Page 3: Researching the market
Having had an idea and created the business opportunity the next thing is to explore the idea. This is done by undertaking some market research. This will help the owner of the idea to find out whether the business opportunity is likely to be successful. It will help them to understand more about the needs of their customers. From this they can build strategies that enable them to tailor products to various parts of the market. This process is known as market segmentation. Every market will have a number of segments. In each segment will be groups of customers with similar needs. For example, in the market for cars there is a segment for multi-purpose vehicles (MPVs), one for convertibles, one for small cars, one for large luxury cars and so on.
At this point, in order to match their idea with the research they have undertaken, an entrepreneur may undertake a SWOT analysis. A SWOT analysis sets out to focus on the Strengths, Weaknesses, Opportunities and Threats facing a business as it develops. The internal element looks at the current strengths and weaknesses of the organisation. The external element looks at the opportunities and threats present in the environment in which the organisation competes.
Turning ideas into products
After mindstorming ideas students at Norbury Manor came up with a range of ideas for their businesses. They then undertook wide-ranging research using questionnaires. This enabled them to set realistic prices. It also helped them to anticipate demand. Many of their ideas evolved into products that could be developed at the school. These included making jewellery, badges, make-up, smoothies for students within the school, making teddy bears and also making and selling hot chocolate. They also came up with ideas for services such as selling bric-a-brac and getting students to sell text books. The idea was that once they had finished with the books, they were sold on to other students at a much lower price.