SOP: How to Conduct Market Research

Market Research for a Childcare Program

Department

Administration / Leadership / Enrollment / Business Development

Person Responsible

Center Director, Owner, Administrator, or Assigned Leadership Team Member

Frequency

Complete market research:

• Before opening a new childcare location
• Before changing tuition prices
• Before launching a new program
• Once per year as part of strategic planning
• When enrollment drops or competition increases

Step 1: Define the Purpose of the Market Research

Before collecting information, clarify why the research is being conducted.

Examples:

• To determine tuition pricing
• To understand competitor offerings
• To identify gaps in the local market
• To improve enrollment strategy
• To define the school’s brand position
• To decide whether a new location or program is viable

Expected outcome:
A clear research goal that guides what information will be collected.

Step 2: Identify Local Competitors

Create a list of at least three direct competitors within the local market area.

Competitors may include:

• Childcare centers
• Preschools
• Montessori schools
• Faith-based programs
• Home-based childcare providers
• After-school programs
• Franchise childcare brands

Collect the following information for each competitor:

• Name of program
• Location
• Age groups served
• Tuition prices
• Licensed capacity
• Waiting list status
• Program quality
• Type of competitor
• Facility condition or construction quality

Administrator Tip:
Visit websites, call as a prospective parent, review online listings, and observe public-facing information.

Step 3: Create a Competitor Price Monitoring Grid

Use a grid to compare tuition by age group.

Include:

Expected outcome:
Leadership can clearly see the market pricing range and where the school fits.

Step 4: Analyze the Competitive Landscape

Review each competitor beyond pricing. Price alone does not determine value.

Use this chart:

Look for:

• Which programs are premium-priced?
• Which programs are budget-friendly?
• Which programs have strong facilities?
• Which programs have stronger branding?
• Which programs appear full or have waiting lists?
• Which programs offer services parents may want?

Step 5: Conduct a SWOT or SWOP Analysis

Review your own school and competitors using the following categories:

Definitions

Strengths:
What your school does well.

Weaknesses:
Areas that need improvement.

Opportunities:
Services, programs, or advantages your school can develop.

Threats:
External challenges such as new competitors, lower pricing, or changing family needs.

Expected outcome:
Leadership can identify how to position the school in the market.

Step 6: Conduct a Parent Market Survey

Keep the survey short and simple so families are more likely to answer.

Suggested questions:

1. How much do you currently pay for childcare?
2. Can you recommend a good childcare program? Why do you like it?
3. Do you currently need childcare services?
4. What type of childcare do you need: full-time, part-time, or half-day?
5. What matters most when choosing a provider: safety, curriculum, teachers, low ratios, location, or price?
6. How much are you willing to pay for childcare services?

Survey options:

• Google Form
• Paper form
• Phone calls
• Parent interviews
• Community Facebook groups
• Local family events
• Enrollment tours

Expected outcome:
Leadership understands what families value and what they are willing to pay.

Step 7: Review Local Demographics

Collect basic demographic information for the area surrounding the school.

Esri report database

Recommended radius:

• 1 mile
• 3 miles
• 5 miles

Collect:

Pricing assumption from workbook:
Parents may pay an average of approximately 10% of total median household income toward childcare expenses.

Use this as a guide, not the only pricing method.

Step 8: Determine Your Brand Positioning Statement

Using the information from the SWOT analysis and survey results, define how your school should be positioned.

Ask:

• What makes our program different?
• What do parents value most?
• What strengths do we already have?
• What market need can we solve?
• Are we a premium, mid-market, or value-based program?

Brand Positioning Template

For families who need ____________________,
our school provides ____________________,
because we offer ____________________,
unlike competitors who ____________________.

Example

For families who want more than basic childcare, our school provides a creative, curriculum-rich early learning experience because we combine safety, strong teacher training, project-based learning, and family communication in a warm environment.

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Step 9: Determine Recommended Pricing

Use three sources to guide pricing:

1. Competitor tuition rates
2. Parent survey responses
3. Local demographic and income data

Then determine:

Consider:

• Staff-child ratios
• Teacher wages
• Rent or mortgage
• Food costs
• Curriculum costs
• Supplies
• Insurance
• Profit margin
• Competitor rates
• Parent expectations

Important:
Do not price only to be cheaper than competitors. Price according to quality, cost, value, and sustainability.

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Step 10: Prepare a Market Research Summary

Create a one-page summary for leadership.

Include:

• Research purpose
• Main competitors
• Pricing comparison
• Parent needs
• Market opportunities
• Threats
• Recommended brand position
• Recommended pricing
• Action steps

Summary Format

Market Research Summary

Location:
Date Completed:
Completed By:

Top Competitors:
1.
2.
3.

Key Findings:

Parent Needs Identified:

Opportunities:

Threats:

Recommended Positioning:

Recommended Pricing:

Next Steps:

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Quality Checklist

Before the market research is considered complete, confirm:

• Competitor pricing has been collected.
• At least three competitors were reviewed.
• Local demographic information was reviewed.
• Parent survey responses were collected.
• SWOT/SWOP analysis was completed.
• Brand positioning statement was created.
• Tuition recommendation was prepared.
• Findings were shared with leadership.
• Final document was saved in the school’s business planning folder.

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Final Administrator Expectation

The administrator should not only collect information but also interpret what the information means. Market research should help the leadership team make better decisions about pricing, enrollment, branding, services, and long-term sustainability.