product– customer– geography– distribution

9/25/02 7

Segment

Stores9%

Municipalities30%

Contractors43%

Home Owners

18%

Home Owners

Contractors

Stores

Municipalities

9/25/02 8

Crossing the chasmGeoffrey A. Moore

9/25/02 9

Creating a new market

• Influence chain– seminal authors– early eustomers– industry analysts– press (trade and business)– most customers

9/25/02 10

Targeting

• Rank segments• Dominate a segment• Jump to other segments

9/25/02 11

Positioning

• Make the company the preferred provider (in that segment)

• Unique• Leverage strengths of firm/product/

service• Sustainable• Deliver value to customer better

than competitors

9/25/02 12

Marketing

• Understanding customer needs• Determine benefits/value• Communicate• Objections• Plan of attack

9/25/02 13

Success Factors

• Excellence in your people• Excellence in your product/service• Excellence in your organization

9/25/02 14

4 Ps

Product Promotion

Price Place

9/25/02 15

Marketing Plan

• Recognize a need• Develop a solution to fill the need• Understand the benefits to the

customer• Create a sales/distribution strategy• Formulate a promotional program• Establish a sustainable market position• Establish pricing

9/25/02 16

The Need

• How many have the need?• How much will they pay for a

solution?• How do they get along now?• How well do you know this area?• Is this a window of opportunity or a

long felt need?

9/25/02 17

The Solution• Can a product or service be designed?• Can it be developed at an acceptable

cost and time?• Can the risks be minimized or

eliminated?• Can it be produced at a cost that will

generate profits?• Can it be differentiated from existing

solutions?

9/25/02 18

Benefits

• Establish between end-user and customer (who pays you?).

• Why will they buy this?• What value do you bring (over the

competitors)?

9/25/02 19

Sales/distribution strategy

• How much can be spent on recurring sales cost?

• What are the best channels now?• The best channels in the future?• How will the competition react?• What sales presentation materials are

required?• How much sales training is required?

9/25/02 20

Direct selling

• Direct sales people in regions or at headquarters

• Direct Mail – telemarketing• Direct response marketing• Corporate relationships

9/25/02 21

Indirect selling• Distributors• Agents and sales representatives• Corporate partnerships• System houses - value added resellers

(VARs)• System integrators• Direct mail houses• Brand name for other corporations

9/25/02 22

Promotional program

• How will the product be positioned?• How will the initial launch be handled?• Will you advertise - where, how much?• How will PR be handled?• Will you use direct marketing?• Who will be responsible for promotions?

9/25/02 23

Sustainable market position

• High cost of entry for others• Patents, copyright, trade secrets• Brand name recognition• Proprietary sales/distribution

channels• Continuing product enhancements

9/25/02 24

Pricing

• Selling price =– Cost to produce the product +– Expenses to run company +– Cost of marketing +– Pretax profit you desire

9/25/02 25

What Can You Do?

• Innovation - in your product• Creativity - in the marketing plan• Execution - of operating plan• Persistence - without it, forget it!

9/25/02 26

Strategies

• Low cost• Differentiation• Customer intimate

9/25/02 27

Differentiation Points

• Quality• Speed• Reliability• Service• Design

• Relationships• Features• Personality• Technology

9/25/02 28

Customer intimate

• Establishing relationships that provide value to the customer

• Teams or partnerships

9/25/02 29

Price vs. Quality

High Qualit

y

Low Qualit

y

High Price

Low Price

9/25/02 30

International marketing

• Every company needs to consider marketing outside of home territory

• Even start ups should consider what international markets they could address

• Specific new ideas and approaches may be needed to succeed

9/25/02 31

Market research project

• Secondary research– information which already exists

somewhere

• Primary research– Talking to real people:

• customers• suppliers• partners• Experts

– Case study that relates to your business

9/25/02 32

Questions

• Open ended questions• Closed ended questions