This project requires me to produce a imaginary business

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Pacey’s Electrical Shop

This project requires me to produce a imaginary business. To do this I must research into all aspects of a business, using books, people, and computer resources. To help me do this I will create action plans, that I will evaluate and redesign as I proceed during the project. The reason for the action plan is to help keep track and organize what I am doing, it also shows points that I must cover for my business to be successful. In this project there are certain parts of the project that can be decided before I created a action plan these are:


What will I sell- I will sell electrical goods like televisions, videos, and hi-fis ect…

My shop name- I will call my shop “PES” (Paceys’s Electrical Shop).


From what I already know I have decided to make my business a sole trader operation as these are the easiest to set up. Also in a sole trader business I will get to keep all of the profits. Also as I am a sole trader business there are less regulations that I have to comply with.  As a sole trader I do not have to make my business accounts available to any one except the inland revenue.  This is useful as it saves me time, and it keeps my business dealings secret to the public.


What is the aim of “PES”

The aim of "PES" is primarily to be able to compete with other companies in the local area. Also to brake even, but provide a high quality service to the public. Then it is to make a profit.  For the first year the aim of my business will also be to become a well established business, and to remain open (not be forced to close due to lack of business).


   Mr. Pacey

Action plan


This is my first action plan, that I will later evaluate and then using my evaluation I will create a second action plan.





What is a market?


A market is where the sellers meet the buyers to exchange money for a product of service. The term “market” is actually used to describe the people whom the product is sold to. This does not always involve face to face selling, it could selling over the television. For a shop there can be different markets, e.g. domestic, and business.


My market- My market is going to electrical goods sold to domestic customers.


Product-oriented vs. Market-oriented business


A product oriented business is when the product is produced first, then a market is found. Business rarely use this type of marketing. Companies that use the type of marketing, usually make basic products needed for life. In some cases though a product must be made first before a person realizes that they need it. This is normally the case when new technology is involved. 


A market oriented business is when a business will find what product people want and then sell it to them. This normally involves market research. This is where the business will identify what the customer wants. These types of business normally survive longer, as they are able to adapt to what the customer wants.


My business strategy- I will have a product oriented market as I will be selling new technology that is constantly changing. This is because people do not normally realise they need a new television, videos, or Hi-fi until the product is made. This method has a lot of risk involved as there is no guarantee that a person will want my product. 


What is marketing?


Marketing is not advertising, it is actually finding out who wants to buy your product. Marketing is finding out what a customer wants, and then giving them that. The goal of marketing is to predict what the customer wants in the future, by looking a past trends, and carry out market research. The goals of marketing are:


ŸIncrease sales

ŸIncrease market share

ŸImprove image of business



What is the point of market research?


A business must find out how many people there are whom will buy its product. This is where market research is used, market research is used to find out:


Ÿ         What parts of the product do people like or dislike

Ÿ         If people want the product

Ÿ         How much would they pay

Ÿ         Who, and where will they buy the product

Ÿ         Competition

Ÿ         What promotions to use


What do I want to find out- I want to find out:


Ÿ         Are people thinking of buying electrical goods

Ÿ         competition in the area

Ÿ         What prices

Ÿ         Who will buy the product


The information can be gathered by two methods:


Primary research


This is where the data is collected for a specific purpose, this involves going out and carrying out questionnaires, and interviews. This method of research can be expensive and time consuming. There are different primary research methods these are:


Ÿ         Questionnaires

Ÿ         Interviews

Ÿ         Observations

Ÿ         Experiments


Each method of primary research has advantages, and disadvantages these are:




These are the most common method of primary research as it is the easiest.




ü      Detailed information can be gathered

ü      Customers options can be obtained



û       To carry out a questionnaire it will take time, then it will also take time to analyse the results obtained.

û       The questions must be well thought out, other wise the results will be misleading




This is when a person asks questions to a person.




ü      Questions can be explained if the interviewee does not understand the question

ü      Very detailed information can be gathered




û       Interviews are very time consuming

û       The interviewer may lead the interviewees answer to the questions




Observations can be in many forms these are:


Recording, a example of this is monitoring how many papers you buy

Watching, a example of this could be you watch how many people ride a bike, past a certain point

Audits, a example of this is counting how much stock there is.




ü      Does not cost much to gather information




û       The information is not very detailed




The best example of this type of research is when a supermarket gives out free samples of a product.




ü      This is very easy to set up, and you get a customers reaction quickly




û       People may lie so not to hurt your feelings

û       You only get the opinions of a small number of people


Secondary research


This is research that has been gathered for a other reason, and is available for anyone to use. This type of research comes in two forms external and internal.


Internal sources


This is information that has already been collected by your business, and 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 the information is gathered outside the business. There are many source, but they vary according to what you are researching. This data has not been gathered for any specific purpose, so it is very general.


External sources are:

Ÿ         Trade associations

Ÿ         Specialist magazines

Ÿ         Reports

Ÿ         Newspapers

Ÿ         Governments reports

Ÿ         Media reports


This method of research is very cheap, but as it does have limitations is not always the best.


Secondary data Vs. Secondary data


What is the difference?


Primary data is data that is collected just for that specific purpose. While secondary data is data that was collected for a other purpose.


Which is better?


Primary data is better as it normally more accurate, and as it has been carried out just for your purpose it will have more specific information.  Also the information that is collected is of a neutral view point.


Primary data or Secondary data- I will use primary data in my project as it will be more accurate, and will be will be of a neutral view point.


Random or quota sampling?


Random sampling


 This is when  every one in the country has a equal chance of being picked. People are picked at random often by computer to complete a survey. The advantage of this is that very one has a equal chance of being picked, but there is there a chance that some of the people that are picked do not use your product or service.


Quota sampling- This is where people picked to do a survey because they meet certain characteristics. These characteristics can be:


Ÿ         Age

Ÿ         gender

Ÿ         Ethnicity

Ÿ         Where you live


This is useful as the person characteristics find out what a certain group thinks, a bout any topic.


My method of research- The method that I will use is random sampling in the local area. This is so that I can see what a wide range of people think and want in the local area. This is so that I get data that is relevant to me. I will use primary research, in the form of questionnaires. This is because the primary research will be accurate, and more relevant, as it is being carried out for a specific purpose. The reason that I am using a questionnaire is that it allows to gather very detailed information. There some limitations to my research methods, the major one being that it will take a long amount of time.



What market am I aiming for?


This is very important as this effects most aspects of my business. When I say “what market aim I aiming for?” I mean am I aiming for the ultra cheap, low end of the market or the upper end of the market. To decide I will carry out research into what markets are not catered for by the large companies, I will then cater for this market. To do this I carry out questioners or use research already carried out by a other company. I will group the people on there response to some questionnaire in social grades. This is because this will help to create a image of the average wage, and class in the local area. Then I will cater for the group that the majority of people fit into.


Market segmentation


Market segmentation is a method of dividing up the market, into smaller subgroups. A example is that products like drinks may appeal to one group like young people, while a other may appeal to older men. This means that the market will broken up by age, and gender. This is very important when advertising, as different adverts will apple to different people in each group.


The most common methods of market segmentation are:


Life style


A married person with kids who has the same wage as a single person will buy different products. This means that the advertising for some products will be aimed at the single person. while some will be aimed at the married person.



People of different age buy different products. This means that a old person will buy different products to a young person.



Certain products are only brought by males, and some is only brought by females, so the advertising targets that group. Sometimes the a products are brought by both groups, but the advertising is just aimed at one.




People in different areas of the country will buy different products. A person in a wet part of the country will buy clothes for wet weather, while in a dry part people wont. This also applies to when a product is exported.




These are created depending on a person’s income. The highest in the groups are the managers while the lowest are the unemployed. A products that is to aimed art the highest income group will have a high price, while a product aimed the lowest will have a low price. This also means that the advertising campaign will be different for each group.


Use of product


A product can be used by domestic home users or business. This will influence the way the that the product is sold and advertised. If selling to a business then the company may go direct to the business and sell face to face. While if selling to the domestic ,market they may just sell over the phone. A product that is aimed at a business user may not be advertised on television, unlike a domestic. Instead brochures may be used. This means that the same product could have to different advertising campaigns.


Social grades


What are social grades?

Join now!


This is a other 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:







The aim of this questionnaire is to find out what social group is not catered for in the local area.




Are you in full time employment?


Yes 75%

No 25%


What type of work do you?


Senior management 20%

Lower management 12%

Supervisor role, administration 30%

Skilled manual 7%

Unskilled manual 23%

Causal labours 8%



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