wolfe ppt

Market Research and Advertising: 

Market Research and Advertising Home-Based/Micro Business Workshop Kent Wolfe September 3rd, 2002

First Step: Market Research: 

First Step: Market Research WHY? “It is easier to sell something people want than it is to sell something that is easy to produce”

Market Research: 

Market Research Exposed to market research each and every day (TV & Radio programming, cell phone packages, beverage products, shelf space, restaurant location). Used to determine customer perceptions, attitudes and preferences (i.e., Georgia Grown, war with Iraq, package or container size) Who uses what, when, how much, and what are they willing to pay

Questions Market Research Can Answer: 

Questions Market Research Can Answer

Types of Market Research: 

Types of Market Research Focus groups Taste tests in-depth interviews Surveys - mail, telephone and intercept

Focus Groups: 

Focus Groups Six to nine users. Discuss issues and concerns about product or service. Focus groups often bring out users' spontaneous reactions and ideas Let you observe some group dynamics and organizational issues The group typically lasts about two hours Run by a moderator who maintains the group's focus. First step in market research. Powerful tool in system development, you shouldn't use them as your only source of usability data

In-depth Interviews: 

In-depth Interviews An in-depth interview is a conversation with an individual conducted by trained staff that usually collects specific information about one person Provide a history of behavior. When conducted more than once or when conducted with someone who has been in the community for a long time, interviews can show if any change has occurred over time. Highlight individual versus group concerns. Topics that may not arise in a group situation can be addressed in individual interviews. Reveal divergent experiences and “outlier” attitudes. Groups often do not allow you to see that experiences may vary person to person. Provide a shortcut to community norms. Interviewing key community leaders (bartenders, favorite teachers, police officers, sex club managers) can give a fast overview of a community and its needs and concerns. Develop other research tools. Results from an interview can be used to generate focus group questions or help form questions for a survey.In-depth interviews can be different from focus groups in several ways: Easier. It is often easier to speak to one person and keep her attention than to address a group. You can also avoid major scheduling hassles with only one person. More detailed. In an interview you have a chance to follow-up on questions and probe for meaning. Source: Good Questions, Better Answers

Surveys - mail, telephone and intercept: 

Surveys - mail, telephone and intercept a method of gathering information from a sample of individuals Mail - low in cost, problems with low response rate, most effective when directed at particular groups Telephone - efficient for collecting large amounts of data quickly and when the length of the survey is limited. In-person - more expensive, necessary when complex information is to be collected.

Telephone Survey Example- Fish: 

Telephone Survey Example- Fish 53% eat fish once a week or more often Roughly 19% purchase fresh fish weekly The households eat roughly 4.0 pounds of fresh fish per month Aided awareness of all species except tilapia was high (>80% and 44%, respectively) One-quarter to one-third of respondents would be likely to purchase the various species (large mouth bass, perch, striped bass, prawn, and flounder) excluding tilapia and eel which was significantly lower (12%). Sixty percent or more of the respondents have eaten the various species (large mouth bass, perch, striped bass, prawn, and flounder), again excluding eel and tilapia where the number is significantly lower (20% and 34%, respectively). 42% would purchase live, unprocessed fish from a local fish market Respondents would travel approximately 27 miles to a local fish farm

Center Examples of Research Results: 

Center Examples of Research Results Aquaculture – people would drive 30 miles to purchase fresh water shrimp from pond bank Trail riders take 8 trips annually Georgian’s consume 2.1 pounds of honey every year Specialty food buyers are generally older and affluent Sod producers are very interested in pelletized poultry litter as a fertilizer/soil builder

Additional Market Research Uses: 

Additional Market Research Uses Market research guides your communication with current and potential customers Market research helps you identify opportunities in the marketplace. Market research minimizes the risk of doing business.

New Agribusiness Opportunities – First Step is ID Target Market: 

New Agribusiness Opportunities – First Step is ID Target Market Target Market – A segment of the population that is most likely to use your product or service. Usually described using demographic variables like, Gender, Income, Race, Age Used to: Determine market potential Develop product packaging Choose marketing channels Develop marketing mix and advertising strategy

Who is your Target Market?: 

Who is your Target Market?

Target Market Examples: 

Target Market Examples

Market Potential: 

Market Potential Market Potential – the maximum sales opportunities achieved by all sellers in the market. Sets the upper limit on consumption units

Estimating Market Potential: 

Estimating Market Potential MP=NxQ; where MP= Market Potential N= number of buyers (Target Market) Q= average number purchased by each buyer

Market Segmentation : 

Market Segmentation A 1995 National Pork Producers Council study identified five very different pork consumer segments and they are as follows: Main Street Today Quality Carnivores Good N’ Plenty Guys Apathetic Eaters Politically Correct Eaters

Market Segmentation: 

Market Segmentation

Main Street Today Segment: 

Main Street Today Segment Main Street Today Largest segment of the population Consist of strong pork supporters. Very price sensitive- cost conscious shoppers. Purchasing decisions are price based rather than product preference. • Women (57%) • Middle aged - (20%) being 50-59 years of age • Lowest income $31,000 median household income • Least educated – less than 10% have college degrees • Blue collar occupations • 19% widowed/divorced (more than the other five segments) • Average household size • Most non-white group (29% are African American or Hispanic)

Quality Carnivores Segment: 

Quality Carnivores Segment Quality Carnivores Generally males Prefer family and fine dining restaurants Not concerned with nutrition Indulge in food and prefer premium cuts of meat •Males (77%) •On average 36 years old •Not primary shopper •High incomes ($48,500 household incomes) •Have some college (62%) or a college degree (26%) •Married (66%) •On average is non-white •Smaller households

Good N’ Plenty Guys Segment: 

Good N’ Plenty Guys Segment Good N’ Plenty Guys frequent fast food and take-out restaurants meat lovers second most responsive to pork behind the Main Street Today segment. •Mainly male •Young (49% of the segment is under 35 years of age) •$38,000 median household income •45% have some college •Employed- split between blue and white color •61% were married •Have large households 47% have 4+ family members •Primarily non-white

Market Potential: 

Market Potential Market Potential – the maximum sales opportunities achieved by all sellers in the market. Sets the upper limit on consumption units

Estimating Market Potential: 

Estimating Market Potential MP=NxQ; where MP= Market Potential N= number of buyers Q= average number purchased by each buyer

Estimating Market Potential: 

Estimating Market Potential Information needed to estimate market potential Market Area - US, State, County, city Roadside stands 10-20 mile draw School field trips – 45 miles or 45 minutes Demographic composition of the specified area Number of people in area with similar characteristics Consumption or usage levels

Estimating Market Share: 

Estimating Market Share A market area and the target market within that area will support a certain level of sales A companies portion of these total sales is referred to as its market share Estimating market share is not easy but essential

Three Steps to Estimating Market Share: 

Three Steps to Estimating Market Share Estimate the total market potential Identify each of your competitors and estimate their market share Decide or estimate what you think your market share might be or what portion of the market you intend to capture

Example Market Share Calculation: 

Example Market Share Calculation Market share for new hot sauce to be marketed locally A supermarket visit identified 10 sauce competitors Market share data is not available, assume each product captures and equal share of the market (10%)

Example Market Share Calculation- Con’t.: 

Example Market Share Calculation- Con’t. New product will mean there are 11 competing products Assuming equal market share, you can assume to capture roughly 9.1% of the market Does 9.1% of the market generate enough sales to make your business feasible?

Estimated Retail Sales: 

Estimated Retail Sales The potential retail sales for a specific retail operation can be estimated by using a standard formula: ES= P x EXP x (ADI/MDI) x MS where ES= Estimated Sales P= Trade Area population EXP= Average expenditures for retail outlet category ADI = Area Estimated Average Household Disposable Income MDI = Georgia Average Household Disposable Income MS= Estimated Market Share

Estimated Retail Sales Example: 

Estimated Retail Sales Example 50% of Americans consume beer Thirty-six percent of microbrew drinkers are 25 -34, 27% are 34 - 45 and 20% are 45 and older. Microbrew consumers have average incomes of $54,000 Microbrew consumers spend between $250 annually on these products Microbrewery Market Area Demographic Information 50,000 residents 15% are 25-34 16% are 34-45 29% are 45+ 25% have incomes over $54,000

Income Information: 

Income Information Area Estimated Av.e Household Disposable In.=$67,000 Georgia Average Household Disposable Income =$30,240

Trade Area Sales Estimate: 

Trade Area Sales Estimate ES= P x EXP x (ADI/MDI) x MS P= 50,000 x 50% (percentage of beer drinkers) =25,000 25,000 x 15% = 3,750 25,000 x 16% = 4,000 25,000 x 29% = 7,250 15,000 37% of area residents have incomes over 50K 15,000 *37% = 5,550 EXP=$250 (ADI/MDI)=($67,000/$30,240) MS = Estimated Market Share = 10% ES= 5,550 x $250 x ($67,000/30,240) x 10% = $307,416

Estimated Retail Sales(market potential): 

Estimated Retail Sales (market potential) The potential retail sales for a specific retail operation can be estimated by using a standard formula: ES= P x EXP x (ADI/MDI) x MS where ES= Estimated Sales P= Trade Area population EXP= Average expenditures for retail outlet category ADI = Area Estimated Average Household Disposable Income MDI = Georgia Average Household Disposable Income MS= Estimated Market Share

Micro Brewery: 

Micro Brewery Micro brewed consumers consume an average of $250 worth of beer annually.  Younger people were more likely to have tried a microbrew. Thirty-six percent of beer drinkers between the ages of 25 and 34 had tried a microbrew. In contrast, 27% of beer drinkers between the ages 34 through 45 and 20% of those 45 and older had tried microbrews.  The appeal of micro brewed beer was strongest among White beer drinkers were almost twice as likely as black Americans to try a microbrew.

Estimated Retail Sales Example: 

Estimated Retail Sales Example Specialty food shoppers spend between $500 and $1,000 Condiments constitute 12% of specialty food purchases – or a $128 annually per specialty food shopper Area Estimated Average Household Disposable Income/Georgia Average Household Disposable Income ($67,000/30,240) MS = Estimated Market Share = 10% ES= $83,616 x $128 x ($67,000/30,240) x 10% = $2,371,332

Easy Demographic Data (WWW.EASIDEMOGRAPHICS.COM): 

Easy Demographic Data (WWW.EASIDEMOGRAPHICS.COM) Miles 20 15 10 Population: 82,683 59,644 36,409 Households: 31,974 22,806 13,773 White Population: 77,003 56,126 34,497 Black Population: 4,881 2,901 1,506 Asian Population: 623 473 307 Hispanic Population: 719 518 275 Median Age: 37.0 36.7 36.4 Med. HH Inc.($): $29,572 $30226 $32,214 Av. HH Inc. ($): $40,855 $41,877 $43,165

Demographic and Population Sources: 

Demographic and Population Sources Sources for Demographic Information: Chamber of Commerce University (www.agecon.uga.edu/~caed/) www.georgia.stats.uga.edu US Census Bureau (WWW.CENSUS.GOV) Easy Demographics (WWW.EASIDEMOGRAPHICS.COM)

Consumption and Usage Data Sources: 

Consumption and Usage Data Sources Sources for information on Consumption and usage: USDA – per capita food consumption estimates Trade Associations Commodity Groups (e.g. Nation Pork Producers Association) University Research

Marketing: 

Marketing There is no “silver bullet” or formula for success Marketing is more like an art than a science

What Exactly Does That Mean?: 

What Exactly Does That Mean? The Company Name Company Goals Location Pricing Packaging Promotional Activities Advertising Sales Techniques Business Cards Employee Uniforms

The Goal of Marketing: 

The Goal of Marketing To present your products/services to the market in a way that makes them more attractive than the products/services of your competitors.

Packaging Counts – Important Aspect of Marketing: 

Packaging Counts – Important Aspect of Marketing Have a beautiful product, including jar and label Use expensive beautiful glass Go to trade shows to show product as well as find out what the competition is doing Make your product presentation count-90%of the purchases of these niche products is based on product presentation.

Packaging: 

Packaging First Line of Promotion is Product Packaging and is your silent salesperson Evaluate your target market and create a package that is consistent with their expectations- i,e. single jar or 3-pack, Packaging should reflect a product’s desired personality (Tennessee Toe Jam) Packaging Considerations (size, plastic glass, dressy) Selling a 8 oz. Jar of Jelly for $6.95, it needs to be packaged accordingly

Packaging Examples: 

Packaging Examples

Hot Sauce Packaging Examples: 

Hot Sauce Packaging Examples $6.95 (5 oz) $6.29 (5 oz) $7.59 (4 oz)

Jams and Jelly Packaging Examples: 

Jams and Jelly Packaging Examples $4.50 (16 oz) $5.25 (10 oz) $5.00 (9.9 oz)

Examples of Advertising Costs and Exposure: 

Examples of Advertising Costs and Exposure

Additional Marketing Events*: 

Additional Marketing Events* Public Relations - getting local, trade or national press write-ups about new products, or other company news. Sponsorship - contributing towards the cost of an event or publication and getting your name and logo featured prominently in return. Corporate hospitality - treating existing customers or prime prospects to a 'jolly' in the hope they will think kindly of you in future. Conferences - speaking at conferences raises your profile considerably and provides a networking opportunity. In addition, it provides the opportunity to obtain a comprehensive attendee list, which may identifying likely new customers and potential competitors. Exhibitions – Go where people are shopping for new products, trade fairs. It is possible to pick up quite a bit of new business and a considerable number of new leads as people wander up to your stand. *mailerhttp://www.bcentral.co.uk/marketing/basics/DirectMail.asp

Routes to reach the customer: 

Routes to reach the customer After defining the sales pitch, it's time to decide the best way of communicating your message to your chosen target customer group. How to communicate your message. First define the market area, local, regional, national and/or international. Determine the most effective means of communicating with your target market , keep your budget in mind. There a many marketing channels to reach customers, i.e., TV, radio, print media, online, direct mail, bill boards and poster campaigns. The combination you choose is called the marketing mix.

Key Attributes of a Good Customer Proposition* : 

Key Attributes of a Good Customer Proposition* KISS – Keep It Simple Stupid - don't expect customers to work hard to understand the material Be Concise - deliver your message in as few words as possible Clarity - deliver a single message that doesn't confuse Consistency - make sure everyone in your team delivers the same message Message - above all focus on benefits not features *mailerhttp://www.bcentral.co.uk/marketing/basics/DirectMail.asp

Direct Mail: 

Direct Mail Advantages Demographic selection Unlimited message length Consistent reproduction Direct response by order or coupon Disadvantages Expensive Difficult to obtain “pure” mailing lists Long lead time Negative reaction to junk mail

Direct mail marketing guide: 

Direct mail marketing guide Use direct mail marketing to get your message straight to the right consumer in the right market. With this concise guide to direct mail. Direct mail marketing can provide a tailored offering directly to your target market and group. However it only gives the best results when it's planned and implemented with care and dedication.

Designing Direct Mail Material*: 

Designing Direct Mail Material* Direct Mailing Responses: Grab Their Attention - make them open it Create Interest - make them read it Create Desire - make them care about it Get Action - make them do something about it *mailerhttp://www.bcentral.co.uk/marketing/basics/DirectMail.asp

Newspaper: 

Newspaper Advantages Broad mkt coverage Immediate Short lead time Flexible ad size Visibility of product Color Use of coupons People believe what they read! Disadvantages Inconsistent reproduction One day life span Limited demographics “Lost in the Crowd” Lack of movement & sound

Radio: 

Radio Advantages Demographic selection High frequency Immediate Sound reinforcement Quick flexibility Disadvantages Restrictive message length Need for repetition Short recall factor Cluttered placement

Television: 

Television Advantages Use of sight, sound, motion, & color Mass coverage Immediate Demographic selection Disadvantages Short exposure Expensive production Expensive to air Cluttered placement Viewing time drops as income increases

Outdoor: 

Outdoor Advantages Reaches large audience Long-term exposure Color & graphics Forms include billboards, posters, illuminated signs, moving vehicle signs, bench ads Disadvantages Limited message length Expensive to produce & place Difficult to obtain the best locations Legal restrictions for use

Conclusion: : 

Conclusion: Understand both your customer and your product to help focus your efforts Before you begin your marketing efforts you should consider what you are selling and exactly who you are marketing to. When it comes to your customers, remember that only a proportion of the population is likely to purchase any product or service, so the more accurately you pitch your sales and marketing efforts to this group, the less your efforts will be wasted. As a result, targeting and segmentation are designed to use the right sales message for each potential purchaser. What ever you do, make sure you get 'the biggest bang for your buck”.