This presentation was produced and is copyrighted by Stewart- Peterson®, Inc. 2004-2005. Permission is granted for use by active AgEdNet.com® subscribers. All other use is prohibited.

STEWART-PETERSON and AGEDNET.COM are registered trademarks of Stewart-Peterson, Inc.

Agribusiness Library

AB242 Doing ResearchTo Measure YourMarket Potential

MAIN IDEA:

• How much can I expect customers to spend at my business?

The importance of market research …

• Markets constantly change.• Market research can be expensive or simple

and low-cost.• Market research answers these questions:

• What gets the attention of potential customers?• What do they buy?• What don’t they buy?• What might they buy if it were available?

Successful businesses can answer basic questions …

• Who are my customers and potential customers?

• How many are there in my market? • Where are they located? • What are their habits, their lifestyle, their likes

and dislikes? • What is their level of disposable income? • What are their spending habits, kinds of

products they buy or do not buy?

More answers you need …

• Am I offering what they want? • Are my products or services available when and

where they want them? • Are my advertisements and promotions

working? • What do customers like or dislike about my

business? • Do customers feel my prices offer them good

value for their money? • How do customers compare my business with

my competitors?

Getting started with market research …

• Define the question: You want to know how many sales your idea can generate at what price.

• Decide what you already know.

• What else do you need to know?• Start cheap• Local statistics, directories, library, Internet

What statistics can tell you …

• Population of your market area

• How many homeowners

• Ages and income levels

• Number of farms or businesses

• Number of competitors in your area

Doing your own research …

• Talk to customers and potential customers.

• Talk to other people in business.

• Check the Internet.• Make some phone calls

and visits.• Talk to related businesses.

More research you can do …

• Talk to newspaper, radio and media ad sales reps.

• Check local census data.

• Review local statistical information.

• Talk to the local chamber of commerce.

• Talk to local banks.

What about surveys?

• Can be very expensive

• Misleading if not done properly.

• Poor questions may give vague or biased answers.

Use what you have learned

• It’s time to make a decision to go ahead, keep thinking or drop the idea.

• Your market research will not make the decision.• It may give you encouragement.• It may raise some cautions.• It will help you to project sales.

• In the end it must be you, the entrepreneur, who makes the estimates and the decision.

Organize the results of your market research:

• What strategies does your information suggest?

• How could you use those strategies?

• Did you learn what you expected?

• What ideas should you play down or drop?

• What new thoughts or ideas did you find?

Set priorities …

• Your research may have given you more ideas than when you started.

• Narrow your priorities to two or three with the greatest potential.

This presentation was produced and is copyrighted by Stewart- Peterson®, Inc. 2004-2005. Permission is granted for use by active AgEdNet.com® subscribers. All other use is prohibited.

STEWART-PETERSON and AGEDNET.COM are registered trademarks of Stewart-Peterson, Inc.

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