This revision presentation provides an overview of the main methods by which a new business can research its target market and gain a better understanding of the needs and wants of target customers.

1. Market Research for
a New Business

2. Why understand customers?
Because they are all different

3. Customers differ in many ways…
• The benefits they want
• Amount they are able to or willing to
pay
• Media (e.g. television, newspapers,
websites and magazines) they see
• Quantities they buy
• Time and place that they buy

4. What a start-up needs to know?
• How big is the market? (measured by sales, volume etc)
• How fast is the market growing and what is the market
growth potential?
• Who are the existing competitors and what market shares do
they have?
• How is the market segmented? (“segments” are the different
parts of a larger market – e.g. low price or high quality)
• What kind of customers are there in the market? What are
their preferences in terms of when and where they buy, what
prices they pay and which methods of promotion are
effective?

5. The answer – market research

6. Primary v Secondary data
• Primary data
– Data collected first-hand
for a specific purpose by
the entrepreneur
• Secondary data
– Data that already exists
and which has been
collected for a different
purpose

7. Secondary data – main sources
Google A great way of getting quick market research for
free
Government Provide detailed insights on the economy and on
departments many industry sectors
Trade associations Most industries have an industry association -
they are a great source of market analysis
Trade press & Essential reading for an entrepreneur,
magazines particularly if he/she has little or no experience
of the market
Competitor websites & Valuable information on marketing activities of
marketing materials competitors
Market research Mintel and Keynote produce a wide variety of
reports expensive reports that analyse individual
markets

8. Primary data – why?
• Secondary data can
provide much information
for an entrepreneur, but
there will always be gaps
• Obtaining formal primary
research data is time-
consuming & expensive
• So primary data is best
used by a start-up to fill in
the gaps

9. Primary data – main sources
• Observation
• Postal surveys
• Telephone interviews
• Online surveys
• Focus groups
• Face-to-face surveys
• Test marketing
• Experiments

10. Quantitative v Qualitative
Quantitative Research Qualitative Research
Concerned with data and Based on opinions, attitudes,
addresses question such as “how beliefs and intentions
many?”, “how often”, “who?”, Answers questions such as
“when?” and “where?” “why”? “Would?”, or “how?”
Based on larger samples and is, Aims to understand why
therefore, more statistically valid customers behave in a certain
The main methods of obtaining way or how they may respond to
quantitative data are the various a new product or service
forms of survey – i.e. telephone, Focus groups and interviews are
postal, face-to-face and online. common methods used to collect
qualitative data

11. Remember
The entrepreneur can
learn much about
customers needs
simply by chatting to
customers, rather than
buying expensive
market research

12. Follow tutor2u on Twitter
tutor2u tutor2u_econ

13. Become a fan of tutor2u on
Facebook!
tutor2u on Facebook

14. Keep up-to-date with business
stories, resources, quizzes and
worksheets for your business
course. Click the logo!