There are two main types of market research Tom could use. Primary research is when the data or information is collected first hand; consequently the business collects the information directly. Secondary research is when information is used that already exists. For example the internet and newspapers. Tom could use questionnaires and testing for his research. Tom has already started to make a questionnaire and he could use testing by asking someone he knows in his target market that will be truthful to rate his service and give him advice on how he could improve. This is a good idea because Tom can find out what his potential customers think of his ideas.
There are many different advantages and disadvantages to surveys or questionnaires. For example an advantage is that the questions can be designed to ask exactly what the business needs. Tom has done this throughout his questionnaire by asking only questions relevant to catering and entertainment idea. Another advantage is that you can collate and analyse the results of a survey to see what consumers want. For example if most people want sandwiches for their type of food, then he could offer sandwiches in his business.
Disadvantages of surveys or questionnaires are that some questions may be closed and force consumers into a fixed response. As some options given in Tom’s questionnaire may not be what the customer wants to answer. This can lead to incorrect data which is bad, because the business may not offer what the consumer wants. For example question two in Tom’s survey asks what types of food the customer would want the party. However he doesn’t include hot foods or drinks as an option, and consumer might want to choose these types of food. On the other had with closed questions it is easier to analyse results, and draw graphs.
Sampling is when you ask or choose people to do research on. A type of sampling Tom could use is random sampling. Random sampling means that everyone has an equal chance of being picket. This may not suitable for Tom, because it means he may ask people not relevant to his business. For example eighteen or nineteen year olds.
Another type of sampling that could be more relevant for Tom is quota sampling. This is where consumers are carefully selected before questioned. So the consumers are based on the target market for his business. Tom’s target market is children aged three to sixteen. As a result of this he should aim his questionnaires at parents, because parents will pay for the parties. Therefore parents need to be sampled.
Other questions will be needed in Tom’s questionnaire, because it is too short, and doesn’t cover all the areas required. He will need to ask which age of children consumers would consider using a catering and entertainment service. That is important so that he aims at the right target market. Another question Tom needs to include is what price customers will be willing to pay. This is essential so that Tom can make sure his costs are covered by his profits, to make his business successful. Furthermore Tom might need a question on parents income and socioeconomic group, to find out what type of price parents would be able to pay. Therefore later on he can try and have a price that is affordable.
Finally I would recommend that in Tom’s secondary research he should find out about his competitors; how they differ from him, and the price of their service. Tom should aim to price his service less then his competitors, if they do exactly the same thing. As if he doesn’t customers will buy of his competitors rather then his business meaning he loses sales. Next Tom would need to research on the income of the area he wants to set up his business in. If a lot of people in this area are unemployed or in a low socioeconomic group then they won’t be able to afford parties, so Tom won’t get as many customers. Therefore if this is true Tom should consider offering his business in a richer area so he gets more customers. Also Tom should do a SWOT analysis of his business. This where the strengths weaknesses, opportunities and threats are looked at. Therefore Tom would be able to see whats good about his business, what needs improving, opportunities he can take advantage of, and problems he may face in the future. By doing this Tom can increase his chances of his business succeeding.