Market research

An essential part of marketing is market research. This should not only precede the introduction of new products, but should keep a regular check on what is happening to existing ones. The object of market research is, primarily, to find out what the public wants. If a product is needed, it will sell.

Market researchers also attempt to find out in what form, shape, colour and package the public will accept the product. They also try to keep track of changing patterns in demand. The successful firm is the one that can commence production today for the needs of tomorrow.

Market research must be distinguished from consumer research. This looks at marketing from the consumers' point of view. It is concerned with such questions as which of many rival products represent the best value for money, and how best the consumers' interests can be safeguarded.

Market researchers will, of course, be concerned not only with what products are needed and what will 'sell' them, but with the peculiarities of the markets with which their firms are concerned. Are there any moral, legal or social reasons why the proposed product should not be marketed in the area under consideration? In what way will demand, and the type of appeal that will have to be made to consumers through advertising, have to take account of the social, linguistic and racial backgrounds of the potential customers?

4. a) You want to set up your own business. The first big problem is where you are going to get the capital. Read the text "Sources of Finance", complete the diagram, depicting some sources of finance. Choose the most suitable for your business and give your reasons.

TEXT 13 D

SOURCES OF FINANCE Introduction

So! You want to set up your own business!

All right - but one big question:

Where are you going to get the capital?

Finding the capital is usually the biggest problem faced by those wishing to set up a business. There are, in fact, two problems involved. One is how much capital will be needed. The other is how it can be raised.

Capital needs

In setting up a business, the first thing to do is to estimate how much capital will be needed immediately. What fixed assets will be needed? What current assets?

There is then the question of how long it will be before the product, or service, becomes established and cash starts flowing in. This will mean estimating carefully the expenses for this initial period, and how much working capital will be needed to cover them.

The amount needed will depend entirely upon the type of business, how large it is going to be, and how long it will be before the business will begin to 'pay its way'. Once these amounts have been calculated, a serious look can be taken at how the money is to be obtained.

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