UNIT 36 P1
Present the initial business idea using relevant criteria
In this assignment I will be presenting my initial business idea using the relevant criteria.
I want to set up my own new business within the make-up market to sell my own branded make-up as I feel I have the right passion, determination and knowledge to do this successfully. My business will take a sole trader form of ownership meaning I will be the full owner. I choose this form of ownership because I feel being a sole trader has many benefits such as; having full control of the business meaning I can run it how I wish to, I will be able to keep all the profit made from the business to myself and lastly all data and information within the business such as trade secrets and recipes will be kept private and secure. All those factors are extremely important to me because they ensures I make decisions effectively and efficiently without any one else input which will allow me to meet the needs of my customers which will lead to an increase in profit. Being a sole trader can be challenging however, I know it will boost my self-esteem as I will have a sense of independence and it will be able to help me control my live more.
As a sole trader I will be able to react to any competitors or any changes efficiently to ensure I am keeping up with the trends, competitors and the market. The products my business will provide are new and exclusive products to only my business. The products I sell will range from bronzers to makeup brushes, to makeup sponges and a whole lot more. I will be liable for every employee I hire as well as all the accounts within my business. Liabilities are my businesses obligations such as money that will need to be paid or services that must be performed. I will have unlimited liability over my business because I'm a sole trader, which has many benefits like having full control over the business and being able to keep all of the profit. Although, there are disadvantages because I will be personally responsible for anything that goes wrong.
My aims for the business is that it survives which will be achieved by making a profit/income and by gaining brand awareness as it is a new business and people won't be familiar with the brand. I aim to make a profit as my business needs to run, also I need to increase the market share which can be challenging however I am determined to do it. To be a successful business, my business needs to grow and expand which is why I need to make a profit to start off with in order for these future aims to happen. My products will be aimed at any females aged between 10-50, this is because there is a wide range of products that are suitable for different people which is why the target audience has a large age range. The products will be priced at an affordable high street price to attract customers however, not too cheap as customers won't want to purchase products that are priced too low as they fear the products represent the price.
A suggested name for my business was 'KANDY', pronounced CAN-DY, as this was thoroughly thought about after a million different names were proposed to me. However, I was really drawn to 'KANDY' because it has a vibrant sound to it and you instantly think of sweets and candy, which is colourful and happy which represents my products. The name has a good vibe to it and is happy which is why I feel this name is perfect to represent my business.
I have a real passion in beauty and make-up as I am a freelance makeup artist with a BA (Hons) Hair and Make-up qualification. I currently work freelance however, I recently opened up a salon at the side of my house where I have various repeat customers. I have previous work experience at MAC Makeup along with Charlotte Tilbury which have both helped to intensify my passion for make-up as I learnt a huge deal of knowledge and skills from working with both of them. My work and personal balance is really good as I know how to manage my personal life separately to my work life, I do not over load on work however, I am extremely professional and do not discuss any personal information with my clients. Managing my own business will be a lot of hard work although I am determined to manage it alone and deal with various things such as; creating profit and loss accounts, managing my accounts, operating day to day business activities, calculating break even points, fixed assets and fixed costs.
The unique selling point of my business is that all my products will relate to a different type of candy. For example, I will be selling a range of mascaras, one of which is called Curly Cane which is a curl intensifier mascara to make your lashes extra curled. The colour of the bottle will be red and white just like a candy cane and it will be in the shape of a candy cane. There is defiantly a gap in the beauty and make-up market for my products as they do not already offer any products like this. I feel like my idea will really stand out from my competitors as they do nothing unique like this and are all closely competing on who has the best makeup and which is the cheapest. I also feel my business is attractive and stands out because there are not a lot of distinctive, quirky and cool makeup brands like mine. All the existing makeup brands all follow the same style and are plain and boring which is why I feel my products will sell. All the products I will be selling are difficult to imitate which means no other brand will copy them because they are distinguishing and exclusive to my business.
There are plenty external influences that I need to consider which include PESTLE analysis. The P stands for political which includes international trade relations, government stability, recession, the possibility of war, tax and employment policy which are all essential aspects to consider when managing my business. Economic factors include tax increases, consumer confidence, banking crisis, economic growth and retail sales trends which also majorly apply to my business. Social consider things such as education, crime levels, retirement issues, changes in population and lifestyle changes. Technological involves technological changes in the industry, ICT application impacting the business and improvements in new equipment and machinery. Legal includes health and safety regulations, employment laws and competition policies. Lastly, the environmental factor considers things such as waste disposal, pressure groups, pollution legislation, the local community analysis of the business's activities. All these factors are extremely important and
UNIT 26 P2
Explain how to identify the target market
In this assignment I will be explaining thoroughly how to identify my target market for my business.
A target audience is a particular group at which a particular product/service is aimed. My target audience for my business are females aged between 10-50 therefore I need to really understand their needs, their spending habits, what makes them want to buy a product etc. Given that my business is new, I will need to carry out various different methods of research in order to receive information and data necessary to help me understand my target market and to understand if my business will be a success or not.
I will carry out market research to first gather research by using primary research as this will give me accurate and detailed information as I will be collecting the information first hand. By choosing primary research, this will allow me to make my research specific and choose questions to suit the needs of my research. Questionnaires and surveys are good formats that I may use in order to collect information as you can choose different question formats which will allow me to obtain short or detailed answers which are useful. Secondary research is also a good method to use to gather data as it is already existing which means It won't waste a lot of time as well as money which is a benefit. The information I need may have already been found out by researchers and published online however, I may need to do additional research in order to collect the most accurate and reliable research I can. Collecting research is a continuous process as you need to constantly meet customers needs and the information needs to maintain current and not out of date.
Published research, also know as desk research could actually benefit me as it is research which has already been carried out. Publish research will provide information about various relevant things such as; customer behaviour, consumer trends, market analysis, potential competitors etc. These are all vital factors to find out in order to help me when starting up my business because it will prevent my business from failing.
I need to be aware of the market place's potential and the best way to do this is by using primary research and sales forecasting in order to find out things such as; who will buy the products, how much are they willing to pay etc. As my business is new, it will take longer at the beginning however, the better my reputation gets and the more my business gets know, the better the forecast will be. Also, the forecast depends on the strength of the competition and seeing as the make-up industry is quite competitive I'm not sure how that will go. Secondary research can also be useful when forecasting sales as I could look at the past trends within the make-up market.
Customer needs and wants are an extremely important factor to consider because I need to be aware of their actions and choices. Sometimes customers do not always know what they want and don't have a preference however, the majority of consumers do. There is so much competition now a days a there is new technology and businesses are trying to compete with one another to be more successful. Direct competition is where businesses offer the same product however, indirect competition is where businesses offer different products that satisfy the same needs from the consumer.
SWOT have strengths such as internal ones like; having expertise in a specific area as this will mean you have had experience working in a business which is similar to working in a make-up business. The location is extremely important because finding the right place to place my store depends on various different aspects such as; if the area is busy, the population etc. The USP which stands for the unique selling point, is also really important to consider as you need to find a space in the market in which their is no business which sell the same products as I will be selling because if there is then my products wont do well because there wont be a reason for customers to buy my products if there are the same products somewhere else which is an existing business which is known. Although, the weaknesses are that you could have lack of expertise meaning you would struggle to get a grip of the business and you would not be able to entice customers if you didn't know what you were talking about within the business. Besides, their is a high competition within the make-up industry along with the products and services because their is a high demand for them as females want the best products for a lower price than high end brands which is what I am providing allotting i have found a USP in the market.
Market trends are the movement of the financial market over a short, mid or long term period. Being aware of these trends ensure I can plan stuff to be as successful I can be and ensure I stay up to date with the latest trends in the make-up industry. Regular basis movement is know as a cyclical trend and this is when something occurs frequently in a cycle.
Environmental issues are the issues that involve the environment which include stuff like; making sure that equipment used it replaced. For example, the first fighting equipment do not harm the environment therefore there is no issues there, this is the same with cleaning products. The Department for Business Innovation Skills (BIS) publishes and communicates leaflets out to the public with relevant information inside of them which covers legislation on it. These would be essential and useful to keep in my store as it will remind employees of the legislations they have to abide by as well as customers who enter my store.
UNIT 36 M1
Explain methods used to identify the target market for the proposed business
Within this assignment, I will be explaining the different methods I will apply in order to identify the target market for my proposed business.
To find out my target market I will use primary research as well as secondary research, as I feel both will provide me with accurate, detailed and reliable information as they both have their own individual benefits along with their own drawbacks. However, by using both I will be able to eliminate the drawbacks from them both and be able to have access to useful information and data that will be able to help me identify my target market appropriately. I have decided to use 1 primary research method, which is a questionnaire, along with 1 secondary research method which is internet research.
I first thing I am going to do is create a questionnaire and hand it to people as this is an easy and efficient method as well as it being specific to my business needs. The advantages of using a questionnaire is that people are familiar with the format therefore, it is easy to understand and clearly laid out. The information I collect will be modern and up to date as I will be obtaining it myself therefore I know where its come from. It allows a large amount of information to be collected from a large number of people in a short amount of time. The results of the questionnaire can easily be converted into graphs and charts to compare and analyse. None of my competitors will be able to steal this information or copy it as I am doing it myself and it will be specific to my business needs which will ensure exclusivity.
Nevertheless, questionnaires have disadvantages too. They lack validity as anyone could answer the questions with random answers just to complete the questionnaire meaning there is no way of telling how truthful their answers are. Some say it is inadequate due to there being different answer styles such as long answers, multiple choice etc. To produce the questionnaires it could become costly and waste a lot of money into producing the resources and equipment and material as I want it to be accurate which means I will have to start from scratch. Questionnaires are a good research method for my proposed business as I can relate the questions appropriately to my business needs as well as being able to choose who are going to answer my questionnaire.
The second type of research I will be doing is internet research which is useful for me to identify my target market. This is because it allows me to obtain a large sample of information at once which increases the amount of statistics I have. Data is automatically inputted into the internet therefore there is no data entry errors. This is a more diverse sample based research rather than a traditional old based research which is good for my proposed business because all the competitors within the make-up industry will have already done research and this would've been published onto the internet therefore this wont be hard to find and there should be not a lack of information on the internet. Internet research is a cheap way of collecting research as you do not need to provide any materials or equipment as the research has already been obtained.
On the other hand, sometimes you could rush through this research which could mean that you don't read something properly and this may result in collecting inaccurate research which is wrong and invalid to my research which won't be useful. Also, a huge percentage of information from the internet is unreliable and can be really uncertain because people with even no expertise can publish information onto the internet which have no source of reliability, which is why I will be extremely careful when searching through the internet and carefully look for websites and sources who have a valid link.
There are some types of research such as interviews in which I would not use. This is because the cost of interviews can be quite costly, as they require staff of people to conduct the interviews. Now a days interviews in a paper form is old fashioned and none is willing to answer them because they are usually done on iPads or tablets which cost an excessive amount of money. Also, the quality of the data that I will receive will often depend on the ability of the person interviewing as some people have natural ability to conduct an interview however, some people may be shy and not other data well. It is common with most people that they are not naturally good at conducting interviews which is why I will not use interviews to identify my target market for my proposed business. The size of the sample in an interview is limited because, some people may not be willing to answer questions for a long period of time. Additionally, if the interview is produced on paper then the data collected will need to be entered manually or scanned into a computer however, data entry can cost a significant amount of money as iPad or tablets etc may need to be required.
Additionally, a focus group is a good research method however, it is not suitable for me to identify the target market for my proposed business. This is because they can be moderately bias because people may intentionally put their personal opinions into the other participants exchange of ideas. This may make the results inaccurate because the group participants may reach certain assumptions or conclusions about a certain idea or product. Also focus groups are not in such depth compared to an individual interview because they are not as efficient in covering a lot of detailed information.
Postal surveys are a commonly used method of research, because they allow you to collect a large sample of work using a very cheap method with a limited amount of resources. Although, there is no way of finding out who has actually answered the questionnaire and who hasn't. They are straightforward and easy to fill out because they have a basic format which allows respondents to choose answers from a predetermined range of responses. I don't think postal surveys are the most suitable method of research because I cannot get immediate responses which isn't helpful when I need a lot of information in a short amount of time. Therefore, I will not use postal surveys as a method of research because it isn't appropriate for the research I need to find out.
To conclude, I feel that my chosen research methods are the most suitable methods, because questionnaires are in a format that people are familiar with, which makes people more likely to answer because they know what the are doing and the idea of them. They are easy to understand because they are clearly formatted which allows for various different question styles to gain a wide range of answers which is really useful for me to collect a huge amount of data which questionnaires fit well. Along with questionnaires, internet research is the most appropriate research method for me to use because I will be able to obtain a large amount of information in one go because its all in one place, it is a convenient research method which makes it useful because in the modern day and age no one really reads books or uses the traditional research methods. Both these research methods are the most suited methods for the research I want to find out which is my target audience. Overall, out of all the research methods I feel questionnaires and internet research are the two most suited methods for my research.
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