NCV 2 New Venture Creation Hands-On Support Slide Show - Module 2

New Venture Creation: NCV Level 2 New Venture Creation: Level 2

Module 2 Investigate markets & needs for a new venture New Venture Creation: Level 2

In Module 2 we shall be covering: how to identify potential customers for a new venture why and how to conduct customer research into the need for the proposed products or services of the new venture how to use statistical information to determine the type of product or service valued by different communities New Venture Creation: Level 2

Marketing is an on-going process New Venture Creation: Level 2 Identify the target market Determine needs & wants Develop product range Promote product range Sell product range Distribute product range Provide after-sales service

Identifying the target market for a new venture New Venture Creation: Level 2 teenage females? pensioners? sports professionals ? doctors? e.g. targeted by age & gender businessmen? e.g. targeted by profession teachers?

Criteria used to identify the target market New Venture Creation: Level 2 Age Different things interest us at different stages of our lives Gender Certain product ranges might appeal more to females e.g. beauty salon Location ‘ Take away’ restaurants will do very well in areas where lots of students live Target market Income The lower the income the more important the price of the product Education People with a lower level of education are less likely to buy imported foods

Determining customer needs leads to business ideas Customer need Product New Venture Creation: Level 2

and more ideas …… Customer need Service New Venture Creation: Level 2

and even more ideas …… Customer need Products & services New Venture Creation: Level 2

‘ Wants’ are needs expressed in a specific product choice Customer need Product choice New Venture Creation: Level 2

Why do customers choose a specific product or service? New Venture Creation: Level 2 The Brand Taste e.g. “it always tastes the same” Status e.g. “it is a really ‘cool’ product to wear” Cost e.g. “they are the cheapest place in town!” Quality e.g. “it lasts a long time” Reliability e.g. “their deliveries are always on time”

How important to a ‘Brand’ is its logo? New Venture Creation: Level 2

Top ten coolest brands New Venture Creation: Level 2

Factors influencing the buying patterns of customers New Venture Creation: Level 2 Price Product Promotion Place

Products are the ‘why’ of the marketing effort Why do customers want to buy a specific product? Features 24” ultra-wide screen maximum resolution quick response time over 200 cd/m2 brightness DVI connectivity Benefits easy-to-read documents no waiting looks great on workstation can be connected anywhere makes games more realistic New Venture Creation: Level 2

Pricing has a huge effect on customer buying patterns Do customers buy mainly on price? O Do customers seek quality and worry less about price? R New Venture Creation: Level 2

Place is the ‘where’ of the marketing effort The success of a business often depends on where it is located – convenience is a very important consideration for many customers! For example; if you’re a gym member wouldn’t you like to get a healthy drink as soon as possible after your workout? New Venture Creation: Level 2

The marketing checklist Does your marketing plan: focus on the benefits you provide? have a clear message ? focus on a specific group ? feature your unique selling proposition (USP) – the one thing that sets your product apart from others? have 1 strong message ? offer methods for customers to respond ? have a specific objective that can be measured? yes ( ✓ ) no ( x ) New Venture Creation: Level 2

Values in marketing (* option 1) Often sales people are viewed in a ‘bad light’ because of the actions of a few individuals who make promises they can’t keep or sell a product to a customer who really can’t afford to pay for it! New Venture Creation: Level 2

Values in marketing (** option 2) Often sales people are viewed in a ‘bad light’ because of the actions of a few individuals who make promises they can’t keep or sell a product to a customer who really can’t afford to pay for it! New Venture Creation: Level 2

Ubuntu values to guide us in marketing Always speak and act truthfully Treat others as you want them to treat you Recognise and respect diverse religious and spiritual cultures Act comprehensively to ensure fair compensation and humane working conditions Ensure that economic activities support and promote human development New Venture Creation: Level 2

Factors that motivate or prevent people from buying a product New Venture Creation: Level 2 To buy or not to buy? Culture e.g. the impact of a common language and history Technological Forces e.g. iPods that allow us to play music when we want where we want Natural environment e.g. is the food we buy natural “ organic” produce or genetically modified?

Surveying opinions for the new venture’s products Question : why should a new business do market research? Answer : because it will help the entrepreneur to ….. understand the various business environments anticipate any changes within these environments forecast the impact and direction of these changes make changes to the current business plan to fit in with these changes in the environment and, it will also help the entrepreneur to investigate … whether customers will buy a new product why existing products are not selling better methods of marketing existing products changes in customer needs whether there is a risk of new competitors coming into the same market New Venture Creation: Level 2

Market research involves the following: identifying WHAT the marketing problem or opportunity is identifying WHERE to find the information needed understanding HOW to collect the information and interpret it making a decision based on the information e.g. WHEN to introduce new products WHERE to open or expand the business New Venture Creation: Level 2

Planning a research project New Venture Creation: Level 2 Identify the problem formulate an hypothesis decide on information collect data with questionnaires analyse & interpret data report findings choose information sources ? ?

Collecting and analysing data Primary Data gathered specifically for the research being conducted Surveys Observation Experimentation New Venture Creation: Level 2

Collecting and analysing data Secondary Data already gathered in previous research projects by other organisations government publications/stats libraries/resource centres university research papers media statistics e.g. AMPS (All Media & Products Survey) professional/business associations e.g. Chamber of Commerce Internet e.g. Google New Venture Creation: Level 2

Format of a questionnaire New Venture Creation: Level 2 Customer Satisfaction Survey Section A: demographics 1.Age 2. Income level 3. Cell phone number Section B: survey questions 1. Queuing time 2. Staff friendliness 3. Staff knowledge 4. Problems resolved

Evaluating and analysing da ta New Venture Creation: Level 2 Step # 1: edit the data have all questions been answered? can the answers be read? are the answers accurate? do the answers make sense? how consistent are the answers? Step # 2: tabulate the data count the number of answers in each category enter the data into the system

Interpreting and discussing data New Venture Creation: Level 2 Interpreting closed questions This is relatively easy because very specific answers have been requested e.g. “do you prefer ‘health food’ to ‘ junk food’?” If 70% answer ‘yes’, it is very clear that the majority of students prefer healthy foods Interpreting open-ended questions Because these questions allow for opinions the researcher has to group similar answers together to develop themes such as people believing that ‘ junk food is bad for you’. X ✓

The research report New Venture Creation: Level 2 1 Title page Title & main theme of report 2 Table of contents Listing main sections & page nos. 3 Tables & figures 4 Proposal Research objectives and plan 5 Introduction Subject, purpose & research plan 6 Methodology Interview techniques, questions asked 7 Interpretation & findings 8 Conclusion 9 Recommendations What action to take based on findings

Using statistical information to determine products/services Question # 1 : why does a business need statistical information to determine which products and services are most valued? Answer : because it will help the entrepreneur to ….. understand the different needs & wants of different communities forecast sales more accurately based on statistical trends make changes to the proposed product/service range offered where needed focus more marketing efforts on the products shown to be in demand Question # 2 : why should statistical information be presented in the form of graphs, charts and tables? Answer : because it will make the information clearer to ensure it is easy to understand and thus correctly interpreted more interesting to ensure that it is properly utilised a valuable tool to convince important stakeholders to support decisions New Venture Creation: Level 2

Using Tables New Venture Creation: Level 2 Example: Provincial demographics Province Size km ² Population Pop. density Eastern Cape 169 600 6 436 790 37.95 Free State 129 480 2 726 840 21.06 Gauteng 18 810 6 869 100 365.18 Kwa-Zulu Natal 92 182 8 505 340 92.27 Limpopo 123 280 2 921 560 23.70 Mpumalanga 78 370 2 921 560 37.28 Northern Cape 361 800 737 310 2.04 North West 116 190 3 252 990 28.00 Western Cape 129 370 3 633 080 28.08 Totals 1 219 080 38 004 570

Observations about Tables In our example we see that: information is summarised, condensed and can be easily presented provinces are listed alphabetically we have to look very carefully to see which province is the biggest and which is the smallest it is very difficult to see which province is the 3 rd biggest in Gauteng there are 365 people/km ² compared to the Northern Cape where there are only 2 people/km ² the total population is just over 38 million the total size of the country is 1 219 080 km ² New Venture Creation: Level 2

Using Pie Charts New Venture Creation: Level 2

Observations about Pie Charts In our example we see that: information is very visual Gauteng is really small co mpared to the other provinces the Northern Cape is huge compared to the other provinces it is difficult to rank most of the other provinces in terms of size when using a Pie Chart New Venture Creation: Level 2

Using Bar Graphs New Venture Creation: Level 2

Observations about Bar Graphs In our example we see that: the names of provinces appear at the bottom (called the x – axis) the number of people/ appears on the left (called the y – axis) KwaZulu Natal is clearly the province with the biggest population although not as detailed as a table, a Bar Graph enables us to rank data very easily New Venture Creation: Level 2

Using Line Graphs New Venture Creation: Level 2

Observations about Line Graphs In our example we see that: provincial names appear at the bottom (called the x – axis) the number of people/ km ² appears on the left (called the y – axis) most provinces seem to have a similar number of people/km ² but the notable exceptions are Gauteng and KwaZulu Natal (high) and the Northern Cape (extremely low) New Venture Creation: Level 2

Trends in different sectors of the economy A trend: gives an indication in which direction something is developing is about what we can expect in the future may not always be correct but at least gives an idea of possibilities is very helpful to the entrepreneur starting a new venture e.g. larger numbers living in urban areas within a smaller area (365 people/km ² in Gauteng) help focus where the marketing effort should be concentrated New Venture Creation: Level 2

Trends in taxes collected every year New Venture Creation: Level 2

NCV 2 New Venture Creation Hands-On Support Slide Show - Module 2

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NCV 2 New Venture Creation Hands-On Support Slide Show - Module 2