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A local manager of a sports shop in Harrow, Janice Reynolds, has decided to start up her own business. She hopes to set up a sole trader sports retail outlet somewhere in the local area.

My task will be to research and advise Janice of the market and marketing strategies. She understands that marketing a business deals with many issues, these are:

* How to promote the business.

* How to compete, while gaining profit, with the other sports shops.

* What the other sports shops are doing.

* Who the target market should be.

* What pricing policy to use.

* Products to sell.

* Where to locate the business.

I will also need to reassure Janice that all these issues are giving a good affect on the local community. Finally that all legal issues are covered and in order.

1.2 Marketing

What is the definition of ‘marketing’? Here I will research the different definitions of marketing. I will use various sources to find the definitions, for example, textbooks, the Internet etc. Here are the definitions and their sources:

1. “Marketing is the process that helps businesses to discover and meet the demands of customers.” Applied Business for GCSE, Malcolm Surridge, Collins.

2. “Marketing is more than just selling or advertising. It is the art of making it as easy as possible to get the potential customer to buy your product.” GCSE Business Studies – The revision Guide, Richard Parsons, CGP.

3. “The exchange of goods for an agreed sum of money.” GCSE Business Studies – Internet – www.askjeeves.com

4. “Marketing is how a business ensures that a customer gets what they want, when they want and at the right price.” Colleague – Mark Gilby, 10H, Vyners School.

2. Methodology

The report in which I shall produce will provide sufficient information for Janice Reynolds to start up her own sports shop business successfully. In order to do this the following questions will need to be answered:

* How to promote the business.

* How to compete, while gaining profit, with the other sports shops.

* What the other sports shops are doing.

* Who the target market should be.

* What pricing policy to use.

* Products to sell.

* Where to locate the business.

Some very detailed research will need to be carried out in order to gather all the answers or suggestions for the various questions. My research will consist of a detailed questionnaire with a large set of answers. Also, information will be gathered from written texts, people, organisations/businesses and electronic sources. The research will investigate the following issues:

* Information on the competing sports shop businesses in the area.

* The responses of many potential customers in the local area.

* The most successful way to produce a questionnaire.

* The methods of market research that is available and appropriate.

* The definitions and importance of marketing.

With this information I shall produce an appropriate analysis, this will then be shown as a business proposal and a specific marketing plan for Janice Reynolds.

3. Research

3.1 Primary and Secondary Research Methods

The following table summarises primary and secondary methods of research. Also, it states whether or not they are suitable for campaigning a small sole trader sports retailer. Primary research is the collection of ‘first-hand’ information and secondary research is using already existing data. Here is the table:

Method

Primary/Secondary

Description

Suitable?

Primary.

Primary research, or field research, is the collection and collation of original data. It involves direct contact with potential or existing customers. This research will usually have been planned and carried out by people who want to use the data; it is ‘first-hand’ data.

Yes.

Secondary.

Secondary research, or desk research, is the use of information that has already been collected and is available for use by others. Secondary research has two types; internal and external. Internal is personal data from a business or firm, for example, a sales department’s sales records. External is information sources that are produced by an outside company. For example, a newspaper or media report on a business.

Yes.

The source in which I used for all this information was a textbook, ‘Business Studies Now! For GCSE,’ Borrington, Stimpson & John Murray.

3.2 Questionnaire Design

In order to research primary information for setting up a new sports shop I will carry out a questionnaire. The important issues when designing a questionnaire are explained in this section.

Questionnaires are a cheap and easy way to gather vast amounts of data from a potentially large number of respondents. Often they are the only way to gather many reviewers’ results and to put it all into an analysis. A well-designed questionnaire that is used effectively can gather information on the overall test system. If the questionnaire includes ‘demographic’ questions on the participants, they can be used to compare performance and satisfaction with the test system among different groups of users.

It is important to remember that a questionnaire should be viewed as a ‘multi-stage’ process beginning with a definition of the aspects to be examined and ending with interpretation of the results. Every step needs to be designed carefully because the final results are only as good as the weakest link in the questionnaire process. Although questionnaires may be cheap to do, compared to other data collection methods, they are every bit as expensive in terms of design time and interpretation.

The steps required to design and administer a questionnaire are as follows:

1. Defining the Objectives of the survey.

2. Determining the ‘Sampling Group.’

3. Writing the Questionnaire.

4. Administering the Questionnaire.

5. Interpretation of the Results/Analysis.

3.3 Research Plan

From doing this questionnaire I hope to discover the public’s views on the various aspects of marketing. I will ask questions to find out; best location, what to sell, pricing systems, who the target market will be and the competition (other sports shops in the area).

Myself and three other pupils will create the questionnaire. I will be doing it in this fashion because we will all be able to collect data individually and then put the information together. Each of us will collect one male and one female for each age group (ten in total). This will then give us a larger set of data each, furthermore, making our results more detailed and reliable.

The main aspect to investigate is the competition. By asking questions like, ‘What sport shop do you use most?’ I will get information on the most popular sport shop (most competition). Also, by visiting the sport shops in the area I will physically view the amount and type of shoppers visiting the sport shops. Finally, the Internet will help with discovering the competition by looking at sales records of the various sport shops.

4. The Competition

JJB Sports is just one of many sport shops in the local area (Uxbridge). It is a well-known business with many branches in various areas. JJB’s main objective is probably ‘sales growth.’ I believe this because sales growth means that there doesn’t necessarily need to be an increase in profit. Perhaps the prices could be lowered to attract more customers and in the long run, gaining more profit. Also, sales growth can be achieved by the business opening more branches to gain even more customers. JJB has many branches and very low prices; this is why I believe sales growth is JJB’s main business objective. The Uxbridge branch is located between the two main shopping centres, ‘The Pavilions’ and ‘The Chimes.’ The shop’s location has helped its success because people that walk from one shopping centre to the next clearly see the shop and it’s advertisements, they are then influenced to shop there. The range of goods in the JJB in Uxbridge is very good. It’s a large store with a wide range of sporting clothes, trainers and equipment. The target market is probably young children, because it stocks in cheap children’s goods. However, the shop also has adult sizes, but not in such a vastness as the children’s goods. The shop’s location influences it’s target market because children are often found walking past or ‘hanging around’ the shop (from my own observations). Opening another sport shop would probably not be very good for JJB as there would be another shop to compete with, however this could make the business owner more motivated to achieve more than the opposing business.

Foot Locker is quite a small sport shop in Uxbridge, The Chimes. It specialises in trainers, hence the name, and also fashionable sports clothing and accessories. Foot Locker’s main business objective is ‘wealth creation,’ it is a very well known business with branches world-wide, so wealth creation is it’s main objective now. This means they are able to have high prices or ‘add value’ to products because of popular brand names, like ‘Nike.’ Its location is very helpful because people walking either in or out of the Chimes entrance will see the shop and the shop’s open plan shows off the goods inside and this probably draws people in. The target market for Foot Locker is people aged 13 to 30. This is because of the range of goods are mainly targeted at teenagers or people slightly older. Its location influences their target market because young people are often found walking in and out of the Chimes entrance. I would imagine that opening another sports retailer in the area would not affect Foot Locker as it is a very successful business and would have no trouble with the competition. However, some customers may be lost, perhaps the new business’ lower prices are more attractive than Foot Locker’s high prices.

For this section of the report I used various resources in order to find out information on the different shops. I used the Internet web-sites of both JJB Sports and also Foot Locker (www.jjbsports.co.uk and www.footlocker.co.uk). This was to find out the range of goods and prices. Also I visited the stores in Uxbridge to view customers, size and location.

5. Research Results

5.1 The Questionnaire

Now, in this section of the report I will use the data found in the questionnaire (following page) to produce suitable graphs with explanations. These will work as an analysis of the results.

Gender

This pie chart shows the answers of the 8 people as to what their gender was. As you can see, the majority of people were male (75%). This could show that the majority of shoppers would be male. However, it could have been pure chance that 6 of the 8 that I asked were male. So this could prove helpful for the target market.

Age group

Here is a pie chart showing the various age groups of the people that took part in the questionnaire. Obviously the most common age group is under 18, so this could help with the target market for the new shop.

Current Occupation

This graph shows that students are most common in the questionnaire. This will also help with the target market of the new sports retailer (students, under 18 and male).

Where is you nearest shopping area?

This pie chart illustrates the areas in which shoppers are closest to and most probably shop at. Uxridge is the most common. This could prove that Uxbridge is the best location because of its popularity, or it could prove that Uxbridge would produce the most competition.

Do you play sports?

This proves that most people play sports and so people will need sports equipment for their sport. The range of stock will have to be adjusted to fit the personal needs of each individual’s sport. So the new shop should look into selling specialist sports equipment.

Why do you mainly buy sportswear?

Now it is clear that sportswear is mostly bought because of the amount of people participating in sports. So sportswear should definitely be stocked up on in the new shop.

What is your preferred way of buying sports goods?

This shows that most people buy sports goods at either a sports superstore or a specialist sports shop. The new shop may look into being made as a sports specialist.

How regularly do you visit a sports shop?

Most people visit a sports shop every two weeks, so the new shop will have to try to compete with this and try to have shoppers visiting their shop just as much, if not more than every two weeks.

What do you buy most from sports shops?

You can see that equipment is the most bought type of item out of any, so the new sports shop will have to take this into consideration when deciding on what to sell.

On average, how much do you spend on sports goods each year?

Most people spend less than �100 pounds in sports shops every year and no more than �200, so the goods can’t be too expensive in the new store because otherwise nobody will buy them.

How did you find out about the sports shop you use?

This graph shows that the most affective form of advertisement for a sports shop is through the television or the radio.

What might attract you to buy your sports goods from a new shop?

As you can see, most people go for value for money. So the new sports shop will have to think about this when pricing the goods.

Research data in this form is called ‘primary research.’ Carrying out a survey like this, I think, works quite well because it presents clear data showing the different aspects to be thought of when opening a new shop, for example, the target market. However, this method is quite long and tedious to do. Actually asking the public may produce bias results too, some people may answer without putting much thought into it, or some people may purposely give false information simply to be a nuisance.

5.2 Other Results

As well as carrying out a questionnaire, I have also done some other research. The research I carried out is as follows:

* I researched various meanings of ‘marketing.’

* Researched the two types of research; ‘primary’ and ‘secondary.’

* Researched questionnaire design.

* Researched the competition; used the Internet (sport shop web sites), visited the sport shops in the area and made personal observations.

6. Business Proposal

After a long period of research, I believe now it is time to make a good, strategic business proposal for Janice Reynolds.

From looking at the competition in the local area, it appears that there will be a lot. The two local sports shops that I investigated were JJB Sports and Foot Locker. These are very different shops but both very successful. JJB focuses on a wide range of sporting goods, yet keeps very low prices. Foot Locker, on the other hand, is quite a small shop that focuses on footwear and top brand names, also, they look to add value to products because of their well known brand name. After investigating these two shops I have come to the decision that the new sports shop for Janice Reynolds’ pricing policy should try to focus on competitive prices (low prices) because JJB appears to be very successful and gain a lot of profit because of their low prices. Also, from the questionnaire I carried out, I found that the majority of people would be attracted to a new sports shop because of its low prices (62%). Furthermore, most people spend less than �100 each year on sporting goods, so the prices can’t be too high otherwise no one will want to buy them. So, I believe that the Janice Reynolds’ main business objective should firstly be to ‘survive,’ but secondly be ‘sales growth’ as the low prices will attract customers and in the long run profits will rise.

The questionnaire I carried out also helped me to discover the target market for the new shop, and that is; male students under 18. This is because most people in the questionnaire were male students under 18. I believe these sorts of people are most likely to buy products from the new sports shop. Also, most people play sports nowadays (7 of 8 people asked in the questionnaire), and so equipment is essential for any sport. I found that there were many sport shops in the area, but none were specialist sport shops, they all sold very general sporting equipment. This means there may be a high demand for a specialist sport shop in the area and Janice Reynold’s shop could be just right for the job. Furthermore, most people answered question 9 as ‘equipment’ so this proves that there is a high demand for sporting equipment.

My questionnaire results also tell me that the most popular area for shopping for sporting goods is Uxbridge. Although the land will be very expensive and there will be a lot of competition, I think that Uxbridge would be the best location for a new sports retailer. There is always a high number of people visiting Uxbridge and it is ever increasing because of the new shopping centre (the Chimes) and many transport links. Many young people visit Uxbridge and so this is perfect for the shops target market too.

Finally, in order to promote the business, advertisements should be done in the form of television ads or on the radio. This is because question 11 tells me that the most affective form of advertising is on the television or radio. Although it will be quite expensive, I believe this method will promote it best and will attract many people to the shop.

7. Marketing Plan

The aims for Janice Reynolds’ new sport shop business are as follows:

* Advertise the business through television ads and radio ads.

* Have competitive/low prices to compete with the other existing businesses.

* Keep a track on how the competitive sport shops are doing in the area.

* Target the market at young males (under 18).

* Pricing policy; keep prices low to attract customers and gain profit in the long run.

* Sell specialist sport goods, specific to a particular sport.

* Locate the shop in Uxbridge town centre; lots of potential customers.

Now, although there will be a lot of pressure and competition from the existing local sport shops, I am confident that Janice Reynolds’ sport shop will be able to cope and compete with them all. If the new sport shop’s prices are kept at competitive rates, then I believe that it will be able to compete with the other sport shops well.

Various advertisement/promotional techniques for a business:

Advertisement

Effectiveness

Popularity

Price

Liability

National press

World-wide advertisement.

Poor.

Expensive.

Good.

Local newspaper

Advertise to the local people (target market).

Fair.

Quite cheap.

Fair.

TV/Radio

Common adverts – people take notice.

Very good.

Quite expensive.

Very good.

Word of mouth

Word gets around local people easily.

Fair.

Cheap.

Poor.

Walked by

People physically view the shop.

Good.

Cheap

Poor.

All of these advertisement techniques work well, however, legal constraints must be taken into consideration with them all too. For example, the law states that you cannot produce ‘false advertising,’ (advertising information that cannot be fulfilled). Also, any type of advertisement must be consulted with the owner of the company in which is being used for the advertisement, for example, the television channel must confirm whether or not the advert can be televised. There is a lot of free reign with advertising, but there are also some constraints to think about.

To finish the report I will produce a summary of my business proposal. As my final proposal for Janice Reynolds, I believe that the way in which she should market the new sports shop is by the following. Firstly, buy the location for the shop (suggested Uxbridge town centre), this will cost quite a lot of money, likely to be between �150,000 to �200,000 for a small area. Arrange the shop to however desired’ decorators may need to be employed, this will cost overall about �500. Then buy all the necessary products to sell, suggested to specialise in sports equipment, start off only selling football equipment, as football is a very popular sport in this area (the shop can look to expand and sell various other sporting equipment in the future). This will cost between �5,000 and �6,000 to start off with. Then decide on the pricing policy, how much each product will cost (cost around �50 for pricing all goods and installing bar codes, database systems etc). Next, finalise everything in the shop; ensure everything works properly i.e. the till, this should not cost any extra expense. Finally, the advertisements can be set out, these must be targeted at the target market (under 18 males). It should cost quite a lot, probably between �2,000 and �3,000. So, all in all, the total cost for the business before opening is likely to be around �110,000.

Here is a step by step guide as to the three phases of the advertising and promotion techniques:

1. Before the shop opens there will need to be a lot of preparation. The location must be finalised. Then the goods must be bought from another company in order to be sold from the new shop. Next, the prices must be decided. Then, advertisements are free to be shown off in whatever form of advertisement is chosen. These advertisements should inform when the shop opens, it’s location and perhaps the goods on sale. Also they must be attractive for young males (who are the target market).

2. When the shop then opens, the goods will then be officially ‘on sale.’ Advertisements must be changed to state that the shop is ‘now open.’

3. The period when the shop is just opened must be a time when newer advertisements must be thought up, produced and then advertised.

Overall I think that the opening of this shop will have a good impact on the local community and sport shop customers because it will be a good change from all of the big name sport shops like ‘Foot Locker,’ ‘JJB Sports’ etc. However, the big named sport shops may not like the opening of this new shop as it could create too much rivalry and competition.

The sources I used for this section were; the Internet – google (marketing plan), previous work in the report and my own knowledge.

8. Conclusion

From doing this report on marketing strategies, it is inevitable that the new sport shop will come under some pressure and will have a lot of competition to compete with. However, if the business manages to get a good location in Uxbridge town centre (perhaps in the Chimes) then maybe the business will get lots of customers and be a great success, although this is very liable.

I believe my marketing plan will help ensure the success of the new local sports shop because it gives good business advice, for example, it advises Janice to locate the business in Uxbridge town centre. Also, it shows all of the possible problems with opening a small sports shop in the area; like the factor of competition.

From looking back at ‘The Task’ I can see that I have fulfilled all of the necessary requirements of this report. Here are the points again:

* How to promote the business.

* How to compete, while gaining profit, with the other sports shops.

* What the other sports shops are doing.

* Who the target market should be.

* What pricing policy to use.

* Products to sell.

* Where to locate the business.

Looking at these points I can see that they have all been carried out, for example, for the first point I suggested that advertisements should be carried out on the television and radio.

While doing this report, I came up with some difficulties researching. One time I had a problem with researching was when I was looking on the Internet for research on questionnaire design. I did not know where to look, however, after some careful thinking I managed to find a good web site that outlined questionnaire design for me (www.askjeeves.com).

After doing the project I have found that it all works quite well. If I were to do a project similar to this one in the future then I would probably do more detailed research beforehand. This would probably prepare me for the project better. Although I am still very happy with how the project generally went.