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UNIT 22 Market Research Assignment 2 Distinction grade
- Module
- Unit 22 - Market Research
- Institution
- PEARSON (PEARSON)
Distinction grade work based on opening a coffee ship. 8 criteria, P2 P3 P4 P5 M2 M3 D2 D3
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Assignment 2 Coursework – CendrineP2: Undertake secondary research for a selected marketing objective.
To open any business, you must have many viable reasons as to why there is a demand for
the business you want to open (in this case a coffee shop), as well as both internal and
external factors as to why you would like to open the business. I will be researching the
feasibility of setting up a new coffee shop, and there are both internal and external reasons
for why I have chosen to do this. These internal and external factors are:
Internal factors
An internal factor is a reason for opening the business which relates directly to the person.
This includes factors such as:
- Passion - the person wants to open the business as they have a deep interest in the
type of business it is or what they sell
- Experience - the person wanting to open the business may have a lot of experience
in the field they want to open the business in, meaning that it is more likely to
become successful
- Fulfilment - the person opening the business will feel like they have more of a
purpose and will feel happier if the business does well
- Enjoyment - they may enjoy the type of work they want to open the business in,
such as construction or retail
External factors
On the other hand, external factors for opening a business are reasons that are outside of
the business and the person wanting to open it, and not directly linked to the person.
Examples of external factors that may motivate a person to open a business include things
such as:
- Lack of competitors – the market for the type of business the person wants to open
does not have many other businesses in the same market so success will be easier,
- Money – the person wanting to open the business may see it as an opportunity to
make extra money or may even need it to live
- Recommendation – many people have said to the person that they should make
their hobby or interest into an actual business
- Low market share – the type of business the person wants to open only has a small
percentage of the market, so the new business can easily gain a large share of the
market
I believe that a new coffee shop business is a viable business idea, as coffee is a very large
target market and it will be easy to sell to people because of the large amount of people that
drink it and there being a consistent demand for it, as well as coffee shops being a type of
business which has strong customer loyalty as many people will only go to their favourite
,coffee shop. Also, a coffee shop business has an immense potential to expand with new
locations offering the same products and services – which will increase the revenue and
success of the business.
However, before opening a new coffee shop business, it will need a lot more research before
it is certain that it is a clever idea. When opening a business, a lot of market research is
needed for many reasons, for example there may be issues that arise such as a changing
market and lowering demand for coffee shops or competitors with extremely large market
shares who wipe out the chance for your business to do well as they take all of the
customers, but mainly to ensure that the business idea is good, and the business will do well
once opened. Some examples of why more research is needed before the new business is
opened include:
- Understanding the market – researching the market you are targeting helps to
understand their needs, wants and preferences. This ensures that the business idea
will meet any demands or needs of potential customers and reduces the risk of
opening a business when there is not any need or demand for one
- Analysing competitors – someone who is potentially opening a new business needs
to look at any competitors in the market in order to see any trends or patterns in
what all successful competitions are doing as well as to see any possible gaps in the
market where the new business could fill a customer need which isn’t being filled by
any competitors.
- Is the business viable – anyone with a potential business should always research to
see if their idea could become successful, by looking at things like is there actually a
need for the product and will the business make a profit by researching costs.
- Complying with law – research should be done on any laws or regulations relating to
the business idea before it is opened. This is to ensure that once opened, the
business adheres to all guidelines and laws and does not get shut down.
Before opening the coffee shop business, there are multiple stages of market research
planning which need to be done. In chronological order, these are:
1. Research brief – what does the customer with the business idea want done?
2. Define any issues/problems with the business/ business idea
3. Set objectives that need to be achieved
4. Determine the research design and propose the data collection methods
5. Collect the data
6. Analyse the data
7. Evaluate the data with recommendations
8. Present the findings
I have already completed the first two points, so now I will be moving onto setting the
objectives. The objectives that will be set to undertake the market research need to be
SMART objectives. SMART stands for smart, measurable, achievable, relevant and time
,bound. These objectives will make sure that all the research found is necessary and relates
to the business we are researching for.
The first objective I have made for the market research for the viability of the new coffee
shop business is ‘To identify sales patterns and trends in 2 different coffee shops by 20th
December 2024’. This will help to make sure that not only we are seeing any trends which
we should follow and include in the new business, but it also helps to see if there are any
competitors which have higher sales so are more of a competition/ threat to our new
business.
The second objective I have made is ‘To identify customer wants and needs from a coffee
shop up until 20th December 2024’. This will help to determine what customers would like
from my coffee shop, as well as things they are not getting from current coffee shops that
they would like to see.
The final objective I have created is ‘To identify competitor activity of local coffee shops up
until 20th December 2024’. This will help us to identify any activity which may be giving the
competitors higher or lower sales, as well as seeing if there are any trends in what time of
year certain products/types of products are released.
To collect the data needed to achieve the smart objectives, I will be using two sources of
secondary research. The first source I have chosen to use is Marketing agencies such as
Mintel and Mustard. These agencies offer comprehensive reports on things such as market
trends and competitors. The use of these agencies is reliable, as they offer research made by
qualified employees who have many years of experience, as well as valid as there are
substantial amounts of primary data found by qualified individuals in their reports. From this
method of research, I will collect both quantitative and qualitative data. Quantitative data
will be collected from any graphs or tables included in the reports, and qualitative data will
be from the rest of the detailed reports.
The second source of secondary research I have chosen to use is competitor
reports/analysis. This is an appropriate from of research as reports from competitors will
show me exactly why their business is successful or not so successful, as well as give me
ideas on any sales/market trends which is the main goal of my first smart objective. As well
as this, competitor reports will be extremely reliable – as they, by law, must be truthful in
their reports and they cannot make their business seem more successful than it is. From this
source of research, I will also be able to collect both qualitative and quantitative data as
competitor reports will have both written and numerical areas, such as graphs showing
which products sold the most or a paragraph describing what they did to increase customer
loyalty in a certain period.
To complete my secondary research, I will be researching data based on the target market
size, segments, competitor data, general trends of coffee shop consumption and popular
products as well as their prices. This data will link to my objective of ‘To identify competitor
, activity of local coffee shops up until 20th December 2024’, as well as another objective
which is ‘To identify sales patterns and trends in 2 different coffee shops by 20 th December
2024’. For my first objective, the kinds of data that will be important are the segments of the
target market, competitor data, and how much people are spending in competitor coffee
shops. For my second objective, the important data to find out will be the target market size,
general trends in the coffee shop market and what people are buying in coffee shops. To find
out this data, I will be using market research agencies and competitor reports, as stated
previously.
Market research agency research:
As I want to find out a lot of general information about the coffee shop industry, I will be
using market research agencies because they provide a lot of overall, broad information
about the market and competitors. The market research agency I am using is Mintel. This is
what I found out:
- Target market size – I have found from a report on the coffee shop market in 2023
that 70% of 16–34-year-olds bought drinks from a coffee shop in the past 12 months.
This shows that there is a large demographic of people who we need to advertise
towards in different ways, but also that there is a lot of people in general who buy
from coffee shops – a good indicator that our business will do well. I have also found
that the value sales of coffee shops in the UK are estimated to reach £4.5 billion by
2026. This is also a clear indicator showing that there is a good chance of success for
our business, as the coffee shop market is extremely large, and a lot of people are
spending money in the industry. I have also found that younger generations are core
users of coffee shops, which is a good piece of data to think about when advertising
our coffee shop and marketing our products towards the correct groups of people.
- General trends of coffee shop consumption – I have found from the same report
that over half of the coffee-consuming market are buying their drinks from coffee-
focused venues in the past year (2023), meaning that there is less competition as
customers are more likely to be spending their money in an actual coffee shop rather
than a shop that also sells coffee. I have found that instore coffee purchases have
fallen by 6% in 2023, which could be a risk to our business idea - however we could
include an online ordering service or delivery service to focus more on convenience
and to reduce this risk. Another thing I have found is that almost three-quarters of
consumers agree that coffee shops should offer more meal deals. This could be a
good idea for our business, as if it is something that consumers are demanding and
wanting then they will be more likely to come to our coffee shop if they see us
offering meal deals. Another trend I have found is that 34% of consumers are more
likely to visit a coffee shop if they can customise their order. This means that our
business could think about offering things like syrups, milks, and sugars to let
customers make their drink how they would like it, as well as make them more
inclined to visit our shop compared to competitors. A final trend I have found is that
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