earching the
rket
We offer
• Support and help for students
starting their own businesses
The Phoenix
Centre
• Enterprise workshops
• Office space
• Access to University resources
Contacting us
• T: 01904 876262
• E: enterprise@yorksj.ac.uk
• @yorkphoenix
• www.yorksj.ac.uk/enterprise
What we shall cover:
•
•
•
•
•
•
The power of research
Researching your business idea
The Competition
Defining your market
USP’s
Your target customer
The Power of Market Research
What is it?
• Market research is a method of looking at the market you plan to enter
in an objective, systematic way, allowing you to analyse exactly how
you will position your business and predict how and where to place
yourself in the market.
• Business owners then include the data in their business plans to help
potential stakeholders gain a better insight into how the business will
fare.
The Power of Market Research
What do we want to know?
• the political, social and economic factors around the business. Can
people afford it? Likewise, is Kensington the right place for a pound
shop?
• Your potential customers and who they are. Finding out about your
customer will help you to decide how to brand the business, how much
to charge and where to place it in the market.
• Who your competitors are and why they are successful. Use
competitors as case studies, looking at what has worked and what
hasn't, and even niches they've overlooked which you can target.
The Power of Market Research
What’s so important?
• Identify the demand for it. Will help you decide whether to go ahead,
work out what volume you will need to produce and what staff you
need.
• Demonstrate your business expertise to others, such as funders.
• identify your customers, their average age, gender, income, occupation
and habits. If your customers are other businesses, it will help you work
out how big they are, who their customers are and who makes the
procurement decisions. This will allow you to target more specific
markets and disregard unsuitable ones
• how much they are willing to pay, as well as an insight into how your
competitors approach pricing will enable you to determine how much
you will charge for your offering.
Researching Your Business Idea
• If you're serious about starting a business, using market
research as part of your business plan will help you
determine how viable your business idea is, as well as
helping to convince potential investors.
• Market research shouldn't just be used when you're
planning your business, though: conduct regular
research to gain a deeper understanding of how your
market and customers are changing.
Researching Your Business Idea
Using market data
• look at pre-published reports and statistics to find how market is performing.
These may be available for free from the government, or for a fee from
commercial data companies.
• Ensure the information is up-to-date!
• It can take time and effort to find the right information for your business.
Try searching:
• Trade associations or bodies: Your trade association will either have
publications of its own or be able to point you in the direction of
information.
• The web: It's an obvious one, but it's surprising how much information you
can glean just from getting the right phrase when you're on search. For the
best results, put speech marks around specific phrases.
• The Office for National Statistics: The government statistics website has
stats on everything, from UK tourism to tomato growers in the South-East.
(this is a very labour intensive task on this website!)
Researching Your Business Idea
Using market data
• Commercial publishers: Companies such as Mintel, Datamonitor,
Euromonitor, Visiongain and The Economist Intelligence Unit (EIU)
publish extensive, detailed reports - but be prepared to pay for the
information.
• If you don't have a spare £3,000 try the British Library Business & IP
Centre, which gives you access to thousands of publications and
statistics.
• Some trade publications also conduct market research. Look at
titles from publishers such as William Reed, United Business Media,
or B2B International.
Researching Your Business Idea
Cold Calling
• It’s harder but quicker than direct interviews and useful if you want a
large amount of data in a short time.
• More suited to quantitative statistics regarding customers' ages,
occupations and habits than for lengthy discussions of your product or
service idea and where it might fit into their lives.
• Make it clear that you're not trying to sell anything to the person on the
other end of the line, and ask politely whether they would like to
answer a few questions.
• Keep your calls as short - people don't like being bothered. Simple
yes/no questions or multiple choice questions, as long as they are
specific enough to provide detailed information, will keep things brief.
• You can buy direct marketing lists which include telephone numbers,
email addresses and other contact details from companies such as TLS
Data or Selectabase. Search the web for specific groups.
• Cold calling has a relatively low success rate, around 5% of the people
you call are prepared to answer your questions, you're doing very well.
Researching Your Business Idea
Conducting Surveys
• Nothing beats going out with a clipboard and a survey, standing on a
street corner, looking your customers in the eye and asking questions.
• Choose a time and place you know lots of your target customers will be
around. For example, if you're launching a cleaning service, busy
commuters may be your best market, so try standing near bus stops in
the morning, or if you're launching a new variety of baby food, mums
will be your best customers - so try to speak to parents returning from
the school run.
• It may be worth offering an incentive to complete your survey. If you
can buy them a coffee while you talk to them or offer money off your
product or service, they will be more likely to stop and chat.
• Don't be disheartened if people turn you down, and persevere.
Eventually, people will stop and talk.
• To increase the number of results you get, employ people to help you
out - but make it clear they need to be courteous.
Researching Your Business Idea
Running Focus Groups
• glean information from customers' responses to your product or
questionnaire, creating a dialogue which will allow them to build on
each others' opinions.
• getting reactions from children or other groups whose level of literacy
or attention span may not be enough to handle questions.
• Ideally six to eight participants, all of whom have been pre-invited.
• Incentivise people to attend the focus group by offering a financial
reward or gift.
• The session should last no more than an hour or people will start to
lose interest. Explain to the attendees exactly how long the session will
last and how it will be run so they aren't left anticipating an endless
stream of boring questions.
• Ensure all the questions you ask are open to prevent people from giving
yes/no answers. Instead, bring up topics and encourage people to
speak to each other about it. If the participants aren't being particularly
forthcoming with their opinions, invite each person to speak in turn.
Researching Your Business Idea
Running Focus Groups
• To encourage them to really think about their responses,
ask participants to consider a particular issue or topic for a
few minutes before they write down how they feel about it.
Then, ask each participant to read their response aloud to
the group. This should help stimulate debate and will
ensure well thought-out and structured arguments.
• Keep minutes for each focus group, as well as a brief profile
of each attendee. This will ensure you have a lasting record
of the focus groups and, in the longer term, will provide
you with information on how your market is evolving.
The Competition
• Competition is a fact of business - but look to turn
it to your advantage. You can stay ahead of the
pack by making sure you're clued up on what your
competitors are up to and finding niches they
haven't yet explored. Even if you can't compete
with your larger competitors on price, find a good
unique selling point (USP) and customers will be
streaming through your doors.
The Competition
Why look at it?
• analysing your competition allows you to come up with a set of USPs
and decide how you will differentiate your business from its
competition. Looking at where your competitors' weaknesses lie will
help you determine where your own business' strengths will be.
• Looking at your competitors will allow you to work out where they will
pose threats. For example, do they have a larger marketing budget or
do they hold more sway with certain suppliers or distributors?
• Conducting an analysis of all your competitors' strengths and
weaknesses will help you to determine exactly how and where your
product should be placed in the market and how your customers will
react to your business.
• If your product or service is wrongly priced, it won't perform properly.
Looking at how your competitors price their goods will give you a good
idea of how to price your own offering based on where you decide to
place it in the market.
The Competition
Why look at it?
• Whether you want to follow the lead set by your
competitors or take an entirely different approach, looking
at how they promote their businesses will help you to come
up with an effective marketing strategy for your company.
• Competitors often serve as a useful springboard for
innovation. If they have come up with a good idea, ask
yourself how you can build on it - or, if they've used a
strategy which was totally ineffective, find out why and
whether you could improve on their idea.
The Competition
Working out who they are
• Competitors aren't just the Pepsi to your Coca-Cola. Everyone who will
detract from your profits is a competitor - no matter how large or small
they are. Think outside the box. If you're planning to manufacture socks,
don't just look at rival sock manufacturers: think about other footwear
companies, designer brands, knitwear boutiques, eBay - even sandal
manufacturers will pose a threat.
• Competitors are everywhere. Consider some of the following to find out
about them:
Advertising
Industry magazines
Trade fairs and industry
events
Networking events
Industry bodies
Local Chambers of
Commerce
Newspapers
The internet
Customers
Brochures and marketing
literature
Companies House
Planning applications
The Competition
What to find out about your competitors
• What their customers think of them. Search internet, blogs, social
networks to find out what is said about them - set up Google Alerts to
be updated each time a news article or blog mentions them. Ask
customers directly as well - what are your competitors doing well?
What are they doing badly? Are there any gaps they aren't filling?
• How they are promoting and branding themselves. Looking at your
competitors' promotional activities will allow you to differentiate your
own - or nab their ideas and build on them. If they're likely to have one,
ask a friend or employee to request a brochure or media pack, or just
look at their website and advertising to get a feel for how they're
promoting themselves.
• Find out how much they're charging for their product or service and
what that cost provides. What special offers, bundles or freebies? What
customer service or support do clients receive as part of the price? Is
there a premium equivalent? Can you get hold of a price list?
The Competition
What to find out about your competitors
• Find out who their suppliers and distributors are and
whether they have signed an exclusivity deal with your
competitor. Would they be willing to stock your product or
supply to you? If your product is better than your
competitors', is there a chance they might ditch them
altogether in favour of your product? Arrange a meeting
with them and try to glean as much information as you can.
Defining Your Market
The more you know about your target customers, the
more you can offer to meet their needs and
desires. And the more you can tailor your marketing
and sales strategies - which means, of course, that
you can sell more product.
• Identify your target customers
• Research their lifestyles
• Research their spending habits
Defining Your Market
Identify your target customers
Your target customers correspond with your
USPs. Who exactly wants your product or
service? Consider gender, age, profession, hobbies,
income - a clearer profile will mean you can meet
their needs more precisely. Hold focus groups, speak
to retailers who deal with the market you're
considering and talk to people who fit the target
category.
• Target customers correspond with USPs
• Research to back up your assumptions
Defining Your Market
Research their lifestyles
Where do they live, what do they do for a living, how
old are they, where do they go on holiday, are they
married, do they commute? This will help you tailor
your product and marketing. Get demographics info
from your local council. Think about where they live
and how that would effect distribution of your
product.
• Build up as specific a customer profile as you can
• Consider how their location will influence your
business
Defining Your Market
Research their spending habits
This is a key decider in how to sell your product. Do
customers shop online or in person, impulsively or
after research? Prefer independent shops or huge
supermarkets? How will they find you? Look at how
similar products are being sold to get a feel for
consumer habits. Remember to consider less obvious
competitors.
•
•
•
Identify customers' spending habits
Use the information to formulate your sales strategy
Consider all potential competitors, not just the obvious
ones
Your USP’s
Your Unique Sales Proposition (USP) is the thing that
makes your business different from anything else out
there - the reason customers will come to you not
them. Identify and plan at least five clear USPs that
define exactly what you offer that the broader
market doesn't. Here's how to start:
• Determining your USPs
• Product USPs
• Service USPs
Your USP’s
Determining your USP’s
USPs must be true to your business vision - and, in turn,
everything your business does sticks to your USPs. They can
relate to your product, the way you deliver your service or the
way you run your business. You might get some ideas from the
sections below. Do loads of market research to make sure
your USPs are unique. Then talk to potential customers about
whether they would be persuaded to buy from you rather
than a competitor because of them.
• USPs must be true to your business vision
• Do loads of market research on them
• Check they're sufficient to persuade customers
Your USP’s
Product USP’s
Your product can compete on price, quality, having a
product that makes a process quicker or easier, being
smaller, safer, greener, more ethical, better looking,
easier to store or set-up and disassemble, be tastier,
more retro, approved by certain organisations, more
reliable, more durable, longer-lasting, made of a
unique material - the possibilities are endless! Your
USP might also relate to the way you package your
product, or be product related - such as no frills
deals, range of products, product finance offers.
Your USP’s
Service USP’s
If you want to differentiate yourself from the
competition on service or the way your business is
run, you might like to consider:
•
•
•
•
•
•
customer service
opening hours
green credentials
speed of delivery
extra services
being online,
• proximity to customers
• international delivery
• the gender or age of
employees
• employees' expertise
• being a social enterprise
• New service in a new location,
offering community-building
Before you can start your business, you need to
identify its target market by working out who will be
using your product or service and what their habits
are. This will allow you to determine how you will
price your offering and work out how much you will
spend on marketing.
Working out who they are?
•
•
•
Think about how your brand will appeal to customers: if
you're marketing to teenagers, you'll need to make sure
your offering is eye-catching as well as affordable.
Once you have collected data about your customers, you
will need to break them down into different groups, or
segment them by age, income, region and lifestyle. This is
called market segmentation
work out how you will position your business in the
market in order to compete. What will your unique selling
propositions (USPs) be? Do you make faster deliveries or
better customer service? How will you let your customers
know about it?
Working out who they are?
•
You can get information about who your customers are
from a number of sources, but try the following:
•
•
•
•
•
•
•
•
Office of National Statistics (ONS), the government stats agency
Figures provided by industry and trade bodies
Information from trade fairs and exhibitions
Industry and national press
Chambers of Commerce
The internet
Competitors
Competitors' annual reports (which can be downloaded from
Companies House if they are a limited company)
What to find out?
•
Begin by looking at your customers' demographics - what
their profiles are. Look at:
•
•
•
•
•
•
Age
Income
Level of education
Gender
Race or nationality
Family status and size
What to find out?
•
Your customers' behaviour is also crucial to how you
present your business. Find out:
•
•
•
•
•
What they spend their money on
What their habits are
How loyal they are to other brands
What their interests are
How often they spend their money, and how much
they spend
What to find out?
•
Your customers' location will have a big impact on how
much they spend and how frequently they buy.
Find out:
• How far they live or work from your premises
• What sort of area they live in
• If it's further afield, what the climate is like
Contacting us:
The Phoenix
Centre
•
•
•
•
T: 01904 876262
E: enterprise@yorksj.ac.uk
@yorkphoenix
www.yorksj.ac.uk/enterprise