To achieve this I will need to carry out a research.
Information about my competitors can be found in:
- Companies house
- Yellow pages or Thompson local directory
- Regional business listings
- Local newspapers
Target market
I have to identify the demand for my service and whether my business will be able to satisfy these demands. Careful market research will identify who the target audience is. I can achieve this by carrying out research, looking at the market segmentation and market trends.
Market segmentation is all about deciding what products to make and sell by finding out who the customers will likely to be. In order to target certain customers, I have to break down the market into different groups. This will allow me to treat each group independently so I can meet the needs of each segment.
By carrying out this marketing technique I will find out which segments are doing well and are most profitable and which needs additional marketing support or should be ignored.
The main segment groups I need to be looking at are:
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Age - Costumers need and want changes with age. I have to consider how to design and promote the product to meet the needs of different age groups.
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Gender - A market can be segmented into males and females. Gender segmentation will help me to plan promotions to appeal to a specific sex.
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Socio economic – there are six socio – economic groups: upper middle class, middle class, lower middle class, skilled working class, working class and the poorest in society. Socio – economic segmentation will help identify and target different groups of people.
Market trends Being in fashion is very important for the small coffee shops like mine, so I need to make sure to keep up to date with trends and fashion by introducing new offers and products or changing the looks. Over the time people become more demanding and want quality, convenience and good value. As a business which provides service I have to consider social changes to create place and atmosphere that everyone finds attractive.
Market research is the collection of information to better understand what is happening in the market place. A business needs to know about economic trends and the customer view. By doing market research business can create marketing plan which will help to meet the aims of the business as well as the customer needs and demands.
There are two types of research:
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Primary – involves obtaining information directly from customers from the first time. This may be done by analysing purchase records, direct observation, carrying out interviews and surveys.
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Secondary – involves collecting data from existing sources, for example company report, websites and trade articles.
SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats and is a simple and powerful way to analyze the business present marketing situation.
The best way to understand the SWOT analysis is looking at the actual example, so I have looked at my business to find out what my strengths and weaknesses are.
Strengths – the strengths of my business will be that my cafe will be different from other in town, because will offer WI –FI connection so my customers can use laptops and browse internet. I will also charge less for product than other cafes on the market.
Weakness – my weakness will be the financial state of my business. I may not have enough financial resources to advertise and promote my business and make improvements in the future.
Opportunities – the opportunity of my business is to get new customers and make a profit, also expand the market share.
Treats – the treats of my business are that my competitors are established and in better financial state.
M 1
Explain and justify the methods you have chosen to use to identify the target market for the proposed business
To identify the target market for my coffee shop I am going to use primary and secondary market research. I am going to use two methods of primary research which will be surveys and visits to similar businesses, and two methods of secondary research: internet and regional business listing. When I complete these tasks I should have enough information to justify the chance of success of my business.
Surveys
Collecting surveys is one of the primary methods of market research. The advantage of survey is they usually easy to obtain and the collected data is up to date and direct from customers. Information collected will not be available to my competitors and I can use them to plan the marketing strategy of my business.
Running surveys have disadvantages as well. It may be hard for participants to recall information or to tell the truth about the question.
Visit to similar businesses
Another method I am going to use is visit to other similar businesses to see how strong my competitors are and what they have to offer. I also might be able to find out the weakness of my competitors. The advantage of using this method is that I may ask questions about the business and this form of collecting information is not expensive to do. Information I will gather are going to be for my use only. Disadvantage of using this method is that I may not be able to ask specific questions about the competitor`s business or he can refuse to answer.
Collecting data from internet websites
As the secondary research I choose to gather data from the internet. Collecting information using this method is not time consuming and is cheap. I can obtain specific information about similar businesses and use them to build my marketing plan. The disadvantage is that the information published might be outdated and not very useful. This information can also be accessed by my competitors and they may use them for the same purpose as me.
Regional business listing
This method allows me to research the existing businesses who offer similar service. From this research I will be able to justify the potential market share and what chances my business has to enter it. The disadvantage is that the listing may include businesses that no longer operate as well as those who started recently and are not included.
Using the information I have gathered I have been able to identify the target market for my cafe. I have come up with marketing plan suitable for my new business. I believe that I found the most cost effective way to promote my business to the new market.
I think that it would be effective to advertise using a printing company. I will print 4000 coloured leaflets on A4 paper, they can be used as posters or be handed out to attract potential customers. This method will be the most cost-effective and allow me to reach the customers directly. I have to make sure that my leaflets are eye catching and include all essential information about service offered, promotions, location and opening times. I have to ensure that my leaflets will be persuasive enough to make new customers come to my cafe.
In the future if my business will succeed I have to put every effort to maintain standard of advertising in order for the business demand to continue.
