Market ResearchThe Purpose of Market Research is to help you,

the entrepreneur, change yourself from

thinking about what you want to

thinking about what the customer wants

ActivityHershey’s Case Study

Results

1 2 3 4 5 6

Part I:

Hershey’s Case StudyBased on the results of the market research,Hershey’s has decided to invest in your team tostart a chocolate bar company that markets toyouth ages 12-18. You must:

1. Create a new chocolate bar2. Design a brand name, logo and slogan 3. Develop a marketing strategy using the 4Ps of

marketing 4. Create a commercial advertisement for the new bar5. Prepare to present work and perform your commercial

to the board of directors

Part II:

Types of Market ResearchPrimary

– Surveys– Interviews– Focus groups– Observations– Trial and sampling

Secondary research– Library, Internet, Bloomberg

Types of Market ResearchPrimary

– Surveys– Interviews– Focus groups– Observations– Trial and sampling

Secondary research– Library, Internet, Bloomberg

Market ResearchComplete market research includes the following

analysis:– Consumer – Market– Competitive – Industry– Organization and environment (SWOT)

Market Research

Enables a business to collect information that can

help form its 4 P’s:

Product – features, benefits relevant to consumers

Price – attractive (competitive or exclusive) pricing

Place – convenient purchasing location(s)

Promotion – incentive to buy from you instead of

your competitors

Market Research ActivityPizza ShopMarket Research: Results

1st Rank: Taste2nd Rank: Cleanliness3rd Rank: Price

Being known for providing these things can be your competitive advantage – what you’ll do to stand-out from your competition

Customer Oriented Pricing

A method of judging what price to set for your product by focusing more on the customers’ point of view.

Different from calculating price based on the costs of making the product (cost pricing)

different from just copying the price of other competitors. (the “going price” or market price).

When…

When Price is not the most important…

Then what…?

When Price is not the most important

You can charge at least 10-15% more than the nearest similar businesses – if you deliver the most important criteria better

than the other businesses!

Control expenses carefully so you can make profit while selling at your price.

always deliver the most important criteria to the customer.

Defining Your Competitive Advantage

Three components of mission statement– Mission Statement: States goal of business

– Strategy: How you intend to outperform your competition

– Tactics: The ways you will use to carry out your strategy

The Mission Statement

Ex.:

Our mission is to design quality t-shirts at reasonable prices for local bands to sell.

Ex.: Our mission is to design quality t-shirts at

reasonable prices for local bands to sell.

Strategy: my competition in town requires a minimum order of 500 t-shirts. We will outperform them by requiring a minimum order of only 50 t-shirts at the same per-unit price.

The Mission Statement

Ex.: Our mission is to design quality t-shirts at reasonable

prices for local bands to sell.Strategy: my competition in town requires a minimum order of 500

t-shirts. We will outperform them by requiring a minimum order of only 50 t-shirts at the same unit price.

Tactics: We will post flyers at shows, run ads on local college radio stations, make t-shirts on the weekend when it’s cheaper to rent the equipment

The Mission Statement

Competitive Advantage Creates a moat around a business such that it can keep

competitors at bay and reap extraordinary growth and profits

Whitney Tilson, 2000

The way an enterprise determines its positioning in the market in relation to its competitors

Brand

At the end of the day, you’re seeking to build a

brand!

Definition:

a name (sometimes along with a symbol or trademark)

that distinguishes a business from its competition,

making it instantly recognizable to the consumer.

Important because consumers have choice

Brand

Definition:

“…a constant promise to our customers.”

-Microsoft Executive

The Brand Pyramid

The Dobney Corporation

The Brand Pyramid

All basketball sneakers have certain

characteristics

The Dobney Corporation

The Brand Pyramid

Trucks made by Ford have a certain level of

reliability

The Dobney Corporation

The Brand Pyramid

Eat Snickers when you’re hungry, drink Coke when you’re

thirsty

The Dobney Corporation

The Brand Pyramid

I read the WSJ or I wear Dolce & Gabbana

or I shop at Whole Foods Market

The Dobney Corporation

The Brand Pyramid

I am the type of person who shops at Whole Foods Market, drives a Toyota Prius, wears SeaSalt organic

cottons

The Dobney Corporation

“If all our buildings were destroyed, world-wide, we could borrow $100,000,000,000 and rebuild everything on the strength of the Coke brand.”

- CEO of Coke in an interview with Fortune Magazine

Best Global Brands – 2007 (source: InterBrand)

Critical to Planning

Key areas to analyze are:– Consumer– Market– Competitive– Industry– Organization and environment (SWOT)

Critical to Planning

Key areas to analyze are:– Consumer– Market– Competitive– Industry– Organization and environment (SWOT)

Market Analysis

What defined market am I trying to reach? What specific companies are servicing this market?

– Are there other companies servicing this market with a similar product?

– Are they successful?– What is their market share?

Who has the power? Suppliers? Or Buyers? What is the size of the market

– Is it a growing market? Is it saturated?– Is the industry stable, volatile or trendy?

Market Analysis (cont.)

What do customers expect from this type of product or service?

What core functionalities must the product or service have?

What are customers willing to pay for this type of product or

service?

How can I reach this market?

– How do my competitors reach the market?

What are the business models of my competitors?

What is my competitive advantage?

Competitive Analysis

Analyze key variables– Product mix– Service offerings– Pricing– Brand: perception of quality– Packaging– Distribution