Course: SLF 130 Marketing Practices for the Small Business

Unit 6 Reading

SubTabs

- Unit 6
- Table of Contents (Selected)
- Unit 6 Glossary (Selected)

Market Research Page 4

MARKET RESEARCH SCENARIOS

The following examples might give you some ideas for conducting research for a proposed small business.

Qualitative Research Examples | Qualitative (numbers-oriented) Research Examples
EXAMPLE A Community members are asked about buying locally produced products. These local residents may state that it is a good and valued activity, but, when probed, it is revealed that the higher prices sometimes prevent them from doing so. A researcher can ask the question “What can be done to motivate you to buy more local products? What will it take? What products are you most likely to consider and why?” The result of asking such questions might result in the creation of an educational newsletter explaining the health and ecological benefits of locally grown foods. A well-known opinion leader from the community, someone known for a healthy lifestyle, might be brought into the business to serve as a spokesperson, motivating customers to spend more money where it counts. | EXAMPLE E A small business owner planning to open a bridal shop centered in a three-county area is trying to determine if such a business could be profitable. She uses government website information (dot.gov sites) and finds that there is an estimated 6.8 weddings per 1000 population. The three county, semi-rural area has a population of 10,000, and is described as disproportionately elderly. Although she has heard comments from residents that they would like to have a local bridal shop, the start-up costs cannot be supported by the number of potential customers.
EXAMPLE B An aspiring entrepreneur might gather together members of a support group that are caring for elder relatives. They will be asked about services could be of assistance to them. Focus group members will share their feelings about being caregivers and what qualities they are looking for in an elder care facility. They can be asked to share their past experiences with other services – both good and bad. They can be asked to honestly discuss what pricing structure would be acceptable (yielding quantitative results, also). The aspiring entrepreneur might learn that the types of services he initially considered are NOT those of top priority to caregivers. | EXAMPLE F A trained early childhood educator would like to start a daycare in her community. She initially has planned to not provide care for infants. She has identified an affordable building with enough square footage to accommodate a certain number of students (based on the state regulations). She has been working with the local community college that has a program that certifies early childhood care providers. The going rate for trained workers is $10 per hour. She gathers information from anonymous surveys distributed at local churches and the school system. She finds out that she would have to have to have a larger site to cover expenses. She then decides to find out if parents of infants are willing to pay more per hour for quality care, therefore making it financially possible to utilize the identified location.
EXAMPLE C A small business owner that has conceptualized the perfect animal boarding service can ask pet owners how satisfied they are with the current options in the community. The value proposition might include state of the art facilities, with a lot of luxury features. The focus group members can be asked if they are willing to pay for such features. What pricing is acceptable? What do they envision as the perfect boarding situation for their pets? Is there a difference in terms of older pets or pets that have special needs? The business owner can begin to solidify a pricing table based on customer input. | EXAMPLE G A trained aesthetician (beautician and make-up artist) would like to open a day spa. She calls ten other day spas to determine their pricing structures. She creates a survey to hand to potential customers that asks them to evaluate their willingness to pay for services at varying fee levels. She compiles the results by percentages; she has pre-determined that at least 75% of customers must be willing to pay the “going” rates in order to be profitable. She has worked with a SCORE counselor to estimate the costs of her start-up. Based on the results, she realizes that some luxury services may not be feasible in her community at this time. She may want to conduct a focus group to determine how potential customers would rank their preferences for certain services. Those will be the services that will be offered first. (A lesson that must be learned by almost all start-up businesses is that you can’t be all things to all people!)
EXAMPLE D
An accountant is considering starting a small business devoted to servicing small businesses. In this instance, he or she might call several small businesses, ask for a few minutes of their time, and gather information about the businesses’ use of accounting firms. Questions might include: Would you prefer using a service dedicated to businesses of your size? Who does your accounting and taxes now? Are you satisfied with the services? Are you satisfied with the cost? What services would you like to see made available? The accountant can begin to understand – through the eyes of the small business owners – what differentiating features and benefits his company MUST offer in order to motivate customers to switch to a new provider.

STOP AND REVIEW

Most small businesses can utilize both quantitative and qualitative research results. Learning first-hand what customers are willing to pay for can shape the overall strategy of a start-up business. Although there is always risk associated with any marketing decision, research reduces the uncertainty for small businesses.