Price
The prices are also worked out differently, as a market trader buys the products for a set price and makes a mark up to a set price to make a steady profit, in order to pay for a fixed, variable and semi-variable costs, for example, rent of pitch, wages and food and drink. The same applies for the theatre because wages still have to be paid, but any extra profit made is put back into the company, so the prices have to bring a reasonable bit of profit by raising prices.
Break Even
The “break Even” point is important to both businesses because it is a figure to let the owner of the business know how many products need to be sold in order for the business to earn back all of its out0going costs, after the break even point is reached, all of the money made by the business is pure profit. This is important for the theatre as the manager will know exactly how many tickets need to be sold to break even, it is a lot easier for the theatre to calculate its break even point as all of the tickets are a set price, whereas the marget traders goods are all different prices and therefore the market trader can only calculate how much turnover is needed to break even instead of a figure of products.
Place
Finding the right place to sell your product is probably the most important issue in a business because if your in the wrong place the product will not sell to its full potential which will leave you with less product, the area in which the theatre is located is good as there are no theatres in the Ilford area so they will get at least all of the local business. “The market trader” there is a lot more competition as there are a lot of other places to buy similar products so that he price factor is even more important, so you can under cut the competition to get more customers.
Promotion
The promotion elements of these two businesses are very different because the “market trader” has no promotion techniques at all where as the theatre uses its own building to promote all of the coming shows.
The theatre and the market trader both believe that the best kind of advertising is your reputation and history, if your customers believe your products are good and that your products are of a good quality then the customer will tell their friends and family and come back for more.
In the theatre, only 2.5% of the income is spent on advertising which is funded by their “supporters club” who buy around 75% of the tickets sold, the which is given from the “supporters club” goes towards the programme and stamp which is on the mailing list of addresses.
Nische Marketing is when a small business is providing either a unique product or a unique service, in order to “win” customers over from big businesses and other markets.
Issues of a small business
- Relationship with customers is extremely important, this is vital so that customers will be happy with a service and come back.
- Reducing the products costs – The cost of a product needs to be reasonable for the customer as they are the main concern of the company.
Market segments
- Age, the theatre has no target age group and therefore appeals to all age groups, depending on the show but the market trader does have a target age group as the product sold only appeals to specific age groups, depending on the product, for example pots and pans will only be bought by 21 to 40 year olds.
- Gender, both the theatre and the trader have no target gender as the products available appeal and can be used by men and women, there are no restrictions at all.
- Income, the income of the customers is important and needs to be considered by both the trader and the theatre because if the customer is not happy with the value of the product or can not afford the product, you will end up loosing a lot of business. In the cases of these two businesses, the product and service are very cheap and therefore the target customers and afford the services and produces , they are also happy with the value.
Financial
The market trader gets a lot more profit than the theatre as they a larger mark up and also, it products are brought in a whole sale they are cheaper so even more profit can be made. All of the profits can be used by the trader and his partner in any way see fit (after paying all of the outstanding debts and costs.) the theatre uses all of its profits to put back into the company to pay any need of the theatre and no worker gets extra pay.
Recruitment
The market trader will recruit very little staff as the staff are normally friends or family and therefore recruitment is a very small part of a market traders business. On the other hand, in a theatre, recruitment is very important as nearly all of the staff work voluntarily, in return for their work they get to see a show for free, but if there is no staff working voluntary, there will be no-one to give out leaflets etc. Therefore the quality of the service will be lowered and the business maybe threatened with bankruptcy.
Method
I will need to gather various bits of information on finance to give a more precise financial situation for both the market trader and the theatre. I will collect research, including leaflets, population statistics, maps, and I will also find out some primary/field research by doing interviews and by also carrying out questionnaires.
After doing these tasks I will be able to understand the status of each business.
I am asking these questions to find out the individual views of the public and how they feel about the “Market Traders” and the “theatre!” I also hope to find out patterns of interest, e.g. what age people tend to like more, compared with others. (Different ages).
After completing my questionnaires I will carry out two interviews, one with “Mr Vivian Ellacott” the manager of the Kenneth More theatre and another one with a “Market Trader”, from these interviews I intend to find information which gives a personal view from a person of high authority in each business, I will also receive information about both businesses such as, Strategies used to overcome competition, from this I will be able to compare the two businesses easier.
From all of the information I have gathered, the staregies and weaknesses of my research methods are as follows: -
Strengths
- I collected a range of leaflets, and information, not just one or two pieces.
- My questionnaires and interviews were fair as I used the same questions for both.
Weakness
- I have not used ALL of the information I found, I sorted out the pieces.
If I were to do this again I would have used the Internet more and also, I would have focused more on the text books, but I believe I have used every source possible.
Local Competition
In my personal local environment there is a large gap in the market for performing arts as there are no cinemas or theatres in the Leyton area, the market trader on the other hand will have a lot more competition as there are stores in Leyton which do sell the same goods as the market trader.
I think that my research is of quite a high standard as it is varied, meaningful and contains facts which I can use. I have also carried out BOTH desk and field research to give me a two sided view.
Yes, the businesses can survive in spite of competition as both companies are greatly valued by both their customers and workers, and therefore both businesses have support from the most important people, their customers.
I have gathered the social economical groups and Waltham forest population in broad age groups to find out the ages of both males and females living in the Waltham forest area (refer to reference 1). From my research I have found that the target age group for the “Kenneth Moore Theatre” which is between thirty and fifty-nine, is highly populated in the Walthamstow area which would guarantee good business for the theatre in my local area
An interview with Vivian Ellacot from “Kenneth Moore”
- How do you measure success in your company?
There are two ways to measure success in a theatre, one is in artistic achievement from a subjective judgment and act can be great personal acheivemt but might not be liked by the public, but success can also be measured financially where the more tickets sold will give a success.
- What is the type of business ownership and how was the business set up?
The theatre is a charitable company, which is limited by guarantee and controlled by a board of trustees who cannot be paid.
- How do you motivate staff?
In this line of work the staff are motivated by their personal love for the theatre and by the example of the artistic director.
- How have you created your image?
This theatres image has grown over the past thirty years where they have become an important part of the community involved.
- How much money do you spend on advertising?
In a normal “West End” theatre they would spend up to 10% of their intake on advertising but in this case our theatre supporters club who bye around 70% of the tickets sold funds us. The money given from the supporters is for the program of on -coming shows and the stamp, the supporters are put on a mailing list and the program is sent to them. In total we spend only 2.5% of our intake on advertising.
- How do you promote and advertise your business?
The first way in which we promote and advertise is by sending out our leaflets to all of the addresses on our mailing list of supporters and the other is by word of mouth which is when people come and see the show and tell their friends and family.
- What is your age group?
In the theatre there is no age group, it changes according to the show and some shows appeal to everyone no matter their age.
- How do you deal with competition?
The only competition against the theatre is the cinema and TV and the Internet because the theatre is a charity they co-operate with each other by lending props etc. to other theatres.
- Do you have a business plan and how do you arrive at your targets?
The business plan is to maintain ticket sales and improve artistic standards also quality improves of costumes and props. Another target is to help build experience for staff example technicians.
Interview with a Market Trader
1. How do you measure success in your company?
Overall profit produced/amount of products sold.
- What is the type of business ownership and how was the business set up?
My business ownership is partnership, and is set up with a market trade lisence, which enables me to trade.
- How do you motivate staff?
Financial bonuses/breaks
- How have you created your image?
By producing quality goods and by being punctual.
- How much money do you spend on advertising?
The market traders society control all types of advertising. (£0).
- How do you promote and advertise your business?
Word of mouth, by selling quality goods, customers tell friends/family.
- What is your age group?
I have no target age group, it varies for each product.
- How do you deal with competition?
Understanding prices, guarantees.
- Do you have a business plan and how do you arrive at your targets?
Yes, I have a business plan as it helps me keep track and I arrive at my targets by working hard and motivating staff to work to their full potential.