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Market Research

Market Research. There are three main forms of market research:. Primary Research – gathering data firsthand (observation, interviews and surveys, etc.) Secondary Research – using data gathered by others (Statistics Canada).

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Market Research

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  1. Market Research

  2. There are three main forms of market research: • Primary Research – gathering data firsthand (observation, interviews and surveys, etc.) • Secondary Research – using data gathered by others (Statistics Canada). • Internal Research –using a business’s own records to gather information (about sales, products, customers or complaints).

  3. For Your Business Plan The Market Research section of a business plan has the following categories: • Customer Profile • Analysis of the Competition • Market Size

  4. 1. Customer Profile It is important to know who will be buying your product or service; this is referred to as your “market.” You might answer the following: • Where do your customers live? • What is their demographic makeup? (i.e. their age, education, gender, etc.) • How many are there? (use statistics where possible) • What makes them “tick”? (i.e. their likes, dislikes, etc.) • Why will they buy your product/service?

  5. 2. Competition A.) You identify the two main competitors that you will have to compete with within the area where your business will operate. For each, you must: - Describe what they offer your target market - Describe any overwhelming strengths and weaknesses held by the competition - Explain what you will do better than them, how will you compete? Can you offer more, will it be better, special, unique, etc?

  6. 2. Competition B.) You must complete a SWOT analysis for your own company - SWOT represents Strengths, Weaknesses, Opportunities and Threats, with regard to your own company. - Strengths and Weaknesses are internal; you have control over these elements, as they exist within the company. - Opportunities and Threats are external; you do not have control over these elements, as they exist outside of the company. - See example on handout

  7. 3. Market Size Market Size is the amount of money being spent overall for a product or service. - Market Size is always expressed using a dollar amount. - To calculate Market Size you use the following formula: (# people in target market) X ($ spent on product/service)

  8. MARKET SIZE Example: Joe is opening a shoe shine business in New York City. Joe has found through study that 1150 people still use this service in NY yearly. These people spend $376 on this service each year. The size of Joe’s market is $ 431,250 That is, there is $431,250 spent on this service per year; that is, all total, people in New York City spend $431,250 on this service. • However Joe also knows there are 13 shoe shone workers that he has counted as his competition. If Joe finds a good place, promotes well and remains competitive he can hope to capture a 13th of this market. • That is $ 33,175 per year. • There is a lot of Educated GUESSING in finding MARKET SIZE

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