Marketing report for a new small business

GCSE Business Studies Coursework-A Marketing Plan

Introduction

The Task

Janice Reynolds has worked in a national chain sports shop in Harrow for several years, and is now intending to start a business of her own. She wants to start a business as a Sole Trader and set up a local sports retail outlet store somewhere in the local area.

She knows that there will competition as there are other sport shops in the area, and knows the only way that she can succeed is through effective marketing for her to be successful.

In this project are research and then a written report to Janice in which there will be advice on marketing the business that will include:

Where to locate the new sports shop
What sort of products to sell
What pricing policy to use
Who should be the target customer
What other competitor sports shops are doing
How to compete profitably with the existing sports shops
How to promote the new business

I will also need to print out any legal constraints and the relative costs of the choices to be made.

Also Janice feels strongly that profit isn’t everything and that she should concentrate on what the effect will be on the local community.

1.2 Marketing

Before I start the report, I will need to know what the term marketing means. Here are some definitions from different sources.

The act or process of selling or purchasing in a

The process or technique of promoting, selling, and distributing a product or service

All from

Marketing, process of identifying, anticipating, and satisfying customer requirements for consumer goods or services. Early marketing techniques involved little more than making potential consumers aware of a product’s existence and benefits, and getting it to the market. Now, however, the marketing process starts even before decisions are taken about what products should be made.

From Encarta 2000

The commercial functions involved in transferring goods from producer to consumer.

From Dictionary.com

In general, marketing activities are all those associated with identifying the particular wants and needs of a target market of customers, and then going about satisfying those customers better than the competitors? This involves doing market research on customers, analyzing their needs, and then making strategic decisions about product design, pricing, promotion and distribution.

From http://iws.ohiolink.edu/moti/homedefinition.html

2. Methodology

This report is to provide Janice Reynolds the information that she needs to start her business and also the market she will need to set up a sole trader successfully. To do this, she will need to answer the following question:

Where to find the new shop
What products the shop will sell
What kind of pricing that they will use
Who they should aim the shop at
What similar shops in the area are doing
How to compete effectively with other jobs
How to promote the new business

In order to get answers to these questions some research will need to be carried out. This will involve collecting primary data by using a questionnaire using many different people and also use some secondary sources e.g. written texts, talking to people, organisations and using electronic sources.

The research will include:

The meaning of marketing and why it is so important.
The means of market research that is available.
The best way to make the questionnaire.
The responses of potential customers.
The nature of competitor shops in the area.

Overall, as a result of this project and the careful analysis, I will hopefully be able to produce a marketing plan.

3. Research

3.1 Primary and secondary research methods

The table below shows some of the methods of Primary and Secondary methods and which would work better for use in preparing a campaign for marketing for a small sole trader sports shop.

Primary Research: is a collection and collation of original data. It involves direct contact with potential or existing customers.

Secondary Research: is the use of information that has already been collected and is available for use by others. This is either from internal sources or external sources.

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Sources:

GCSE Business Studies Text Book

Internet

3.2 Questionnaire Design

To collect important information to use in setting up a new sports shop, I needed to collect information for a questionnaire. In this section the key outlines of how to make a good questionnaire is written.

Ask no more than 12 questions as the interviewee could get bored.
Keep the question’s short and clear. Also keep the answers short and sweet.
If you want to know the age of someone give them a option e.g. 21-40 as ...

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Sources:

GCSE Business Studies Text Book

Internet

3.2 Questionnaire Design

Ask no more than 12 questions as the interviewee could get bored.
Keep the question’s short and clear. Also keep the answers short and sweet.
If you want to know the age of someone give them a option e.g. 21-40 as no everyone would like you to tell them their age
Avoid open-ended questions unless you need to know someone’s opinions.
Be careful not to lead the interviewee to make him say an answer which might not true.
Think about the order in which you ask the question. You should be logical.

3.3 Research Plan

Primary Research

After concluding many different options I have concluded that using a questionnaire would be the best method of getting research for marketing. I have chosen this for the following reasons. The questionnaire will ask where most people get their sports equipment from. I will then ask if someone would go somewhere special to go and get their sports gear. Also would like to know if someone would shop in a certain area if more sports shops were located there.

I would also like to find why a certain sports shop are considered to be better and is it because of the range of products that they have or maybe the size of the shop. I want to know what products are more popular be it trainers or clothes. If it is clothes I like to find out what brands, sizes and if shoes is the most popular the same questions. Talking about pricing I will find out if selling cheaper products makes your sport shop better. If that was true I would like to find out how much cheaper they would have to be. If not then I would like to find what attracts people to sports shop. For example range of products and convenience etc.

I also would like to find out what will be the ideal age for a certain shop and also to find out if anyone else from a certain age will be appealed.

The structure of the questionnaire will be done by the whole class having a brainstorming session and then putting them into one questionnaire. This will then be put to everybody in the class who will answer and then the results will be given back to us.

There are several other methods of primary research that I could use but have decided not to. An example of this is the customer observation but this would take very long time and also the shop would not allow me to it as it would be a nuisance for them. I have chosen to conduct a questionnaire but not use a telephone to get the answers. I have decided this because most people find telephone surveys irritating and I would properly not get sufficient answer. Or a person might give incorrect answers as he or she is annoyed.

In order to give a successful report I have chosen I need to research on the local competition. I will need do note on their location and how many people walk though the shop. This will give a good response to weather it is worth paying more for the location.

I will study what types of goods are sold in the sports shops. For example, see if the sell a certain product or a range of equipment. Or if they sell certain products for a certain gender. I could also ask specialist questions such as if the sell more fashion clothes or real sports clothes. I could also ask the average age of people that come to the shop and what products they would buy.

In order to form the questionnaire I need to research the main points of questionnaire design. The research can be found in Appendix 4.

Secondary Research

There are several methods of secondary research that I could use.

In order of finding a business plan I shall look at website. I also might be able to find there takings from the site...

I will use these methods to find out about the location of rival shops and what kind of profit they take they make. I also want to find there target market.

The Competition

In Uxbridge is a very large JJB sports shop. It is located between The Pavilions and The Chimes. JJB Sports main aim is supply high quality branded and leisure goods to their customers at fair prices. It stocks all different types of brands and products which are exclusive to the company. JJB supplies people who need the products for sports or just for fashion. In general JJB supplies almost everything and with this I have also found it takes in a very large income.

JJB

It also has many other shops around the borough. This being it is very popular with younger people around 15-24 is the shops best customers

One thing which is bad is that the staffs are not very helpful as they get paid one salary so have no motivation to work hard.

In Uxbridge there are two JD Sports one located in the Chimes and one outside coming off the Pavilions. JD sports are my favourite brand of sport shops. It specialises in sports clothes that are intended to be worn as fashion clothing. It sells a huge variety of foot where but also sweat shirts, t-shirts etc. Its main brands are Nike, Adidas and Reebok but also contain more. The only products which it sells that is meant for the play of sport are football boots and equipment. The staff in the shops are young and know all the right brands and are very helpful as they get paid for each sale not a set price. So they are always willing to help. It also has a very good website which used to sell just trainers but now is going into selling clothes and other items.

5. Research Results

5.1 The Questionnaire

To find out what kind of goods and what to sell 336 people filled n a questionnaire designed to find out what I needed to know. The response is as following.

This Pie Chart shows that people that answered the questionnaire mostly do their sports shopping in Uxbridge. This shows that Uxbridge would be a good location for a new sports shop. Harefield has the lowest appeal and would be the worst place to set it up

This Pie Chart shows the age of the people that took the questionnaire. It shows that all age groups are fairly even and not one stands out. This makes it hard to try and think of a target market.

This Pie Chart shows why people buy sports equipment. It is important to have in the store these goods so customers can get what they want without trouble.

This Pie Chart shows how people found out about the shops that they use. It shows that where the shop is located seems to be the best form of advertising as most people heard from about the shop just from walking by.

This Pie Chart shows what people buy from sport stores. Clothing seemed to be the most bought item and therefore should be stocked the highest. It also shows though that having a wide range would be successful.

There are some things that have been flawed about this questionnaire and that is that the responses are only from friends and relatives. However there is a varied amount of people that answered the questionnaire.

5.2 Other Results

On observing the shops in Uxbridge I have come to the conclusion on each shop.

For JJB Sports I have found that:

It is in a good location for customers for seeing the shop. It is between The Chimes & Pavilions. It is also next to the train station so people coming out from there will see it. It contains products for all ages and has a wide range of stock.

For JD Sports I have found that

It has two shops in Uxbridge. One is in The Chimes next to the Odeon. The other is on the High street and is seen by many people. It contained a good selection of stock and people around 11-25.

6. Business Proposal

After looking carefully at all of the possible situations I believe that Janice should go as a Sole Trader. There are many reasons for this. First at the beginning of the report it is noted that she as always wanted to become a Sole trader. Also it will not take that much Capital to set up. Again you do not to make any agreements with anyone else as in theory she could start up the business sin a few days.

Location

I believe that she should set up the shop between the two big shopping centres in Uxbridge. This is because people will see it as many people walk between these two shops. Also it will catch the eye of people coming of the train or bus.

Target Market

I believe that as most of the competition around the city is aimed at younger people. Janice should try and spread out to reach older people as there is a good market for it. With this she can sell a mixture of sports equipment and fashion clothes as in the research this has proven to be effective.

Pricing Policy

I believe that when the shop is first opened she should have cheap prices so people will come straight away to buy them. Then later on put the full price so people will still come and hopefully buy them for that price as they know how good the products are.

7. Marketing Plan

Aims

Pay off all the debt that she already have.
To make a profit over the first 5 years.
To survive for the first year.
To expand on the company into other shops.
To attract as many customers as possible.

The business will affect by other existing by other local sports shops in many ways. It will first need to establish it’s self as a well known sports shop. To do achieve this they well have too many things. First they might have to have a form of pricing with is first cheap so they can establish them self’s as a cheap shop. They also have to get a good location as I found that this is on of the most important things for it to be important. So the shop should be set up in Uxbridge and between the two main shopping centres. Another thing that might happen is that they other shops nearby might see the new shop as a threat and start there own cheap price scheme or. Good things also might occur from this as well. Such as small sports shops such as Action Replay in Ruislip will get neglect from people that live in Uxbridge as they will have a far variety of choice.

There are many ways for a company to advertise it’s self. Firstly a Local Newspaper such as the Gazette this will simply be used for to inform local residents, that a decent sports shop will be opened soon. Although people reading the paper may be above the target audience but it is still necessary to advertise in this way. The newspaper and printing methods would be a good way to promote as it is fairly cheap. It would cost around £10-£15 for about 50 words. Then they would need to be duplicated, but there are many different ways you can print these. When choosing between leaflets, flyers or broachers, the cost and style of each had to be taken in consideration.

I do not think that a broacher would be a very practical thing to do as the target audience as teenagers would not want to take a big brochure. This then eliminates it as a method. I also think that a flyer would be thrown away easily. So this leaves leaflets. I have chosen to print A5 Leaflets Full Colour 100.

At this I have decided before the shop is opened leaflets shall be printed and give out. I shall produce 2000 of 2sided leaflets at the price of £219.

There are several legal constrains that could effect on how a business could advertise. The British Codes of Advertising and Sales Promote Practise (BCAP) control on how advertising is used. They say “advertising must be legal, decent, honest and truthful and must not grave widespread offence”.

When a business advertises it cannot make false claims. It must be obvious that any prices that are said in the advert and correct include VAT. It must not make offence or make fake claims about other companies.

A company can not follow these rules if they wish but if the do not the Advertising Standards Authority will make it hard for the company until they withdraw the advert.

Before The Shop Opens

This will all come from the 4 p’s

Price

Place

Promotion

Product

Get as many leaflets out as possible. This is because it will spread awareness about the shop to people that have heard nothing about it.
Find a place to have the shop built. I believe that somewhere between The Chimes and Pavilions.
Hiring the staff will be needed. They will help Janice out in running the shop. To advertising this ad will be put in the newspaper having about 50 words. This will cost around £15-£20.
Get the stock into the shop. As the questionnaire shows it seems that more people buy sports where for fashion. But also playing sport is quite a popular choice. Using this I recommend to get an even amount of both types.

At the opening of the shop:

Attract as many customers as possible. This will be need as these will have to convinces that the shop is good and hopefully then they become loyal customers. These will then hopefully go out and spread the word abuts the shop.
Put signs up on the High Street mentioning the launch of the new sports shop. These will inform people walking by.
Make personalised bags that have a distinct colour or logo as a way to advertise the shop.
Produce some form of free gifts or discount vouchers. This will convince the customers that it is good value and tempt customers into coming back.

The period immediately after the opening:

Create a website to promote the company. This is very cheap (from £75 or even free) but still an affective way of advertising. It will also be a good form as young people use it a lot and hat is the shops target audience.
Expansion into a new shop is a good idea. Janice could rent or but another available unit nearby. It would cost around £100 per month to rent a nearby lot. So running both businesses will make totals incomes go up.

In summary, I believe that the launch of the new shop will have a positive affect on the existing shops. This is because the new sports shops will be willing and able to please all loyal customers while making profit too. All of these promotions will not actually affect the cost of the business. Also id another sports shop s opened in the area other shop which might target older people will get more trade. There also will be some negative effects such as. Shops that have similarly target audience and are not doing as well will get less attraction. In terms of the local community they will be getting better quality goods and we make use of a vacant shop.

8. Conclusion

There area number of issues that will determine if this shop is successful or not. First you can never tell if enough people would have heard about the shop to start with, also if enough people will come to the shop and spend money there. Also other sports shop’s nearby might see Janine’s one as a threat and do anything they can to make sure it gets no business.

I believe that my marketing plan will help ensure the success of the shop as in it tells Janice where I think the best location for the shop is. Also I have done sufficient research on other sports shops and a questionnaire. Using all this data I have been able to find what people want in a sports shop. Is Janice uses this data correctly I believe that her shop will stand above the rest. If I look back on the original Task in section 1.1 I believe that I have achieved all of my original aims and in some case have found more.

The problems that I did encounter were only the problems of investigating the competent. This was because it was hard to obtain the information from school and also hard to get information from the shop. But I finally got some figures from a past report.

If I would do the report again I would change some things. Firstly I would have liked to get dome more primary research results from shops as this would have made my intestate the completion section easier. Also I would have tried to get some varied results for the questionnaire. But apart from these things I believe that the report is very affective.

9. Bibliography