What is a Target Market?

 Target Market - the individuals or companies that are interested in a particular product
or service and willing and able to pay for it
 Identifying who you will most likely sell too

Understand your Customer

 Customers - people who buy the products and services companies offer...the customer is
always right! :)
 What do your customers want? How are you going to fill that want?

Demographics

Demographics - data that describe a group of people in terms of their age, marital status, family
size, ethnicity, gender, profession, education, and income

Identify your Target Market

Please answer questions to identify the target market for below product/service

Market Segments
Market segments - groups of customers that share common characteristics

 Segmenting or dividing your target market into several small groups can help you
develop a product or service that will meet customer needs
 You cannot meet the needs of the entire market - narrow it down!

Market Research
Market Research - system for collecting, recording, and analyzing information about customers,
competitors, goods, and services

Secondary Data

 Data found in already published sources

 Population, family size, household income, economic trends, industry forecasts, and
other info.
 Pg. 119

Primary Data - information collected for the very first time to fit a specific purpose
- helps identify and understand the target market
- questionnaire/survey
Watch - see how many customers would be in that area
focus group - an interview with groups of target customers who provide valuable ideas on
products or services
- in-depth discussion

Section 2

How to Perform Market Research

5 steps of Primary Market Research
In Class Activity pg 123

- Interpret the information

- Consider the market segment you are targeting

- Once you have analyzed and interpreted your data, you will need to determine how to use the
information.
- Develop a plan of action based on the information you found in market research

Identify your Competition

Section 3
Find your Direct Competition
- can be located in the same geographic area as your business
- look in telephone directory or Chamber of Commerce
- can be located far away

1. Large retailers usually are able to keep larger quantities of products in stock

2. Large retail chains don't rely on one single product line

3. Large companies usually have more resources to devote to advertising

Pg 129

1. Price

2. Location

3. Facility

4. Strengths

5. Weaknesses

6. Strategy
2. Select a Research Method
Business Plan:
- see shared Google Document for specifics
- Use handout as a guideline!
Chapter 6
5. Draw Conclusions

3. Collect Data

 Collect secondary data first (demographics & psychographic data)

 This will help you determine what kind of primary data research to perform
 Surveys - need to be clear, easy to answer, and only include the most important
questions

What Went Wrong

pg 125
Survey? Observation? Focus Group? How many people should be involved in each?
- The method you use will depend on what type of information you want to gather

You need to define exactly what it is that you are trying to find out

1. Define the Question

Direct & Indirect Competition
The value of Market Research
Direct Competition - competition from a business that makes most of its money selling the
same or similar products or services as another business
Indirect Business - competition by a business that makes only a small amount of money selling
the same or similar product or services as another business
The Importance of a Customer Profile

Understand the Competition

Businesses must identify some special customer need or want that is not being met.
Who is the target market ?
1. 90 day around the world cruise
2. NFL games
3. First class flight to Europe
4. Music concerts
5. Disney World Resorts

In Class Activity
pg 117
Competing with Large Businesses

Analyzing the strengths and weaknesses of your competition will help you figure out what you
can do to get customers to buy from your business
Assignment

Psychographics

Strategies for Maintaining Customer Loyalty

Business Plan

- Direct & Indirect Competition

- Analysis of Competitors

Primary Data
Think of all of the possible busineses that can compete with you indirectly

Identify & Meet a Market Need

4. Analyze Data
IDENTIFY YOUR TARGET MARKETFOR YOUR SERVICE/PRODUCT
1. Who are my customers: individuals or companies?
2. If customers are individuals:
a. How old are they?
b. How much money do they earn?
c. Where do they live?
d. How do they spend their time and money?
3. If customers are companies:
a. What industries are they in?
b. Where are those industries located?
4. What needs or wants will my product or service satisfy?
5. How many potential customers live in the area in which I want to
operate?
6. Where do these potential customers currently buy the products or
services I want to sell them?
7. What price are they willing to pay for my products or services?
8. What can I do for my customers that other companies are not already
doing for them?
Study Individual Competitors
1. Listen & Respond to Feedback
- what are their concerns and how are you going to fix them?
Disadvantage of Primary Data

Entrepreneurship
2. Other Strategies for Maintaining Loyalty
- Superior service
- more convenient hours than other businesses
- Easy return policies
- Store-specific credit cards
- Personal notes or cards for birthdays or a thank you for joining
- Frequent buyer programs
Find your Indirect Competition

 Data that describe a group of people in terms of their tastes, opinions, personality traits,
and lifestyle habits

Assignment
Focus Group
Observation
1. Define the Question
2. Select a Research Method
3. Collect Data
4. Analyze Data
5. Draw Conclusions

 A description of the characteristics of the person or company that is likely to purchase a

product or service
 See pg 118

can be very time consuming