Entrepreneurship Research Guide : Market Research
This guide is a collaborative effort between the Wisconsin School of Business and the Business Library.
One: Characterize the market and industry conditions
What is happening in the market you will sell into?
- What industry are you in?
- Is the market growing?
- How will you differentiate yourself?
- Why are you unique among your competitors?
Two: Sharpening the ability to evaluate the business context
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What are the key technology, regulatory, and societal trends affecting your possible business venture?
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How many customers can you reach, and what switching costs and other factors will drive their purchasing decisions?
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# customers x price x frequency of purchase = market size $
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Are there macroeconomic forces like recessions or expansions that might affect your venture or your customers?
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What does the balance of power among suppliers, competitors, and buyers look like? Are barriers to competition strong? Or weak?
Three: Sample techniques/frameworks
- Buyer Utility Map and Price Corridor of the MassesThe Buyer Utility Map outlines all the levers companies can pull to deliver utility to customers as well as the different experiences customers can have of a product or service. This lets managers identify the full range of utility propositions that a product or service can offer. The Price Corridor of the Masses, will help managers find the right price for that irresistible offer—which, by the way, isn’t necessarily the lowest price. The tool involves two distinct but interrelated steps.
- Competition MatrixA chart that compares your product or service to your competitor(s).
- PESTEL FrameworkA PESTEL framework is used to analyze and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis.
- Porter Five Forces AnalysisPorter's Five Forces Framework is a tool for analyzing competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack of it) of an industry in terms of its profitability.
Suggested Readings
- The New Business Road Test: What entrepreneurs and executives should do before launching a lean start-up.Written by John Mullins. 2013 (4th edition). Building on lessons learned by studying numerous entrepreneurs, this book details the author's seven domains model for assessing new business ideas. The model is comprised of four market and industry domains and three related to the entrepreneurial team.
- Knowing a Winning Business Idea When You See One.W. Chan, K., & Mauborgne, R. (2000). “Knowing a Winning Business Idea When You See One.” Harvard Business Review, 78(5), 129-138. A new product has to offer customers exceptional utility at an attractive price, and the company must be able to deliver it at a tidy profit. But the uncertainties surrounding innovation are so great that even the most insightful managers have a hard time evaluating the commercial readiness of new business ideas. In this article, W.Chan Kim and Renée Mauborgne introduce three tools that managers can use to help strip away some of that uncertainty. The first tool, "the buyer utility map," indicates how likely it is that customers will be attracted to a new business idea. The second, "the price corridor of the mass," identifies what price will unlock the greatest number of customers. And the third tool, "the business model guide," offers a framework for figuring out whether and how a company can profitably deliver the new idea at the targeted price. Applying the tools, though, is not the end of the story. Many innovations have to overcome adoption hurdles--strong resistance from stakeholders inside and outside the company. Often overlooked in the planning process, adoption hurdles can make or break the commercial viability of even the most powerful new ideas.The authors conclude by discussing how managers can head off negative reactions from stakeholders.
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Library Resources
- ProQuest One Business (formerly ABI Inform)Full-text journals, dissertations, working papers, country profiles, industry reports from Business Monitor International and First Research (under the Browse tab), and key newspapers such as The Wall Street Journal, Financial Times, and The Economist. Covers a wide range of business topics including accounting, finance, management, marketing and real estate. (Updated daily)
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only. - IBISWorld: Industry ReportsMarket research reports on over 700 different industries in the United States, organized by NAICS code. The reports include key statistics, market segmentation, life cycle, regulation, market share, industry outlook, and more.
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only. - ReferenceUSA (Infogroup)Provides access to information on U.S. businesses and U.S. consumers. The business database includes data such as employee size, sales volume, geo-codes for mapping, contact details, franchise and brand information, judgments and bankruptcies, and credit rating scores. The consumer database includes comprehensive demographic and lifestyle attributes for any type of marketing or research.
Access: Available to anyone on-campus. Available off campus for UW-Madison students, faculty and staff only.