Market Research and Consumer Behavior

Study Notes

Entrepreneurship: The process of starting and running one's own business, involving risk.
Entrepreneur: An individual who undertakes the risk associated with creating, organizing, and owning a business.
5 Steps of the Entrepreneurial Process:
- Discovery: Generating ideas, recognizing opportunities, and studying the market.
- Concept Development: Preparing a business plan, choosing a location, and deciding if a patent or trademark is needed.
- Resourcing: Identifying and acquiring financial, human, and capital resources.
- Actualization: Starting the business.
- Harvesting: Expanding the business.

Develop a Business Plan:
- A detailed proposal describing the business idea.
- Presented to potential investors and lenders.
- Typically 30+ pages.
Acquire Finances
Meet Legal Requirements

Executive Summary: Brief overview of the business plan.
Product/Service Plan: Presents the product or service being offered.
Management Team Plan: Qualifications of the entrepreneur and partners.
Industry/Market Analysis: Analyzes customers, competition, industry, demographics, and economic data.
Operational Plan: Includes all processes involved in producing and delivering the product or service.
Organizational Plan: Management philosophy, key management personnel, and employment policies.
Marketing Plan: Describes how the business will make customers aware of its products/services.
Financial Plan: Includes financial statements forecasting the business's future financial health.
Growth Plan: Presents a plan for future expansion.

Confidentiality Agreements: Bind one or more parties to non-disclosure of confidential information.
Patents: Exclusive rights granted for an invention, providing a new way of doing something or a new technical solution.
Trademarks: Words, signs, symbols, or logos that identify and differentiate a business from others.
Copyrights: Rights that automatically vest to someone who creates an original work of authorship.

Components of Creativity:
- Environmental Stimulants: Freedom, good project management, sufficient resources, encouragement, and more.
- Environmental Obstacles: Various organizational characteristics, constraint, organization disinterest, poor project management, and more.
Impacts of Innovation:
- Effecting a new policy
- Finding new opportunities
- Designing new structures
- Devising fresh methods

Data points to include in your target market:
- Demographics: Age, gender, employment status, life stage, family structure, religion, and income.
- Geographics: Physical location, rural/suburban/urban environment, area of the country, local language, and time zone.
- Psychographics: Intrinsic personal qualities, hobbies, leisure activities, entertainment interests, and preferred sources of information.
- Behavioral patterns: Purchasing habits, qualities customers look for in a product/service, and why they want to purchase it.

The Concept of Fair Pricing:
- PRICE: The value placed on goods and services offered to the public.
- Factors affecting price decision: Cost of making the product, marketing and administrative costs, competitors' prices, customer ability to pay, supply and demand, and company image.
Basic Pricing Principles:
- All prices must cover costs.
- Effective way to lower sales price is to lower costs.
- Prices must be regularly updated to reflect market developments.
- Prices must be established to ensure sales.
- Product utility, longevity, maintenance, end use must be judged continually, and target prices should then be adjusted accordingly.
Elements in Pricing:
- Labor cost: Employee salaries, wages, benefits, contractors/subcontractors, and supervised or managed services.
- Overhead expenses: Indirect expenses required to operate the business, including insurance premiums, equipment depreciation, business forms, rentals, office supplies, dues, and membership payments.