Micro and Home-Based Businesses - Market Research

Glenn Muske PhDHome
Based and Micro Business Specialist

Tom woke up one morning with an idea for a new product. To his carpool friends, he asked if they would ever use such a product. Tom was doing market research.
Sally always wanted to have a small business. She knew what she wanted to do but could not decide where to locate. One day she happened to drive to a new area of town and noticed a vacant store that seemed like a good location. During lunch time she went to the library to see what she could find out about that part of town. Sally is doing market research.
Bob owned a printing service. While shopping for supplies at the hardware store, he noticed what items people bought. He wondered why they made the selections they did. Then he wondered why his customers made the decisions they did. To find out, Bob hired the students from a college marketing class to survey his customers. Bob is doing market research.
In the morning paper, Janice noticed a competitor had opened a store downtown. Since she had a client to meet that morning, so she decided to leave early and take a look at the store. Janice is doing market research.
Any good marketing book will contain numerous refer­ences on how a business owner must do marketing. Market research is an organized process to gather, analyze, interpret and utilize relevant information about the business environment for the purposes of making accurate business decisions.
Market research focuses on potential customers, existing customers, the competition, and the business environment. The ultimate goal of market research is business success. Market research provides information useful in developing short, medium, and long-term marketing plans. The objective of market research is to:

1. Identify potential target markets
2. Identify customer needs and wants
3. Determine if the product or service meets customer needs
4. Determine the best promotion technique for each mar­ket
5. Examine the competition

These scenarios show that market research can be a formal or informal process. Asking questions to friends, rela­tives, or family is an informal method of market research, while hiring an individual or agency to do a survey in person, through written questionnaires, or by phone is a formal way to do market research. The data can be quantitative (some­thing that can be reduced to numbers) or qualitative (such as Janice’s observation of the open look of the competitor’s new store and the manner in which the owner is greeting each customer personally).
Market research also uses primary or secondary data in the analysis and decision making process. Primary data is collected directly for the business owner. It can be a formal process like Bob’s surveys performed by students in the mar­keting class, or an informal process like Tom’s questions of his carpool group. Primary data also is collected from sources other than people. Janice’s physical survey of the competition provides her with primary data. Secondary data is information collected and made available to the public to use as needed. Secondary data can be Census Bureau information, highway traffic counts, building permits issued, trade association sales figures, or chamber of commerce statistics.
Whether formal or informal, primary or secondary, the purpose of market research data is to help the business owner make better decisions. Using market research, the business owner can develop an accurate understanding of the potential customer. The goal of market research is to reveal unfilled needs in the form of a market niche, customers’ needs, a competitor’s weakness, or an unused marketing strategy. The ultimate goal is to increase the business’ sales and profits.Not all data collected is valuable to the owner. Surveying the customers who walk by a telemarketing business tells the owner very little. National sales statistics alone offer little assistance in a decision to open a store. The data collection and analysis must relate to the question the owner is trying to answer. Bob’s selected his own customers as the database from which to gather information; customers are one of the most valuable data sources for the business owner.
Should marketing research be done by all businesses includ­ing micro and home-based firms? Yes. While it is possible to operate a successful business without it, market research improves the business’ chances of success. Some business owners have been called “lucky” or have made good “edu­cated guesses.” This luck or successful educated guesses are often the result of observations of the business environ­ment – in other words, market research. The best market research programs, however, go beyond hoping to catch the right information. The best market research programs are carefully thought out and planned with a study question(s) in mind. Micro business owners typically have limited resources. Effective collection and use of market research data improves the chances of avoiding mistakes that can consume all those scarce resources.
Can a business owner do his/her own market research? Certainly the process can be learned and need not be difficult. Should the owner do the market research? When possible, it certainly is cost-efficient. However, like Bob’s use of students in a marketing class, there are ways to hold costs down. Market research does consume time. It also requires the ability to fully analyze the data. But the most difficult part of an owner doing his or her own market research is the ability to be objective. The owner may be too closely involved in the business to accept what the research reveals.
When deciding to do your own market research, at the end of this publication is a sample customer profile and competitor analysis. These are only two examples of the possible forms that can be used. Remember to structure research specifically to a certain business.Market research programs provide three types of informa­tion – about customers, about competitors, and in general. The following kinds of information may be learned in each area:
About Customers
Characteristics

1. Demographics (age, where they live, where they work, race, gender, marital status)
2. Socio-demographics (income, number of children, edu- cation, home ownership, lifestyle)
3. Needs, wants, and desired benefits
4. Past and future purchases (what, when, why, where, how much)
5. Products and services that complement or substitute

Use of various media (radio, television, newspapers, magazines, Internet, etc.)

About Competitors

1. Who they are
2. What products and/or services they offer
3. Price range of products and services
4. Policies on returns, credit, warranties, etc.
5. Special services
6. Parking and store amenities
7. Staff (experience, customer respect, customer focus)
8. Promotions/advertising
9. Image

General

The physical/geographical area (traffic flow, develop- ment plans, history, growth patterns)
The industry
The economy
SummaryThe purpose of market research is to help the owner gather information and make decisions – decisions about who may buy a product or service and about the competition. The information serves as a blueprint to guide future business decisions.To organize market research data, consider using a SWOT (strengths, weaknesses, opportunities, threats) format. When evaluating a business, what are its strengths (where is it a leader?) and weaknesses? When evaluating the environ­ment, where are chances for growth and what might slow the business?Market research identifies the available market, discovers the best method to reach the target market, and asks what the customer needs or wants. Market research is a simple, structured, objective way of learning about people – the people who will buy your product or service.

Resources

Bull, Nancy and Passewitz, Greg (1994) Conducting Market Research. Fact Sheet - CDFS-1252-94. Columbus, OH: Ohio State University Extension.
Gerson, Richard (1996) Marketing Strategies for Small Businesses. Washington, D.C.: U.S. Chamber of Com­merce.
Mowat, Barbara and James, Ted (1996) Right from Home. strategies.ic.gc.ca/cg1-bin/dec/
Torres, Nayda and Israel, Glenn (1991) Marketing Fact Sheet. Florida Cooperative Extension Service SS-FL18-08. Gainesville, FL: University of Florida.
Oklahoma Cooperative Extension Fact Sheetsare also available on our website at:http://osufacts.okstate.eduDivision of Agricultural Sciences and Natural Resources • Oklahoma State University

Health officials warn against rabid bats

Date: August 8, 2008

General questions: Patrick O'Neill, DHS, 971-673-1282

Technical questions: Emilio DeBess, DVM, MPVM, 971-673-1111

Oregon health officials are warning people to protect themselves and their pets from rabies after finding five rabid bats since the beginning of 2008."People can take two precautions to protect themselves and their pets from bats and rabies," said Dr. Emilio DeBess, public health veterinarian in the Oregon Department of Human Services State Public Health Division. "Never handle bats; and make sure your cats and dogs are up to date on their rabies vaccines."Rabies is common among bats, DeBess said. Bats, which are most active in warm weather, play an important role in the ecosystem, especially in controlling insects at night.
Oregon bats often eat mosquitoes and can catch over 1,000 tiny insects in an hour.“Unfortunately, bats often carry rabies,” said DeBess. "If you find a bat during the daylight hours, it is probably not healthy and should be avoided.”“Bats that don’t have rabies generally don’t fly into people,” said DeBess. “So if a bat touches you, think about rabies and ask your doctor about vaccination.”Of the sick and dead bats tested in Oregon during the last 10 years, about 9.5 percent have had rabies.
Other mammals in Oregon can be infected with rabies from bats."Vaccinating pets against rabies protects them and provides a buffer zone between humans and rabid wild animals,” he said. “And, sadly, if a pet is unvaccinated and is exposed to rabies, the recommendation is that it be euthanized."Nationally, twice as many cats as dogs are reported to have rabies each year, underscoring the need for better vaccination coverage among cats, according to DeBess.
Rabies is an infectious viral disease that affects the nervous system and is almost always caused by exposure to a rabid animal.
Exposure is usually through a bite but can also occur through scratches. It is almost always fatal once symptoms begin.Human rabies is rare in the United States with two to six cases per year. But animal bites are very common and, as a result, thousands of people receive rabies post-exposure vaccinations each year, underscoring the importance of education and prevention, DeBess said.Medical therapy for someone who has been exposed to rabies averages more than $3,000.
taken from : http://www.oregon.gov/DHS/news/2008news/2008-0808.pdf

Terrebonne-area residents will discuss Lower Bridge Mine

Date: August 4, 2008

General questions: Patrick O’Neill, 971-673-1282

Technical questions: Karen Bishop, 971-673-1219

Residents of the Terrebonne area will have a chance to discuss health concerns about the Lower Bridge Mine during an informational meeting beginning at 6:30 p.m., Aug. 13, at the Redmond Senior Center, 325 NW Dogwood Ave., in Redmond.The meeting, sponsored by the Oregon Department of Human Services Public Health Division, will begin at 6:30 p.m. and include presentations from Oregon Public Health Division’s Environmental Health Assessment Program (EHAP), and Oregon Department of Environmental Quality (DEQ). A question and answer session will follow.
Before the meeting, representatives from EHAP, DEQ, and the Department of Geology and Mineral Industries (DOGAMI) will be on hand to answer questions informally during a drop-in informational session beginning at 5:30 p.m.The Lower Bridge Mine is a former surface mine on a 600-acre site near Redmond. It was used from 1930 to 1958 to mine diatomaceous earth. The focus of the meeting will be to provide local residents an opportunity to communicate concerns related to possible health risks from living near the site.
EHAP will also describe how the health assessment process for the site will be conducted. In addition, staff from DEQ and DOGAMI will be available to address questions about the site history and plans for environmental clean-up.For questions regarding the meeting contact Karen Bishop either by telephone: 971-673-1219, or by e-mail: karen.bishop@state.or.ustaken from : http://www.oregon.gov/DHS/news/2008news/2008-0804.pdf

State epidemiologist says data supports restaurant calorie listing

Date: July 30, 2008

General questions: Patrick O'Neill, 971-673-1282

Technical questions: Dr. Mel Kohn, 971-673-1071

Dr. Mel Kohn, Oregon state epidemiologist, praised efforts requiring some Multnomah County restaurants to post the calorie contents of menu items.

Kohn, with the Oregon Department of Human Services State Public Health Division, said recent studies show that listing calorie counts on menus is an effective way to help control obesity.

“Obesity is the leading emerging public health issue that we face as a state,” Kohn said. “If we don’t address the rise in obesity, attempts at fixing our health care system are likely to be unsustainable.”

The Multnomah County Board of Commissioners, meeting as the county’s board of health, has proposed a nutrition labeling regulation for about 90 chain restaurants in Portland and Multnomah County.

The proposal is similar to rules going into effect in Seattle and New York.

Kohn cited two recent Oregon reports that have recommended providing calorie information to customers at the point of purchase as a way to help prevent obesity.

The “Statewide Physical Activity and Nutrition Plan, 2007-2012,” prepared by the Nutrition Council of Oregon and the Oregon Coalition for Promoting Physical Activity, and “Promoting Physical Activity and Healthy Eating Among Oregon’s Youth,” by the Oregon Health Policy Commission, both found health value in listing nutrition information for customers at the point of purchase.

Kohn said a study of customers at Subway restaurants, which provide nutrition information, found that diners who reported seeing the information averaged 52 fewer calories than those who did not report seeing it.While 52 calories may not seem like much, Kohn said the impact is substantial when spread across the large number of customers who eat at chain restaurants.

“This study provides good evidence that nutritional information at the point of purchase influences consumers’ buying habits in a way that reduces their calorie intake,” he said.Oregon health officials are considering establishing a statewide nutrition-labeling rule when the state’s food code is updated, beginning in 2009

Taken from : http://www.oregon.gov/DHS/news/2008news/2008-0730a.pdf