Research Project Outline
To accompany Cateora/Graham/Bruning’s International Marketing Canadian Edition
Guide for developing your project
Summary
Successful businesses have extensive knowledge about their customers and their competitors. Acquiring
accurate and specific information about your customers and competitors is a critical first step in market
investigation and development of a marketing plan. Accurate market assessment and development of an
effective plan is critical to the success of both new and existing businesses. The market impacts and directs
all aspects of the company's activities and ultimately will lead to success or failure of the business. In
developing a market plan, your primary functions are to understand the needs and desires of your customer,
select or develop a product or service that will meet customer needs, develop promotional material that will
make the customer aware and ensure product or service delivery.
Market Analysis
Who is your customer?
Knowledge of the customer enables you to determine the market size and what determines their buying
decision. It provides information that will assist in choosing a location, determining product or services to
be offered, establishing pricing and planning a selling strategy.
Key issues to consider are:
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Who will buy your product? Primary and secondary target groups.
Where does the buyer live and what is their profile?
What factors influence the decision to buy?
Who is involved in the purchase decision?
How often will buyers buy?
Where do they buy, when and how much do they buy?
What are the buyer's preferences and needs?
Are customers loyal? Can long term relationships be built?
What product or service are you selling?
An important aspect of market analysis is to ensure that the product or service meets the market (customer)
needs. Product or service focus must be the customer.
Issues to address are:
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Specifications of all your products and or services and key features relative to what prospective
buyers in your target market are saying they need.
Comparison with competitors and how customers perceive your product relative to others
available.
What are the current trends, at what stage of maturity is the product life cycle?
What regulations apply to your product or service?
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What packaging is required?
Who is your competition?
Are there competitors that exist now and what new competitors are likely to enter the market? How will
your product or service compare and what is the probable reaction of your competitors once you enter the
market?
Issues to consider are:
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Who are your major competitors?
What share of the market do they have?
What are their strengths and weaknesses (e.g. quality, price, service, payment terms, location,
reputation, etc.)?
How do you compare to your competitors and how will they react to your entry into the market?
What factors are there that could increase or reduce your competition?
What is your target market?
Accurate identification and analysis of the target market enables you to develop an effective overall
marketing strategy. The information will assist in determining business size (output requirements),
distribution channels, pricing, promotion strategy and other marketing decisions.
Target market issues include:
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What is the overall market size? Number of potential customers and physical boundaries?
Which segment of the market is the most attractive in terms of future growth potential, ease of
entry, competition, profit potential and overall risk?
How do products generally get to the customer?
What is the current dollar value or quantity of product/service being sold into each segment of the
market?
What social, technical, environmental or economic changes are taking place within the market and
how will they impact sales?
What are your distribution channels?
There may be many options for moving your product to the customer such as direct retail, wholesale,
consignment, broker etc. The method of distribution has important implications affecting your pricing
structure, advertising message, cash flow, etc. You will want to choose the distribution method best suited
for your product and where you want to be positioned in the marketplace.
Key issues are:
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What methods of distribution are best suited for your product?
What methods of distribution do your competitors use?
What are the costs relative to market coverage?
Does your level of available capital or production capacities restrict your choice of distribution
methods?
Are there ownership opportunities in the supply chain?
Pricing
The objective is to maximize profits while remaining competitive in the marketplace. Pricing can be based
on either the cost price or market price (what will the market pay?). Regardless of the pricing method used,
it is critical to know all of your costs involved in delivery of your product or service to avoid possible
underpricing and operating losses. If the market will not support a price level sufficient to cover cost, it will
be necessary to investigate whether costs can be lowered or alternatively, it may be necessary to abandon
your plans to proceed.
Issues to consider are:
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What control do you have over the product price (e.g. exclusive product, no competition, high
market demand, etc.)?
What are competitor prices and how do they price their products?
What price and sales volume are needed to achieve profit objectives?
Can you sell your product at different prices into different markets?
Can you maintain your prices over time and what do you expect to happen to competitors prices?
Are your prices quantity sensitive?
Promotion and Selling
Promotion of your product or service and development of a promotion strategy is part of the market
analysis. It is important to analyze what are the best methods of making your customer aware and what
message will motivate them to buy. From the promotion strategy the advertising budget and overall sales
plan are then developed.
Items to consider are:
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What media of advertising and sales do your competitors use?
What media of advertising is best suited to reach your customer? Primary and secondary media.
(e.g. Primary - newspaper and radio; Secondary - flyers and trade shows).
What sales tools and training will be required for staff?
What image are you attempting to build through your promotion?
Packaging?
Note: While customer service, in store display and merchandising are not part of the market analysis, they
are an important part of the business image and promotion package. Ongoing attention should be given to
these areas to assure maximum promotional benefit is achieved and that the desired image is portrayed.
Primary/Secondary Data Sources
Primary data is the information you will obtain through your own efforts or by hiring someone and can
include observation, surveying, and experimentation.
Secondary data consists of information which has been gathered by someone else and is relevant to the
venture you want to establish. Examples of sources and types include:
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Canada Business Service Centre in your region http://cbsc.org
Statistics Canada 1-800-263-1136 http://www.statcan.ca/start.html
o Census Divisions and Subdivisions Profiles Catalogue No. 94-115 and No. 94-116
o Family Expenditures in Canada Catalogue No. 62-555
This publication will highlight average family expenditures for a variety of consumer
items.
o Household Expenditures Research Paper Series Catalogue No. 62F0026M1E
This publication will highlight types of equipment located in various households
throughout Canada.
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Family Food Expenditures Catalogue No. 62-554
Highlights dollars spent on various types of food per household.
Canada Post - 1-800-267-1177
o Demographics and Income Statistics for Postal Areas
o Household Figures for Letter Carrier Offices
Lists populations for various postal code communities in Canada.
o Household Figures for Non-Letter Carrier Offices
Local, Municipal, Provincial, and Federal Government Departments and Agencies
Business and Industry Associations / Trade Publications / Periodicals
Business and Industry Trade Shows and Exhibitions
Local Public, Business, and Educational Institution Libraries
Business and Popular Press
Business Professional Services, e.g. Accountants, Lawyers, Consultants, Insurance Brokers,
Financial Institutions
Business and Educational Seminars / Courses, etc.
Other Business People / Known Acquaintances / Competition / Internet
When researching your business idea, it is important to do as thorough a search for information as is
possible. It is also recommended to do as much of it as you can on your own. This will help you to know
the market for your idea better, and can help to keep the costs down at the start. Once this initial research
has been completed, you may then feel the need to contract professional services to collect additional
information for you, or to verify the information you have collected so far. The information you have
gathered yourself can form an important base of information from which a consultant can work from, and
as well, will allow you to identify more specifically what you want them to do for you, particularly when
there will be costs associated with their services.
What is market research?
Market research is an orderly, objective way of learning about people - the people who buy from you or
might buy from you.
It can provide unbiased answers to questions such as:
Who will buy your product?
What are the requirements of your customers? What price will they pay for your pickles? What size of jar
do they prefer? What are their requirements for shipping that would affect jar size and/or shape? Where do
they want to be able to buy your pickles? Are there other types of pickles they would buy?
What are the characteristics of your customers? Who buys and eats pickles - what is their age, gender, and
income level? Where do they live?
What are the attitudes and perceptions of your customers? Are they looking for new and different pickle
products? Is the combination of dill and carrot an appealing one?
Who else is producing the same or similar product - at what cost? Can you compete with their price,
quality, etc? If no one else is producing such specialty pickles, why?
What advantages can you offer that your competition can't or doesn't? It may be that your carrots are
organically grown or that your pickles are an Alberta made product.
What marketing constraints exist? Are there expensive start up costs involved with going into pickle
production? Are there major legal requirements needed to get the name or label information you want?
Is the market saturated or is there room for your company? Will you be one of many companies selling
pickles to people in your market area?
Is this an area with an expanding market or one that is declining? In other words, can you make a profit at
it? Does trend data indicate an increasing consumption of pickled products? Is there a growing or shrinking
body of scientific evidence about possible health risks associated with eating too many pickled foods? How
might this affect people's consumption of pickles?
What do you see as the future for your business? Do you visualize your pickles to be on the shelves of all
Canada Safeway stores in Alberta? In Western Canada?
Why do market research?
It's impossible to sell people what they don't want. That's obvious. Just as obvious is the fact that nothing
could be simpler than selling people what they do want. Market research is essential in helping you find out
what people want.
Market research provides what you need to get sound information about your product, service or market so
you can develop good marketing and business strategies.
Who should do market research?
All businesses, big and small, old and new, need to do market research. A common feeling of many small
business owners is that they don't need to do market research since they already have a feel for their
customer market, given their long experience. However, experience, though useful, can lead to a false sense
of knowing. Be careful; information gathered randomly over the years may be out of date, vague, biased or
of a folk tale nature.
Business owners can't afford to make errors in judgment. Their savings, their families' future and their
business reputations are at stake. Market research is a critical step.
When should I do market research?
Market research is not a one time only activity. It needs to be done on an ongoing basis and whenever a
major business decision needs to be made. It usually needs to be done:
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before starting a new business
when introducing a new product or service
to maintain your existing business
Before starting a new business:
Innovative ideas and gut feelings aren't enough when it comes to predicting success for a product or
service.
Just because your friends and relatives rave about the great parties you throw, doesn't necessarily mean
your party planning and catering business will be an overwhelming success. Up front, you need to know:
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Is there a need for this service?
Who is likely to buy your service?
Are there enough of these people in your market area?
How are you going to find these customers?
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Is a competitor meeting the need? If so, can you offer something they can't?
How much are these people willing to pay?
Will finding customers cost more than the profit margin will allow?
Is there a profit margin?
When introducing a new product or service:
Again, a good idea, experience and intuition just aren't enough when it comes to predicting success.
Without market research at this stage of a business, you could end up with a basement full of jars of your
gourmet mustards which didn't sell nearly as well as your popular line of flavored vinegars. Or, you might
face competing products sold at local delis, supermarkets, gift shops and farmers' markets that you didn't
even know existed. Or, adding a fried pastry product to your existing line of healthy muffins may damage
your company's reputation for healthy snack foods.
To maintain your existing business:
Success today doesn't necessarily mean success tomorrow. Changes in markets, competition, technology
and customers mean you can't rest on your laurels. You need to constantly be sure your product or service
fits with these changes. You need to know what your customers think of your specialty dog biscuits.
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Is there a new untapped market - perhaps lower calorie biscuits for older, less active dogs?
Are your customers ready for a new product?
Are your prices in line?
Is there new technology that would enable modifications or substitutions for an approved product?
Has your target market become more concerned about the health and well-being of its dogs?
Are competitors introducing new product lines?
How to do market research?
It's to your advantage to do at least some of your own market research. The more you do, the less money
you'll pay to consultants and the more insight you will have regarding your product/service and market.
Start by doing some indirect market research. Gather information that is already done and available to you
at little or no cost. Existing businesses can look at their records and talk to employees. All businesses are
well-advised to read government reports, industry magazines, trade association surveys and other
documents. Be sure to talk to people directly and indirectly involved in your industry. Some good initial
contacts include provincial government economic development agencies, municipal offices and chamber of
commerce offices. Check to see what your competition is doing.
You may then find you need to do some direct market research. In other words, generate some information
yourself. It might include such things as conducting a taste test of your new product, doing a telephone
survey, or observing the numbers and types of people who shop at the local competitors. This type of
market research, since it is often more complicated than indirect market research, can benefit from the
expertise of a market research professional. This doesn't necessarily mean turning the entire research
project over to a consultant. Rather, it may mean the consultant does some work (e.g. develop a
questionnaire) and you do some work (e.g. conduct a taste test of your vegetable dip at the local farmers'
market and have tasters complete the questionnaire).
So, although there is a need for specialists and consultants, they aren't needed to solve every problem. With
additional reading on the subject, even those with no formal market research training can take an active role
in conducting their own market research.
Where to do market research?
Much of your market research can be done at home or close to home since you need to know as much as
possible about the market in your target area. Your local public, college or university library, chamber of
commerce and government departments are excellent places to begin your search on local and global
market information. Many government departments have libraries containing valuable information for
doing market research.