Topic:Marketing Research for The Bissett eBay Challenge
From SharedExperienceProject
Contents |
Topic Highlights
(What you will learn)
- The importance of conducting market research including:
- The value of examining secondary research
- The value of conducting primary research
- Techniques and skills for identifing your target market
Introduction and Motivation
(Why learn it)
Market research is a broad topic that will be covered off in great detail through the market research course(s) and activities during your educational experience. The eBay Challenge will introduce you to a few key market research concepts. You can approach the challenge with no market strategy and you may get lucky, however the past has shown that you should keep your luck for a trip to Vegas and not count on it to help you with your learning experience and the corresponding assessment (marks). Entrepreneurs make their luck and the key to this is having a keen understanding of the market you are targeting. If you are good at identifying the right individuals or companies you want to serve (buyers on eBay) and you do a good job at finding product(s) for them you will be more successful. Understanding who your target market is will give you a distinct advantage in finding the right product from the right suppliers (individuals or companies whom you will get your product from) to satisfy their needs or wants. Imagine if you became an expert on a segment of the consumer electronics market. You would know what this segment wanted and would therefore be able to approach potential suppliers with sound information and expertise to successfully negotiate agreements with them.
Learning Objectives
(Levels of understanding to be gained)
| Level of Understanding | Objective(s) |
| Very best |
|
| Highly satisfactory |
|
| Satisfactory |
|
| Maybe just enough to pass |
|
Topic Notes
What is Market Research?
The American Marketing Association defines market research as the function that links an organization to its market through the gathering of information. This information facilitates the identification of market-driven opportunities and problems, as well as the development of marketing actions. Finally, it enables the monitoring of marketing performance and improved understanding of marketing as a business process[1].
Market Research Concepts for the Challenge
eBay has a vast number of product categories and products within those categories. Each of these categories has a client base, a group of individuals that purchase these products on eBay. Your priorites for your research report are as follow:
- Determine 1-3 product categories that are good sellers on eBay; provide rationale for your selections
- Select your number one choice
- Identify potential suppliers of the product(s) you have selected
- Conduct primary research on the suppliers
- Research three of these suppliers (go talk to them) and explain why these suppliers would want to do business with the team. For example they have excess inventory, old stock, or want to increase sales through a new distribution channel
- Using secondary research and information from the suppliers above determine who are the typical purchasers of these products (target market)
- Create a detailed profile of that target market including demographic and psychographic characteristics
- Determine market size (Canada)
- Provide a conclusion and introduction to the report
- The team report should be 4-5 pages, double spaced and be properly cited using APA format
Key Definitions
Secondary Research
Secondary research comes from secondary sources such as books, magazines, journal articles, statistical data bases and internet sites. It is information that has been gathered for other purposes but may be relevant to your market research problem. It is the kind of information that is typically collected first and will be the main form of research used in the Challenge.
Secondary research can be used for many purposes. For the Challenge it will be used by teams to identify who their target market will be on eBay. Teams need to clearly articulate who they are targeting and why. Information such as market size, demographic and psychographic profiles could be included in this section. This information can be found in libray reference books and data bases. Secondary research can also be used to gather key financial information about your target market and specific information on items you wish to sell into your target market. Item sales price, average price and sales trends can be found using the eBay research toolsKey eBay Links for the Bissett eBay Challenge. Remember you only have use of these tools for a couple of days so be organized when you use them. Teams can also look at other secondary resources to complement the eBay information. Your library can help with this.
Primary Research
Primary research is information derived directly from people for your particular research problem. Customers, suppliers, industry contacts, lawyers and accounts are examples of people you can talk to in order to obtain this information. Information is typically gathered from these individuals via two main methods; surveys and interviews. You may choose to supplement your secondary research by gathering primary research from people who use eBay to buy products using eBay
Defining Your Target Market
Identifying who your primary target customer in eBay is the key to success for your team. Information from your research, taking into account your gut feel and other environmental circumstances will allow you to land on a target market. These will be the individuals or businesses that you feel have a need or want that you can satisfy. For example you may decide that given your research, the onset of the Christmas season and general personal interest from a number of your team members that individuals looking for ornaments and decorations for the approaching festive season is the right target market for your team. Primary and secondary information may tell your team certain things about this customer helping you develop a profile. The team may also develop secondary customers: businesses that are looking for similar products to sell to their clients. The team would then source these products from suppliers to sell into these markets.
Competitive Grid and Price Quality Matrix
Let's face it, to succeed in any business, you've got to know what your competition is up to. If you're just starting a business, you need to find out whether there's room for you to be successful, and what niche is open to you.
Here's how:
1. Identify your competitors by name, address, telephone number, Fax, e-mail, URL, and any other pertinent contact information.
Check directories and Yellow Pages in your field and in your geographic area of operation. The library can also be of help. Think about who you could lose sales to, or who your potential customers or clients might consider as an alternative solution to their problem/pain. Make the list as broad as it needs to be. Chances are, it will still be fairly small. Include your own company on the list, and research it also, to be compared alongside the others.
2. Develop a list of the information it would be helpful to know about each of the competitors above.
You'll at least want the basics: their service or product offerings; how they're structured, and how they work; their prices, and the basis for their charges; area of specialty, or niche; where they are really strong, and where they might be vulnerable; reputation, or marketplace image; level of their service or the quality of their product -- where they "fit in"; their competitive advantage, or point of difference; how they do business -- their values, business principles and practices; marketing and sales activities, advertising and promotion; and what they're likely to do next. Other questions specific to your situation will also occur to you. Brainstorm.
3. Now you're ready to start gathering information.'
* Collect competitors' literature.
Trade shows offer a great opportunity to gather literature and marketing materials from exhibiting competitors. Listen to their sales presentations. Your customers may have some of your competitors' literature.
Check the library, supplier reps, media reps, trade associations and other industry sources, business and social friends. You could even call the competitor and ask for their material.'
* Check competitors' World Wide Web pages.
If they're on the web, this is a good place to start. It will be the easiest, and probably most current way to get good information.'
* Trade shows and conventions.
List the events your competitors may attend. Go to as many as practical to gather competitive literature; and to visit with booth personnel, people visiting the booth, industry and media reps and other attendees. Remember to include smaller, local shows. If a competitor is speaking at a meeting, go to hear him or her.'
* General resources
The library has many resources for getting competitive information. Check with the business librarian. Check, particularly, the online reference from the major newspapers. You can also check with the local chamber of commerce from the area/region in which you want to start the business. Regional business publications frequently have reference services on articles they've published. Read competitors' advertising. If you have the budget for it, order reports from credit and other business services. Meet the industry media people, both locally and on the national level. Talk with your competitors' former and current employees. Talk with mutual suppliers.
Check others' knowledge of the competition. In addition, check trade directories and annual reports (if publicly traded). The information is out there. Just put your imagination to work, and you will come up with ways to get it.
Steps for Building the Competitive Grid:
1. Develop a list of “quality differential” categories – individual categories in which the customer PERCEIVES quality for your type of product or service. These differentials are to be from the customer’s viewpoint, not necessarily yours, and are the ways that the customer views how one product/service best fulfills their desire to have their problem/pain solved.
2. For each “quality differential”, define on a separate piece of paper, usually in paragraph format, how each differential can objectively be measured on a scale from 1-10, with 1 being the lowest amount of quality perceived for this type of differential, and with 10 being the highest amount of quality.
3. Take each differential in a table format, and with the criteria established in (2.), give each differential a score for each identified competitor.
4. Weight each of the “quality differential” categories showing which differential means the most to customers as they make their buying decisions. The total of all the weightings should equal 100%.
5. Multiply the individual competitor scaled score for each “quality differential” weighting and add these together to form the individual competitor’s total perceived quality measurement.
Competitive Grid for Fast Food Hamburgers in Canada – sample (not inclusive of all competitors or potential Quality Differentials)
Quality Differentials
25% 45% 20% 10%
Competitor Cooking Method Weight and Grade of Patty Condiments Cleanliness of Bathrooms Total
Peters 8 10 8 5 8.60
McDonalds 5 4 10 5 5.55
A&W 5 6 10 5 6.45
Wendy's 5 6 10 5 6.45
Fuddruckers 10 10 10 7 9.70
Cooking Method:
1 = Boiling
5 = Frying
8 = Flame Broiling
10 = Mesquite BarBQ
Weight of Patty:
1= less than 1/4 lb commercial Grade beef or less
4 = standard 1/4 lb commercial Grade beef or less
6 = less than 1/4 lb, grade A beef
8 = standard 1/4 lb, grade A beef
10 = variety more than 1/4 lb, grade A beef
Condiments:
1= Ketchup (not Heinz)
2= Ketchup and Mustard (not Heinz)
4= Ketchup, mustard and pickles (other brands)
5= Assortment of non-brand name condiments
6= Ketchup and Mustard (brand name)
8= Ketchup, mustard and pickles (brand name)
10= Assortment of brand name condiments including bacon, cheese, tomatoe, lettuce, etc.
Cleanliness of Bathrooms:
1= smelly, stains on walls, floors and cabinets wet, etc.
5= generally clean, graffiti evident, water spills, no diaper changing area
10= exceptionally clean, attendent/host present, no graffiti, lcd panels in stalls with movies playing, cloth handtowels, granite counters, music playing, pleasant smelling, diaper changing area, family restrooms available.
4. Build a competitive grid to make it easy to review and compare. Be sure to include your own company.
5. Build a Price/Quality Matrix
Now take the Total Perceived Quality Measurement from the Competitive Grid and build a Price Quality grid, accounting for the size of the competitor in the market place and the average price the competitor charges for a similar product.
Competitor Total Perceived Quality Average Price per gram Total Canadian Stores
Peter’s 8.60 0.0159 1
McDonalds 5.55 0.0135 1200
A&W 6.45 0.0155 600
Wendy's 6.45 0.0185 352
Fuddruckers 9.70 0.0300 1
Once you have the information, it's time to use it. By itself, gathering competitive information will not guarantee your total success, but it will give you the basis for making sound business and marketing decisions. It will also help you check the assumptions you've been working with to determine your unique selling advantage. You will find ways to invest in opportunities providing the greatest return, and to avoid some big mistakes as you develop your unique niche.
This page is part of The Bissett eBay Challenge.
