Faculty of Engineering & Technology

Manav Rachna International Institute of Research &

Studies
Deemed to be University (NAAC Accredited ‘A’ Grade
University

Subject: Entrepreneurship Development

Subject Code: COM-O306
Academic Session: January- July 2019
Module 2: Market Analysis
Fundamentals of Market Research;
Scanning Business Environment
Industry and competitor analysis;
Demand estimation and forecasting.
  Market Research
Market plan helps an entrepreneur’s in market
research.

Market plan is basically outlines the specific actions

which an entrepreneur intend to find out the interest
potential customers/clients for his/her product/service.

 For successful business marketing, you need to

develop a proper business marketing plan, and
then gauge its performance for your business
growth.

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 Contd……
There are many things that your business market research
need to address as follows:
• What are your business goals ?
• What is your targeted audience ?
• How to promote your business/product/services
• Decision about the business activities

Market Research is concerned with collection of

quantitative and qualitative data to assess the market
scenario (consumer needs/expectations).
To run a business entity, data (information) is required for
the entrepreneurs because they are often hundreds or
thousands of miles distant from the end users
 Contd……
This is the only way, by which they can stay in touch
with customers and their needs
Market Research aims to identify the
Size of the market (Both in volume and in value),

The various customer segments and buying patterns,

The competition, and

The economic environment in terms of barriers to entry and

regulation.

5
 Why Market Research
To collect the information requisite for business

To understand the level of risk associated with the business

To know about various alternatives

To provide the data needed to the marketing manager to
make decisions
To find and measure the new business opportunities
To target and divide the market into niches
To suggest/promote the product placement and position in
the mind of consumer
Entrepreneurship
© Oxford University
Press 2011
 Market Research: Describes the targets (Who &
Why)
 Customers
 Competition
 Competitive Advantage
 Critical Success Factors
 Critical Risks
 Potential Sales/Market Share

7
What are the Customer expectations/needs?

What problem will you solve? What need/desire does

your product address?
How will your product make their lives better, easier,
happier?
Know what your customers are currently doing:
 Going to the competition/Using another
solution/Nothing
Know how satisfied they are with existing options.
How hard will it be to get them to change what they’re
currently doing?
Who Is My Competition?
Competition = everybody who’s after the same
consumer dollar you are.
 Direct Competitors
 Indirect Competitors
 Possible New Entrants

How Stiff is the Competition?

Analyze your competitor capabilities.
Look for marketplace gaps you can fill.
Develop a competitive matrix.

Berkley Center for Entrepreneurial

Studies
Example: Competitive
Landscape

Honda Honda Toyot Toyot Your

Civic Civic a a Produ
LX Prius Coroll ct
a XLE
Mpg 37 28 44 32 ?
5-Yr $6,500 $8,500 $5,500 $7,500 ?
Fuel
Cost
Tax $525 0 N/A 0 ?
Rebate
Price $23,27 $18,43 $24,17 $19,33 ?
0 0 0 0
Berkley Center for Entrepreneurial
Studies
How to create the competitive
advantage
Intangible Items
Superior Product/Brand
Quality
Selection
Availability
Operational Excellence
Innovation Leadership
Intimate Customer Relationships/Experiences
Cost Advantage

Berkley Center for Entrepreneurial

Studies
 Identify the Critical Risk factors
 Investors aren’t looking for risk-free businesses; there is no such
thing.
 What they are looking for is evidence that you know where
potential trouble lies and that you’ve thought of contingency
plans.
 Be forthright in your assessment of risk.

 Ex. Competitor response to your entry into the market.

 Sales projections below expectations.
 Unable to find suppliers.
 Inability to find a distributor.
 Inability to get shelf space.
Berkley Center for Entrepreneurial
Studies
Ways to Target the Market
Geographic
local, regional, national, international
Demographic
B2C: gender, age, income, education, ethnicity
B2B: revenues, # employees, industry
Psychographic
values, lifestyles, hobbies
Behavioral
benefits sought, usage rate
 Steps to do market research
To collect certain information about the customers, market and competitors, we
generally do the market research

This information tells us about the potential market, prices, trends, competition, target
customer, its preferences, income, habits, accessibility, convenient time and plans.

This information should be accurate, and reliable to help you make the right business
decision.
Step One : Defining the Purpose or Objectives
Ask people what they think of the product or
service and collect some background demographics
& attitudes of these individuals.
How much potential customers would be willing to
pay for the product or service.
Where potential customers would prefer to
purchase the product or service.
Where the customer would expect to hear about or
learn about such a product or service.
 Step Two: Gathering Data from Secondary Sources
Data that already exists i.e information from
Trade magazines
Libraries
Government Agencies
Universities
Internet

The entrepreneur should exhaust all possible secondary data

sources, observation, and networking before beginning any more
costly primary data research.
 Step Three: Gathering Information from Primary
Sources
Information that is new is Primary data and
involves data collection procedures like
Observation
Networking
Interviewing
Focus Groups
Experimentation

Data collection is done with the

help of Data Instruments like
Questionnaire.
FOCUS Groups: They are more informal method of gathering
in-depth information. A focus group is a sample of 10-12 potential
customers who are invited to participate in a discussion relating to
the Entrepreneurs’ research objectives.

Step Four: Analyzing & Interpreting the results

The results should be evaluated and interpreted in
response to the research objectives. The data can then
be cross tabulated to give better insights and
interpretations regarding the segmentation of the
market.
 Marketing Research – Analyse
Complexity of Buying Behaviour
SOCIOLOGICAL
SOCIAL CLASS,
CULTURAL ECONOMIC
STRUCTURE
BELIEFS & PRICE, DELIVERY,
FAMILY/GROUP
VALUES, LIFE PAYMENT TERMS,
INFLUENCE,LIFE
STYLES SALES SERVICE
CYCLE, OPINION
LEADERSHIP

INDIVIDUAL PSYCHOL-
OGICALFACTORS
COGNITION, LEARNING PROCESSES,
INTERPERSONAL RESPONSE, ATTITUDES
MOTIVATION, PERSONALITY THEORIES

BUYING PROPOSITION PRODUCT OR SERVICE

Market Research
Field survey
Systematic Observation
Focus groups
Secondary sources
Test marketing

Entrepreneurship
© Oxford University
Press 2011
 Determination of Marketing Goals
After segments have been established, match these results to your
marketing goals
1) What are your goals w.r.t. this (these) product(s)(i.e., promotion
or penetration)
2) Product Development: new or improved version (microwaveable
vs. frozen block)
3) Market Development: motivating people to buy the product
(healthy vs. saturated fats)
4) Product Diversification: adding products to the product line (4
oz. fillets in garlic/lemon or Cajun spice)
Why to scan the business environment?
Identifying Target Market
Identifying Market Characteristics
Measurement of Marketing Potential
Competitors Analysis
Sales Analysis
Identify and forecast Business Trends
Sales Forecasting
New Product/Service Acceptance and Potential
Long Range Forecasting of Marketing Mix Variables
Pricing Strategies and Studies
Mind Maps

Entrepreneurship
© Oxford University
Press 2011
All rights
 SWOT Analysis
A basic marketing plan begins with SWOT analysis
about your company and the SWOT should be :
A summary of the key elements in your business
Brief, concise and interesting, without being too
abbreviated
Focused on the real issues facing your company
Action-oriented, so that positive proposals can be
envisaged
 Contd……
Strengths- You can bank upon
these.
Weaknesses- Definitely need to
be corrected
Opportunities- Help you in
setting the target where you
want to reach.
Threats- Make necessary
contingency plan to combat
threats which would
automatically become a part of
the marketing plan.
Porter’s Five Forces

Entrepreneurship
© Oxford University
Press 2011
All rights
Forecasting Demand
Define the total market
Divide total demand into distinct market
segments
Forecast drivers of demand in each segment
Match with own product to come up with
possible sales of own product in that
segment
Total the forecasted sales in the segments
that can be profitably targeted
Conduct sensitivity analysis to understand
assumptions
Entrepreneurship
© Oxford University
Press 2011
 Estimation of Market Potential
There are several methods of guessing or estimating possibilities in a
market
Market possibilities: total number of sales possible in a target market
for all producers
Sales forecast: level of sales expected for a single firm within the target
market
Market share: percentage of total sales gained by a single firm (SF/MP)
Any Query
30