Marketing research was also touched on in Chapter 10. Secondary data is cheaper and faster, but less than perfect.
Primary research is more expensive and takes longer to do but can be tailored for your specific need. Most small companies will hire a professional to do this for them as they have more expertise and access to resources.
Ethnographic research is gathered by observation. Various methods can be used such as video surveillance, secret shoppers, and even bar code tracking to see which products are naturally purchased together. Focus groups are paid groups brought in to a central place, using the research firm, to gain their thoughts and opinions on a product or campaign. Participants should be drawn from the target market and are usually paid. Many times the discussions are monitored and recorded for detailed analysis.
Surveys are generally cheap and popular. As shown earlier phone surveys are more expensive than mail surveys. However, phone surveys allow more depth of information. Internet surveys are gaining in popularity for their ease of administration and data entry (which is automatic by the computer).
So if you can’t use history what can you use? See the next slide.
Your differential advantage makes you look different (I.e. superior) in the eyes of your customer. A lower price give the customers a reason to choose you. A lower cost structure allows you to either sell at a lower price, stealing market share, or at the same price, earning more profits.
In you marketing plan you must discuss and describe your target market and their needs. Why are they unique? Why will they react in a similar manner? What are they missing? Your situation includes your company’s position in the market and that of competitors. Each of these components is discussed in turn.
Geographic segmentation can be by state, region, county, or whatever makes sense for your company. By choosing to operate in the US only you have chosen one segment. Service industries by their nature segment geographically. People do not travel across the country to get their hair cut.
Demographics are typically things we do not change, or do not easily change, about ourselves.
Each advertising tool has it’s own advantages and disadvantages. Each is more or less appropriate in any given situation. When considering distribution remember USPS and UPS have programs specifically aimed at small businesses so make sure you get the information you need.
Market Planning Checklist Use this list to develop your marketing plan: Have you analyzed the total market for your product or service? (features of your product?) Have you described how your product or service will benefit your clients? Have you prepared a pricing schedule? Have you prepared a sales forecast? Which media will you use in your marketing campaign? Do your marketing materials mention any optional accessories or added services that consumers might want to purchase? have you prepared clear operating-and-assembly instructions if required? What kind of warranty do you provide? How will you distribute your product?
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