How the 4P's will influence the marketing of an establishment.

1. Cost related
2. Market related
3. Competitor related

Why do companies use market research?  Market research should be undertaken for such a business?

Market research is the collection and analysis of data about customers and its use for management purposes.  The term marketing research has gained favor in the past and is an all embracing phrase to include product research, promotion research and price research.  Research into customers is rightly called market research. 

Market research data, from whatever source is invaluable to the manager in providing a sound base on which effective marketing decisions can be made.  All small businesses need feedback from their customers and many will want to know why people are not using their facilities but prefer what a competitor is providing.  It is the job of market research to provide such data in as objective form as possible (with no bias).  Not all market research is a costly or complicated affair.  Small businesses will constantly get informal feedback from their customers on their opinions of the products and service level and will then make the necessary adjustments

With the proposed business in mind an amalgamation of product and market orientated research should be carried out.  As there are already well-established coffee and sandwich bars within the lace market it is crucial that the business has the right idea of what the market wants, they must investigate existing products in order to find a gap or niche in the market.  This would give the business a chance when it comes to attracting customers and maintaining a loyal customer base.

The use of secondary and primary research would allow the business to analyze the existing market and what is going on within it.  Face to face campaigning on the chosen ideas will also give a specific idea as to whether customers could be persuaded to visit the business.

The Main Legislative requirements for the business

• Local authority

• Planning permission
• Change of use

• Insurance
• The Health and Safety at Work Act (HASAWA)
• Food hygiene
• Business name

Planning permission

The town and country planning act imposes control over the use to which land and property are put.  Control is vested in local planning authorities, which are under a duty to ensure that all land and property within the area is used for the best possible purposes in view of the shortage of land and the needs of the community.  The act relates to the development of the land, which encompasses buildings etc. or any material change in the use of land or building.  Developments like this cannot be started without permission being granted by the local planning authority.  Planning permission is required for internal and/or external alterations that change the function of the premises.  When planning permission is required an architect must be instructed to draw complete plans of the proposed work.  The plans are then submitted to the local authority officials who will check if the work is being carried out according to the plans.  If planning permission is not sought prior to work commencing, an enforcement notice will be served requesting that the developer return the building to its original condition.  Where the premises include listed buildings or are situated in a conservation area, there is a separate system of control in place.  This control system imposed by the Planning Act 1990 states that advice must be sought from a solicitor before any demolition or alteration commences.

Change of use

If the business premises bought were to be converted say from a factory to a restaurant even if the alterations are only internal then planning permission is required due to a change of use.  Where a change of use occurs the local planning authority is concerned with the intended use to which the premises are to be put, in order that the character of the locality may be maintained in accordance with other development schemes.  Before the planning permission is required the change of use must be a material change.

J Hodgson gave clear suggestions of the way in which the judiciary approach the issue of use and change of use from one class to another

• Arrive at an actual description of the actual use

• See as a matter of description, whether that description fits into a use class

• See whether the description includes activities that fit into more than one class, whether the one is ordinarily incidental to the other

• One can have a use that does not come within any of the specified classes but the activity either comes within the use specified or it does not and there is no scope for the management of the problem in terms of facts and degree.

If a wine bar discovers that the catering side of the business brings in more trade and decides to convert the bar area into a restaurant as this is not a material change it does not require planning permission, however it they wanted to expand the business by building a restaurant this would be classified as a material change and means planning permission is required.

A change within a class does not require planning permission whereas changing from one class to another does as this is considered a material change.

Insurance

• Employers liability

There must be insurance to pay out for legal liability.  If one of the employees is injured or taken ill as a result of working for you and you have been negligent.  The amount of cover is usually unlimited but must be at least £2 million.  The law states that the business must show a certificate of employer's liability insurance at each place of work.

• Public and product liability

This will cover your liability to visitors and members of the public if the business causes injury or illnesses or even damages their property.  Product liability insurance covers the business against these risks.  The amount of cover should be high (recent damages in courts have been as high as £1 million).

Health and Safety at Work Act (HASAWA)

This act provides a legal framework to promote and encourage high standards.  The act introduced a comprehensive and integrated system dealing with the work place health and safety and protection of the public from work activities.  By adhering to the legislation the business is protected by the law the act consists of four parts:

1. Contains provisions on

• Health and safety of people at work
• Protection of others against health and safety risks from work activities
• Control of danger from articles and substances at work
• Controlling certain atmospheric emissions

2. Establishes the Employment Medical Advisory Service
3. Amends previous laws relating to safety aspects of building regulations
4. Contains a number of general and miscellaneous provisions

There is an absolute duty on employers with five or more employees to prepare and revise as necessary a written statement of safety policy.  This will detail the general policy, the particular organisation and the arrangements for carrying it out.  The policy must be bought to the attention of all employees.

Food hygiene

Hygiene policies are produced by companies along the line of and in many cases integrated with health and safety policies.  Hygiene policies normally contain a general policy statement requiring all employees to comply with the letter and spirit of the legislation.  Statements of legal responsibility can be incorporated into food hygiene policies.  Quoting or paraphrasing the appropriate legislation, but also relate the risk involved in the food production process does this.

The basic legal responsibilities of food handlers are to inform staff that they must keep themselves and their clothing clean, cover cuts and abrasions, avoid hand to mouth contact near food and inform the company if they have contracted any diseases.

Business name

A limited company cannot register names that are:

• Considered to be the same as that of an existing business
• Contains limited or its equivalent anywhere else in the company name other than at the end
• Could be considered offensive or illegal

You will also be unable to register a name that suggests a connection with the government or local authority.  There are a variety of names that will require the agreement of the secretary of state or various other bodies before you can use them including:

• Abortion
• British
• Building society
• English
• National
• Royal
• Windsor

A sole trader using a name other than their own surname must observe certain rules.

• The business name cannot be registered in a government department, but instead disclose your name in various ways
• The sole traders name and address must be written legibly on all business stationery
• The sole trader must display their name and address prominently at the business premises and at any place customers and suppliers have access.

The means of controlling the success of the business

It is imperative for the owner of a small business to retain complete control over the business in order for it to thrive.

They need to make certain there are adequate funds to cover overheads until the business breaks even and starts to run in a profit.

Selection of the correct staff to suit the business is vital and the qualities they posess should include, reliability, honesty and hardworking with a positive attitude in helping the business to ducceed

Retaining good members of staff and encouraging good morale.

They must guarantee customer satisfaction.

Reputation will spread by word of mouth therefore it is important to make first impressions last.

Why such a business could fail

There are several reasons as to why this particular business enterprise could fail this includes:

• Over estimating sales
• Underestimating how long it takes to achieve sales
• Underestimating costs
• Failing to control costs ruthlessly
• Losing control over cash (too much stock, allowing to long a credit period)
• Failing to identify the market due to inadequate research