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Business planning - Marketing planning
Step 1 - Market research
An essential part of the business planning process is market research. This may include:
- Looking at the market - how big is the market? What type of consumers are we aiming to attract? What is the spending pattern of the target consumers? Are there any other market segments we could adapt the product to meet? For example, putting orange juice into mini-cartons to tap into the packed lunch market.
- Looking at the product - this may mean some test marketing on a focus group or representative group of consumers and seeing what their reaction is.
- Competitors - who are the key competitors? How can we differentiate our product from theirs? Where are they located? How have their sales been changing recently? What prices do they charge? Where do they sell their products or services?
- Price - we may need to test how sensitive consumers are to price changes (how elastic is the price?).
- Distribution - what are the most appropriate shops or outlets to sell the product in? What are their price expectations?
- Promotions - if you are proposing any promotions or other advertising then it may be worth research to see what the reaction of consumers will be to these promotions.
Types of market research
There are two main types of market research. These are desk research (or secondary research) and field research (primary research).
Desk research is research using secondary data. This is data that has already been found by someone and published. This may mean:
- Using government published statistics - perhaps from the Office for National Statistics or from international organisations.
- Using existing market research information from specialist market research companies.
- Using sales figures from competitors (if they can be acquired), together with pricing and product information, perhaps from their promotional information.
- Trade associations - many trade associations gather data from all firms in a particular sector and publish the data.
- Internet - many web sites offer information and much government published data can be accessed for free through their web sites.
Field research is research that collects primary data. This is data or information that does not already exist. It can be collected through:
- Customer questionnaires
- Focus group
- Direct mail surveys
- Web-based surveys
- Customer interviews
However, results do have to be treated with caution where the sample cannot be controlled, as the sample may not be representative of the population you are trying to reach.
There is a business planning case study that you may like to have a go at.
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