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WELCOME TO THE ENTREPRENEURIALPROGRAM<br />Today – Marketestimation<br />

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Agenda<br />QUICK GROUP PRESENTATIONS<br />WHAT ARE YOU WORKING ON<br />HOW WILL YOU WORK ON YOUR MARKET ESTIMATION<br />MARKET RESEARCH<br />DIFFERENT TYPES OF MARKET RESEARCH<br />CUSTOMER SEGMENTS, TARGETING & POSITIONING<br />MARKET ESTIMATION<br />WORKING ON THE PROJECTS<br />PROJECT STRUCTURE <br />GROUP SUPERVISION<br />

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GROUPPRESENTATIONS<br />

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MARKETRESEARCH<br />

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Why do market research?<br />

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DefinitionMarketing Research is:<br />”The process of designing, gathering, analyzing and reporting of information that may be used to solve a specific marketing problem” <br />(Burns & Bush, 2000)<br />

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Beforedoingmarket research, oneshould have:<br />A clear objective as to what the organization is aiming to achieve – both through marketing and corporate objectives<br />A reasonable understanding of the targeted segments, and thus an ability to position the product or service<br />

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HOW TO DO MARKET RESEARCH ? <br />

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MARKET RESEARCH TOOLS<br />Primary Research Methods<br />Observations (going native + antropology)<br />Focus Groups<br />In-Depth Interviews (In person, mobile, Skype or by using video conference)<br />Questionaries(personal, mobile, online, e-mail)<br />

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MARKET RESEARCH TOOLS<br />Secondary Research Methods<br />(Desk Research)<br />Intern information (sale, payment, inventory)<br />External information (Published or Commercial market research reports, Information about competitors, Government reports, Industry specific homepages<br />

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Market Research<br />Ask the customerswhattheywant<br />Ask the customerswhattheydream of<br />Talk to ”non-customers”<br />Talk to competitors<br />Understand the competitors’ business model<br />Know the positioningmap of the industry<br />Talk to distributors<br />TEST!!!<br />

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WHAT CAN WE LEARN FROM TOMATO SAUCE ?<br />

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STP)<br />Segmentation<br />Determinations of variables thatwillinfluencewhichcustomer segment youfocuson<br />Targeting<br />Howmany segments shouldyoutarget?<br />Which segment shouldyoutarget?<br />Positioning<br />Which position within a segment do youwant to obtain?<br />

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Definition<br />Segmentation is the ability to: <br />”…divide the markets into groups, or clusters, of customers based upon realistic and meaningful criteria so as to offer clear, targeted benefits to every customer” <br />(Wright, 2004)<br />

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SEGMENTING BY MARKET TYPES<br />Mass Market = Undifferentiated<br />Segments = Homogeneous groups<br />Niche = Specialized customer segments<br />Multiple segments = You serve multiple segments at once – examples could be Google or even Golf courses<br />Customized or individual = Dell<br />Local customer groups = You tailor the offering to meet local needs<br />

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Targeting<br />Targeting = Which customer segment should we aim at?<br />Can we spot any gaps in the market?<br />Look for fit between strategy and resources<br />

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Positioning<br />The percieved position of the brand!<br />Does it differentiate from competitors<br />Is there enough customers in that place?<br />Multiple positioning strategy = Procter & Gamble<br />

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MINI CASE - 15 min<br />

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List of car BRANDS<br />FORD<br />FERRARI<br />BMW<br />VOLVO<br />MERCEDES<br />KIA<br />TOYOTA<br />MINI<br />SEAT<br />SUZUKI<br />RENAULT<br />

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Positioning map for cars<br />Niche Market<br />Sporty<br />Safety<br />Mass Market<br />

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How to Estimate the market potential?<br />

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Estimating Market Potential Check-List<br /> Estimating the market or market potential for a new business or business expansion is critical in determining the economic feasibility of a venture. Estimating the market potential will determine if the market is large enough to support your businesses. <br />What type of customer will buy the product or service?<br />Where are these customers located?<br />How many potential customers (N) are there?<br />How often do they consume or use it?<br />What is the Competition?<br />What are people paying?<br />What is the Potential for the Market to Develop?<br />What is my share of the Market<br />

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Cornmaze in WakeCounty, Georgia<br />

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Estimating Market Potential:<br />Key Steps in Estimating Market Potential: <br />1. Define your target market and market segments.<br />2. Define the geographic boundaries of your market.<br />3. Derive average expenditures for the category.<br />4. Determine the average household income for the area and state.<br />5. Estimate market share<br />

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Estimating Market Potential:<br />MP = market potential<br />N = number of possible buyers<br />P = average selling price<br />Q = average annual consumption<br />FORMULA: MP = N x P x Q<br />

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Estimating Market Potential:<br />EXAMPLE : Agritourism Market Potential Analysis<br />Situation - estimate the market potential for a new corn maze in Wake County, Georgia. The<br />facility will have a maze and hayride. Other activities include pig races, hay bale play grounds,<br />and a petting zoo. The average price for corn mazes in the area is $8.00 per person. They plan to<br />target children 8 years old and under. There are two other competing corn maze operations.<br />These operations have been in business for over five years and have established a clientele.<br />Estimating Market Potential: <br />MP = market potential<br />N = number of possible buyers<br />P = average selling price<br />Q = average annual consumption<br />Number of potential customers (target market) =101,600 people under 9 years of age<br />P - average selling price = $8.00 per person<br />Q - consumption - assumes an average of 1.5 visits per year per child= 1.5 <br />MP= 101,600 * $8.00 * 1.5 = $1,219,200.00<br />

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Estimating Market Potential:<br />EXAMPLE :Agritourism Market Potential Analysis<br />Adjustment: It is unrealistic to assume that the operation will capture 100% of the market given<br />they are new and there are established operations in the area. Need to estimate our market share<br />of the corn maze business in the county.<br />Market share = Market potential * percent of the market captured.<br />Assume each corn maze obtains 33% of the market<br />Market Share = $1,219,200.00 * 33% = $402,336<br />Use 20% and 10% to see how sensitive the market share number is and if these figures will<br />support your business. <br />Market Share = $1,219,200.00 * 20% = $243,840<br />Market Share = $1,219,200.00 * 10% = $121,92<br />

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How to dertermine THE Price LEVEL ? <br />

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HOW TO - Calculating The Price:<br />Cost-plus pricing. Used mainly by manufacturers, assures that all costs (fixed and variable)<br /> are covered and includes a desired level of profit.<br />2) Demand pricing. Used by companies that sell their product through a variety of sources at<br /> differing prices based on demand.<br />3) Competitive pricing. Price according to your competitors. Used in competitive markets with<br /> little product differentiation.<br />4) Mark-up pricing. Adds a level of profit to the cost of the product being retailed. Also good<br /> for products that are co-packed.<br />Evaluating Price Competitiveness:<br />Investigate your competition. Are your prices in alignment with theirs? What is the<br />value of your product relative to theirs? Do not be a price taker or implement a “me, too”<br />pricing strategy if your product can be differentiated and offers a higher value than<br />competing products. If your price is too high to compete directly in the market, look for a<br />niche market that desires your product’s attributes and charge accordingly. <br />

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How do I KNOW IF MY PRODUCT IS DIFFERENTIATED ?<br />

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3 criteria needs to be fulfilled<br />Does my value proposition differ from what is currently being offered to the market?<br />Is the segment large enough for my value proposition?<br />Is it hard for competitors to imitate, copy or replace my value proposition? <br />

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OK quality – BETTER in price and size<br />OK price – BETTER in design<br />OK service – BETTER in price<br />Ok speed – BETTER in price and size<br />

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EKSTRA<br />

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Advertising Media<br />Print Media<br />Broadcasting Media<br />Viral Media<br />

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Newspapers: National & Local Newspapers<br />

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Magazines: Consumer- & Professional Magazines <br />

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TV & Radio<br />

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2 EXAMPLES on virale videos<br />

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Corporate Blogs<br />

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Personal Blogs<br />

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TOP TIP on corporate bloGGING<br /> “…businesses with corporate blogs receive 55 percent more traffic than small businesses that don’t blog”<br />Source: http://mashable.com/2010/07/20/corporate-blogging-tips/<br />

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Billboard<br />

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Billboard<br />

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Billboard<br />

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Billboard<br />

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Billboard Battle<br />

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Billboard Battle<br />

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Ambient Media<br />

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Guerrilla<br />

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FLASH MOB VIDEO<br />

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Mini Task<br />Whichchannelsareyougoing to use?<br />Find 2 potential channels for yourcompany<br />Describewhyyou have chosenthesechannels?<br />Howwouldyouusethem?<br />Whatareyougoing to use it for?<br />

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Thanks for today <br />