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Market Research for
 a New Business
Why understand customers?

  Because they are all different
Customers differ in many ways…

• The benefits they want
• Amount they are able to or willing to
  pay
• Media (e.g. television, newspapers,
  websites and magazines) they see
• Quantities they buy
• Time and place that they buy
What a start-up needs to know?
• How big is the market? (measured by sales, volume etc)
• How fast is the market growing and what is the market
  growth potential?
• Who are the existing competitors and what market shares do
  they have?
• How is the market segmented? (“segments” are the different
  parts of a larger market – e.g. low price or high quality)
• What kind of customers are there in the market? What are
  their preferences in terms of when and where they buy, what
  prices they pay and which methods of promotion are
  effective?
The answer – market research
Primary v Secondary data
• Primary data
  – Data collected first-hand
    for a specific purpose by
    the entrepreneur
• Secondary data
  – Data that already exists
    and which has been
    collected for a different
    purpose
Secondary data – main sources
Google                   A great way of getting quick market research for
                         free
Government               Provide detailed insights on the economy and on
departments              many industry sectors
Trade associations       Most industries have an industry association -
                         they are a great source of market analysis
Trade press &         Essential reading for an entrepreneur,
magazines             particularly if he/she has little or no experience
                      of the market
Competitor websites & Valuable information on marketing activities of
marketing materials   competitors
Market research          Mintel and Keynote produce a wide variety of
reports                  expensive reports that analyse individual
                         markets
Primary data – why?
• Secondary data can
  provide much information
  for an entrepreneur, but
  there will always be gaps
• Obtaining formal primary
  research data is time-
  consuming & expensive
• So primary data is best
  used by a start-up to fill in
  the gaps
Primary data – main sources
•   Observation
•   Postal surveys
•   Telephone interviews
•   Online surveys
•   Focus groups
•   Face-to-face surveys
•   Test marketing
•   Experiments
Quantitative v Qualitative
Quantitative Research                 Qualitative Research
Concerned with data and               Based on opinions, attitudes,
addresses question such as “how       beliefs and intentions
many?”, “how often”, “who?”,          Answers questions such as
“when?” and “where?”                  “why”? “Would?”, or “how?”
Based on larger samples and is,       Aims to understand why
therefore, more statistically valid   customers behave in a certain
The main methods of obtaining         way or how they may respond to
quantitative data are the various     a new product or service
forms of survey – i.e. telephone,     Focus groups and interviews are
postal, face-to-face and online.      common methods used to collect
                                      qualitative data
Remember

 The entrepreneur can
   learn much about
    customers needs
 simply by chatting to
customers, rather than
   buying expensive
    market research
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Market Research for a New Business

  • 1. Market Research for a New Business
  • 2. Why understand customers? Because they are all different
  • 3. Customers differ in many ways… • The benefits they want • Amount they are able to or willing to pay • Media (e.g. television, newspapers, websites and magazines) they see • Quantities they buy • Time and place that they buy
  • 4. What a start-up needs to know? • How big is the market? (measured by sales, volume etc) • How fast is the market growing and what is the market growth potential? • Who are the existing competitors and what market shares do they have? • How is the market segmented? (“segments” are the different parts of a larger market – e.g. low price or high quality) • What kind of customers are there in the market? What are their preferences in terms of when and where they buy, what prices they pay and which methods of promotion are effective?
  • 5. The answer – market research
  • 6. Primary v Secondary data • Primary data – Data collected first-hand for a specific purpose by the entrepreneur • Secondary data – Data that already exists and which has been collected for a different purpose
  • 7. Secondary data – main sources Google A great way of getting quick market research for free Government Provide detailed insights on the economy and on departments many industry sectors Trade associations Most industries have an industry association - they are a great source of market analysis Trade press & Essential reading for an entrepreneur, magazines particularly if he/she has little or no experience of the market Competitor websites & Valuable information on marketing activities of marketing materials competitors Market research Mintel and Keynote produce a wide variety of reports expensive reports that analyse individual markets
  • 8. Primary data – why? • Secondary data can provide much information for an entrepreneur, but there will always be gaps • Obtaining formal primary research data is time- consuming & expensive • So primary data is best used by a start-up to fill in the gaps
  • 9. Primary data – main sources • Observation • Postal surveys • Telephone interviews • Online surveys • Focus groups • Face-to-face surveys • Test marketing • Experiments
  • 10. Quantitative v Qualitative Quantitative Research Qualitative Research Concerned with data and Based on opinions, attitudes, addresses question such as “how beliefs and intentions many?”, “how often”, “who?”, Answers questions such as “when?” and “where?” “why”? “Would?”, or “how?” Based on larger samples and is, Aims to understand why therefore, more statistically valid customers behave in a certain The main methods of obtaining way or how they may respond to quantitative data are the various a new product or service forms of survey – i.e. telephone, Focus groups and interviews are postal, face-to-face and online. common methods used to collect qualitative data
  • 11. Remember The entrepreneur can learn much about customers needs simply by chatting to customers, rather than buying expensive market research
  • 12. Follow tutor2u on Twitter tutor2u tutor2u_econ
  • 13. Become a fan of tutor2u on Facebook! tutor2u on Facebook
  • 14. Keep up-to-date with business stories, resources, quizzes and worksheets for your business course. Click the logo!