MARKETING STRATEGIES

Marketing Strategies

MARKETING STRATEGIES

2003/2004

Introduction

For this assignment I will have to make a marketing strategy on how to promote our business. I will be opening a sports shop in Whitechapel so I will have to promote my business. To choose how I will promote the business I will have to investigate on the options available and then choose the best one. There is already another sport shop (JD Sports) in the area so we will have to compete with it to maximise our profits.

Our sports shop will provide the customers with a choice of sports equipment and sportswear.

To choose the type of promotion that I will employ, I will have to find out about the people’s demands and the type of advertisement/promotion that influences them the most.

Here are some of things that I would like to find out about from my research:

Who my customers will be
What customers are willing to pay for
What types of advertising are most effective
The sport needs that the customers demand
What they are interested in from sports shops

To get this information I will make a questionnaire and visit a park on a Saturday afternoon. There are regular football tournaments held on Saturdays in the park, where a good number of sporty people will be there. Most of the people that are present will be male and in their late teens and from my observations I have noticed that most of the people who wear sports clothes are also male and in their late teens. I will hand out my questionnaires to the people present at the park and from the answers received I will make my judgement on the type of advertisement that I should use.

If, for instance I find nobody at the park or the wrong people are present I will ask for permission to observe people in the sports shop that I will compete with. By observing the people I will note down what they look for in a sports shop so that I can find out about the strengths and weaknesses.

Marketing: “The procedures for ensuring that the products of a business meet the requirements of the market, that the market is aware of them, and wants to buy them”

Source: “Business Studies” by Chris J. Nuttall

“Marketing is the interface between customers and suppliers”

Source: Mohammed Iqbal (teacher)

Market research involves researching the market, the product and the competition.

Businesses must undertake market research to ensure that their products are competitive and meet customers demand.

Questionnaire

I will handout this questionnaire to about 20 people at the park.

(Tick appropriate box)

What is your age range? 12 or under 13-19 20-35

Do you visit sports shops often?

If so for what types of good?

What type of sportswear do you purchase most?

Which sports brand do you prefer? Nike

Why do prefer this brand?

Which famous sports shop is your favourite?

Why do you prefer this sport shop?

Where other than TV and billboards do you hear of these shops?

What advertisement attracts you the most to visit the shops?

“Questionnaires are lists of questions designed to obtain the information required in a way that is not open to misinterpretations and can easily be analysed”

Source: “Business Studies” by Chris J. Nuttall

I produced this questionnaire so that I can find out about who the target market will be and what they demand. It will also help me to find the best type of reasonable advertisement which will attract people the most. The answers will let me know whether advertising in a newspaper or in a magazine, for example, will be worth the money paid towards the businesses promotion. After analysing the answers I would be able to make a fair judgement on the way I should promote my business.

The completed questionnaire will also let me know which goods are in most demand so that I can stock up on wanted goods. If I don’t know what the customers demand then I will be taking risks, as I cannot pay to buy every sort of sports goods. So the goods that I will buy must be in demand but since I don’t know what the demand is I would be taking a very big risk.

The answers from the questionnaire will also tell me who will be the target. I will be able to find out which age ...

This is a preview of the whole essay

The answers from the questionnaire will also tell me who will be the target. I will be able to find out which age group will be interested in my businesses so I can stock up on sportswear, most of whose sizes will be for that age group. I will have to know who most of my customers will be as I only have limited funds. From my limited fund I will have to buy sportswear for the target age group. I wont be able to buy clothes whose size will range from children’s size to the size of fully-grown men’s.

This will be very important, as I will need to make sure that the goods I purchase from the manufacturers will have to be sold to make any profits and not go bust.

Here are some of the other methods that I could have used as my market research

Interviews

I could have asked a number of people to be interviewed, face to face or on the phone, as then I would be able to get a clearer opinion of the interviewee. This would have been a better option as I would be able to ask them a wider range of questions than give them a multiple-choice questionnaire, but it may be difficult to find a lot of people to interview as it takes time. Another problem is that the interviewee may be subject to bias as the interviewer may misinterpret the responses given.

Newspaper

I could have placed the questionnaire on a newspaper or a sports magazine where a person who completes and sends the questionnaire back will receive a £5 voucher at our store, when it becomes opened. This may have been a good idea but it would cost us quite a lot of money as advertising in our borough’s weekly newspaper will cost us a weekly fee of £57. Giving away vouchers will also mean us losing more money, which will not be helpful, as we need all the funds that we can accumulate for starting up the business.

Internet

We could have also asked people on the net using the E-mail system. This may not be very successful though as many people will not be bothered to fill in and send back our questionnaires.

I have visited a sports shop in Whitechapel market called “JD Sports”. This is one of many branches throughout London and the UK. This branch was set up only a couple of years ago and has been fairly successful. Its main objectives are to expand their stores to the European and American markets and to provide the nation with top quality sport goods at an affordable price.

One of the reasons for this is because there are no other sports shops in the location. Whitechapel market is also a very busy place all through the weekend with stalls on one side and shops on the other. During Saturdays, it is the busiest though as the market becomes crowded with people. There is also an underground station at the centre of the market. This means many people will pass by the sports shop during going or coming from work/school. This is one of the biggest factors as there are 2 secondary schools nearby, some of whose students pass through this branch as they come and leave school. As I have mentioned before most of the customers of sports shops are teenagers and so many students stop off at the branch to check out the goods. The two schools are ‘London Islamic School/Madrasah’ and ‘Swanley School’. London Islamic School/Madrasah is a boys school so this a bonus as most of the customers are male and in their teens.

Here are some of the goods that the branch offers:

Trainers
Sweatshirts
Jackets/Coats
T-shirts
Baseball caps
Sports bags
Tracksuits
Sport Kits
Football Jerseys
Basketball Jerseys

All their products are of major sports brands such as Nike, Reebok, Adidas, Puma, Umbro, Diadora etc.

I think that the target market is secondary school children, especially boys. I think they set up the branch in Whitechapel market next to the underground is because many secondary school children use the underground to come to the 2 schools nearby.

I think the existence of these two secondary schools near Whitechapel market was a key factor in choosing the location to set up the branch. They realised that many of their target market will pass their shop as they go to school. In the last year a college was set up very close to this branch. This is very helpful as more of their target market will pass by the store.

I think that because their target market was secondary schoolchildren they decided to set up this branch in an area where there are two secondary schools nearby.

I think the opening of my business will help to increase the activity of children in playing sports. This will be helpful as a massive number of schoolchildren are overweight and spend all day long watching TV or playing video games. Hopefully, from my sports shop I will be able to supply them with sports equipments such as a football or rugby ball. Although there is another sports shop in the area, it does not offer any sports equipment such as footballs or basketballs. I think this will be a huge advantage for us as many kids are without any proper equipments and we will be able to offer them these equipments. I think that the opening of our sports shop will be very beneficial to the local customers, as it will give them an alternative to the one store currently present. I don’t think the other sports shop can beat us with their prices as their prices are fairly high. They took the advantage of being the only sports shop in the area by making their prices high. I would be able to offer reasonable prices for a steady growth because if I overcharge the customers there would not be many sales but if I make it too low then I would be making losses rather than profits, so I will have to get the balance between the two just right.

Here are pie charts a table showing the results for each of the question in the questionnaire:

The target market completed most of the questionnaires, as 65% of those who were questioned were between 13-19. This is helpful as then I would be able to get a clearer picture of what my main customers want and how they are attracted by advertisement.

From this I can see that most people usually buy sportswear rather than sports equipment. But 35% usually buy sports equipment which is good news for me as my rival shop only sells sportswear. This means that I will need to buy both sportswear and sports equipment for my business to succeed.

This pie-chart shows that the sportswear the customers purchase most are tracksuits and T-Shirts. This tells me that the sportswears that I should stock up on are tracksuits, T-Shirts and trainers. As I would have a limited amount of fund, I will have to purchase the goods that are on demand and this chart lets me know what the demand is.

Sport brands are very important to many customers, as the names themselves will attract customers regardless of whether the item is of good or bad quality. This pie chart tells me that most of the goods I stock up on should either be Nike, Reebok or Adidas.

This chart reveals that most people choose a specific sports brand because they are the names that are currently in fashion. This means that I will have to keep an eye on the fashion situation, as some brands will go out of fashion whilst others will become fashionable.

This chart tells me the stores that are most preferred. Almost have (45%) chose JJB Sports as their favourite sports shop so I will have to take a visit to this shop and find out what makes them a favourite with customers.

30% chose JD Sports and the shop that I’ll be competing with will be a JD Sports branch.

From this chart I can get an insight into why customers prefer their chosen shop. This will help me to identify some of the successful strategies that the businesses employ and so that I can use them myself. More than half said that the reason why they chose their preferred shop was because of the latest products that they offer. This means that I’ll have to keep in date with all the latest products.

35% said that the wide variety of goods was the reason why they chose their preferred shop. So I should buy a bit of everything.

This pie chart reveals that over half of those questioned hear (from any sources other than TVs and billboards) of sport stores from newspapers. 35% hear of these shops from leaflets and only 10% percent hear of them from magazines.

This tells me that I should probably advertise my business on a newspaper or make leaflets and distribute them to the local homes.

This pie chart will tell me what being advertised will attract the customers most. I will have to have some sort of reduction while advertising on the opening of this shop so that people are attracted to come. 40 % of the people questioned said that the thing that attracted them most was the advertisement of a sale. ¼ of the questioned said it was the announcement of new products whilst another ¼ said it was the attraction of price cuts. So I should probably have an opening day sale to attract customers.

The results from the questionnaire tell me that advertising in a newspaper will probably be the best option. Making leaflets is also a fairly good option as 35% of the people questioned usually hear about sport shops from leaflets. Distributing leaflets to local homes may have more of an affect as the customers will at least have a look at the leaflet but the cost will be more than advertising in the borough’s weekly newspaper as there will be a printing cost for all the leaflets and we will also need to hire a few people to distribute the leaflets.

I will have to stock up on the latest sportswear and also on some sports equipment. Most of my products will be Nike, Adidas and Reebok as these were the sport brands that were preferred the most. I will make sure that I should have a wide range of products. Most of my sportswear will be tracksuits, T-shirts and trainers. I will have a number of coats and baseball caps. Most of my products will be sportswear as 65% of the questioned said that they usually bought sportswear. I will try and keep up with my rival by making sure that I have the latest products as 55% of the questioned people said that this was the main reason why they preferred a specific shop.

I will try and make the price of my items lower than that of my rival as the answers that I received from the questionnaire suggested that the customers want sales and price cuts. When asked about why they preferred a specific shop, none replied that it was due to low prices. I will not make the prices too low as then I wont be making much (or any) profits.

I will need to make sure that I keep I up with my rival by purchasing items which are in fashion and so in demand. The reason why almost half the people questioned chose a specific brand was because of the fact that their products were fashionable.

40% percent of the questioned people said that the broadcasting of sales attracted them most to the shops. When I advertise through leaflets or on a newspaper I will also have an opening day sales so that I get a lot of customers.

I think that doing this kind of survey is very helpful as it makes things far clearer in terms of who your target market is, what price customers are willing too pay, what types of advertising are most affective and how products can be developed to suit the needs of the customers. If these surveys are done on a bigger scale and represents the whole then this information can be very helpful if analysed correctly.

Doing these types of surveys will be good for small businesses and can give them a head start against their rivals but he business will to invest both money and time in these surveys for it to be helpful.

Deciding on how you will get the information, selecting the sources will be is as important as deciding what information is required and the questions that will be set.

So a business will need to do a lot of discussion before doing a survey of this type.

Advertisements are usually persuasive. They tell people about something in a way which persuades them to buy the product. There are many mediums through which businesses can advertise and the cost of advertising in different media can vary considerably.

Here are some of the main types of advertisement:

Television

A television advertisement at a peak viewing time can reach millions. The adverts consist of sound and moving images and are easily remembered. Some adverts are screened on regional TV while others in national TV. The massive cost of advertising on television is why small businesses do not place adverts on TV. A 30-second advert on national TV can cost up to £50,000 so only big businesses are able to afford to do them.

Radio

Advertising on radio is far cheaper than on TV yet the adverts can also reach up to a million listeners at peak times. So smaller businesses can advertise on local radio. A disadvantage of radio advertising is that it does not have a big impact as TV adverts do because there are no visuals involved.

Cinema

Cinema adverts are just like TV adverts but they reach to only a small number of people. This means that local firms can place adverts in cinemas to attract the locals.

Newspapers/Magazines

Advertising in newspapers and magazines is cheaper than on TV or radio but the prices do vary. A full-page advertisement in a daily mass-circulation newspaper can cost £30,000 or more. However advertising in free local newspapers are much cheaper and can reach customers of the whole locality as they are distributed to all homes in the area. Advertising in special-interest magazines can also be very effective as the reader of the magazine will be interested in the adverts as they are related to the magazine topic.

Leaflets

Leaflets can be used to advertise a business by sending them to people’s homes or on the streets. Leaflets can be effective if people read them but they are usually seen as ‘junk mail’ and thrown in the bin.

Internet

Internet advertising is increasingly being used as a medium for businesses to promote their business. Many make their own websites on which they can advertise their products and also give the customers information about themselves. Nowadays you can shop online and have the goods delivered to your home. A disadvantage of advertising on the net is that the only people who will receive these advertisements will be those who own a computer and have it connected to the Internet.

There are many legal constrains that can affect how a business promotes itself.

Here are a few:

The Trades Description Act 1968. This act makes lying about the description of a product/service as illegal. This means that a business must make sure that the products/services must not be different to the way described in adverts.

The Sale of Goods Act 1979. This act states that the goods must be as they are described in any promotional materials, packaging or in any statements made by the business.

The Consumer Protection Act 1987. This act makes it illegal to mislead customers about the price of goods and also includes sale prices, discounts etc.

To promote my business I will have to first find out about the prices involved. As my business will be pretty small, the costs involved in promoting the business will be crucial in deciding how to promote the business. Television advertisements may be effective in provoking the consumers to buy products, but there is a huge cost involved though which means that only big firms can afford to advertise this way. As I have mentioned before a 30-second advert can cost up to £50,000.

The cost of newspaper adverts can vary greatly.