Business- Open retail store

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TASK TWO

 

Part A: Introduction

This report will consist of a detailed marketing plan for my new fictional retail business. I will be focusing on the following aspects:

• Identifying my target market
• Carrying out market research
• Analysing this research
• Developing a marketing plan

My choice of business is a bakery called Scrumptious in Leicester Square. The shop will specialise in freshly baked goods, my business will have a wide range of other products like muffins, cup cakes, cookies, sandwiches, occasional cakes and many other products. I chose this type of business because there is less competition particularly in central London of unique baked goods which cannot be bought anywhere else in the world. These products cannot also be bought anywhere else for example ring tones and music can be downloaded of the internet because of advanced technology unlike food which cannot. This business will be a profitable and successful because it is unique, there is little competition of bakeries in Leicester square and there is a wide range of customers from young children who like sweet product and adults who make large orders, to pensioners who buy cookies for their grandchildren.  

Part B: Business Objectives

Business objectives are “specific, measurable outcomes or results that an organisation plans to achieve in a given period.” [1] Business objective are described as (SMART) Specific, Measurable, Achievable, Realistic and Time bound

My three objectives for my business are:

Objective 1: for the business to survive for the minimum of two years.

Objective 1 uses SMART because it is specific which is to survive. It is measurable because if the business does not go bankrupt it is surviving. It is achievable because there are many sole traders who have lasted for over two years. It is realistic because it is the only way to carry on the business. Finally it is Time bound because there is a time limit of two years in the objective. I have chosen this objective because if my business does not survive I will become bankrupt

Objective 2: to increase profits by 20% every year

Objective 2 uses SMART by specifically stating to increase profits, this is measurable because the businesses income which will be found in the financial records should show increase. It is achievable because other business have done this and realistic because without making profit Scrumptious would go out of business. Finally it has the time bound of every year.

Objective 3: to make an increase in sales by 50% every 24 months

Objective 3 uses SMART because it is specifically saying to increase sales, are easily measured by finding data from the receipt. It is defiantly achievable and reasonable because most businesses make a great increase in sales after their birth and many finally has a time bound of every 24 months.

Part C: The Importance of Marketing

"Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives."

Marketing is a mixture of the four P’s

1. Product which is what I sell
2. Price which is the charging cost the customers pay to buy my products
3. Promotion which is how I get the customers attracted to buy the products
4. Packaging which is how the product is represented to the customers in order to attract them.

Marketing is important to my business because I have to fill the wants for my customers using the marketing mix. Having the right product allows me to the supply the best possible baked goods to my customers. Having the correct price will determined how much profit I make, by covering my expenditure and having money left over, who my customers will be and how many customers I will have, the more customers the more profit I will make. Having an accurate place will affect who my market segments and access to the bakery. Finally promotion is important because it will attract customers to Scrumptious it will allow my customer, new customers and customer of my competition to know the location of the bakery, what I sell and advertising sales and any offers or discount that may be currently proceeding.  

If my business did not have any form of marketing it would most likely to lead to bankruptcy of the business. Firstly I would be selling the incorrect product, which would result in customer buying the product, which leads to no of profit and eventually bankruptcy. An inaccurate price would lead a loss of consumers. If the products are sold too cheaply, customers may assume that the products are faulty and dangerous to eat; on the other hand if they are sold too expensively customer will not be able to afford it and will therefore not buy it. An imprecise place would lead to a terrible launch and life of the business. If the positioning of the bakery is in a low-class area with people who do not eat baked goods and cannot afford to buy them the business would not make a profit and if it is too close to other well known bakeries all the consumers would buy from the other business. Location is also important because it has to be easily accessible or else customers would not know where to go and get their goods from. Lastly without promotion customers would not know about the shop’s existence and therefore would have people to buy my products.

Part D: Identifying the Target Market

“Target market is the market segment to which a particular product is marketed. It is often defined by age, gender, geography and/or socio-economic grouping.”

My business has a target market of people who are all ages and genders because children are very fond of backed goods, middle-aged people usually buy cakes, cookies, sandwiches, muffins and doughnuts either for themselves at lunch or for their children. As the bakery is located in central London most of the customers would be tourist. (Passers by) the only possible market segment that Scrumptious would not attract is pensioners because older people are venerable of diabetes and other illnesses, which do not allow them to eat baked goods. The gender is not really an issue as both males and females need to eat and there is no evidence shown to prove that a certain gender prefers baked goods. As the shop is positioned in central London the product prices will be quite high. So the income of regular customers will have to above average. Because most food is priced at a high priced and there is little competition, it allows me to charge high prices for my product. As mentioned above most of the customers are likely to be passers by so the location does not really have a great deal of significant, as there are not many houses in Leicester square so the location which is important is the surrounding business, their employees may come into the bakery of lunch. The only interest which is related to bakeries is eating sweet food, the business also has a wide range of products from low fat cookies and chocolate cookies to occasional cakes.

It is vital for me to know who my target market is for my business because it would affect the marketing mix for Scrumptious. If I did not know my target market I would be providing the wrong products which none of my customers would buy. For example if my target audience is children and I sold sandwiches it would not be their demand, it would be a ideal want for working people who come for lunch. The target price also affects my decision on the pricing of the goods. For example if I was to sell the products at a high price and the target market was children, they would not be able to afford it and therefore would buy my competition’s product instead. The place for my target market is yet again essential for the bakery because the location has to be convenient for my customers. Finally it is critical for promotion to know my target audience because if I did not they would not be aware of my business. For example if yet again my target market was children I would advertise my bakery on a television channel for children  and before 9pm, whereas if my target audience was men I would advertise my shop in a television show more likely to be viewed by males such as a sky sports or a DIY channel.

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TASK THREE

Market Research Questionnaire

Questionnaire for Scrumptious

Hello I am a 14 year old student from Queens Park Community School who has chosen GCSE business as one of four options to take as a GSCE. For my coursework, which is worth 25% of my final grade, I have to create a marketing strategy for a retail shop. To proceed with this project I have to carry out market research for my business and I would be extremely grateful it you could help me by simply filling in one of these questionnaires. Thank you! Please tick or fill in the space below for each question according to your opinion.

1. What is your gender?

  Male     Female

2. What is your age?

5-12        13-18        19-30        31-40        41-50        51-60   61+

3. How often do you buy baked goods in a month?

Everyday        1-3 times in a week        4-6 times  once a week   once a month   never                

4. How often do buy the following products?

5. How many minutes do you travel to buy baked goods?

 2-15         16-30         31-45          46-60           61+

6. Where do you usually shop?

Brent cross        the internet        local high street    Blue water         Central London

Other________________________________________________________________

7. Which of the following bakeries buy from?

Millie’s cookies      Local bakery    Krispy kremes   Greggs              Supermarket    

Subway   Other _______________________________________________________

8. How do you usually travel when shopping for food products?

Walk        bus        car        train        bike        Other__________________________________

9. What is the most you would be willing to pay for the following product?

10. How do you usually know about a new bakery?

TV Adverts         Radio Adverts      Newspaper        Posters      Leaflets     Friends

Family member    Other_________________________________________________

11. What types of opening promotion do you like the most?

Loyalty card        3 for 2 Offers        15% Discounts   Spend over £50 and get £10 off

Other_________________________________________

Thank you very much for your time and help!

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TASK FOUR

Part A: Carrying out my Questionnaire

There are many ways of carrying out my questionnaire some of them are:

Random sampling – only a small percentage of a population is haphazardly chosen to take the survey. Everyone has an equal chance of being picked and that small percentage has to represent the whole population.

Advantages

• Only a small percentage is used as the sample
• Each person has an equal chance of being chosen
• No tight control on amount of people sampled

Disadvantages

• The small percentage has to fairly represent the whole area.
• Sample may not fairly represent the entire population

Systematic sampling – this is similar to random sampling however instead of randomly picking a person, the nth person is chosen

Advantages

• Equal chance of being chosen
• Not picked because of certain characteristics

Disadvantages

• Could end up being all one gender or have the same characteristics

Stratified sampling – the sample is divided into “strata” (group) and within these categories simple or systematic sampling is preceded. For example I want 10 out of 50 people as my sample. To ensure that I get the same proportion of males and female I do

Males = (10/50) x 20 = 4

Females = (10/50) x 30 = 6

Advantages

• Equal proportions of sample from each strata
• Able to categorize the sample

Disadvantages

• Have to have round figures
• Have to secondary data to make strata

Quota sampling – the survey is given out to a population which the most alike to the target market, after being stratified into groups. For example you would give out a questionnaire Ealing road if the target market was Asians.

Advantages

• Get to aim at groups which is more like the target market
• My choice of sample

Disadvantaged

• Could be a biased result
• Sample may not represent whole population

Targeted sample – the people chosen who are going to answer my questionnaire is specifically chosen according to their occupation, age, gender, religion ECT…

Advantages

• Get sample that it exactly needed
• No tight control on amount of people sampled

Disadvantages

• Because the sample is targeted it could be unfair and predictable data

                                                                 

I will need to choose a type of sampling because it is important to know exactly who to give my questionnaire to and how many people to give it out. If I choose the wrong sort of sampling I will get an unreliable data from the market research, which would give me incorrect data therefore I would be not fulfilling the customer’s desires. For example if carried out my random sampling the public is more likely to be willing to pay less for products then  a person in central London, which would then lead to low prices and customers thinking that the products are not good, so they are priced low. Eventually leading to bankruptcy and the business failing.  

I have chosen quota sampling to fill out my questionnaires, because I need to target a sample that spend a lot of time in central London as that is where my business will be placed. I need opinions of people in central London because they are my potential customer, who will buy my products if when the business is opened.

This means I will not have a sample filling out my questionnaires, who do not spend money in central London. If my sample does not buy food products in central London, I will not gather any data about what the potential buyers want. Usually people who buy in central London are wealthier that people who buy in markets. For example Oxford Street is more expensive than Wembley market. People who also work in central London have higher annual pay than in communities.

Part B: Getting my questionnaires filled in

I got my questionnaires filled out by people on the streets on central London, specifically in Leicester Square. The people I targeted on the streets were random, however I tried to target during lunch time, as that is when most of my potential customers are likely to buy. As food is an essentiality in life I did not target people in Leicester Square.

Part C: Other ways of getting my questionnaire filled out

I could have used targeted sampling to get my questionnaire to the sample, because by targeting I would not have some odd results like I do now. If I had specifically chosen my sample it would result in me getting the answers which I want for my business, for example I would have target affluent people so I could charge higher prices.

The advantages of using targeted sampling would have been that everyone that I sample will be specifically fitted and is most likely to give me the result that I need for my business. There is also no tight sample that I have to distribute to, unlike quota sampling were only a specific number of questionnaires will be handed out.

The disadvantages of using targeted sampling are that the results will be predictable and therefore there will be no point in me carrying out the questionnaire. The result will also be unfair and biased, because I am only asking certain people and they may not necessarily be the only type of people who buy from Scrumptious.

Another ways of getting my questionnaire filled out

I could also get my questionnaire filled out by direct interview, because I could personally interact with the sample. I could also promote my new business to them in person.

The advantages of using direct interview is that I will have face-to-face interaction. There is also a low refusal rate because people find it rude to walk away from people asking polite questions. I could also make potential customers aware that there will be a new bakery opening.

The disadvantages of using direct interview is that it would be expensive and time consuming, because people have to be hired and have to have good personal skills as they have to approach the sample personally.

Another way of getting my questionnaire filled out

I could also get my questionnaire filled out by using telephone survey, because I could ask the questions over the internet and get direct answers.

The advantages of using a telephone survey is that I will be able to interview people form far distances, it would be fairly cheap and you can promote the bakery over the internet

The disadvantages of using a telephone survey is that there can be many negative responses and very few people are willing to answer questionnaires on the phone. Questions also have to be brief otherwise people will become bored and hang up the phone.

Part D: Different types of Market Research

There are 2 main types of market research. They are desk research known as secondary research and field research known as primary research.

Field research or primary research. “This is research, by direct contact, with an identified (or targeted) group of potential clients.”

This is usually done by the researching or marketing department in big firms. The main advantage is that the business has control of the entire process. The main disadvantages are that it can be time – consuming and costs a lot more money than desk or secondary research.

Examples of primary research are face-to-face interviews, telephone, mail, internet and questionnaires. These are all types of surveys. Most of the time surveys are conducted by targeting potential customers and asking them questions or giving them samples of the product to test. Then they give their opinionated answers, which are recorded and then analysed.

Desk research or secondary research. “Desk Research is the analysis of information that already exists, in one form or another. Useful sources of information can be found in a variety of places”

This is generally done using external or internal sources, seated and behind a desk. The main advantages of this are that it is cheap and can be done quickly. The main disadvantages are that the information that you are looking for may not exist or may be secured by companies, so it cannot be used.

There are 2 sources of secondary research and they are external, which is data from outside of the business and internal, which refers to information about the company itself. Types of external source are: census data, which is statistics about the population such as family size, income, gender, age and distribution. Published material, which are reports from business groups, government, trade organizations, companies and media research. Types of internal sources are: sales, stock, financial records of my company and firm.

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TASK FIVE

Part A: Analysing my research

After I have handed out my questionnaires and got them filled out, I have to analyse them to find out what they show. I can present this data in many different ways, some of the ways I could illustrate this information are:

        Tally charts because it can be easily and quickly done, it is easy to read and understand and ICT and mathematically skills are not required. However it is not a neat or fascinating way to look at data.

        Pie charts because it is can be done easily and quickly using ICT skills, the use of colours makes it easy to read and understand and data can be clearly represented in one graph, rather than having different tallies for each answer. On the other hand to create pie charts ICT and mathematical skills are needed.

        100% stack columns because they can be easily and quickly made using spreadsheet software, but it is harder to understand, interpret and make not using ICT.

        Column graphs because they can be easily created either using a spreadsheet software or drawing them by hand. It is also an easy way to interpret data and no extra skills are needed to make them. Nonetheless it is complicated to draw if the information from the questionnaires is complex.

The methods that I have chosen to use are tally charts, pie charts and column graphs. I will firstly tally up my results on a blank questionnaire, so I know the number of each answer for the structural questions. Then I will use this data to make 5 different graphs or columns.

Part C: Analysing my graphs

Graph 1

This graph shows how often products are bought. The products are listed horizontally on the x axis and on the y axis are how often people buy it. The cluster column graphs shows that sandwiches have the most sales daily, cookies, pastries and muffins have the highest weekly sales, pastries also have the most monthly sales. Fresh cream occasional cakes have the highest yearly and iced occasional cakes have the least potential sales as over 20 people said they would never but them. This means that I will make most of my profits on sandwiches and cookies, I would make the least profit on iced occasional cakes. For my business I will need more supply for sandwiches.

Graph 2

This graph shows who my competitors are. This pie chart shows that Subway, Benjys and Treats are my main competitors in central London. Greggs is also a competitor but not as high as the others, the minor competitors are Millie’s cookies, Krispy Kreme, local bakery and supermarkets. This means that I have to be aware of my competitor’s products, prices, promotions and place, so I can make my business more profitable. For my business I will need to have better quality and more of a range in product then my competitors, I will have to have lower prices then them and have more promotions to make sure that more people are aware of my business.

Graph 3

This graph shows what prices my target market is willing to pay. I have arranged this graph slightly differently, for every person paying between 50p-£1 I have multiplied by 1, for every £1-£2 I have multiplied by 2, for every £2-£3 I have multiplied by 3 and have multiplied one more for every higher price. This stacked column graph shows that I will make the most profit on sandwiches and pastries, because people are willing to pay more for them products. I will make the least profit on cookies and cup cakes because people are not as willing to pay as much. I will make a moderate amount of profit on muffins, doughnuts and small cakes depending on the number of sales. For my business it means that I can charge higher prices for sandwiches and pastries and will have to lower prices for cookies and cup cakes.

Graph 4

This graph shows my how my sample gets to know about new bakeries. The column graph shows that most people get to know about a new bakery through word-of-mouth. Leaflets and walking past both have 14 votes. Posters could also be used however they are not as popular as leaflets. Newspapers, radio and television adverts all have 5 or less votes. This means that I will use a leaflets and an electronic window display may contribute to impulse buying. For my business I will also need to have to have excellent customer service, so customers tell their friends and family about it

Graph 5

This graph shows me what opening promotions my sample prefers. The pie chart clearly shows that most people like the 15% discount as nearly half the sample chose it. Nobody chose the promotion spend over £50 and get £10 off. Less than 25% of the sample wanted loyalty cars as an opening promotion and one third wanted 3 for 2 offers. This means that I will have discounts as my opening promotion. For Scrumptious particularly during seasonal times I will 15% discounts and 3 for 2 offers.

Part D: What I expected from my research

From my research I had some results I expected whilst I was creating my questionnaires and some which surprising results. For example I expected most of my sample to be mostly between 19 and 40 years of age and roughly an equal amount of males and females. I also was not surprised when I found that most people are only willing to travel up to 15 or 30 minutes to get to a bakery and most of the sample bought their baked goods from central London as I conducted my questionnaire in that location. Finally I also expected the most popular way of knowing about a new bakery is through friends, family and leaflets, the opening promotional offer was going to be the discount and buy 2 get the third free.

The results which were unexpected were that sandwiches would have a higher sale that cookies and muffins and people would be willing to pay the most amount of money for sandwiches rather than small cakes. I was also surprised to know that Benjys is my main competitor. I thought that Millie’s cookies, Krispy Kreme and Subway would my main competitors as they are better known brands, than Benjys and treats.

Part E: Evaluating the effectiveness of my research

My research was successful mainly because I got the information which I needed for this project. Overall I found out that I had found out what my target market wants by getting the information from my questionnaires. Using the information from my questionnaires I can make important decisions for my business, such as what type of advertisement and opening promotions appeal to my target market. I think that there was the right amount of questions, because it was not too long so the sample got bored and irritated to fill out and it was not too short because I fitted in all the questions which were relevant to help me gather information for my business. I asked the right questions because I got helpful information from the questions asked. The only extra questions which I believe could have helped me and my business is to ask what time of day the sample are likely to visit the bakery, whether people would buy or make orders over the internet and to have an internet options for how you usually get to know about new bakeries.

Part F: Discussion of how the research will affect business decisions about marketing

Target Market 

Using the data from my questionnaires I now defiantly know that my target market is both males and females between the ages of 19 and 40. It is also directed to the working class people in central London and tourist in Leicester square.

Product range

My questionnaires show that the most demand for products is on sandwiches and then cookies. I will also sell many pastries and muffins but instead of daily it will be weekly. According to my questionnaires I will not sell many iced and fresh cream occasional cakes.

Exact location

My business will be situated in central London, specifically in Leicester square. As I conducted my questionnaires in Leicester square I was expecting most people to shop for baked goods in central London. My shop will be nearby Leicester square tube station and

Competition

Using my questionnaires I know who most of my competitors in central London are. I have 3 main competitors in Leicester square and they are Subway, Greggs, Treats and Benjys. These are all big brands of sandwich and bakery business.

Pricing

One of my questions on the questionnaire specifically asks want price my target market would be willing to pay for the products sold in bakeries. The most profitable products are sandwiches and pastries as my target market is willing to pay up to £5 for them.  

Advertising

I will be advertising my business by using leaflets and an electronic window display. My questionnaires show that the most common ways in which my target sample gets to know about new bakeries are word of mouth from friends and family, leaflets and by walking past. So I have decided that leaflets will be distributed in the local area and will have a multimedia presentation running on the shop window.

Opening promotions

I can also make a confident decision in choosing 15% discounts as my opening promotion because that is what the target sample wanted. The pie chart about promotional offers in the section about analysing the market research shows that almost half of the samples choose 15% discounts as their preferable promotional offer.

Part G: What impact will this have on my business?

Using the data which I gathered from my questionnaires I found that not many people buy iced or fresh cream occasional cakes. Instead of continuously making occasional cakes my business will only make them if they are specifically ordered by a customer, so we can still satisfy some customers if they want occasional cakes. I also found that many people are willing to pay up £4 for sandwiches, so I will raise prices of the freshly made sandwiches. However I have to still have prices which are able to compete with my rivals, Benjys, Treats, Subway and Greggs. After finding out that the big name brand companies are my competitors I have to find alternative ways to compete, such as differentiating my products. The type of advertising has also had an impact on my business. I have made the decision to use leaflets, good customer service and electronic window display, as the ways in which I will get the potential customers to know about my business. By doing this it has had an affect on the budget for Scrumptious. Leaflets and good service are reasonably cheap, however making a multimedia presentation to impulse buy may be costly.

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TASK SIX

Part A: Competition in my area

Scrumptious is located in Leicester square the postal code for my business is WC2H 7JY an it has some competition in the area, but not in the same type of bakery, I no this because of the results from the questionnaires and I have done further research into these bakeries and they are:

• Subway
• Benjys
• Treats

These are all located in Leicester square. Subway is a big brand of sandwich shop, there are three firms in the area of my bakery, and the three firms are on Charing Cross Road, Upper St. Martins Lane and Shaftesbury Avenue. Benjys also has 3 firms which I will be competing with and they are on Tottenham Court Road. Stratton Street and New Oxford Street. Finally treats which another competitor only has one firm on Villiers Street.

I have collected information on how my competitors advertise and market their products and their company

Here are some examples of name brand companies:  

 

Subway tries to get the message that their food is healthy

Benjys use their logo to advertise the company

        

Greggs also use their logo to promote the company

Krispy Kreme try to make

their products look attractive

Part B: Main Competition

My main competitor is: Benjys I know this because in my market research it showed that most of my sample currently buys from Benjys. The official name of this store is Benjys Group Ltd.

Address: 110, New Oxford St, London, WC1A 1HD.

Telephone number: 020 7323 5135  

Open from 7am to 6pm

It is a private limited company (LTD)

The target market is similar to scrumptious, which is both male and female, working class people and tourist, usually between the ages of 19 and 45. The aims and objectives are to get out of debt and to make a profit rather than a loss. It offers a range of good of food and drink such as sandwiches, cakes, chocolate, crisp, pastries, hot drink and cold drinks.

Part C: Factors that influence my competition

My main competitor is influenced by many different factors outside of the business. These include the following:

• Location – Benjys has many firms in Westminster and central London, near places such as Oxford Street, Trafalgar square, big Ben, millennium wheel, Buckingham palace and near many tube and bus stations. There are many potential customers in that area for Benjys
• Public transport – Benjys firms are in central London there a numerous ways of arriving there. There are constantly buses in and out of Leicester square. Many of Benjys shops are based in or near tube and bus stations.  There are also many black cab services from central London. However cars are not very common because of the congestion charge. So if there is a sudden strike on buses and tubes there is a high chance of there being very few customers.
• The target market – my target market is working class people aged from 19 to 45. Benjys’ target market is likely to be in the area because many people who are in the area are either tourists or employees of shops in the area. The shops appeal to their target market because they use a unisex colour, green and has a logo aimed for both men and women, we know this because of the font and colours used.
• Market trends – there has been a lot of focus on healthy eating and avoiding obesity, so to help people to stick to healthy eating or certain diets Benjys offers sandwiches, which are reasonably healthy. They could make more products aimed at healthy eating to gain more customers.
• Changes in fashion – this factor has nothing directly to do with any of Benjys’ firms, however because it is situated near many busy high streets such as Oxford Street, which is known for the trends and latest fashions it will bring in new potential customers into the area.

The state of the Economy- this factor may affect Benjys in some ways but not entirely as it sells some products which are essential to life and others are treats. Products such as sandwiches and drinks are an important healthy food particularly for the workers, so if the economy is poor people would still but foods like sandwiches. On the other doughnuts are seen as treats so people are less likely to buy it. If the state of the economy is good then they can charge higher prices and more products will be bought.

Part D: Factors that influence my business

My business is influenced by many different factors outside of the shop. These include:

• Location – by my shop being situated in a busy area, near places such as Oxford Street, Trafalgar square, big Ben, millennium wheel and Buckingham palace, I am expecting many tourists and other shop employees. This also means that there are a lot of potential customers from the nearby areas.
• Public transport – as my shop is in central London there a numerous ways of arriving there. There are constantly buses in and out of Leicester square. The nearest underground tube station would be Leicester square station. There are also many black cab services from central London. However cars are not very common because of the congestion charge. So if there is a sudden strike on buses and tubes there is a high chance of there being very few customers.
• The target market – my target market is working class men and women aged from 19 to 45. My target market is likely to be in the area because many people who are in the area are either tourists or employees of shops in the area. My shop will appeal to men and women aged from 19 to 45 because I will have a light dull orange colour which is a unisex colour throughout the entire shop and have a mature but young theme e.g. Not tweenies, which is aimed at children. I will also have different product aimed at different people, such as low fat cookies aimed at generally women on diets and smarties cookies for parents.
• Market trends – there has been a lot of focus on healthy eating and avoiding obesity, so to help people to stick to healthy eating or certain diets Scrumptious will offer low fat product and more importantly healthy fresh sandwiches. We could even team up with a dieting programme such as weight watchers or slimming world and create healthier products and it will bring in more business as people who attend these diets will know about the bakery.
• Changes in fashion – this factor has nothing directly to do with Scrumptious, however because it is situated near many busy high streets such as Oxford Street, which is known for the trends and latest fashions it will bring in new potential customers into the area.

The state of the Economy- this factor may affect my business in some ways but not entirely as I sell some products which are essential to life and others are treats. Products such as sandwiches and drinks are an important healthy food particularly for the workers, so if the economy is poor people would still but foods like sandwiches. On the other doughnuts are seen as treats so people re less likely to buy it. If the state of the economy is good then I can charge higher prices and more products will be bought.

Part E: How my competitor will influence my business

Benjys, my main competitor will influence my business in many ways. These include:

• Pricing – the prices of my products will have to be lower to be able to compete with Benjys. My prices will be reasonable as if I have them too high then customers will not be able to afford it, particularly if the state of the economy is poor, however if it too low people will think there is something wrong with the products.  
• Location – as my business is new compared to Benjys I will have to have a location which is easy to access. It will be near a tube a bus station. I also cannot have it too close to Benjys as it already has customers, so they are unlikely to buy at a new business rather than a famous brand of shops.
• Store – as well as not being too close to Benjys I will have to have a large store for customers to have a proper break and sit and eat. I will also have to have a larger store so I can fit in more customers without being too crowd.
• Advertising – Benjys is a big name brand company so can afford more advertisement and have current loyal customers, however as they are currently in debt they may not be willing to put money into advertisement. My choice of advertising will have to be cheap but grab attention of current Benjys’ customers.
• Products – my products will have to be unique, better quality and differentiate from Benjys. Scrumptious specialises in cookies which differentiates the products as Benjys specialise in sandwiches and my products will be unique as the cookies are made from a secret recipe.
• Customers – Scrumptious is planning to steal Benjys current customers. As both businesses have a similar target market we will be competing for customers. As Benjys has been there for longer, it will have made loyal customer, which my business will not have. I will have to find a way of attracting loyal consumers.

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TASK SEVEN

Part A: Types of Promotion and Advertising

There are many ways which Scrumptious could be promoted. These different methods include:

Part B: Costs of Advertising

The cost of advertising for my business varies according to the type of advertising I use, how often I use it and how many people I want it to appeal to.

Magazine – the cost of the advertisement depends on the size, the amount of time it is in and what magazine it is in. for example to advertise in Heat magazine is costs £15,000 for a weekly issue and to advertise in Sugar magazine it is £20,000 for a full page in a monthly issue. As my target market is ABC1 I would advertise in Vogue magazine and Autocar magazine, to appeal to both men and women. This is a high price for my new business and none of my sample said that they get to know about new bakeries from magazines.

Local Newspaper - I may in local newspapers such as the metro, because 72% of their readers are ACB1 and over 75% are in the target market age group. It would cost £16,000 for a page advertisement every day. This cost is too expensive for a small retail business, which starting up. Moreover only 5 people in my sample said that they get to know about a new bakery from a newspaper.

National Newspaper – I could advertise in national newspapers such as The Sun and The Daily Mail. The Sun is not targeted at ACB1 it is more towards C2 and D. whereas The Daily Mail readers are more likely to be ABC1. The prices to advertise in The Sun are cheaper than The Daily Mail.  Moreover only 5 people out of 30 said they get to know about new bakeries from newspapers.

Television – I could advertise on television on channels 3, 4 and 5. Channel 4 has 16,500 ACB1 viewers. It is too expensive to advertise on television for a small business, usually only big franchises can afford to do so such as Mc Donald’s. Furthermore only 2 people out of 30 said that they get to know about a new bakery from television adverts.

Leaflets – the pricing for a flyer depends on the amount you order, the size of them and the amount of colours used. It is reasonable cheap to design and make compared to the other types advertisement. It costs £500 for 20,000 coloured 2 page leaflets nearly 50% of the sample said that they get to know about new bakeries by leaflets.

 

Posters – the pricing for posters are also fairly cheap and can vary on the size and location of the poster. For £20,000 my business can have 48 billboard posters for 2 weeks in London. However only 6 people said that they get to know about a new bakery from posters.

Radio – depending on the radio station, which I use depends on how many and what type of people get to hear about the advertisement. Foe example capital FM listeners are not necessarily ABC1 they tend to flick through radio channels and do not notice the advertisement, whereas Capital Gold listeners 75% are likely to notice the advert. They are also loyal listeners, which suggest that they will be loyal buyers. It is fairly cheap to advertise on the radio, however only 1 person out of 30 said that they get to know about new bakeries from radio adverts.

Electronic Window display – having an electronic window display is initially cheap to set up then the running cost if fairly cheap. It will cost to create and buy the hardware and software to design and run the presentation on the window, however after it has been set-up it will be easy to maintain, run and edit. In addition nearly half of the sample said that they get to know about a new bakery by walking past.

Part C: Advertising my Business

For my business, Scrumptious I will use two main types of advertising. As a main advertisement I will use billboard posters and as an extra back-up promotion I will use I will promote my business and the products it sells in a national newspaper like The Daily Mail.

The reasons I would use the billboard posters are because it encourages impulse buying, can be designed easily, is very cheap, and are noticed easily. Even though it can be graphitised and only a limited amount of information can be put onto it, it can appeal to audiences from all over central London, rather than just Leicester Square. I have chosen to advertise in a national newspaper like The Daily Mail because it is a cheap additional promotion, which does not take long to create and has a high ABC1 target audience. On the other hand the advertisement may be overpowered by other advertisements but I could pay more for more space for my business

Part D: Laws that affect my business

Every business including mine must follow certain strict laws concerning promotions. The law covers the products and the way in which they are sold. The laws which I have to take into consideration with my products and its advertising are:

• Trade Description Act 1968 – this law is set to make sure that my customers know what they are getting, it states that everything I claims that I make  about my products must be true. For example if I insisted that my cookies were low fat, but really had the same amount as fat in them as a full fat cookie I would be violating the Trade Description Act. I could be fined or put into prison for making that claim
• Food Safety Act 1990 – this law states that the food sold must not be misleading and is set to prevent illness from food. For example the ingredients must not be used after use by date and products must be made in hygienic conditions so consumers can avoid allergic reactions and food poisoning.
• Sales of Goods Act 1979 – my business must sell the products as they are described and at the same satisfactory quality. For example if I sold a chocolate chipped cookie and it was mouldy I would breaching the Sales of Good Act
• Misleading Advertisement Regulations 1988 – all the advertisements which I use cannot lie on the advert, for example I could not advertise my products as the cheapest on the entire nation, if they are not. That would be misleading the consumers to believing they are buying it at the cheapest price.
• Race Relations Act 1976 – this law prohibits racial discrimination. My business cannot advertise by being prejudice and be racist to certain races. For example by saying that Scrumptious’ products are too good for specific races
• Sex Discrimination Act 1975 – this particular law stops discrimination to certain genders. For example my business cannot advertise or claim that we do not employ or sell to a specific gender.

The Advertising Standard Authority (ASA) – the ASA ensures that all types of advertising for a business meet the high standard advertising codes

Part E: How advertising will affect the success of my business

The main aim of advertising is the hope that potential customers will get to know about Scrumptious and the products it sells. By making more people aware of the business, I will have more demand, resulting in more sales and profit, which is the goal for most businesses. Advertising will have an effect on the accomplishments of my business in the following ways:

• Customers – advertising should get more people to know about Scrumptious and therefore lead to more customers leading to demand.

• Demand – advertising should create more demand for my products because more people will be aware of the business and the products it sells, leading to more sales
• Sales – advertising should also increase sales as there will be more people, who buy more products after promoting, which then leads to profits.
• Revenue – as advertising will increase the sales it will also increase the revenue. The revenue is the money I gain from the sales without taking away all expense, so as the revenue increases so should the profit.
• Profits – advertising will initially put us in a loss because we are spending money on it, but after sales come through we should make huge profits. This is the money which I will make after paying for the supplies, bills and advertisement costs for the business.
• Competitors – after advertising I should steal my rival’s customers and will then be competing with them for more customers.
• Market – my business will be another business in the market, advertising for my business should get my competitors to lower their prices. By being noticed in the market I should have more customers and popularity.

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TASK EIGHT

Part A: Conclusions: Final decisions on marketing my business

I have finally decided to promote my business by using leaflets and an electronic Window display. I have chosen an electronic window display, because it is not very common so will attract people’s attention and also encourages impulse buying. It can also include sound and action like a television advert, but without the cost. As it does not take a long period of time to get through to the potential customers walking by, they should come into the shop to buy products, whereas if it was in a magazine, newspaper, radio or television, it would not be an instant response. It is initially expensive to set-up as the hardware and software needed is costly, there will be a low long term maintaining cost. ICT skills are also needed, but I have experience with computers. I have also chosen leaflets as an extra promotion, because it also has an instant effect and is an impulse selling method, except leaflets are not as expensive to design and create, is a permanent source, however because it is common in central London to be given leaflets it is ignored by many potential customers. It also causes litter, which the company could be blamed for and only a limited amount of information can be put in.

I did chose to use posters and national newspapers to initially promote my business, however after decided that they were not the best forms of advertisement for Scrumptious. I would have chosen posters because they are cheap, easy to design and noticed easily. On the other hand they could easily be graphitised on, are ignored most of the time, because they are so common and cannot have movement or sound. I was going to use national newspaper such as The Daily Mail because it is a permanent source, most of it’s readers are in the ABC1 sector and is relatively cheap, however it has a high chance of not being noticed by the readers because it will be overpowered by other bigger advertisements by competitors, it can only be in black and white, movement and sound cannot be added and it also does not appeal to tourists who are also the target market.

Part B: Constraints to my Business

My business will not be doing all the marketing I would like to do because of many various reasons, these include

• Money – because of the amount of funding available to the business, it is difficult to do all the marketing I wanted to do. For example I could not promote my business on the television because it would cost too much.
• Competitors – my competitors affect the way in which my business is marketed such as I could not charge higher prices for my products, because my competitors such as Benjys sell their products for less, so the customers were more likely to eat there
• Location – the location has made it complicated to do all my marketing, for products and promotions. For example I was originally going to promote my business for its cookies for children, however because the majority of people in central London a working class and tourists I cannot advertise or sell products to the wrong market segment.
• Economy – the economy restricts me from doing the marketing I would like to because the state of the economy could change and vary which affects the amount of demand and supply. Without knowing the state of economy it stops me predicting the amount of supplies I will need to fulfil all the sales I get.

Part C: Improvements to my marketing plan

I could have improved the marketing plan for my business in for all 4 P’s. I could have changed my place by locating my business in a busier high street such as Oxford Street, however as a small business I could not afford to situate my business in that specific location. I could improve my advertising plan by using television adverts as well as the advertisements I already have, because this would be aimed at a wider audience and could get more customers, however I could not afford it. I could improve my products by buying in bigger bulks, which would be cheaper and more convenient, however I cannot buy in bigger bulks because my business is only a small shop and does not have that many potential sales. Finally I can improve my price my lowering it, however if I lower the prices it will not cover the expenditure and my business will be in a loss.

Part D: Improvements to my research

I could have improved my research in many different ways. I could have increased the number of people in the sample this would have allowed me to get more of an accurate result. I could also have extended the area in which I handed out the questionnaires, because it would show how many customers I could then further appeal to and widened the type of sample, such as asked children as they are a wide potential market segment. Instead of giving out questionnaires to people in Leicester Square, my business could have hired professional people, who can speak different languages to communicate with tourists to interview the sample. This way they could have expanded on answers and given extra suggestions and understood the questions better. I could also do further secondary research into my competitors, such as investigating the accounts of Benjys. This would give me information on what products are likely to sell more, how much profit I will make and what promotional offers are most popular by my target market.

Part E: Environmental, Financial and Social effects

My business will affect the community environmentally, socially and financially. I will affect the community environmentally, because of the packaging for the products I sell which will be plastic carrier bags will be non-sustainable and polluting the earth. Customers are also likely to throw the packaging onto the ground, littering the streets. The gas which I use to make the products in the shop is also polluting the earth and transport used to get my supplies to the shop. The electricity and heating which I will use in the shop also affects the environment, by using extra electricity adding to global warming. To reduce the affects which I have on the environment by packaging my products in paper bags rather than non-biodegradable plastic bags. To reduce the amount of litter pollution I will put signs on the packaging to tell them to recycle the paper bags. I will use energy efficient light bulbs and use the least amount of gas and petrol possible.

My business will affect the community financially by decreasing profits for my competitors, because I should take there customers and potential sales and they will also have to lower their prices to compete with my business, which means they would make less profit. I will also be increasing the profits of other business such as souvenir and clothes shops nearby, customers should come to Scrumptious for lunch and then whilst they are in the area possible buy other products such a clothes and souvenirs if they are tourists. Also to increase their profits they could increase the prices for their products as this will also result in more profit.

My business will affect the community socially by contributing to the increase of obesity. The main reason for the increase in obesity in England is because of the types and amount of junk food which people are eating. As cookies and baked good contain a lot of sugar and fat it is contributing to unhealthy eating which leads to obesity. To reduce this unsocial activity I will sell low fat products and also sell healthy products such as sandwiches. I will be helping the economy by bringing in profit to the government as they take tax off the profits and will also be providing jobs for the public, which is reducing the amount of unemployment.

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BIBLIOGRAPHY

-Contemporary Marketing Wired (1998) by Boone and Kurtz. Dryden Press.

Mr. P. Goldsmith – my business studies teacher

“The Cost of Advertising” – Business Studies handout

Ms. R. Fraser – a business studies teacher in my school

Miss M. Patel – my aunty doing a marketing degree

Mrs. S. Kerai – my aunty who has got a business degree

Coursework guide

“Business Studies for GCSE” 4th Edition - Author Renee Huggett (Book)