Lesson 4.2
Pages 101 - 109
Research the Market
Goals
 Explain the role of market research.
 Identify the six steps involved in market
research.
 Explain the role technology plays in
marketing research.
Chapter 4
Slide 1
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Get to know your market
 Read “Get to know your market” on page 101 of
your book. Answer the following questions.
1.
Do you think Roseanne and John are using good methods to
gather data? Explain.
2.
Can you suggest any other ways they can find out what their
potential customers think about the business idea?
Chapter 1
Slide 2
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Role of Market Research
 For your business to succeed, you
need to identify potential markets,
analyze demand, and determine how
much customers are willing to
________ for your products or services.
 To collect this information, you will
perform _______________________.
Chapter 1
Slide 3
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Role of Market Research
 market research
 a system for __________, recording, and
analyzing information about




Chapter 4
Slide 4
customers
_______________
products
services
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Role of Market Research
 Based on the findings of market research, a
business will be able to determine which
marketing strategies will be most effective
and most profitable.
 Market research has its limits because it can
be very _________ and ________________,
but it is worthwhile when major decisions
must be made
Chapter 1
Slide 5
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Primary Data
 primary data
 information collected for the ___________
to fit a specific purpose
 a researcher collects primary data to help
identify and understand the ____________
 there are a few different ways to collect
primary data
Chapter 4
Slide 6
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Primary Data
 survey
 a list of questions you ask your customers to
determine
 _________________ information
 psychographic information
 the ____________________ of primary market
research
 can be conducted by mail, over the phone, on the
Internet, or in person
Chapter 1
Slide 7
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Primary Data
 Surveys (continued)
 should be kept to a ________ in length when read
over the phone or mailed to respondents
 longer surveys can be used if an interview is face
to face
 questions should be clear and easy to answer,
and only the ____________________________
should be asked
Chapter 1
Slide 8
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Primary Data
 observation
 determining information by watching
customer _________________
 Example: if you are considering opening
a juice bar in a shopping mall, you might
want to see how many customers you
could attract. You could go to the mall
and count the number of people
purchasing drinks at various food outlets
Chapter 4
Slide 9
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Primary Data
 focus group
 an ____________________ with a group of target
customers
 questions are similar to survey questions
 group interaction allows for more discussion
 usually led by a moderator, who asks questions
about buying habits, likes and dislikes, and
interest in particular products and services
 Usually ___________ so the comments can be
reviewed after the session
Chapter 1
Slide 10
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Primary Data
 ________________ of primary data
 time-consuming
 more expensive
As an entrepreneur, you will need to determine
how much primary and secondary market
research data you need to collect.
Chapter 4
Slide 11
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Secondary Data
 secondary data
 information found in ____________________
sources
 data on population, family size, household
income, economic trends, industry forecasts,
and other information can be found in
secondary data resources
Chapter 4
Slide 12
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Secondary data can be found in:
 publications issued by government and
community organizations (U.S. Census Bureau,
______________, The Chamber of Commerce)
 industry specific books
 government and business websites
 books about entrepreneurs in similar businesses
 trade publications
 newspaper articles and __________________
Chapter 1
Slide 13
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Activity: You Are Where You
Live
 www.cengage.com/school/entrepreneur
ship/ideas
 Choose Chapter 4 from the drop down
at the top
 On the left side, click Net Bookmarks
 Follow the steps to complete the activity
and email me your assignment
Chapter 1
Slide 14
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What types of data can be collected
through market research?
Chapter 1
Slide 15
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Six Steps of Market Research
 Although primary data collection is time
consuming and expensive, it will tell
you exactly what you want to know.
 Primary data can uncover information
that is often not available through
_______________________.
 Conducting primary market research
involves six steps (see next slide)
Chapter 4
Slide 16
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 4
Slide 17
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1. Define the Question
 Determine exactly what it is you need to
know and ______________________ that
will be the focus of the research
 Example: Maggie is thinking about starting
a dog-walking service. Before she invests in
her business, she needs to determine who
would be most likely to use her service (her
target customer)
Chapter 4
Slide 18
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2. Determine the Data Needed
 Decide what data you need to
_____________ the question.
 Entrepreneurs need to be sure the data
they collect will be helpful

Chapter 1
Slide 19
Example: It would not be helpful for Maggie to
know how many families live in the area where
she wants to open her business. She needs to
know how many people living in the area are dog
owners who lack the time to walk their dogs.
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3. Collect the Data
 Decide the best way to ___________ data.
 The method you use will depend on what
type of information you want to gather
People’s opinions can be obtained through




Chapter 4
Slide 20
focus groups
surveys
 NOT observation
______________________should be completed
first to familiarize yourself with your market. This
will help you determine what kind if primary data
research to perform
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 If you use observation
 Determine where and when to get the best
information
 If you use __________________
 Think about what kinds of individuals to include
and what questions to ask them
 If you use a survey
 Think carefully about how long it should be, what
questions to include, how to administer, and how
many people to survey
Chapter 1
Slide 21
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Example: Maggie decides a survey is the
best way to find answers about customer
preferences for a dog-walking service.
Through secondary data research, she
learned that 60 percent of the households in
her area own one or more dogs and the
average annual household income is
$75,000. Most households have one or more
adults working in a professional field. Dog
ownership is on the rise in her area. Maggie
puts together a survey to find out about
lifestyles, opinions, and choices of dog
owners.
Chapter 1
Slide 22
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4. Analyze the Data



Chapter 4
Slide 23
Once you have collected your primary and
secondary data, thoroughly ______________ and
interpret the information.
Write down analysis results for future reference.
Example: Through secondary data research,
Maggie found that 2,500 dogs live in her area.
From her primary data research, she found that 30
percent of dog owners in her area would pay $20 to
have their dogs walked for 30 minutes. Many would
pay to have them walked two or three times a
week. Maggie determines that she could easily
have 750 dogs to walk each week.
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5. Take Action
 Use your analysis results to develop an
_______________.
Chapter 1
Slide 24
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Example: Maggie’s market research has helped her
conclude that her idea for a dog-walking service is
profitable. From her market research, she has
created a target customer profile for people aged 31
to 50 who travel often, work long hours, and earn
$50,000 to $100,000 a year. She also knows the
amount of money her target customers are willing to
pay for her service and how much income she can
expect to make. Maggie plans to create a flyer which
she will distribute in neighborhoods and veterinarian
offices. She also plans to distribute the flyer
downtown and in other business areas where many
of her target customers work.
Chapter 1
Slide 25
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6. Evaluate the Results
 Entrepreneurs must regularly
____________ the actions they take as a
result of the plan.
 Example: Once Maggie has developed
and distributed the flyer, she will need to
evaluate the results. If she feels that she
is getting a good response from her target
market, she can assume that her plan of
action is effective. However, if she is not
getting a good response, then she will
need to revise her plan of action
Chapter 1
Slide 26
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What are the six steps of market
research?
Chapter 1
Slide 27
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Market Research Activity
 Complete the Market Research
Handout
 Turn in
Chapter 1
Slide 28
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Technology-Driven
Marketing
 Customer relationship management
 a business strategy designed to increase
_____________ and customer satisfaction
 uses technology to track customer
interactions
 focuses on understanding customers as
___________ instead of as part of a group
Chapter 1
Slide 29
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Interactions with Customers
 In a CRM system, companies identify customer
relationships, including information on who
customers are, where they are located, and what
products and services they buy
 Companies collect data about customers through
interactions that occur via




______________________
web
salespersons
product ___________________
 product warranty cards
Chapter 1
Slide 30
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 touch points
 places where a customer might have
______________________________
 discussion with delivery personnel
 company websites
 electronic data transfer
 the movement of data between locations in
a structured, _______________________
 The information is then used to define
market segments, adjust marketing
strategies, develop new products, and
improve customer relationships
Chapter 1
Slide 31
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Customer Database
 _______________________
 a large computerized database containing all of
the information collected in the CRM process
 data mining
 finds hidden ___________ and relationships in
the customer data stored in the data
warehouse
Chapter 1
Slide 32
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The value of data mining is the ability of a
company to transform individual bits of data
into ________________ that marketers need
to develop successful marketing strategies
 Using data mining, marketers can search the
data and develop customer profiles
 Once the most profitable customers and
prospects are identified,
___________________ that will appeal to
them are created
Chapter 1
Slide 33
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What is the goal of CRM?
Chapter 1
Slide 34
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Assessment Questions
 Directions: Answer the Think About It
questions on page 109. Add the
questions to your 4.1 assessment
questions. Type the questions and bold
your answers. Save and upload.
Chapter 1
Slide 35
Entrepreneurship: Ideas in Action 5e
© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.