Welcome to unit three, video five. As we reviewed in unit two, market research is an important step in new product development. Market research is also important for the marketing section of a business plan. In this video, we will Review the Marketing section, which often includes Market Research, Competitive Analysis, and a Marketing Plan. First, let's talk about Market Research. Entrepreneurs include Market Research data in a business plan to show that the New Product presents an Opportunity in a market and if possible to show information about the target market. As we discussed in units one and two, a Target Market is the group of people who are most likely to buy a product. Let's review target markets by looking at two of our simple product descriptions from unit one. A paperclip is a tool that will help teachers and office workers hold papers together. Here the target market is described as teachers and office workers. A taxi is a travel service that will help people in cities move from place to place. In this description, the target market is described as people in cities. Another component of the marketing section of a Business Plan is Competitive Analysis. Most new products have some kind of competition in the market. For example, consumers often have a choice of more than one kind of toothpaste at their local store. The different toothpaste products are competition for each other. Competition in a market means that people have choices about which products they will buy. If people already have a lot of product choices and usually it is more difficult for a new product to succeed. Therefore, it is important for entrepreneurs to do a Competitive Analysis by examining their market for competition. Which can come in two forms, direct and indirect. Direct competition comes from businesses that offer products with the same or very similar, almost the same, function. For example, direct competition for paper clips would be from other paper clip products. And direct competition for a taxi service would be from other taxi service companies. Indirect competition often comes from substitutes. Products that are different, but can provide a similar function. For example, indirect competition for paperclips would be from staplers, string, and tape, which are other goods that could help hold papers together. And indirect competition for a taxi service would be from bicycles, buses, subways, and personal cars. Other forms of transportation. Here is a sample structure for simple competitive analysis. To begin, there is a simple clear sentence describing the competition. A product has a specific number of direct competitors. And a specific number of indirect competitors in the local market. Then some information is listed specifically. First, direct competitor's price. In a simple business plan, one sample competitor price works well here. When there are many competitors, an average price or the most common price may also be used. Second, indirect competition includes a short list of substitute products. Let's look at the sample structure for a new paper clip product. Paperclips have three direct competitors and three indirect competitors in the local market. Direct competitor's price, $1 per box of 100. Indirect competition from staples, string, and tape.