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Understanding Customer NeedsUnderstanding
Customer Needs
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Today….• Understand why customer needs are
important
• Understand primary research
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Why understand customers?
Because they are all different
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Where would these people shop and what would they buy?
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Customers differ in many ways…
• What they want• Amount they are able to or willing to
pay• Media they see• How much they buy• Time they buy• Where they buy
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What a start-up needs to know
• How many potential customers are there? • How fast is the market growing?• Who are the existing competitors?• How is the market segmented? ie What kind of customers are
there in the market? - What do they like in terms of when and where they buy? - What prices are they willing pay and what are their
likes and dislikes? - Which methods of promotion are effective?
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The answer – market research
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Primary v Secondary data
• Primary data– Data collected first-hand
for a specific purpose by the entrepreneur
• Secondary data– Data that already exists
and which has been collected for a different purpose
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Primary data – why?
• Primary data is best used by a start-up
• Finds out EXACTLY what you need to know
• Can get straight to the point
BUT….• Obtaining primary research
data is time-consuming & expensive
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Primary data – main sources
• Observation• Postal surveys• Telephone interviews• Online surveys• Focus groups• Face-to-face surveys• Experiments
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Your Task….
• You must design a questionnaire to find out what people in your class spend their spending money on……
• You must find out how much they spend, how often they spend money, when they spend it and do they believe they get enough money to spend….
• THINK about your design…. A lot of people will be answering your questionnaire!!!
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You must find out if they think they get enough spending money and how often they spend money
Do they save any??
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Today you have…
• Understood why customer needs are important
• Understood primary research
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Market Research
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Today….• Recap Primary Research
• Understand different methods of secondary research
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You tell me…..
• Survey
• Respondents
• Questionnaire
• Focus Group
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Homework….
Write down four conclusions you can make from your questionnaires. eg:
• What age and gender were the people you interviewed?
• What did most people spend their money on?• Did this vary with gender and age?• What was the most money someone received? What
gender and age were they?• What was the least money someone received? What
gender and age were they?
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Understanding Customer needs
Market Research
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Quantitative v Qualitative Research
Quantitative Research Qualitative Research
Based on opinions, attitudes, beliefs and intentionsAnswers questions such as “why”? “Would?”, or “how?”
Aims to understand why customers behave in a certain way or how they may respond to a new product or service
Focus groups and interviews are common methods used to collect qualitative data
Concerned with data Addresses questions such as “how many?”, “how often”, “who?”, “when?” and “where?”
Based on larger samples – this is why numbers are used to analyse.
The main methods of obtaining quantitative data are the various forms of survey – i.e. telephone, postal, face-to-face and online.
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Secondary ResearchSecondary Research involves the collection of
secondary data.
Secondary Data:
This is information which is already available either within an existing business or outside the business.
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Secondary research
Advantages
• Already exists - saves time
• Ease of access• Low Cost
Disadvantages
• Might not answer exactly what need to know
• Time consuming
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Secondary data – main sources
Internet A great way of getting quick market research for free
National Statistics
Provide detailed insights on the economy and on many industry sectors
Trade Newspapers & magazines
Essential reading for an entrepreneur, particularly if he/she has little or no experience of the market
Competitor websites Valuable information on marketing activities of competitors
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Over to you….
• There are two methods of secondary research Jack intends to
use before he starts up his business. In pairs, find out as much as you can for Jack Padmore’s Bouncy Castles.
* Internet * National Statistics
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Is unemployment falling or rising?
Will people be able to afford to rent the bouncy
castles?
Where are the
competitors located?
Is there a lot of
competition?
Who are my Competitors?
Will there be a demand for my bouncy
castles?
The internet: National Statistics:
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What did you find out for me?
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Thanks Guys!
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Conclude your research…
• What did you find out for Jack?
Competitors Are customers spending?
EmploymentWill he be in demand?
Are sole traders popular?
Should he advertise?
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Market Research
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A.K.A……
• Primary research can also be known as FIELD research
• Secondary research can also be known as DESK research
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Remember …
The entrepreneur can learn much about customers needs
simply by chatting to customers, rather than
buying expensive market research
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Direct Customer Contact
• This is very important for a business.• Customers can provide vital information for a
business• Direct customer contact will help understand
the market and how it is changing
I was in Brighouse Boots last summer …
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Interpreting Data
By analysing data collected it can help answer some questions:
• What does it all mean?• Was it important?• What does different data tell you?• Will the business be successful?• Is starting up a business a risk?
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Case Study…..
Fabulous Cakes
1. Read the Case Study2. Answer ALL 3 questions3. Use information in the case study for your answer
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Fabulous Cakes
Question 1
• Give a definition of “primary research” (2 marks)
• Explain in a sentence, one method of primary research used by Grace and Peter (2 marks)
• Explain in a sentence, a second method of primary research used by Grace and Peter (2 marks)
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Fabulous Cakes
Question 2
• Give a definition of “secondary research” (2 marks)
• Explain in a sentence, one method of primary research used by Grace and Peter (2 marks)
• Explain in a sentence, a second method of primary research used by Grace and Peter (2 marks)
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Fabulous Cakes
Question 3
• Give your opinion: eg “I think/do not think Grace & Peter do have a good understanding of their customer needs because …………..” (2 marks)
• Justify your decision – explain TWO different types of research that Grace & Peter did that helped them find out what their customers wanted/liked/disliked when they bought cakes (4 marks)
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Chris wants to set up a business fitting kitchens and looks in the Yellow Pages to see what other businesses offer similar service in his area. This is an example of what type of research?
A – QualitativeB – PrimaryC – SecondaryD - Observation
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Chris wants to set up a business fitting kitchens and looks in the Yellow Pages to see what other businesses offer similar service in his area. This is an example of what type of research?
C – Secondary
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Chris designs a questionnaire and asks the respondents to tick, from a list, which colour kitchens they prefer. This is an example of what type of research?
A – QualitativeB – SecondaryC – QuantitativeD - Observation
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Chris designs a questionnaire and asks the respondents to tick, from a list, which colour kitchens they prefer. This is an example of what type of research?
C – Quantitative
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Which TWO of the following are most likely to give a researcher qualitative data?
A – The meeting of a focus groupB – Researching names of businesses in an area
from a telephone directoryC – Conducting interviews with shoppers in a
supermarketD – Analysing government statistics
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Which TWO of the following are most likely to give a researcher qualitative data?
A – The meeting of a focus group
C – Conducting interviews with shoppers in a supermarket