Entrepreneurship Unit 2 Vocab

Target Market

A particular group of customers of interest to an entrepreneur.

Market Segmentation

The process of grouping a market into smaller sub-groups defined by specific characteristics.

Market Analysis

Presents research findings about target markets. It includes a target market profile that explains the traits of the company’s potential customers. It provides potential investors with a realistic forecast of the growth potential for the market in which your company will operate.

Geographics

The study of the market based on where customers live.

Demographics

The personal characteristics of a pop. (age, gender, family size, income, education, religion, etc.

Psychographics

The study of consumers based on social + psychological characteristics. (personality, values, opinions, beliefs)

Buying Characteristics

Knowledge of and personal experiences with the actual goods + service.

Exploratory Research

is used when you know little about a subject

Focus Group

A group of 8-10 individuals from the Target Market whose opinions are studied.

Descriptive Research

Develop a customer profile. Learn the age, gender, occupation, income + buying habits of potential customers through interviews, questionnaires, or observation.

Historical Research

Involves studying the past. Trade associations + trade publications are sources of useful historical data. Tells you why a business has been successful or unsuccessful.

Primary Data

Research collected for the first time + relates directly to the collectors study.

Secondary Data

Information collected by someone else for their own purposes.

Competitive Analysis

Explains the market positions of both a company’s indirect and direct competitors. It often uncovers new business opportunities by pinpointing where customer needs are not yet being met.

Niche

A small, specialized segment of the market based on customers needs. Some business’s will focus on a smaller segment instead of competing w/ everyone else for the bigger marker.

Direct Competitors

Offer similar products

Indirect Competitors

Offer close substitutes that meet the same basic need.

Barriers To Entry

Conditions or circumstances that make it difficult or costly for outside firms to enter a market and to compete w/ the established firms. Existing businesses may bar new companies from certain distribution channels.

Threats from Substitute Products

Suppose you are planning to open a restaurant serving low-carb options. You will be competing w/ other restaurants in your area, w/ grocery stores, and w/ specialty food stores.

Buyers Ability to Bargain

In industries where large discount buyers have bargaining power, a new business may have difficulty gaining a foothold. Small businesses usually compete by offering personalized service and customized products.

Competitive Intelligence

Visit competitors outlets, buy competitors products, search the internet + your competitors websites.

Location

a critical factor in the success of a business, especially for retail stores.

Value Proposition

The reason why the business was created. It states that given equal price the company with the best quality will get the market.

Trade Area Analysis

Studying the economic activity in an area, it focuses on patterns of movement.