By location: the region of the country, urban -v- rural, etc.
Effective segmentation of the market can lead to new opportunities being identified (i.e. gaps in the market for a product), sales potential for products being realised and increased market share, revenue and profitability.
PROCEDURE
We researched into many local businesses and came to a split decision between to high quality and close customer standards. We contacted Swallow Combe water and we were turned down. All contacts that were made have been added to my folders.
We then decided to go to our second decision which was Chesil Motors. We had heard excellent reports from the previous year doing the expo. I quote “A pleasure to work with.” We wrote to Chesil Motors telling them about the project and reminding them about the previous year, we had a replied quickly and promptly with a good response to the effect of allowing us to use there product for market research.
Batch Production
Batch Production is a way of creating items in bulk. In batch production, general-purpose equipment and methods are commonly used to produce small quantities of items that will be made and sold for a limited time only. Usually a similar design and process will be used to make a new product, cars are a good example of this. Often after car has been made another version will be created that has got new features.
In batch production specialized tools or items for construction purposes are created. Batch production is also used commonly in food and packaging and large ovens get specifically made to produce batch foods, these types of ovens are known as one-off productions.
Continuous production
In continuous productions products are usually made in a series of steps. Large amounts of goods are expected in Continuous production and often workers will each be assigned a small part of one item. In continuous production one item is made and then re-produced hundreds, sometimes thousands of times. The tasks given to workers can be quickly mastered and sufficiently done. For example the parts produced to be used inside televisions and car engines are often constructed under means of continuous production.
What is Mass Production?
In mass-production machines are used to produce Items extremely quickly and very cheaply. Despite it being cost effective and a good way to make things in Bulk, if somebody wishes to change the design it can take a very long time and stop production all together. Cars are good examples of mass-produced items.Violins and other musical instruments are often one-off productions Cars are a good example of mass production. Foods like bread are often created using continuous production. Packaging is often batch produced
Findings From Company
The company we choose was Chesil motors. We went to see them on the 12th June and here is what we found when we asked them our questions.
-What is your legal identity?
Chesil Motor company.
-What is your product range?
Chesil Speedster 1
Chesil Speedster 2
Kit cars
-What is your target market?
Everybody
-How do you promote your products?
Shows, specialist magazines, TV adverts
-How do you set your price?
Price of materials
-At what time in the year do you sell most your products?
Winter but they go on the waiting list until summer
-Do you currently export (where to) if not have you considered it?
We have exported to Hong Kong before but generally Europe
-Has your business developed and how so?
Over the last 12 years we have developed to manufacturing.
-Have you changed premises or expanded in any way?
We have built a bigger factory so we can build the cars
-When was your business founded?
1989
How many people do you employ?
8 people
-Has your business changed hands at all?
No just the 1 owner.
-Do you sell cars from the factory?
We have a showroom next door.
Now that we have visited the company and found out some information about the company I can proceed to find further independent findings.
What I found from independent research about the product and company:
CLASSIC SPEEDSTER...............£18,950
1600cc Engine
Swing-axle suspension
Original style bucket seats with slotted backs
Carpeted rear seat area, including seat backs
Black hood
Side screens
Wood rim steering wheel
Body
Metallic paintwork £295
Special effect pearlescent paint £325
Hood supplement: choice of burgundy, tan or blue £85
Stainless steel luggage rack £250
Hard top £1295
Interior
Mota Lita wood rim steering wheel..........£80
Nardi wood rim steering wheel..........£180
ROAD TAX
Road Tax is arranged prior to collection. 25 year classic status, although exempt from payment, must still display a current road fund licence disc.
WARRANTY
Chesil offer a full years warranty against defective parts.
BREAKDOWN SERVICE
Chesil customers are able to benefit from the company's AA fleet policy covering all the schemes offered, including Relay Plus to get you home while your car is sent to a destination of your choice for repair.
From this further research I found that Chesil for a range of extra customer services which would attract a customer to a place like chesil Motor’s to buy there product as it is a small time business that needs to offer its customers assurance that there product is not a cheap remake.
EXPORTING SERVICE
Chesil Motors manage to operate in foreign companies by using representatives of Chesil Motors. They set up certain people in specialist car dealerships where the car is promoted and hopefully sold. Chesil Motors have a excellent exporting trade service they go as far as Japan!
Findings From Market Research France
More females answered the questionnaire which may show to be have different results than what would be the results if both sexes answered equally as it may show to be more of a female car than a male car.
Over eighty percent of the people who filled in the questionnaire were above the legal driving limit mainly being in the 17-29 age group and the
60+ group.
People are willing to pay in general in the €31,000 to €40,000 mark which is just over our mid point in he survey as cars are also cheaper in France price shows the cars desirability to the general public.
Marketing Mix
4 P’s
Organisational Structure
A person wanting to set up in business has to decide what legal form the business organisation should take. This will depend on many factors.
- How many people are going to own the business?
- Can the owner take the risk of having liability?
- What will be the tax position of the business?
- Does the owner want to be in complete control of the business?
- Does the owner want complete privacy in the affairs of the business?
- What will happen to the business in case of the owners illness or death?
Unlimited Liability - a legal obligation on the owners of a business to settle (pay off) all debts of the business. In law, there is no distinction.
Limited Liability - When shareholders of a company are liable for the debts of a company only to the value of their shareholding.
Sole Trader - A business owned by a single person who has unlimited liability.
Advantages of being a sole trader:
- Easy to set up
- Easy to run
- Tax advantages
- Control
- Small start-up costs
- Profits are all kept
- Privacy
- Flexibility
Disadvantages of being a sole trader
- Unlimited liability
- Lack of continuity
- Illness
- Long hours
- Difficulty of raising capital
- Limited specialisation
- Limited economies of scale
- Slow growth
- High risks
PARTNERSHIPS
Deed of partnership - the legal contract which governs how a partnership will be owned and organised.
Ordinary partnership - a business organisation which has between 2 and 20 owners, all of whom have unlimited liability.
Partners - the owners of a partnership.
Partnerships are common among professional people, such as architects, solicitors and accountants. They may also be set up in any kind of business, and are found in the retail trade and among small firms in the services sector, particularly among craft workers, such as potters and weavers.
LIMITED COMPANIES
Articles of Association - the document which gives details about the relationship between the company, its shareholders and its directors.
Company - a business which has limited liability and is incorporated under the Companies Act.
Directors - people elected to the board of a company by the shareholders to represent the shareholders interests.
Managers - workers who are responsible for the day to day running of the company. Some managers may also be directors. They are called executive directors.
Limited Liability - When shareholders of a company are liable for the debts of a company only to the value of their shareholding.
Memorandum of Association - the document which gives details of a company’s purpose and its shareholders. It needs to be drawn up in order to get the company registered before it can start trading.
Private limited company - a company whose shares are not openly traded on a stock exchange.
Public limited company - a company whose shares are openly available traded on a stock exchange.
Shareholders - the owners of a company.
AGM - Annual General Meeting
Ltd & Plc
There are two types of limited company: PRIVATE LIMITED COMPANIES and PUBLIC LIMITED COMPANIES. Private limited companies add Ltd after their as in Manx Glass and Glazing Ltd. Public limited companies add Plc after their name, as in British Gas Plc.
Differences Between Private And Public Limited Companies
There are important differences between the two.
Sale of shares - The shares of a plc must be tradable on a stock exchange. British Gas Plc, for example, is listed on the London Stock Exchange. This means that the stock exchange is prepared to allow the shares of the company to be bought and sold through the stock exchange. There is no open market for the shares of private companies like Manx Glass and Glazing Ltd.
Share capital - A plc by law must have at least £50 000 in share capital to start up. A private company can start up with just £2 in share capital. In practice, new plc’s today have to have a market value of millions of pounds in order to get a listing on a stock exchange.
Size & number of shareholders - The number of shareholders is likely to be far greater in a plc than in a private limited company. Plc’s tend to have more shareholders because they tend to be bigger companies. There is no open market for shares in private limited companies. Anybody wanting to sell shares in a private limited company has to have the permission of the majority of the shareholders. This can make it difficult to sell shares to people outside the business.
Control - In theory, shareholders control a limited company. Each year, at the Annual General Meeting, they elect DIRECTORS to represent the interests of shareholders. The board of directors will appoint MANAGERS to run the company.
The Advantages & Disadvantages Of Being A Limited Company
The great advantage of being a limited company is that it is easier to attract extra shareholders to invest money in the business because of limited liability. This means that the business can grow and become quite large. One disadvantage is that information about the company has to be given to the public. More information has to be given if the company is a plc than if it is a private limited company. Giving information is also costly. Its costs at least £700 a year to prepare a report and accounts for a private limited company. The minimum cost for a plc is over £100 000. The published reports and Accounts of a plc alone costs tens of thousands of pounds to prepare, print and distribute.
Co-operatives
Consumer (or retail) co-operative - a business organisation owned by customer shareholders and which aims to maximise benefits for its customers.
Worker co-operative - a business organisation owned by its workers who run the business and share the profits among themselves.
Franchising
Franchise - the right given by one business to another to sell goods or services using its name.
Franchisee - a business which agrees to manufacture, distribute or provide a branded product.
Franchisor - the business which gives franchisees the right to sell its product, in return for a fixed sum of money or a royalty payment.
Examples of franchise’s are Wimpy, Chem Dry, Body Shop, Prontaprint, BSM (British School of Motoring), Kentucky Fried Chicken.
Remember a franchisee will still need to decide how it he/she wishes to trade; sole trader, partnership or private limited company.
Public Sector Organisations
Nationalisation - the purchase by the state of a private sector business.
Privatisation - the sale of state owned business to the private sector.
Public Corporation - a public sector enterprise owned by central government.
Public Sector Enterprise - a business owned by the state which sells what it produces to the private sector.
Enterprises in the Public Sector do not exist to make a profit for shareholders but to provide a service to the community. The public sector is made up of enterprises which are owned and controlled by the government or local authorities. They range from a small public swimming pool to a large organisation such as the Post Office. Examples of public sector organisations include:
NHS;
Roads;
Social Services;
Primary & Secondary Education;
Prisons;
Refuse Collection;
Libraries;
Police;
Fire & Ambulance services.
Remember - Public sector organisations are funded by the public, through taxes, for the public.
Economies of Scale
De-merger - Breaking up a large company into two separate businesses.
Diseconomies of scale - An increase in costs which occurs when a firm becomes too big to be managed effectively.
Division of labour - Dividing production into separate tasks which can be done by individual workers. These specialist workers need little training and can work faster.
Internal economies of scale - The reduction in costs which arise through a firm growing in size.
Profit maximisation - Making the biggest profit possible.
Large companies (i.e., BT, Ford, IBM and Sainsbury's) have many advantages. These benefits are known as internal economies of scale. Some of the main economies, or savings in cost, are :