Research Project Outline

To accompany Cateora/Graham/Brunings International Marketing Canadian Edition

Guide for developing your project
Summary
Successful businesses have extensive knoledge about their customers and their competitors! "c#uiring
accurate and specific information about your customers and competitors is a critical first step in market
investigation and development of a marketing plan! "ccurate market assessment and development of an
effective plan is critical to the success of both ne and existing businesses! The market impacts and directs all
aspects of the company$s activities and ultimately ill lead to success or failure of the business! %n developing a
market plan& your primary functions are to understand the needs and desires of your customer& select or develop
a product or service that ill meet customer needs& develop promotional material that ill make the customer
aare and ensure product or service delivery!
Market Analysis
Who is your customer?
'noledge of the customer enables you to determine the market si(e and hat determines their buying
decision! %t provides information that ill assist in choosing a location& determining product or services to be
offered& establishing pricing and planning a selling strategy!
'ey issues to consider are)
*ho ill buy your product+ ,rimary and secondary target groups!
*here does the buyer live and hat is their profile+
*hat factors influence the decision to buy+
*ho is involved in the purchase decision+
-o often ill buyers buy+
*here do they buy& hen and ho much do they buy+
*hat are the buyer$s preferences and needs+
"re customers loyal+ Can long term relationships be built+
What product or service are you selling?
"n important aspect of market analysis is to ensure that the product or service meets the market .customer/
needs! ,roduct or service focus must be the customer!
%ssues to address are)
Specifications of all your products and or services and key features relative to hat prospective buyers
in your target market are saying they need!
Comparison ith competitors and ho customers perceive your product relative to others available!
*hat are the current trends& at hat stage of maturity is the product life cycle+
*hat regulations apply to your product or service+
*hat packaging is re#uired+
Who is your competition?
"re there competitors that exist no and hat ne competitors are likely to enter the market+ -o ill your
product or service compare and hat is the probable reaction of your competitors once you enter the market+
%ssues to consider are)
*ho are your ma0or competitors+
*hat share of the market do they have+
*hat are their strengths and eaknesses .e!g! #uality& price& service& payment terms& location&
reputation& etc!/+
-o do you compare to your competitors and ho ill they react to your entry into the market+
*hat factors are there that could increase or reduce your competition+
What is your target market?
"ccurate identification and analysis of the target market enables you to develop an effective overall marketing
strategy! The information ill assist in determining business si(e .output re#uirements/& distribution channels&
pricing& promotion strategy and other marketing decisions!
Target market issues include)
*hat is the overall market si(e+ 1umber of potential customers and physical boundaries+
*hich segment of the market is the most attractive in terms of future groth potential& ease of entry&
competition& profit potential and overall risk+
-o do products generally get to the customer+
*hat is the current dollar value or #uantity of product/service being sold into each segment of the
market+
*hat social& technical& environmental or economic changes are taking place ithin the market and ho
ill they impact sales+
What are your distriution channels?
There may be many options for moving your product to the customer such as direct retail& holesale&
consignment& broker etc! The method of distribution has important implications affecting your pricing structure&
advertising message& cash flo& etc! 2ou ill ant to choose the distribution method best suited for your product
and here you ant to be positioned in the marketplace!
'ey issues are)
*hat methods of distribution are best suited for your product+
*hat methods of distribution do your competitors use+
*hat are the costs relative to market coverage+
3oes your level of available capital or production capacities restrict your choice of distribution
methods+
"re there onership opportunities in the supply chain+
Pricing
The ob0ective is to maximi(e profits hile remaining competitive in the marketplace! ,ricing can be based on
either the cost price or market price .hat ill the market pay+/! 4egardless of the pricing method used& it is
critical to kno all of your costs involved in delivery of your product or service to avoid possible underpricing
and operating losses! %f the market ill not support a price level sufficient to cover cost& it ill be necessary to
investigate hether costs can be loered or alternatively& it may be necessary to abandon your plans to proceed!
%ssues to consider are)
*hat control do you have over the product price .e!g! exclusive product& no competition& high market
demand& etc!/+
*hat are competitor prices and ho do they price their products+
*hat price and sales volume are needed to achieve profit ob0ectives+
Can you sell your product at different prices into different markets+
Can you maintain your prices over time and hat do you expect to happen to competitors prices+
"re your prices #uantity sensitive+
Promotion and Selling
,romotion of your product or service and development of a promotion strategy is part of the market analysis! %t
is important to analy(e hat are the best methods of making your customer aare and hat message ill
motivate them to buy! 5rom the promotion strategy the advertising budget and overall sales plan are then
developed!
%tems to consider are)
*hat media of advertising and sales do your competitors use+
*hat media of advertising is best suited to reach your customer+ ,rimary and secondary media! .e!g!
,rimary 6 nespaper and radio7 Secondary 6 flyers and trade shos/!
*hat sales tools and training ill be re#uired for staff+
*hat image are you attempting to build through your promotion+
,ackaging+
1ote) *hile customer service& in store display and merchandising are not part of the market analysis& they are an
important part of the business image and promotion package! 8ngoing attention should be given to these areas
to assure maximum promotional benefit is achieved and that the desired image is portrayed!
Primary!Secondary "ata Sources
,rimary data is the information you ill obtain through your on efforts or by hiring someone and can include
observation& surveying& and experimentation!
Secondary data consists of information hich has been gathered by someone else and is relevant to the venture
you ant to establish! Examples of sources and types include)
Canada Business Service Centre in your region http)//cbsc!org
Statistics Canada 96:;;6<=>699>= http)//!statcan!ca/start!html
o Census 3ivisions and Subdivisions ,rofiles Catalogue 1o! ?@699A and 1o! ?@699=
o 5amily Expenditures in Canada Catalogue 1o! =<6AAA
This publication ill highlight average family expenditures for a variety of consumer items!
o -ousehold Expenditures 4esearch ,aper Series Catalogue 1o! =<5;;<=B9E
This publication ill highlight types of e#uipment located in various households throughout
Canada!
o 5amily 5ood Expenditures Catalogue 1o! =<6AA@
-ighlights dollars spent on various types of food per household!
Canada ,ost 6 96:;;6<=C699CC
o 3emographics and %ncome Statistics for ,ostal "reas
o -ousehold 5igures for Detter Carrier 8ffices
Dists populations for various postal code communities in Canada!
o -ousehold 5igures for 1on6Detter Carrier 8ffices
Docal& Bunicipal& ,rovincial& and 5ederal Government 3epartments and "gencies
Business and %ndustry "ssociations / Trade ,ublications / ,eriodicals
Business and %ndustry Trade Shos and Exhibitions
Docal ,ublic& Business& and Educational %nstitution Dibraries
Business and ,opular ,ress
Business ,rofessional Services& e!g! "ccountants& Dayers& Consultants& %nsurance Brokers& 5inancial
%nstitutions
Business and Educational Seminars / Courses& etc!
8ther Business ,eople / 'non "c#uaintances / Competition / %nternet
*hen researching your business idea& it is important to do as thorough a search for information as is possible! %t
is also recommended to do as much of it as you can on your on! This ill help you to kno the market for
your idea better& and can help to keep the costs don at the start! 8nce this initial research has been completed&
you may then feel the need to contract professional services to collect additional information for you& or to
verify the information you have collected so far! The information you have gathered yourself can form an
important base of information from hich a consultant can ork from& and as ell& ill allo you to identify
more specifically hat you ant them to do for you& particularly hen there ill be costs associated ith their
services!
What is market research?
Barket research is an orderly& ob0ective ay of learning about people 6 the people ho buy from you or might
buy from you!
%t can provide unbiased ansers to #uestions such as)
*ho ill buy your product+
*hat are the re#uirements of your customers+ *hat price ill they pay for your pickles+ *hat si(e of 0ar do
they prefer+ *hat are their re#uirements for shipping that ould affect 0ar si(e and/or shape+ *here do they
ant to be able to buy your pickles+ "re there other types of pickles they ould buy+
*hat are the characteristics of your customers+ *ho buys and eats pickles 6 hat is their age& gender& and
income level+ *here do they live+
*hat are the attitudes and perceptions of your customers+ "re they looking for ne and different pickle
products+ %s the combination of dill and carrot an appealing one+
*ho else is producing the same or similar product 6 at hat cost+ Can you compete ith their price& #uality&
etc+ %f no one else is producing such specialty pickles& hy+
*hat advantages can you offer that your competition can$t or doesn$t+ %t may be that your carrots are organically
gron or that your pickles are an "lberta made product!
*hat marketing constraints exist+ "re there expensive start up costs involved ith going into pickle production+
"re there ma0or legal re#uirements needed to get the name or label information you ant+
%s the market saturated or is there room for your company+ *ill you be one of many companies selling pickles
to people in your market area+
%s this an area ith an expanding market or one that is declining+ %n other ords& can you make a profit at it+
3oes trend data indicate an increasing consumption of pickled products+ %s there a groing or shrinking body of
scientific evidence about possible health risks associated ith eating too many pickled foods+ -o might this
affect people$s consumption of pickles+
*hat do you see as the future for your business+ 3o you visuali(e your pickles to be on the shelves of all
Canada Safeay stores in "lberta+ %n *estern Canada+
Why do market research?
%t$s impossible to sell people hat they don$t ant! That$s obvious! Eust as obvious is the fact that nothing could
be simpler than selling people hat they do ant! Barket research is essential in helping you find out hat
people ant!
Barket research provides hat you need to get sound information about your product& service or market so you
can develop good marketing and business strategies!
Who should do market research?
"ll businesses& big and small& old and ne& need to do market research! " common feeling of many small
business oners is that they don$t need to do market research since they already have a feel for their customer
market& given their long experience! -oever& experience& though useful& can lead to a false sense of knoing!
Be careful7 information gathered randomly over the years may be out of date& vague& biased or of a folk tale
nature!
Business oners can$t afford to make errors in 0udgment! Their savings& their families$ future and their business
reputations are at stake! Barket research is a critical step!
When should # do market research?
Barket research is not a one time only activity! %t needs to be done on an ongoing basis and henever a ma0or
business decision needs to be made! %t usually needs to be done)
before starting a ne business
hen introducing a ne product or service
to maintain your existing business
Before starting a ne business)
%nnovative ideas and gut feelings aren$t enough hen it comes to predicting success for a product or service!
Eust because your friends and relatives rave about the great parties you thro& doesn$t necessarily mean your
party planning and catering business ill be an overhelming success! Fp front& you need to kno)
%s there a need for this service+
*ho is likely to buy your service+
"re there enough of these people in your market area+
-o are you going to find these customers+
%s a competitor meeting the need+ %f so& can you offer something they can$t+
-o much are these people illing to pay+
*ill finding customers cost more than the profit margin ill allo+
%s there a profit margin+
*hen introducing a ne product or service)
"gain& a good idea& experience and intuition 0ust aren$t enough hen it comes to predicting success! *ithout
market research at this stage of a business& you could end up ith a basement full of 0ars of your gourmet
mustards hich didn$t sell nearly as ell as your popular line of flavored vinegars! 8r& you might face
competing products sold at local delis& supermarkets& gift shops and farmers$ markets that you didn$t even kno
existed! 8r& adding a fried pastry product to your existing line of healthy muffins may damage your company$s
reputation for healthy snack foods!
To maintain your existing business)
Success today doesn$t necessarily mean success tomorro! Changes in markets& competition& technology and
customers mean you can$t rest on your laurels! 2ou need to constantly be sure your product or service fits ith
these changes! 2ou need to kno hat your customers think of your specialty dog biscuits!
%s there a ne untapped market 6 perhaps loer calorie biscuits for older& less active dogs+
"re your customers ready for a ne product+
"re your prices in line+
%s there ne technology that ould enable modifications or substitutions for an approved product+
-as your target market become more concerned about the health and ell6being of its dogs+
"re competitors introducing ne product lines+
$o% to do market research?
%t$s to your advantage to do at least some of your on market research! The more you do& the less money you$ll
pay to consultants and the more insight you ill have regarding your product/service and market!
Start by doing some indirect market research! Gather information that is already done and available to you at
little or no cost! Existing businesses can look at their records and talk to employees! "ll businesses are ell6
advised to read government reports& industry maga(ines& trade association surveys and other documents! Be sure
to talk to people directly and indirectly involved in your industry! Some good initial contacts include provincial
government economic development agencies& municipal offices and chamber of commerce offices! Check to see
hat your competition is doing!
2ou may then find you need to do some direct market research! %n other ords& generate some information
yourself! %t might include such things as conducting a taste test of your ne product& doing a telephone survey&
or observing the numbers and types of people ho shop at the local competitors! This type of market research&
since it is often more complicated than indirect market research& can benefit from the expertise of a market
research professional! This doesn$t necessarily mean turning the entire research pro0ect over to a consultant!
4ather& it may mean the consultant does some ork .e!g! develop a #uestionnaire/ and you do some ork .e!g!
conduct a taste test of your vegetable dip at the local farmers$ market and have tasters complete the
#uestionnaire/!
So& although there is a need for specialists and consultants& they aren$t needed to solve every problem! *ith
additional reading on the sub0ect& even those ith no formal market research training can take an active role in
conducting their on market research!
Where to do market research?
Buch of your market research can be done at home or close to home since you need to kno as much as
possible about the market in your target area! 2our local public& college or university library& chamber of
commerce and government departments are excellent places to begin your search on local and global market
information! Bany government departments have libraries containing valuable information for doing market
research!