Conducting market research to find out who the target market is for a business.
Louise Hinchliffe
Action Plan
Introduction
I have been asked by my client to conduct market research in order to find out who the target market is for their business. My client’s business is a sole trader. A sole trader is when one person owns the business. My client is still able to employ other people, but these employees are unlikely to be involved in the control, financing or decision making of the business.
Marketing is highly important towards a new business. To make the marketing more efficient my client will need to consider what is often called the four P’s: product, price, place and promotion. Different types of business need a different emphasis form the four P’s. The marketing mix must be right to attract the target market. By my client’s marketing mix being suitable to attract the targeted market, my client should be able to have a competitive edge over their rivals.
My client wants to set up their business in the local market town of Penistone. Penistone is close to the M1 and has good transport links. As my client’ advisor, I feel that it will be ideal for the new business to be set up in Penistone. Although there are already florists in Penistone, I believe that my client’s rivals will push my client to present a better product.
As you can see from my Action Plan I will be conducting market research, in order to find out who the target market are. After doing this I will analyse the results I have gathered from market research. This will help me to decide how my client can advertise and promote their new business to achieve the best possible outcome. Ultimately I will be producing a marketing plan for my client’s business.
Marketing objectives
Marketing is: ‘…the management process responsible for identifying, anticipating and satisfying consumer’s requirements profitably’. (From the chartered Institute of Marketing)
The main objectives of any marketing department in a business are:
- To look at the company’s current market regularly and be aware of what is happening outside of the business.
- To find out consumer needs and wants by carrying out market research.
- Trying to increase the company’s market share.
The objectives can be achieved by my clients business if they are always trying to make sure that they are making the right product, ...
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Marketing objectives
Marketing is: ‘…the management process responsible for identifying, anticipating and satisfying consumer’s requirements profitably’. (From the chartered Institute of Marketing)
The main objectives of any marketing department in a business are:
- To look at the company’s current market regularly and be aware of what is happening outside of the business.
- To find out consumer needs and wants by carrying out market research.
- Trying to increase the company’s market share.
The objectives can be achieved by my clients business if they are always trying to make sure that they are making the right product, selling at the right price, at the right place and promoting at the right time.
Target market
Finding my client’s target market is one of the most important tasks. Assumptions on targeted markets can lead to wrong decisions, wrong pricing, a wrong market strategy and ultimately, business failure.
The marketing demographic of Penistone is middle-aged, middle-class families. These people have a reasonable income, so a florist would appeal to them. There are currently many florists that cater for high-business class areas and charge larger amounts of money for very simple, exotic flowers. ‘Hacketts’ (the current florist in Penistone) caters for the local people. It offers bunches of flowers at reasonable prices, and is a typical market town florist.
The products that would be of most interest to the people of Penistone are large bunches of flowers and craft arrangements for various occasions. This is what the market want and this is what my client’s business will provide for them.
There are several ways of collecting data. Two of the main methods of market research are:
Desk research-Is gathering together existing data that has already been published for another purpose. For this my client could visit the website www.barnsley.gov.uk and look at the Barnsley council census that is currently available.
Field research-Is gathering new data direct from the consumer through asking questions.
Both of these types of research are adequate for the different information I will need to gather. Desk research is useful as it is often quicker to gather information and field research is helpful as it allows you to have a better understanding of the information. This is because you have found it out yourself. Field research in this respect is more relevant as you have found out exactly what you want.
In order for my client to find out about the targeted market I have advised him to produce a questionnaire. The questionnaire will be aimed towards local people, who will use the florist the most. It will allow my client to find out what he needs to offer from his business, in order to receive the most income.
Questionnaire
I am gathering information to see if a florist is in demand in Penistone. I would highly appreciate it if you could find the time to fill this in a return as soon as possible.
- What age group are you in?
10-20 [ ]
21-30 [ ]
31-40 [ ]
41 and above [ ]
- Do you live in Penistone?
Yes [ ]
No [ ]
- If no do you visit the town regularly?
Yes [ ]
No [ ]
- What is your occupation?
Senior managerial [ ]
Middle managers [ ]
Supervisory or clerical workers [ ]
Manual worker [ ]
Long term unemployed/casual worker [ ]
Full/Part time education [ ]
- How often do you purchase flowers?
Every week [ ]
Once a month [ ]
Once year [ ]
Never [ ]
- How much would you be willing to pay for a bouquet of flowers?
Under £10 [ ]
£11-£15 [ ]
£16- £20 [ ]
£21 and above [ ]
- Do you buy flowers for special occasions?
Yes [ ]
No [ ]
If yes what is the main purpose? _____________________________
Thank you for taking the time to complete this questionnaire. It will be of great help.
Interview for the owner of Hacketts
1. What were your original aims and objectives of your business at opening time? _____________________________________________________________________
2. Where is your business situated within Penistone? And how does this link to your businesses success? __________________________________________________________________________________________________________________________________________
3. What are the ranges of goods/services you offer? _____________________________________________________________________
4. What is your target market?
_____________________________________________________________________
5. How has your target market influenced the ranges of goods/services you offer? _____________________________________________________________________
_____________________________________________________________________
6. In what ways will the opening business similar to yours in Penistone affect your business?
Strengths__________________________________________________________________________________________________________________________________
Weaknesses__________________________________________________________________________________________________________________________
Opportunities_______________________________________________________________________________________________________________________________
Threats_______________________________________________________________
_____________________________________________________________________
Interview with shop owner analysis
From my interview with the shop owner of Hacketts I have been able to find the strengths, weaknesses, opportunities and threats of a new business opening in Penistone. When interviewing the shop owner, he said that my client should ensure that the prices for his products are reasonable, as the marketing demographic of Penistone is middle aged and middle class families. The owner of Hacketts said that he thought that his business was a success due to his central location and quality products.
Analysing Data From Questionnaire
This graph shows that the majority of people I asked questions to, were aged between 21 and 30 years. This tells me that my client’s target market should be directed towards middle-aged people.
This shows my client that Penistone is a good place to situate my clients new business. Most of the people I asked to fill in my questionnaire lived in Penistone.
This graph shows that most of the people who answered the questionnaire normally bought flowers every week. This is good for my client’s business, as this will enable him to cover the costs he spends on buying the flowers.
This graph shows me that the main socio-economic group is group C. Hence most of the people in Penistone are supervisory or clerical workers. I will now advise my client to aim his business towards this group of people. He will now know what sort of prices to charge and what is in demand.
This graph shows that most of the people who answered the questionnaire normally bought flowers every week. This is good for my client’s business, as this will enable him to cover the costs he spends on buying the flowers.
The majority of my client’s targeted market is willing to pay between £16 and £20 for a bouquet of flowers. This will help my client to put a reasonable price on the product.
Promotion and Advertisement
There are various types of promotion and advertising that should be considered by my client in order to choose the most effective for their business. I think that the three most effective methods are, radio, newspaper and leaflets. Costs will not be wasted when advertising using these methods, as all of them will reach my target market. For my client, I contacted the Barnsley chronicle (A local Newspaper) and asked for quotes regarding advertising in their newspaper. I found that:
- For an advert (credit-card sized) they charge £57.00 + VAT
- For an advert (quarter of a page in size) they charge £769.50 + VAT
The advantage of advertising using a newspaper is that many people keep a newspaper for a long time. Although a disadvantage of using this advertising method is that some people do not read the classified section.
I also decided to contact a local radio station that is well known within the Penistone/Barnsley area. My results for this investigation were:
- For a 30 second advert that will be played on a set, 42 times a week, the radio station charged £4,200.00. This means that the price per advert is £100.00
The advantage of advertising using a local radio station is that the advertisement is played to many people over a large area. But a downside to this advertising method is that it may not be broadcasted to the targeted market.
After contacting the local newspaper and a local radio station I thought that it would be ideal if I contacted, the Barnsley Printing Company (a local printing company) their prices were:
- For 5000 leaflets on A4 in colour, £130.00
- For 5000 leaflets on A4 in black and white, £80.00
The advantages of leaflets are that they are cheap and quick to produce but people can also throw them away. To prevent this I advise my client to make the leaflet suitable and eye catching.
From the quotes I received, I would advise my client to opt for the leaflet option. I believe it is one of the cheaper options also helping my client to avoid wasting money on advertising that may not be beneficial. An advantage of advertising through leaflets is that they can be handed out to the targeted market. An advert in a newspaper would possibly have the same effect but there is more advertisement available with the leaflet option. The newspaper advertisement will only be able to be seen once after printing.
The local radio station (galaxy 105) does not reach my clients target market. This method is the most expensive and despite my client being not likely to have the sufficient funds for this it would not be cost effective as the target market may not hear the advertisement.
The leaflets will be the most affective to my clients new business with its initial objective to obtain custom and awareness of my clients business. If my client is willing to pay a small additional fee, they will be able to use their leaflets to create posters, which could be placed in local shops etc. I would highly recommend this option to my client.
Marketing Plan
Using the information I have gathered for my client’s new business. I have been able to identify my client’s targeted market. From this I have been able to see what effects the target market will have on the four P’s; product, place, price and promotion.
I have come up with a marketing plan suitable for my client’s new business. I believe that I have found the most cost effective way of acquiring custom to my client’s business, still allowing it to be a success.
I think that it would be suitable for my client to advertise using a printing company. Ideally, my client could pay the local printing company to print approximately 5000 coloured leaflets on A4 paper.
This will allow them to be used as posters as well as leaflets that would be handed out to the targeted market. I believe this will be the most cost-effective method and will allow my client to direct all its custom to the intended target market.
I think that coloured leaflets or posters will be more attractive to the eye and is appropriate for a florist advertisement. On the leaflets, my client must include introductory offers, if they are available and state where the shop is and when it will be opening. My client must also be able to persuade the targeted market to visit the florist.
In the future, if my client’s business were a success, then it would be suitable for them to expand due to the popularity. My client will have to continue to maintain their standards of advertising, in order for the businesses demand to continue. My client could also look at becoming a Ltd company. If my client’s business became a private limited company, it would mean that they would be able to sell shares. Those who set up the company, or others whom they allow to own shares, can only own the shares that would be sold.
