Market Research
Questionnaire
Sex (please circle): Male Female
How old are you? (Please circle)
17-20 21-30 31-40 41-50
50+
What is your annual salary? (Please circle)
0- £10,000 £10,000- £20,000 £20,000- £30,000
£30,000- £40, 000 £40,000 +
What type of car do you drive (Make/Model)?
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Would you be interested in buying a car performance enhancer product?
Definitely Buy Probably Buy Don’t Know
Probably wouldn’t buy Definitely wouldn’t buy
How much would you be willing to pay for this product?
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What type of shop would be most convenient to buy this product from? (Circle one or more if necessary)
Garage Car Hypermarkets Internet
Other (please specify) ………………………..
When purchasing car products what do you look for?
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How Can I Make My Product Better Than The Competition?
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I collected my info from 100 people, this gives me an accurate amount of results and an even sample percentage.
I chose 100 people and used their answers and put them in graph. I chose these people with random sampling. This is where I choose people to do it at random when I was giving them out so that everyone has an equal chance of getting chosen. The results are as follows:
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Sex
The Graph above shows that males seem to be more interested in my shop so I will aim my products towards a male population.
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Age
The graph shows that a majority of people under age 30 were interested in my shop. So I will target this group.
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Wages
The graph shows the majority of people earn £10000 - £30000. I will aim my products toward these people. As a lot of my accessories I will be selling are expensive it is better to aim the price range to higher earning individuals.
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Cars
The graph shows the four most dominant types of car owned by my target market. As these cars are most popular I will specialise in selling accessories for these models.
I am now going to summarise my questions. Most people whom I questioned said that they probably would buy my product. Most people said they would pay between £300 - £1500 depending on the item. The majority of people would buy their parts from a car hypermarket. Most people said they look for quality and well priced parts when purchasing them, these are also the reasons people said I improve my services to differentiate me from all competitors.
Laws Affecting My Business
The Race Relations Act, 1976
Makes discrimination on grounds of race illegal in the same way as the Sex Discrimination Act. Again, there is scope for GOQs - for example, advertising for an 'Italian waiter' to work in an Italian restaurant.
How It Affects My Business
Prevents people from racial discrimination at work and prevents colour prejudice such as when applying for a job.
The Equal Pay Act of 1970
Sets out that women and men should receive the same pay for doing the same type of work or ranked as being of the same value.
How It Affects My Business
This prevents men and women being paid different wages for the same job. And means I will have to pay both sexes equally. When recruiting people I must make sure they are getting paid the same as someone else doing the same job.
The Sex Discrimination Act, 1975
Protects employees against discrimination on the grounds of gender, for example:
- in job advertisements
- in selection of employees for jobs
- in promoting employees
- offering training and career development opportunities.
There are some situations in which the Act does not apply related to Genuine Occupational Qualifications (GOQs). For example, it is regarded to be legitimate to advertise for a 'male lavatory attendant', or for a female actor to play a female part in a film.
How It Affects My Business
This protects people regarding gender so when advertising I can’t say which gender people have to be.
SWOT Analysis
Strengths
- I Have An Original Name Because Through Research I Found I’m The Only Business With That Name.
- A Unique Range Of Products. No Other Companies Have The Diversity Of Products I Have.
- I Have A Wide Knowledge Of This Type Of Product.
- I Have Some Knowledge Of How Businesses Work Through My Business Studies Course.
Weaknesses
- Lack Of Business Experience
- Not An Original Business Idea
- Harder To Get A Bank Loan Being A Partnership Whereas It would Be Easier If I Was An LTD Or PLC
Opportunities
- Expansion
- Trend Of People Revitalising Cars On TV. E.g. Pimp My Ride, Overhaulin’ Etc.
- The Street Racing Culture That Is Increasingly Growing
Threats
- Competition As This Area Of The Market Is Growing Rapidly
- Petrol Prices Go Up So Delivery Prices Go Up
- People May Also Want Fuel Efficient Cars Or Electric Cars
- Possibility Of Being Priced Off The Road
Overall the strengths and opportunities seem to outweigh the weaknesses and threats to my business as a whole. It seems apparent through this, that my business will be successful and prosperous.
Product
The products I have chosen are supplied by:
- HKS
- Enkei
- Borla
- StreetGlow
- Yokohama
- Turbonetics
- AutoSportz
- Hemi
I have chosen these companies to supply these parts as they are well known by my target age group and are reasonably priced. The parts will be specifically suited for different makes and models of cars. The main cars I will stock for are the Ford Fiesta, Renault Clio, Vauxhall Corsa and the Ford Focus. I will stock these parts for these cars as my target market identified these as popular choices.
I will differentiate myself by offering special discounts to store card holders and allow them to purchase items on credit. I will give each customer free fitting for customers who spend over £1250 and will give all customers a year long money back guarantee and free servicing if they are store card holders, this differentiates me from my competition because none of them offer this service. I have chosen not to offer credit agreements as a lot of companies have lost a lot of money in recent months through customers being unable to pay the money back.
I will try to portray my company as a company that offers good quality named products at very competitive prices. This will in turn create a well respected image for my business which will help me stand out from the competition, this will help attract my target market.
I have chosen the name AutoModz as my company name as this relates to the products I’m selling and is catchy.
Product Life Cycle
Introduction
During this stage my sales will be low. Heavy promotional spending is needed I will do this by spending a large portion of my money on advertising such as leaflets and paper advertisements. The aim of my promotional strategy is to create awareness of my business.
Growth
During this stage sales and profits are steadily rising, I will need a lot of advertising to promote the demand. I will attempt to build up customer loyalty before the entry of competitors. I will use persuasive advertising such as special offers and customer guarantees.
Maturity
During this stage the product will be bought by the majority of my target market also during this stage the rate of sales growth will start to slow down.
Brand preference is crucial factor and therefore I will have to make sure customers are loyal by offering guarantees and special offers. I hope to stay in this stage for as long as possible. I will use extension strategies such as:
- Hold sales every quarter
- Refurbish the shop every 5 years
- 20% off members’ first purchase
- Revise my stock each quarter to keep up to date with currents trends
- ‘Buy One Get One Free’ on certain parts and accessories
Saturation
There is a lot of competition in the market and the sales level off. If I can’t revitalise my shop I will plan on closing but if I can revitalise my shop I will carry on trading.
Decline
Sales volume shows a marked fall due to substitutes appearing. If the product is not improved it will be withdrawn to avoid loss. I will seek to cut my losses by eliminating the services.
Logo
I have chosen this logo because it shows some of the products I will be offering in real image. For example:
- Gravis Alloy Wheels
- Hodkin Body Kit
This will attract my target market because it is colourful and it shows a car my customers will likely to aspire to have.
Price
In the short term I will use penetration pricing. This is when a business offers products or services cheaper than a leading competitor. A main competitor of mine offers a full Ford Focus Body Kit for £512.89 my business can offer the same products for £475. I will use this form of pricing as this is a competitive market to break into. I have chosen not to use skimming, which is where you start off with a higher price than the competition the steadily lower it, because this would be inappropriate in this type of market as I have competitors offering products the same as mine but at higher prices so skimming would give them an advantage over me for a period of time.
In the long term I will use competition based pricing as I will be able to keep up when the competition change their prices. This will enable me to change my prices and lower them so that I can keep my customers loyal and happy.
Promotion
I aim to promote my business by:
Advertising – In newspapers, by radio. I will use the radio station Metro to promote my business to many of my target market who listen to this station. I will put information on products I am selling and various introductory offers and information on my location so my customers know where I am located. I will also put an advert in my local newspaper The Evening Chronicle. I will put a similar advert as my radio advertisement as many local people read this paper and this may promote word of mouth. I will not use TV as this is expensive and is broadcast to a national audience.
Direct marketing (mail) - Posting leaflets through doors. I will use this type of marketing as it is easier to give areas where my target market lives information on my business.
Public Relations- Main aim is to boost image, companies may hold sponsored events. I have very limited cash flow so I will not be able to fund public relations if it going to cost me money. I could contact my local newspaper and ask them to do an article on my business to help promote me.
Displays - Used in supermarkets and at trade fairs – used to attract people to stop and look, free pens, food etc. I will use displays in my own shop as these will attract more customers.
Sponsorship – Businesses often sponsor teams or events by providing money. I will not use this as it will be to expensive to sponsor Formula 1 race cars and won’t just provide my target market with information.
This is because all of the different types of promotion aim to attract the target audience to buy my products and visit my store and create a well respected and liked image which in further will attract more new customers.
Place
Producer –> Retailer -> Customer
I will use this form of trading as it will give my business a full range of up to date parts and accessories and advice on current trends. It will also give my customers cheaper high quality products than those companies who use wholesalers as the wholesalers are cut out of the equation so they don’t make any profit at all.
Location 1 is the current location of my main competitor.
Location 2 will be the location of my business. I have chosen this place as it central to Newcastle and is a main place identified by my target market. Therefore my shop is easily accessible by roads such as the A1, A167 etc.
Section 2
Action Plan
Month 1
I intend to undertake high levels of informative market research to allow the local target market to find out about my shop. I will use a questionnaire to do this as this is easy and simple to use. It is also easy to put in graph form. I will then identify that sales will be low so costs have to be kept low. This is because at the beginning of a product life cycle is called weaning and not many sales are expected straight away
I think it will also be important to be more attractive than competitors. I will do this by using various pricing strategies such as special introductory offers such as buy one get one free on alloy wheels etc.
Months 2-6
I will analyse my data that I collected in month 1 and see if it fits my predictions. If it does I will continue research into other aspects of my business. If it doesn’t I will try to adapt certain aspects of my company to suit these results. During this time I hope to reach the growth stage of my target market. If I don’t reach this stage I will have to inject more money into my business to promote it as this will increase sales.
Months 6 - 12
By this time I should have established myself and have a few repeat customers. Due to this I can start using persuasive advertising and start putting money back into the business. I can also determine which products that are selling and order more of these and get rid of other non selling products through sales and special offers.
Months 12+
Hopefully by now my company will be making a lot of money. People will associate my business with high quality products at very low prices. I may expand my business and if business is going well I will think about locating in new areas.
Conclusion
In conclusion, I feel my marketing mix has been put together so that it will attract my target market. I feel that with my price, product, promotion, place all coming together, they work well together and that with all of them together I can create a successful business that will hopefully still be a successful business in years to come.
Constraints
I feel that the main thing that will get in my way of creating and maintaining a successful business are simply my competitors. With all of the experience that they have of being and staying in a car market, I think they will feel that they will have the edge over me in that respect, but I feel with the right attitude, a lot of hard work and my business plan, I can fend off these competitors to create a good segment of market share over the car business.
A few more things that could contribute to the downfall of my business, if they go against me over the next few months, are:
- Unemployment in my area – I might not be able to get many customers, if they are all unemployed, they might not be able to afford any of my products and/or services. On the other hand, if I need staff, a large unemployment rate in the area could be good and it could be easier for me to recruit staff.
- If they continue to go up; interest rates could stand in my way. Usually to buy an expensive car, people would take out a loan. If the interest rates for these are particularly high, people might resist. This could result in fewer sales for Carl's Car Mod's, therefore lowering my profit margins.
- Not enough money being spent on promotion – I need to get the balance right between not spending enough money on promotion, and spending too much money on promotion. If I do not spend enough money, people might not end up knowing about my shop, and sales will fall. On the other hand, if I spend too much on promotion, people might get sick of hearing about my shop, and not come. Or, because I have spent so much money on promotion I might not have the money to get enough products in, or to make my staff happy by paying them the right amount of money for working in Carl’s Car Mod’s.
- Not enough market research – personally, I think I have carried out a good amount of market research and enough, to make my shop successful. Saying that, I might find out in the next few months if I have done enough. Also, if I had more time and capital I could maybe have carried out more market research.
- Poor customer service – I need to have an excellent customer service, simply to compete with my main competitors. Nook Car Accessories has an excellent customer service. All of the staff there are very friendly and helpful. I need to match or better this or Carl’s Car Mod’s will fail miserably. Quality recruitment and training will be essential if I am going to have any chance of better my competitors in this area of my business.
Alternative Ideas
If I find that my business is not a complete success within the first few months, I may need to change a few things about it. I could change things like customer service (make it better via more training for staff), pricing strategies, re-evaluating and/or (if necessary) changing my target market to accommodate more specific types of people to buy my products. I could also get some new products in to try and attract a wider range of people (i.e. accessories), or alternatively I could try and get rid of some older products that I have had. This could result in me losing money, but it could all be worth it in the end if it turns out to be the right move. I could also change my promotional techniques. This could include things like changing my advertising campaign, or just changing the way I advertise, in general.
Strengths and Accuracy of Methods Used
Product Lifecycle
This could be the key to making my business work, but I do have to realistically evaluate if my product will stick to the diagram. The reality is that it is unlikely that my product will stick to the diagram, so I cannot completely rely on it. The product lifecycle is an ideal scenario. It will have to accommodate for the fact that my product is unlikely to fall into each stage perfectly. The product lifecycle does not take into account any external factors.
Market Research
Even though I took most of my market research from customers coming out of my main competitor, Nook Car Accessories, I cannot assume that all of the results from my market research will always happen. This was only one sample on one day. These could, potentially be freak results, and totally different to what they would be like on an average day. In the unlikely case that this is the case, it could have dramatically bad effects on my business, as all of the things that I will have based my business plan on (the market research) will have been all inaccurate and therefore of no use to me at all.
Competitor Scan
I think that the competitor scan that I did was quite accurate, and that I appropriately scanned all of my realistic competitors. I will hope to eventually eliminate all of these competitors and maybe one day, create a monopoly over the car market in the city of Newcastle upon Tyne. The only thing about the competitor scan that I have to ask myself is, ‘Was I able to get all of the information that I needed?’ The answer is no, probably not, as obviously most of my competitors would not give me information that would help me with my business, because they could inadvertently end up compromising their own profits and sales.
Bibliography
For my business project, I used a number of sources to get all of my information from. I will list them below.
Google UK –
Wikipedia –
Microsoft Word 2003 – Word Processing Software
Microsoft Excel 2003 – Database Software
