2. WHY DO I NEED TO DO MARKET RESEARCH?
One of the main factors that will determine weather my business is a success or a failure is the competition that my hairdressing business will stand against. As I am planning on setting up a hairdressing business, I realise that there will be mass amounts of competition as there are many hair salons within my place of location. However, to help prevent the risk of my business failing, there are many things that I can do. One of these aspects is called market research.
I believe that I need to conduct market research to help the setting up of my business as this will help me compare the competition and get a better idea about the market I am appealing to. It will also help me evaluate weather there is enough room in the market for my business and if anyone will be interested in the service I am offering.
There are many forms of market research that can be done. This market research, as I said previously, can be broken down into two major sections. These two sections are called:
- Primary Research,
- Secondary Research.
These are very different from each other but they both are types of market research. Primary research is the gathering of first hand data that is tailor made to a firms own products, customers or markets. There are many examples of primary research, and I believe that this is the best form of research that can be done as it is directly for the use of your business only. One of the best examples of primary research includes a document called a “Questionnaire”.
A questionnaire is a very good form of primary research. This is because you are able to ask a wide range of people many questions in a short space of time. It would also be very cheap for my business to do. A questionnaire is a document containing a series of questions designed to discover the information required to meets a firms research objectives.
Other forms of primary research include:
- Direct interviews where questions are asked by a representative of the company to gain information from the public whom may become future customers,
- Surveys can be used to get the opinions of many people at once,
- Focus groups where people can express there views upon the product or service I will be providing,
- Shopping observation where you are able to watch people shop and view what they purchase to help your market research.
However, the major disadvantage of primary research is that it takes a great amount of time and effort. For example, if I wished to use the method of a questionnaire then I would have to firstly make the questionnaire, then copy it thousands of times to cover a wide spread of different people and then some how gather all of the questionnaires back. I would then have to collate all the results and analyse these. This is why it becomes an extremely lengthy process. Therefore, there is an alternative.
The alternative to primary research is secondary research. Instead of using primary research I can use secondary research as this is also just as useful. The only problem is, is that the secondary research may not be directly tailor made for our business. Examples of secondary research are:
- Previous research reports,
- Newspapers, magazine and journal content,
- Government statistics.
The main advantage that using secondary research has over using primary research is that secondary research is already completed for you and therefore, does not take up any valuable business time. However, the major disadvantage with secondary research is that you are using somebody else's research and therefore, the research may not be valid to your business. Basically, the secondary research may not meet all the needs to what you are attempting to find out. For example, if i am deciding to begin a hairdressing business, then i could use some other hairdressing business's research. However, their research may be different to what i wish to research.
Therefore, i believe that the best method of research for my business is a primary one and out of the primary options, i believe that using a questionnaire will be most effective to help me achieve what i want to. I need to produce a questionnaire as this will help me find out about my market and exactly what market type i will be aiming at.
The questionnaire itself, once created, will be handed out firstly to friends and family and then to some members of the public. I will try to ask varied types of people to make my market research more reliable and valuable. I will ask twenty to thirty people as i believe that this is healthy number and that that will gain me some very good comeback. I will then be able to analyse the results and collate them. I believe that the questionnaire should have at least ten questions, upon it, as this will enable me to ask the majority of things that i wish to. Also, ten questions is not too lengthy, and therefore, people will not get bored with filling it in. My main area of focus will be Tamworth town center as this is where, i believe, my business will be set up. The actual types of questions upon the questionnaire will be based upon the opinions of hair styles and pricing aspects. For example, “How much do you pay at the moment at your current hairdressers?”.
3. WHAT RESULTS DO I TINK I WILL GET?
From completing my questionnaire i hope to learn more about my market and, mainly, how much people are prepared to pay for a hairdressing service. I would also like to find out how much money many people are paying already for their current hairdressing. This will help me as i believe that i will be able to make my business's prices more inviting to customers. I also wish to discover what it is that attracts a customer to a certain hair salon and what keeps them visiting it. This information is important to me as from this i will be able to make my business more inviting than the other hairdressing competition and this is how my business will succeed.
I need to find out about the best marketing mix for my marketing campaign to open a retail outlet selling the service of hairdressing. I will need to find out about the four P's which make the perfect marketing mix and are:
- The Product – It is important that a firm finds out what consumers need and want through market research, and produces products and services to match. This includes its design, its appearance, its special features, its quality and its reliability,
- The Place – This involves making sure that the product is in the right place at the right time, so that potential customers can buy it,
- The Promotion – This comprises the methods used to bring a product to the attention of the customers and to sell it to them. This means advertising and promoting the product,
- The Price – This is based on how much customers are prepared to pay and how much the product or service costs to produce or run.
In my opinion, prior to doing market research, i think that my target customer will be people of the female gender but of all ages. This is because, i believe that, although my hairdressing business will be uni – sex and open to both male and female peoples, in my view, i think that my business will attract more female custom. I intend to offer the following services and products to my target customer:
- The service of having your hair dressed / cut at my business,
- Many salon products will also be available for the customers to purchase at my business. These products will be mainly haircare products or hair styling products which will include such items as the following pictures:
Moving on from what i intend to offer my future customers. I need to decide upon what i am going to be charging for these services and products. Therefore, i have prototyped a price list that will the basis of what i charge my customers. This may be altered as i re-evaluate my prices in the future, (the initial price list is on a separate piece of paper as a whole).
I am intending to set up within the boundaries of Tamworth. This will be my location. However, i have done some research and found it the best option for my business to attempt to find a location within Tamworth which has not got a hairdressing business close in its vicinity. This way i will be open to more customers and will attract more of the market around me due to the factor of being “convenient”. I researched the addresses of all the hairdressing businesses within Tamworth and have listed them to help myself more than anything. From this list, i will then try to find an area, using maps, that hasn't already been occupied by a hairdressing facility:
- Spike and Violet,
- Sun Showers,
- The Retreat,
- Francesco's,
- Super Cuts,
- Rage,
- Candy Cuts,
- Magic Mirror,
- Men’s Hair,
- Stansfields,
- Alley Barber,
- John English.
After looking at the competition that is positioned within Tamworth, i notice that the main area for hairdressing businesses to be located is within Tamworth's actual town center. Therefore, after analysing various areas, i believe that the best location for my business would be actually within Tamworth's town center even though that there is a mass amount of competition, which i have taken into account and considered.. I concluded this as i found the least amount of hairdressing businesses here compared to any other area of location. Another advantage that the location of the town center would give my business is that it would attract a large amount of publicity and custom. Therefore, i would locate my business here.
There are many types of promotion that i would be able to chose from, therefore, i need to find the perfect types that would suit a small and local hairdressing business. Here are some examples of promotion methods:
- National Television,
- Radio,
- Cinema,
- National Newspapers,
- Regional / Local Daily Newspapers,
- Magazines,
- Posters And Billboards,
- Leaflets,
- Directories,
- The Internet,
Choosing the best method of promotion for my business will be based upon:
- The cost,
- The advertising of competitors,
- The target audience.
Therefore, i have realised that, as my business will be a reasonably small one and very local, the best methods of promotion for me to use would be:
- Local Radio Stations,
- Regional / Local Daily Newspapers,
- The Internet,
- Leaflets,
- Posters.
These methods would be very effective in attracting customers, and also very cost effective.
I am carrying out market research to establish whether my opinions are correct. I could have opened up my retail shop without doing any market research but it would be very unlikely that i would have attracted any customers due to the factor of there being no correct promotion for my type of business. This would have have therefore resulted in no money coming in and no capital for the business to use. This would lead onto bills and expenses not being able to be paid for and eventually the business would start to make a dramatic loss. In the end, the worst possible outcome would be for the business to go bankrupt and this is why doing market research is so important to a businesses future.
