Lecture 8
Market Research
Dr. Hatem Elaydi
ECOM 5368 Engineering Management
(Entrepreneurship & ework)
Islamic University of Gaza
Sep 26, 2016
Market research
The process of gathering, analyzing and interpreting
information about a market, about a product or service to
be offered for sale in that market, and about the past,
present and potential customers for the product or
service; research into the characteristics, spending habits,
location and needs of your business's target market, the
industry as a whole, and the particular competitors you
face .
Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
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Why conduct market research
The goal of doing market research is to equip yourself with the information
you need to make informed business decisions, 4 P's:
Product — Improve your product or service based on findings about what
your customers really want and need.
Price — Set a price based on popular profit margins, competitors' prices,
financing options or the price a customer is willing to pay.
Placement — Decide where to set up and how to distribute a product.
Promotion — Figure out how to best reach particular market segments
(teens, families, students, professionals, etc.) in areas of advertising and
publicity, social media, and branding.
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Market research can help you
Understand your customers and their preferences (4 P's)
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Profile your customers (location, age, gender, income level, etc.)
Create more effective marketing campaigns
Find the best business location
Identify opportunities to grow and increase profits
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Recognize changes in demand
Offer new products and services for the new demand
Find new markets within
Recognize and plan for industry and economic shifts
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Shift inventory, price and staff levels as needed
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Market research can help you
Monitor the competition in your market
 Identify competitors
 Get information on how your competitors operate
 Learn how customers compare you with your competitors
Mitigate risk in your business decisions
 Use information, not just intuition, to drive your business
decisions
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Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
When to conduct market research
 Market research is widely viewed as a component of the planning stage
of a business.
 Indeed, market research is critical for new start-ups and should be a key
element of any entrepreneur's business plan.
 Market research data feeds into a number of areas of the business plan
 Examples of situations that might call for market research include:
 New advertising campaigns
 Opening a new location or changing business locations
 Increasing production levels
 Introducing new lines of products or services
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Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
How to conduct market research
 Primary research
 Primary research is original information gathered through your own efforts to respond to
a specific question or set of questions.
 This information is normally gathered through surveys, observation, or experimentation.
 The following are examples of questions that can be addressed through primary research:
 Who are my customers and how can I reach them? Customer profiles, Prospective business
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locations, Marketing strategies
Which products and services do buyers need or want?
What factors influence the buying decisions of my customers? Price, service, convenience,
branding, etc.
What prices should I set for my products and services? Customer expectations
Who are my competitors, how do they operate and what are their strengths and weaknesses?
Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
Primary research: surveys
 Surveys are the most common way to gather primary research. Surveys can be conducted:
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Through direct mail
Over the telephone
On the web or via email
In person
 When designing your own research questionnaire, be sure to:
Keep it as short and simple as possible
Make sure it is visually appealing and easy to read
Move from general questions to more specific questions
Make sure questions are brief and easily understood
Avoid leading questions, questions with ambiguous words, questions that are too difficult to
answer
 Make sure any response scales used are logical with categories that are mutually exclusive
 Always pre-test your questionnaire to identify potential problems
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Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
Primary research
Constant contact with your customers can provide
information on:
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Customer profiles
Goods and services that customers demand
Satisfaction with price levels and quality of service
Experiences with your competitors
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Secondary research
Secondary research exploits existing resources like
company records, surveys, research studies and books
and applies the information to answer the question at
hand
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Secondary research
Examples of questions that can be addressed through secondary
research:
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What are the current economic conditions that my business is operating
in? Are these conditions changing?
What trends are influencing the industry my business operates in?
Consumer preferences, Technological shifts, Prices for goods and services
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What are the demographic characteristics of my customers or where do
they live? Populations, age groups, income levels, etc.
What is the state of the labor market?
 How many people have the skills I require?
 How much should I expect to pay my employees?
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Sources of secondary research
a number of quality statistics and analytical resources available :
Demographics Get data that sheds light on population characteristics such as
location, age, income, education level, and more.
Labor and employment data Find statistics and analysis related to the labor
force, employment and income from official national & international sources.
National economy Get the latest official economic indicators, which shed light
on the performance of several segments of the national economy.
Industry sector data Find statistics that can help you better understand your
industry, and study the latest trends that could impact your business.
General research and statistics
Other sources: libraries, universities, industry associations and government
departments at various levels.
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Analyzing the market
Dr. Hatem Elaydi, IUG, Fall 2016,
Entrepreneurship
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What is a market
Market are groups of people
They are willing to buy
They are able to buy
They have authority to buy
They share a common interest, need or problem
They could realize an advantage by buying
They can be reached to communicate information about
the product
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Analyzing the target market
Demographic segmentation
Psychographic segmentation
Geographgic segmentation
Benefit segmentation
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Steps to market segmentation
Identify desired customer characteristics
Develop market segment profiles
Forecast market potential
Select specific market segments
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Product life cycle
Introduction
Growth
Maturity
Decline
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Consumer buying process
Recognition of wants
Research
Evaluation
Decision making
Post-purchase evaluation
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Analyzing the competition
Dr. Hatem Elaydi, IUG, Fall 2016,
Entrepreneurship
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How to analyze competition
Who are your competitors
Number of competitors
Are competitors profitable
Prices charged by competitors
Volume of sales in $
Expanding or declining market
Competitors’ products
Is repeat business obtained
How well your business differ from competition
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Make competitors work for you
Be knowledgeable
Identify competitors’ strengths and weaknesses
Anticipate customer objections
Observe competition frequently
Learn from competitors’ mistakes
Improve on competitors’ ideas
Never speak ill of competition
Be consumer-oriented
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About the competition
My competition do more for me than my friends do. My friends are
too polite to point out my weaknesses, but my competitors go to
great expense to advertise them.
My competitors are efficient, diligent and attentive; they force me
to research for ways to improve my products and services.
My competitors would take my business away from me if they
could; this keeps me alert to hold what I have.
If I had no competitors, I would be lazy, incompetent, inattentive;
I need the discipline they impose upon me.
I salute my competitors; in the final analysis, they have been good
to me.
Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
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Analyze the competition
Rank competitor Marketing
strong points
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Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship
Marketing
week points
Share
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Dr. Hatem Elaydi, IUG, Fall 2016, Entrepreneurship