THE CHILD CARE MARKET AND CONSUMER CHOICE In looking at the potential market for child care, it is important to distinguish between “need” and “demand.” For child care, need is the expression of the total number of spaces required in a given time period. It is a driven by the total child population, either now or at some point in the future and is most often expressed as “a need for XXX child care spaces in the years X to Y.” Demand is that total segmented by the wants of the child care purchasing consumer. That is, the consumer will seek out child care based on things like location, price, staff, curriculum, developmental activities and the like. In some cases one want will be the driver of the consumer’s decision (for example, the location of the provider within a particular driving distance); in other cases it is the mix of these wants that drives the decision. It is the ability of the provider to meet these wants that creates value for the consumer such that the consumer will take action to acquire the services. In some cases, such as smaller family child care providers, the demand may be apparent from anecdotal comments of co-workers, friends or neighbors who are child care consumers. In other cases, social service organizations, schools, churches and the like may have completed, or be encouraged to complete, more extensive surveys or focus groups. Despite the fact that many publications on starting a child care business emphasize the importance of demographic data, it needs to be remembered that these will most often yield expressions of aggregate need rather than immediate or predictable demand for specific characteristics of service. When a potential child care provider desires to have more formal demand research (to accommodate, for example, a larger potential geographic market), the potential provider should seek the assistance of an organization knowledgeable about the design and interpretation of such surveys. This is particularly important if the potential provider expects to be using that data in a business or financing plan to be submitted to a bank or other commercial lender that will want to be assured of the quality and confidence level of any data supporting a funding request. There are multiple sources of possible errors and biases in survey market research.
6
Made with FlippingBook - Online Brochure Maker