Entrepreneurship and Small Business Management

1. Entrepreneurship and Small Business Management Chapter 6 Exploring Your Market

2. Ch. 6 Performance Objectives • Explain how marketing differs from selling. • Understand how market research prepares you for success. • Choose your market segment and research it. • Position your product or service within your market.

3. Marketing • Identifies your customers and their needs/wants • Develops and uses strategies for getting your product or service to customers • Generates interest by communicating your competitive advantage to customers • Drives all business decisions

4. Market Research • May be conducted at various levels: • Industry • Market segment • Individual consumer • Two main types: • Primary—research conducted directly on a subject or subjects • Secondary—research carried out indirectly, through other existing resources

5. Primary Research Methods • Personal interviews • Telephone surveys • Written surveys • Focus groups (guided group discussion) • Observation • Tracking

6. Secondary Research Methods • Online searches • Public and proprietary database searches • Data published by industry associations, chambers of commerce, and public agencies • Review of books and records • Competitor Web sites

7. Customer Research • Who are your potential customers? • Where can you reach them? • What do they want and need? • How do they behave? • What is the size of your potential market?

8. Industry Research • What is the industry size in units and dollars? • What is the industry’s geographic range? • Is it a “niche” or a mass market industry? • What does industry profitability look like? • What trends are occurring in the industry? • What is the structure of the industry? • What are competitors doing in the industry?

9. Customer Decision-Making • Awareness of a need or want • Information search • Evaluation of alternatives • Decision to purchase • Evaluation of purchase

10. Owning Customer Perception • Features create benefits • Feature—a fact about a product or service • Benefit—what the feature can do to meet a customer’s needs • How needs, want, and demands differ • Meeting a need is solving a problem • Wants—needs with individual preferences • Demands—wants backed by buying power

11. Choosing a Market Segment • A market segment is a group of consumers or businesses who have a similar response to a particular type of product or service. • It is difficult to target very different market segments simultaneously. • A company that concentrates on one market segment will likely do better than a company that tries to sell to everyone.

12. Market Segmentation Methods • Geographic—dividing according to location • Demographic—dividing according to age, gender, income, and/or education • Psychographic—dividing by psychological differences (such as opinions or lifestyles) • Behavioral—dividing the market based on observed purchasing behaviors

13. Product Life Cycle (PLC) Stages • Introduction • Growth • Maturity • Decline Where is your product/service in the PLC? Is your market saturated?

14. Market Positioning • Distinguish your product/service from others offered to your market segment. • Clearly communicate your competitive advantage. • Write a positioning statement. Sample format: [Your business name/brand] is the [competitive industry/category] that [provides these benefits, or points of difference] to [audience/target market].