4
4.2 How to do Research
4.3 Identify Competition
4.4 The Marketing Mix
4.5 Promotion and Goals
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

Lesson 4.1
 Identify a target market by analyzing the needs of customers.
 Describe how to conduct market research
Chapter 4
Slide 2
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

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Target market
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Demographics
Psychographics
Market segments
Market Research
Secondary Data
Primary Data
•
Observation
•
Focus Groups
Chapter 4
Slide 3
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Why is it important for Cheryl to know exactly who her customers are?
 What characteristics would you look for in your customers if you planned to open a paintball store?
 What about a bakery?
Chapter 4
Slide 4
Textbook Page 74
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Target Market
•
The individuals or companies that are interested in a particular product or service
Chapter 4
Slide 5
Textbook Page 74
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Customers are your most important asset.
 They are the individuals and businesses who buy the products and services companies offer.
Chapter 4
Slide 6
Textbook Page 75
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Demographics
•
Data that describes a group of people in terms of
 age
 marital status
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 family size ethnicity
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 gender profession
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 education income
Textbook Page 75
Chapter 4
Slide 7
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Psychographics
• data that describe a group of people in terms of
 tastes
 opinions
 personality traits
 lifestyle habits
Chapter 4
Slide 8
Textbook Page 75
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Consider the following information regarding your customers:
• individuals or companies?
• age and income?
• industries customers are in?
• needs and wants my product will satisfy?
• number of potential customers?
• competitive environment?
• pricing of product or service?
• what is unique about my offering?
Textbook Page 75
Chapter 4
Slide 9
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

Chapter 4
Slide 10
What questions should you ask when identifying your target market?
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Customer profile
• a description of the characteristics of the person or company that is likely to purchase a product or service
Chapter 4
Slide 11
Textbook Page 76
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Market segments
• groups of customers within a large market who share common characteristics
 Most products and services appeal to a small portion of the population.
•
Segmentation helps you serve your niche efficiently.
Chapter 4
Slide 12
Textbook Page 76
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Use-based data
• data that helps you determine how often potential customers use a particular service
 Geographic data
• data that helps you determine
 where your potential customers live
 how far customers will travel to do business with you
Chapter 4
Slide 13
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Do they offer high quality with high prices?
 Do they offer low quality with low prices?
 How is their customer services?
 Are their customers happy?
•
How much repeat business do they get?
Textbook Page 77
Chapter 4
Slide 14
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

Chapter 4
Slide 15
Why is it important to have a customer profile and understand your competition when determining your target market?
You must understand your competition and your customers’ needs and wants in order to define your target market.
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 You need to find out who your customers are, what they want or need, and how much they will pay for it.
 Without customers, you have no business.
Chapter 4
Slide 16
Textbook Page 77
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

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Market research
Secondary data
Primary data
Survey
Focus group
Chapter 4
Slide 17
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Market research is
• a system for collecting, recording, and analyzing information about
 customers
 competitors

 goods services
Chapter 4
Slide 18
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Secondary data
• information found in already-published sources
 Secondary data can be found in:
• government publications and websites
• industry specific books
• trade publications
• newspaper articles
• books about entrepreneurs in similar businesses
Textbook Page 77
Chapter 4
Slide 19
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Primary data
• information collected for the very first time to fit a specific purpose
 Observation
• determining information by watching customer behavior
Chapter 4
Slide 20
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 Focus group
• an in-depth interview with a group of target customers
• questions are similar to survey questions
• group interaction allows for more in-depth discussion
 Survey
 a list of questions you ask your customers to determine
 demographic information
 psychographic information
Chapter 4
Slide 21
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western

 disadvantages of primary data
• expensive
• time consuming
Chapter 4
Slide 22
Entrepreneurship: Ideas in Action
© Cengage Learning/South-Western