Advantages
#Questions can be explained if the interviewee doesn’t understand a question
#Very detailed information can be gathered
Disadvantages
#Interviews are very time consuming
#The interviewer may lead the interviewees answer to the questions
Observations
Observations can be in many forms:
#Recording-an example of this is monitoring how many papers you buy
#Waiting-an example of this is you watch how many people ride a bike past a certain
point
#Audits-an example of this is counting how much stock there is
Advantages
#Does not cost much to gather information
Disadvantages
#The information is not very detailed
Experiments
The best example of this type of research is when a supermarket gives out free samples of a product.
Advantages
#This is very easy to set up and you get customers reaction quickly
Disadvantages
#People may lie to not hurt your feelings
#You only get the opinions of a small number of people
Secondary research
This is research that has been gathered for another reason and is available for anyone to use. This type of research come in two forms:
Internal resources
This is information that has already been collected by a business and is available for other departments to use. As the information has already been collected, it is easy and cheap to use.
External sources
This is when information is gathered outside a business. There are many external sources but vary according to what you are researching. The data has not been gathered for any specific purpose, so it is very general.
External sources are:
#Trade associations
#Specialist magazines
#Reports
#Newspapers
#Government reports
#Media reports
This method of research is very cheap, but as it does have limitations it is not always the best.
Primary data Vs Secondary data
What is the difference?
Primary research is data collected for a specific reason while secondary data is data which is collected for another purpose.
Which is better?
Primary data is better as it is normally accurate and it has been carried out just for a businesses’ purpose, it will have more specific information and the information that is collected is of a neutral view point.
Random or Quota sampling?
Random sampling is when everyone in the country has an equal chance of being picked, often by computer. The advantage of this is that everyone has an equal chance of getting picked, but there is a chance that some people picked do not use your product or service.
Quota sampling is where people are picked to do a survey because they meet certain characteristics such as:
#Age
#Gender
#Ethnicity
#Where you live
This is useful as the personal characteristics find out what a certain group thinks about any topic.
I have concluded the following:
I will use random sampling in the local area in order to find out what a wide range of people think and want in the local area. This is so I get data that is relevant to me.
I will use primary research in the form of questionnaires. This is because the research will be accurate and more relevant as it is being carried out for a specific purpose.
There are some limitations to my method of research, the major one being that it will be time consuming.
This is very important as it effects most aspects of my business. I will also group the people on there response to the questionnaire in social grades. The reason being that it will help create and image of the average wage, and class in the local area. I will cater for the group that the majority of the people fit into.
Social Grades
What are social grades?
This is another method of segmenting the market by class. The groups are created on what the head of each home does for a living. The social grades are:
Social group
(A) Senior management- Doctors, Judges, Company Directors
(B) Lower management- Teachers, Solicitors, Department Managers
(C1) Skilled non manual- Supervisory workers
(C2) Skilled manual- Plumbers, Electricians, Secretaries, Sales Assistants
(D) Unskilled manual- Cleaners, Assembly Line Workers
(E) Casual Labour- Unemployed, State Pensioners, Casual Workers
The most common methods of market segmentation are:
Life Style-A married person with children who has the same wage as a single person will buy different products. This means that the advertising of some products will be aimed at the single person while some will be aimed at the married person.
Age-Different age groups will buy different products.
Gender-Male and females will often (but not always) buy different products.
Region-consumers living in different parts of the country will have different tastes and needs.
Income-people with higher levels of income will want particular products. This also means that the advertising campaign will be different for each group.
Questionnaire
The aim of the questionnaire is to find out what social group is not catered for inn the local area. The results are shown in the form of a pie chart, as they are the best way to show percentages.
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haven’t got pie charts yet (20/07/02)
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Conclusion
After analysing my market research, I have concluded that the social grade of the local area is (B) Lower Management, and the average pay is between £25000 and £35000. The majority of the people do shop locally, the main reason being that the local shops cater for their needs. This shows that there would be a place for me in this local area because there aren’t any specialised internet cafes, aimed at social group B. The majority of people surveyed fit into this group, so it makes sense to primarily aim for them, and then the skilled non manual workers.
I must now find out an area that is made up of that group seeing that I have two choices of a local vacant business site. The place where you situate a shop is how you get your products to your customers. When looking for the ideal location, theses factors must be considered:
#Competition
#Parking
#It must be in an area where the income is around £25000+ (for my shop)
From my research I have found out that the Earl’s Court are meets the criteria as the majority of the inhabitants are in group B. There is also no competition that would effect my business and there is easy access to the area.
Planning restrictions
Planning restrictions are used to restrict where a business can build or start up. If the government rejects then it would be against the law for the company to build there. Planning restrictions help to protect beautiful nature from being destroyed. They also stop factories from opening near homes. Planning restrictions also help bring businesses into areas where there is high unemployment. The government would do this by offering incentives of building in a certain area.
From research into local planning restrictions, I have found out that I must get permission for the following:
#Any ballads placed by me near my shop
#Shutters
#Extra building at the rear of shop
#Any structural work
I do not need to worry about the replacement of doors and windows as my business is a non listed building.
Social effects of my place
Social costs are the costs that the rest of the area must pay because of where a business or factory is situated. There can also be social benefits which means what is gained by the local area from placing a business there.
The social costs as a result of where I place my business are:
#May be increase in traffic
#Increase in litter
#My result in local competition closing down
The social benefits from me placing my business are:
#People shop locally
#Creates one or two extra jobs
#Helps the local economy
Evaluation
The place that I have chosen has more advantages than disadvantages. This is because my shop will be right next to a main road which will allow people to see any promotions, and they will be drawn to the area by a Sainsbury’s Local. There is also a bus stop a few metres away from my shop which will make it easy to get to my shop. Another major advantage is that there is a bank nearby that has a cash point meaning it is easy to withdraw cash. There are some disadvantages; primarily that there is no dedicated car park, and that there are parking restrictions. The main parking restrictions are that there is no parking on certain points between 6pm and 8pm Monday-Friday. The planning restrictions in the local area are not very strict so this will help if I want to make changes to my business. There are very few social costs and there are benefits as well. The major benefit of me placing my shop in the chosen place is that this would bring people into the local area to shop which would help other local shops.
How will I price?
The price must be right, as people will have to buy large numbers to make profit. The price you charge can depend on what you are trying to do. I am selling pastries, tea, coffee etc as well as providing an internet service so I will have a low prices in order to attract a lot of customers and to see if my business will succeed. It is different for me as I don’t sell things (apart from pastries, coffee, tea etc) to make a profit, I provide a computer service as my main way of making a profit.
There are three types of pricing:
#Low price-to attract lots of customers, you will have a price lower than the competition.
#Average price-Your price will be the same as the competition, so you will try to get customers to go to your shop.
#Higher price-If you know your product is better then your rivals, and the customers know that, then you can charge a higher price.
My price
My price will be as low as possible, so that I can attract the largest amount of customers. I will also have some goods such as pastries, coffee, tea etc at are at high prices because they are unique. I am aiming at social group B
How to price?
This is very important as I must decide how to price the use of the internet and how to price the food and drinks.
Hour based pricing will be the most suitable way to charge the use of the computer and the internet.
The food and drinks will be charged at high price seeing that the social grade of this local area is group B and most of the local area earn £25000+ so they will be more likely to spend more money.
From my first plan, I know my place, my pricing structure and what group I am targeting.
After evaluating my first action plan, I have found that I need to cover areas that I missed in my previous plan. .
I will be selling food and drink, so each and every product must have a good strong brand that makes it recognisable to people. A very strong brand is Coke a Cola brand, as the colours, shape of cans, and lettering tell the buyer what the product is. The characteristics of the brand comes from the products physical features of the product. This means the taste and the shape of the product. These are created by the manufacturer through adverts and packaging.
What is the aim of advertising?
The aims of advertising are:
* Inform people about the Internet cafe
* Create an image
* Increase sales
* Compete with other shops
* Introduce new products into the market
The aims of my advertising will be:
* Increase sales
* Compete with other shops
* Create an image
Informative advertising
Currently, the biggest spender on this form of advertising is the government. This advertising is used to pass on information to the public. The passing on of this information is very important in any advert.
Persuasive advertising
The washing power industry spends as much as the government on advertising. Their adverts try to persuade the viewer that there products are much better then the competition. There goal is to attract people to buy there products.
There are different types of pervasive advertising:
* Adverts that show a famous person using the product
* Adverts that compare one product with another
Public relations
Public relations is the department that tries to promote the company and shows the good side of the company to the public.
Advertising agencies
Advertising is a very expensive business, to make sure that the money is well spent they will hire a company to do it right. For an advertising campaign to be successful it must:
* Reach the right audience
* Be attractive and appealing
* Make the money that the audience cost back in sales.
Control over advertising
In an advert you can’t just put anything in it, there are certain rules:
There is a code of practice inside the advertising industry that you must obey. The trade description act, which means that the advert must mean what it says.
I plan to use informative advertising as I want to inform people of the benefits of buying from my shop.
What media's are there for advertising
There are many different types of advertising, each has advantages, and disadvantages:
Television
This is a very powerful media to use to get your message across. The advert that is produced will be seen by millions. The time at which your advert is shown effects who see it. If your product is for children then you would show your advert during children's programmes. You must also take into account the number of people watching, as this will effect the cost. To produce a advert you must take I these things:
How many adverts can you afford, as there would be no point in only being able to run your advert once. When will it be shown. Is the advert its self correct?
Advantages
* Reaches a large audience throughout the country.
* The adverts can make the product look much better, then in print
Disadvantages
* Very expensive
Radio
This method of advertising is very similar as television adverting, but it is cheaper and sound is used instead of visual images. In a radio advert a theme tune is used.
Disadvantages
* People may switch station when the advert comes on
* If there is poor reception then the listener may miss the advert
* There are no radio stations that take adverts that span the whole country
Advantages
* Cheaper then television
* Large audiences can be reached
* This type of advertising is very good for local shops
* The advert can be repeated many times
Newspapers/Magazines
Advantages
* An advert in print is normally kept for longer, so it may be seen many times by different people
* Colour printing is now available at a much lower cost
* Coupons can be in the advert so that the person can cut them out
* Easy to reach a target group with magazines
Disadvantages
* Reader most of the time will skip the advert
* You may have to design different adverts for different newspapers, or magazines
* In some newspapers/magazines the advert may be surrounded by others, thus causing the advert to loose its affect
* Magazine adverts cost more then newspapers
Posters billboards
Advantages
* A poster will be visible for a long time
* The posters are normally big, colourful so they grab people attention
* They can placed on buses, trains, and in stations
* Very good to advertise in the local area
* Quite cheap
Disadvantages
* Posters may be ignored by drivers, or pedestrians
* Message must be brief, or it will not work
* Adverts may be damage by vandals
* No detailed information can be placed on the advert
Leaflets
Advantages
* Very good to target a certain group
* Are relatively cheap
* Can include coupons for the reader
* May be kept around for a long time by the reader
Disadvantages
* May not be read
Cinemas
Advantages
* This a good method for a local business to advertise
* The advert will have a big impact, because of the size of the screen and the quality of the sound
* Very good to target a young audience
Disadvantages
* People may dislike the fact that they have to wait for you advert before they can watch the film
* Only seen by a limited number of people
Evaluation of advertising
It would be impractical of me to use television as a form of advertising, as I will only have one shop in a local area, and television is not good to advertise in the local area. Also the cost involved in creating the advert, and putting it on television is enormous. This would mean for me to run the advert more then once. I would have to cut things for my business like customer benefits, and opening hours. Radio would be a better option but as I only have one shop, it is not a good method to use at this time. This is because the advert will be heard by the whole of London. However, I will only target the earls court area. Local papers are a very good method in my case, but this will depend on the results of questionnaire that I carry out. A magazine is not suitable as they are normally national. Another very good method would be advertising on local transport, as they will be seen by people in the local area. This will also depend on the results of my questionnaire. A mail shoot would be a good method as I can target a specific group, and it is very cheap, but this will also depend on my research. Advertising in a local cinema would be a very good method, but because it only goes to a limited number of people I think it is not that good. Also as films are normally seen by young people, this is a disadvantages as they often have the least money. The method of advertising that I am choosing has little effect on the local area. The only effect that there is that the leaflets that are delivered are just thrown away damaging the environment.
Questionnaire
Aim
The aim if this questionnaire is to find out:
Which media most people see/have access to
Which adverts do they read them
When they are seen/read
Questions
Which of these media's do have the most access to?
Television 35%
Radio 15%
Print 6%
Poster bill boards on transport 25%
Road side posters 3%
Cinemas 1%
leaflets 15%
Do you often read the leaflets that you receive?
Yes 44%
No 56%
When do you listen to the radio
8.01 am -12 PM 22%
12.01 PM - 4 PM 8%
4.01 PM - 8 PM 34%
8.01 PM - 12 PM 10%
12.01 am - 4 am 1%
4.01 am - 8 am 25%
What grabs you attention in a advert?
Slogans 22%
Bright colours 18%
Brand names 35%
The shape of the paper the advert comes on 25%
Results
The results are shown in pie char form as they best represent percentages.
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Not done yet
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Conclusions from results
My conclusion is that the best method for me to use is poster bill boards on public transport. Even though more people have access to television, this media is not suitable for my business. I will also use leaflets as this would mean that I could put in coupons for the reader. Also that I should use bright colours in my advert, as my leaflets should have a distinctive shape.
I will advertise on the local transport system £98 per month, for a small advert on the back of a bus. The leaflets that I will produce will cost £25 for a 1000 delivery, and printing costs vary.
My two adverts will look like:
The first adverts is the one that would be placed on buses. The advert is brief, as there may not be enough time to read it, and shows some information about opening times. The advert tells people about my Internet café and special offers.
The second advert is in a shape of a computer as I hope that this will catch a persons attention. It has the same colours, and style of the other advert so that people will remember them. There is also a discount if you show the advert on one purchase, this is a way of getting people into the shop.
Promotions
A promotions is not run for a very long time, they are used to help the advertising, and to get existing and new customers to buy the product. This is only ever used for a short time.
The advantages of having promotions are:
* Can help to boost sales when they are low
* Gets people to use new products
* Engorges
The different kinds of promotion which will be suitable for me would be:
Money off
This is where you offer money off your product so to attract customers. Coupons could be used, these can be in leaflets, or come in a previous product that you buy. Another way is where there is a discount in the whole shop and no coupons are needed. The idea of these are to get the customer to use the computers.
In store displays/demos
This is where there is a in store demo of the product in use, or there is a special in-store displays. The idea of these is to incise the customer into buying there product.
The method of promotion that I going to use is price reductions, and in-store demo's. This is because if people are using the computer for the first time, they would hopefully have some knowledge of how to use a computer and the internet. Using price reductions, such as using the internet for an hour at half price, would help to bring people back. The use of free samples, gifts, competitions are not very suitable for my shop. This is because it would be impractical to give out free samples, competitions will take a lot of time to set up and run, and gifts are not of any use as you normally only buy one of the product. I will also have special offers such as buying a coffee will give you a free extra 15 minutes to use the computer.
Conclusions from action second plan.
* I now know what methods of advertising, promotion, and packaging I will use
* I know what benefits I will offer my customers