Topic 2: Understanding your Eco-

system
Dr. Kuthea Nguti
Is it possible to eliminate all risk in
business?
Is it possible to eliminate all risk in business?
Elimination of all risk is impossible for two reasons:
First, it is impossible to account for all factors that may affect
the outcome.
Second, market research requires time and is costly resulting
in a diminishing rate of return.
Introduction to Market Research
Market research concerns the collection, analysis and
interpretation of data about the marketplace and
industry at large, to derive information about its size,
nature and development.
An industry is a set of firms focusing on the same set of
activities drawing on the same suppliers, distribution
channels, and customers. The market concerns the place
where customers and providers meet.
Market research results in market and industry
knowledge that can help make informed business
decisions and reduce the risk involved in these
decisions.
Discussion

What (market or industry) information would

your business benefit from today?
 Key Research Issues
Who makes up the potential and target audience that you are
addressing and creating value for?
1.Key characteristics?
2.Compelling problem/need/pain?
3.Most attractive segments? Why?
4.Do customers care about how you create economic and social value?

How large is this market?

5.Number of people/companies seeking solution?
6.Assumptions? How might you confirm them?
7.Easy to target and access the market?
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 6
 Understanding Evolving Market
Trends
Knowledge about market: Establish baseline of knowledge about the markets,
prior to developing your product/service (i.e., market trends that influence business
success).

• Blockbuster: Brick-and-mortar retailer, known for video rentals.

1. 2010: Filed for bankruptcy; by 2018, last stores shut down in Alaska.
2. Failed to evolve with massive change in consumer demand for convenience and
immediate access.

• Netflix: Launched in 1998, initially known for delivering DVD’s by mail; later
evolved to video streaming. By end of 2018, over 137 million subscribers
worldwide.

• Takeaway: Ability to change business model to remain relevant and in business.

Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 7
Research Design
Often research involves a mix of these two types of
research. You begin by collecting secondary data and
complement them with primary data, either qualitative
or quantitative. If launching a radical new product that
will change the market place, you first require
understanding the potential shifts that may take place,
qualitative research is most likely needed (e.g., visit
anaesthesiologists to learn more about their attitudes
towards current systems and get feedback regarding the
newly developed respiratory concept to better
understand adoption by this target group and
hospital’s decision-making units).
Data Collection 1/2
Two types of data collection should be distinguished:
Secondary- concerns drawing on data that was
collected for other purposes and is readily available. It
may be useful to your topic and question but was not
gathered for that specific purpose and thus does not
fit completely.
Primary - involves new research focused on
collecting data specifically and uniquely for a specific
research question. As this information is not available
the research question is new and unique, and specific
research should be developed to answer the question.
Data Collection 2/2
Primary research can be performed by the entrepreneur
him/herself but also external help can be obtained, for instance,
from a consultant, student or market research agency.
Secondary data can be collected from a multitude of sources. Key
is to check these sources and to categorise your data, for
instance, using the format from an external analysis of a strategic
business plan: customers, providers/competitors, distribution, and
general market information. It will not only facilitate analysing
and interpreting the materials. It will also help identify areas
where too little or no information exists yet, and thus where extra
efforts are required.
 A key issue with regard to secondary data is the reliability of the
data. In case of lack of consistency in data more efforts will be
needed to decide which data is more reliable and should be used.
You need to listen carefully!
How else can you talk to your
customers or get information
concerning them?
C

D
 Sources of Industry Data and Trends
1.Key associations and publications in your industry.
2.Websites and social media pages of companies that belong
to these associations.
3.Surveys or research these associations conduct.
4.Value proposition/messaging from companies affiliated with
the industry.
5.Annual industry statistics.
6.Conferences well respected by the industry.e.g SME
conference
7.Hot topics and trends being discussed at conferences.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 16
 The Value of Industry Association
Data
• TAM: Total Available Market: Calculated by identifying revenue
within the market in the last year or future projections (2–3 years).

• SAM: Serviceable Available Market: Refers to geographic

region/market segment you will have access to.

• SOM: Share of the Market: Percentage of the market you plan

on capturing.

Small market gives opportunity to learn: Having a small market size

is not necessarily a negative since it gives you an opportunity to
learn about the market and customer needs and when you are ready,
expand beyond the reaches of your dorm or local community.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 17
 Your Business Relative to Others in
the Industry: SWOT Analysis (1 of 2)
External factors for business ideas: Business ideas will not
flourish if the following conditions (external factors) are not
met.
1.Proven need in the market.
2.Ability to pay for the solution you offer.
3.Market conditions must allow for you to access your market.

Internal factors not stressed enough: Ability to organize

resources, partners to deliver value that target market
requires.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 18
 Your Business Relative to Others in
the Industry: SWOT Analysis (2 of 2)
Internal factors: That you do have some level of control.
1.Strengths: Areas where your organization stands out from others in your
industry.
2.Weaknesses: Areas in which your company fails to excel or lacks
expertise altogether.

External/Environmental factors: That are much more difficult/impossible to

control.
3.Opportunities: External factors you do not control. Present you with
ability to grow if you position yourself correctly.
4.Threats: Conditions that make entry/growth less desirable, difficult, risky.
Obstacles that stand in the way of success.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 19
Group Discussion
Conduct a SWOT Analysis on one of your business (group member to
volunteer)
 Conducting a PESTLE Analysis
• Political: Areas to consider: governmental stability, import–export regulations,
freedom of the press.

• Economic: Areas to consider: growth rate, GDP, stock market trends.

• Social: Areas to consider: social classes, diversity and racial equity, attitudes
toward lifestyle factors.

• Technological: Areas to consider: automation, innovation, Internet

infrastructures.

• Legal: Areas to consider: discrimination, antitrust, consumer protection.

• Environmental: Areas to consider: renewable energy, natural disasters,

climate change.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 21
What aspects of the Macro-
environment (PESTEL) could affect
your business?
 Turn Data into Knowledge
• Simple facts alone cannot help business
growth.
• Improper use of raw data can lead to poor
business decisions.
• These facts need to be turned into
knowledge, adding analysis and primary
research.
• This creates value for the business.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 23
 Ask the Right Questions
• Ask what customers value before doing
the product design.
• Begin with end in mind:
– Purpose of obtaining information.
– How to improve business with the answers
provided.

Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 24

 Methods of Discovering Customer
Needs (1 of 2)
• Methods to obtain customer information.
– Survey design.
– Ethnographic studies.
– Focus groups.
– One-on-one interviews.

Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 25

 Methods of Discovering Customer
Needs (2 of 2)
• Methods for advanced business.
– Website activity.
– Social media exchange.
– E-mail, text, other communications.

Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 26

 Ethical Issues in Customer
Research
• Everything you do when securing customer data
should be guided by ethical business practices.
– Active consent needs to be given
– Proper use of data collected
– Identity protection of the respondents

• Awareness on content and goal: Participants or

respondents should be aware of the content and
goal of your research
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 27
 Getting to Know Your Customers (1of 2)
• Demographics:
Factual-drive data points: Age, family status, ethnicity,
education, location, businesses (industry, title, company size).

• Lifecycle events:
1.Timely events/activities that happen to people/organizations
that impact purchasing decision.
2.For consumers: marriage, purchase of a new home, starting
a new job, having a baby, and so on.
3.For a business: launching a business, funding, impacted by
new law/regulation, and so on.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 28
 Getting to Know Your Customers (2 of 2)
• Psychographic/Behavioral influences
1.Attitudes, values, and beliefs held by customers.
2.What you, as a business, need to understand are the
following:
1.Pain points/challenges.
2.Opportunities being sought.
3.Purchasing location.
4.Behavior and decision-making processes.
5.Spending patterns.
6.Price sensitivity.
7.Lifestyle, interests, and attitudes.
8.Brand loyalty.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 29
 Select Your Questions Wisely
• For customer analysis, it’s best to start with what you don’t yet
know about your potential customers but need to learn to launch
or grow your company.

• Opportunity to ask questions: Imagine that you are in a room

with your top prospects/customers and you have the opportunity
to ask them anything you need to know about how they make
purchasing decisions. What 10 questions would you ask them?

• Online survey, easy process: It’s easier to have them complete a

survey online because you want to collect data from hundreds of
different types of prospects so one-on-one interviews won’t work.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 30
 Survey Design (1 of 7)
• Questions: Clear and concise. There’s no room
for ambiguity, since you won’t be able to clarify
what you really meant to ask.
• Ask the most critical questions. If you cannot
think of a good use for the response, then
eliminate the question.
• Test with people matching criteria. If such a
person can understand the questions (even if
he’s not qualified to answer them), then you very
likely have a clear, precise series of questions.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 31
 Survey Design- Question formats (2 of 7)
Open-ended: An open-ended question is one in which you give the person
the opportunity to write down their input on a topic at length.

Closed-ended: A closed-ended question is one that seeks a short response.:

1.Yes/No: This type of question is used to get a very specific answer about a
need or interest.
2.Rank value: These questions ask the respondent to evaluate the
importance or their agreement about the topic posed based on a scale.
3.Multiple select response: This allows the respondent to pick from a variety
of options and allows them to select more than one response.
4.Single select response: This allows the respondent to pick only one feature
from a variety of options.
5.Order items: This type of questions asks the person to order the importance
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 32
Create a survey with the three
crucial questions you would like to
ask your customers
 Survey Design (3 of 7)

Survey Tools

• Google Forms: https://docs.google.com/forms/

• Survey Monkey: https://www.surveymonkey.com/

• Qualtrics: https://www.qualtrics.com/

• Typeform: https://www.typeform.com/
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 34
 Survey Design (5 of 7)
Boost Your Survey Response Rates
• Keep it simple: Don’t confuse your respondents by asking them
to do anything other than complete the survey.

• Use clear and concise questions: Make sure that the survey is
easy to complete and understand.

• Offer a gift or premium of participating: Make sure you’re

offering an item that will be an incentive to your target audience.

• Assure confidentiality: Let them know that what they say will be
confidential.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 35
 Survey Design (6 of 7)
Boost Your Survey Response Rates
• Thank them: Thanking respondents for their time can only help to
further promote your image.

• Tell them why: They can’t read your mind, so make sure they know why
they’re spending their time doing this for you.

• Highlight what they will get for responding: It’s important that you not
only offer a gift but also clearly explain when, why, and how the winning
respondent will receive it and then follow through on your promises.
• Send request from highest level: Receiving a letter from the company
president or customer service director will have a strong impact on
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 36
response rates.
 Survey Design (7 of 7)
Boost Your Survey Response Rates by:
• Including a space for comments: People may want
to share additional thoughts with you.

• Allowing them to respond in variety of ways: The

more options you can offer for response, the higher
your response rate will be.

• Giving them something unexpected: Under

promise and over deliver works in every venue of
business life.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 37
 Ethnographic Studies
• Dr. Margret Mead’s saying: “What people say, what people do,
and what they say they do are entirely different things.”

• Observation, powerful tool: In understanding human behavior.

• Dr. Brand’s insight on ethnography: Dr. Stephen Brand,

Associate Director and Lecturer, Berthiaume Center for
Entrepreneurship at Isenberg School of Management, at the
University of Massachusetts, Amherst, shared his insight
around Ethnography and has provided us with a template for an
ethnographic study that you can conduct to get comfortable
with the practice.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 38
 Focus Groups
• A focus group can build upon what you learn in the
survey or be completed before you run a survey.

• Subjective and open ended: It will allow you to

compare the responses to your survey or
interviews in order to validate the results.

Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 39

 Rules for running successful focus groups:
1.6–12 individuals, part of your target market.
2.Prescreen participants, to ensure they fit your customer profile.
3.Approximately 45–90 minutes.
4.Have at least one note-taker, but two is better, to catch missed
information and misinterpretations.
5.Audio/video recording of the session, with group’s consent.
6.Start broad, before you narrow focus around your product.
7.If possible, show a prototype/sample.
8.Consider asking questions such as
1. “Tell me more about…?”
2. “How would you improve…?”
3. “When you first saw this, what is your reaction”
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 40
 One-on-One Interviews
• Great method for further exploration: This is a great method to use
if you want to further explore the information revealed in your
other research methods.

• No “right way” to do this: The interviews can be done before

surveys/focus groups, afterward, or both.

• Deeper level of feedback: The goal is to give you a deeper level of

feedback to develop your customer profile.

• Unbiased questions: Make sure that the questions are focused

and unbiased so that you create knowledge.
Goldstein, Entrepreneurial Marketing, First Edition. © SAGE Publications, 2021. 41
Questions?

Clarifications?

TITLE LOREM IPSUM ILIUM | TOPIC ETYM ELIU IPSUM | 29.03.2019v 2