B U L L E T I N
Tools and Resources for Data-Driven Market Research
Third Wave Research
Vol. 1 No. 2   June 4, 2002
IN THIS ISSUE:
  • Who you are and what you do
  • Take our June survey!
  • Household Spending: find hidden markets
Bulletin Archive

FROM THE EDITOR

WHO YOU ARE AND WHAT YOU DO
Thanks to everyone who responded to the survey in our last issue. We asked questions that allow us to categorize our respondents by type of business, annual sales, and number of employees. The big news? You’re new, you’re small, and you’re hard to pin down! More respondents chose the business category "other" than any of the existing categories on our list. We also asked questions about your uses for demographic information. We found a few surprises there, as well.

Who are you?
About 60% of you employ five or fewer people in your business. About 55% state sales under $250,000. Just under 53% of you describe yourselves as "Entrepreneur/start-up (0-3 years)" and – you guessed it – those answers correlate. In other words, you could describe over half of our Bulletin subscribers as "start-up businesses with sales under $250,000 employing 5 or fewer people".

The "Other" dilemma
The majority of you answered "What type of business are you in" with the categories Professional Services, Retail Trade, and Other. I wish we knew more about you "Others"! To clear up the mystery, stop by the Survey in this issue and tell us precisely what you do.

What are you using the Market Research Tools for?
Your responses show a broad interest in demographic research tools. In order of popularity, your uses for population information are: 1) Demographic profiles; 2) Household or consumer expenditures; 3) Demographic trends, Market size forecasts (tie); 4) Life stage/life style attributes; 5) Mailing lists; and 6) Market projections. I was a little surprised - I thought mailing lists would be higher on the list.

What kinds of geographies are you studying? The most popular geography: Zip Codes, followed closely by Metro areas. Here is a tip. If you were using Zip Codes to get detailed local information, we've got a better idea. Try selecting radius around address next time you use the Market Research Tools. Why? Both our Zip Code and our radius reports are driven by U.S. Census Block Group data. Zip Codes are often too large for truly local analysis. A radius around an address or intersection will give you even more detailed information.

And the final surprise? We asked what you would do with this information. The answers, in order: (1) Develop marketing strategies; (2) Find new customers; (3) Evaluate a start-up; (4) Create a report for financing; and (5) Locate your business. And here I was thinking support for financing and location decisions would be at the top of your list.

Your responses will help us develop new tools and reports for the Market Research Tools, and new articles for bCentral Demographics. Thanks again for participating.
SURVEY

PLEASE TAKE OUR 3-QUESTION SURVEY
Don't worry, none of the questions are hard.  Please give us a few minutes of your time?  We could really use your help.  Your responses will guide the development of Market Research ToolsPlease click here to participate.
TELL A FRIEND
You can help the BULLETIN grow with just one click.  Click here to send the link to this issue to a friend or colleague.

I look forward to your feedback.  Click here to write to me and I will try to respond promptly.

Best regards,
Sarah White, Editor, the Bulletin
Third Wave Research

TO CHANGE YOUR E-MAIL ADDRESS OR TO UNSUBSCRIBE
Log in to Market Research Tools, then click Modify Profile.

ABOUT THIRD WAVE RESEARCH
The BULLETIN is published occasionally by Madison, Wisconsin-based Third Wave Research.  Editor Sarah White and other associates of Third Wave Research write articles that appear in bCentral's "Demographics" and "Market Research" topic areas.  For information about Third Wave Research's services, click here.

OUR SPONSORS
Businesses like yours reach prospects nationwide by sponsoring the BULLETIN.  Put your message where interested small business people will see it.  If you are interested in purchasing a sponsor message, e-mail the editor.

TOOL BITS

HOUSEHOLD SPENDING: FIND HIDDEN MARKETS
Patty is a new business owner - she has just opened her first video arcade. In the last issue of the Bulletin, we saw how Patty used radius requests and demographic profiles to choose her first location. Now, Patty returns to the Market Research Tools to develop her strategy for promoting her new business.

Patty turns to the Household Spending tool to learn about consumer spending on the category that interests her – spending on arcade-style games. Household Spending reports provide estimates of market potential for specific products and services, segmented across demographic variables. These reports group data by categories like age of householder, household income, household type, and more.

Patty begins her session by logging in and selecting the Household Spending tool. At the first screen, she selects "Entertainment" as her product category, and from the product list she selects "Pinball, electronic video games."

For her geography of interest, she clicks on "Other" to select her
metropolitan area, and then clicks "Go". As she looks over the report, she sees some support for her earlier assumptions – and some new information as well.
To view Patty’s Household Spending report, click here.

Patty had expected her primary market to be under 25 years old. This report supports that assumption. In the first category, "Age of Householder", she sees that householders under 25 years old have a demographic index of 152. In other words, these households are about 1.5 times more likely to spend on pinball and electronic video games than all households on average. But those are households headed by a person under 25. What about families with children? Patty turned to the category "Household Type" at the bottom of the report. Households made up of married couples with children show an index of 199 - about twice the average of all households in the U.S. And the homes headed by a single parent aren’t far behind, at an index of 171. Clearly the presence of children in the home correlates to spending on pinball and video games, as Patty assumed from the start. These families represent a strong base for Patty’s video arcade business.

But then Patty notices something interesting. In the "Age of Householder" category, there is another spike in the demographic index, even higher than the Under 25 bracket. The 45 to 54 Year Old bracket’s spending index is 164. Patty scans down the page, looking for high index numbers. Under "Household Income" she sees that households earning over $100,000 index at 207, or more than twice the U.S. average in spending on pinball and video games.

A picture begins to form in Patty’s mind; she is imagining her best prospective customers. She sees several members of a middle class family, perhaps the father and one or two sons or daughters. Each enjoys relaxing by playing games in arcades. Do they visit arcades together? They might – and that’s where Patty finds the "spin" for her new marketing strategy. She’ll promote a "family night special" at the arcade, with 2-for-1 game and beverage prices. Once the promotion brings customers into her arcade, she can study their playing behavior. She predicts that the kids will head toward certain favorite games and the parents will choose others, perhaps the vintage games they enjoyed when they were kids. Patty doesn’t really care – as long as they enjoy themselves, she is accomplishing what she set out to do. She is creating happy customers – and loyal customer relationships.
SPONSOR MESSAGES

Business Locations, Inc. Commercial Leasing and Sales Specialists in Chicago. Call Cindy Exline at 312-379-3993 or e-mail cindy@businesslocations.net



Third Wave Research offers a service that takes the names of your current customers, merges and matches them with our master database of all businesses, and finds new prospects who look like your best customers. The result is a highly targeted mail or telemarketing list. Interested? Contact us.



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Help us shape our Market Research Tools and resources. What do you WISH our tools could do for you? A tool for custom-tailoring a mailing list? A tool for analyzing local media alternatives? We would sincerely like to know. Suggest new tools – we will pass your ideas along to our software developers. Send us your comments and questions. We will share them with your fellow users. Drop me a line!



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