Unit 10: Assignment 2: Market Research and Analysis
Market Research to gather information from potential customers and end users and to gauge the viability of my marketing business ideas whilst also identifying whether there is still a need for marketing material distribution.
For the past year, I have been operating as a sole-trader distributing marketing materials for various businesses mostly in and around the East Midlands and some as far as London. Over this period of time, I have decided that there is an awful lot of physical labour involved in my current business and this is why many distributors end up discarding material (also known as “dumping”), that and the fact that the industry pays based on quantity rather than time (even to distribution staff who typically operate on a self-employed basis) and if the distance between doors or people is longer, to distribute 1000 leaflets which would take four hours at most on terraced streets could take up to two days in the countryside and at that point, the earned income becomes almost insulting to those who put in the leg-work.
Because of this, the fact that the return on their investment is typically between 3% and 5% (statistic based on new and existing customers who have responded to offers exclusively on the distributed materials) meaning 30 respondents per 1000 leaflets, for example, and the continually increasing trend towards digital marketing, I believe the services I currently provide will be obsolete, especially with companies like Just-Eat and Deliveroo taking away a large portion of mine and other people in my industry’s customers.
Market Research Objectives:
The methods I will use to gather data will be done via digital and face to face communication and through the use of surveys, conversation and secondary research.
I have chosen to survey businesses and gather secondary data in regards to businesses as business owners will be my target customer, specifically, for the most part, small to medium sized businesses including sole traders but where necessary, referring to larger businesses.
Plan:
Questionnaire for customers (businesses).
(35 questions in total)
The first set of questions will be to gain an insight into who your business is, just basic demographics. (7 questions)
The second set of questions are in regards to their overall advertising and marketing experiences. (6 questions)
The next set of questions is in regards to leaflet distribution specifically. (7 questions)
The next set of questions are in regards to digital media marketing. (8 questions)
My final set of questions will be around general marketing methods and preferences specifically to allow me to gauge the customer’s preference to how a marketing business should structure their pricing and to also get an idea of your opinion regarding new and upcoming marketing methods. (8 questions)
Survey link: https://docs.google.com/forms/d/1MFn10sKYpv_FGZ1s0_dTZzJFJPWizvv7YnHxRlotUBU/edit?c=0&w=1
Proposed Timeline:
Data/Report
Upon attempting to carry out the above survey, it soon became apparent that business owners were reluctant to divulge too much information about their own businesses. I attempted to convert the survey into a Google form so that I would be able to fill it in for them, therefore minimising the amount of effort they would need to input themselves.
I was unable to gather any conclusive data from my survey with the exception that those small businesses who work in the landscape and horticultural industries tend to spend less than £1000 per year. I believe the lack of respondents is as a result of too many open ended, qualitative questions and due to time constraints, I have been unable to carry out my primary market research adequately which is a shame.
What I have had to do instead, because of the failure of carrying out the above survey, is to try and gather information through having deliberate conversations with business owners which, to the best of my ability without seeming too nosy, I hoped to be able to meet at least some, if not all of my marketing objectives.
I decided to profile each business I approached by asking if each business was independently owned or not, I did also speak with franchise owners who informed me that most of their marketing was carried out by head office so I’ve decided to omit franchises from my findings. Because I ended up targeting only small to medium sized businesses which were independently owned, for the most part, they had fewer than 10 employees however, what I did find was that there is a direct correlation between the amount of employees a business has and their marketing budget, I believe this is as a result of an increased ability to handle more customers and often goes hand in hand with the business occupying a larger premises, for example, Radia’s Supermarket on Melton Road in Leicester spend a large amount of money (over £1000 a year) on instore marketing and on fliers though they do not have them distributed for themselves specifically, instead if customers want one, they can take one but do very little in the way of outside marketing. With that being said, they do partner with several entertainment companies and venue hire companies such as JJPromotions (owned by Dr. Jajoo), Jay’s Entertainments and Sony Asia who will place Radia’s Supermarket on their show fliers as a place to purchase tickets which subsequently drives a large amount of new customers to Radia’s Supermarket for every show. Radia’s was a fantastic example for my market research as it really gave me an insight into how companies can still market themselves without having to spend a large amount of money; even without spending the £1000+ per year on in store marketing (banners, fliers, posters, etc.) they’d still have a strong marketing strategy from their several partnerships with companies as far as London (and sometimes India) who often put on shows in Leicester and areas of the UK with a high Indian population. Radia’s Supermarket has less than 10 employees working on the premises at any one time, this excludes those who are travelling to pick up supplies or make deliveries and any casual workers they employ. I gathered from this that they do in fact have more than 10 employees and from this we can conclude that Radia’s Supermarket will be well suited to handle a lot of customers and in my opinion, they could quite safely increase their marketing budget without having any adverse effect on their business.
Although Radia’s Supermarket do not personally distribute their marketing material door to door or face to face, this doesn’t mean that leaflet distribution was obsolete. In fact, what I have found (and this can be gathered from my survey responses and secondary data collected from Leicester Leaflet Distribution [LLD]) is that leaflet distribution is especially popular with businesses with less than ten employees and also larger retail companies who often change their stock, one particular supermarket retailer who is guilty of regular stock changes is Lidl, Lidl will distribute their catalogue every quarter and it’s no easy fete to deliver them as there are only 10 to a box when usually there are 1000 to a box of any other marketing materials. I have not personally had the opportunity to sign on of their distribution contracts yet but LLD has and they have informed me that they pay above £100 per 1000 catalogues distributed whereas typically they would pay only £28 for 1000 A5, up to 130 gsm (paper size) fliers, of course they would not disclose to me how much Lidl would pay LLD but I can only imagine there is a significant profit. I also know that TNT subcontract distributors to deliver Lidl catalogues also which is evidence of Lidl carrying out a national marketing campaign. If companies like Lidl are still choosing to have their catalogues distributed, does that really mean distribution is not obsolete? Well, not exactly. I mean, it is quite clear that some companies will throw money at things simply to increase their expenses for the benefit of tax, it isn’t to say Lidl is guilty of this but until we see actual results based on the customer response to their campaigns.
So, it sounds as though leaflet distribution is obsolete, does it not? Well, yes it does but leaflet distribution is arguably one of the most effective methods of advertising in the twenty first century, especially given Neilson data which shows the contrast of digital advertising on the television and radio whereby when these adverts are shown, viewers simply switch off, change channel or mute their devices (62%) and simply flick past printed advertising (81%). This, coupled with the Direct Marketing Association’s (DMA) statistic of 79% of recipients who keep, glance at or pass on to a friend printed marketing materials they receive through their letterbox shows leaflet distribution is far from obsolete. In fact, suddenly it’s just became rather attractive. It is often believed that the response gained from leaflet distribution is as little as 3-6%, which is believable but this doesn’t mean that leaflet distribution is ineffective. Do you think the John Lewis Christmas themed advert gets hundreds of new customers the first time it is shown? Of course not, it makes us realise Christmas is just around the corner but by dinner time, we’ve already forgotten about it. No, marketing campaigns are most effective when it is repeated; this is why JCDecaux (Britain’s largest outdoor advertisers) will recommend having any outdoor advertising for at least a week if not longer and don’t even have a price to quote for one single bus stop advertisement for less than a week. Based on this evidence gathered mostly from secondary research, we can deduce that print and distribution is still perfectly viable and definitely is not obsolete, far from it in fact, especially when we take into account LLD who specialise in only distributing other company’s marketing material for them.
I was also able to discover, especially from smaller businesses on Evington Road in Leicester, that digital advertising is becoming more affordable, speaking to one marketing business on Evington Road called Digital-Adverts.co.uk whose digital billboard on the corner of East Park Road/Evington Road boast a viewership of over 50’000 per week for as little as £625 per month (on the big screen), so if a month is three weeks, the price works out to be half of that of a typical door to door leaflet distribution campaign. It costs significantly less on the smaller digital billboard. Is it effective? Well, Bray & Bray Solicitors and Mercedes Benz Leicester (an independent Mercedes show room) certainly think so as they are regular returning customers of Digital-Adverts.co.uk.
After speaking with Bray & Bray, a Leicester based legal firm and MB-Leicester, I was informed that they use affiliate marketing, now I’ve only ever known affiliate marketing to be carried out by online businesses so I learned something new today myself. I personally cannot currently perceive how I would implement affiliate marketing into my own business without having somebody who is technologically able to show me how to set up an affiliate scheme however, what I do know is that the cost is based on the amount of clicks the advert receives from individuals visiting different websites. I have been an affiliate for Amazon in the past who pay a commission based on sales, I advertised their products on a content hosting platform called HubPages where I also placed Google Adverts and eBay affiliate links sparingly. Google Adsense (Alphabet’s payment application for content creators) would pay based on traffic to your site and eBay would pay, like Amazon, based on purchases. However, due to cookies, if a customer clicked through to Amazon through your link and purchased something other than the advertised item, you would still receive commission so it is more of a referral fee that you would earn instead of a sales commission. I believe this has enabled me to confirm that digital media is definitely a great way forward, especially for smaller businesses who maybe cannot afford or simply don’t need prime-time television advertising. The beauty of online digital advertising is that you can target the exact demographic you’re looking for where local or national television and radio simply cannot give you that control.
To decide whether or not businesses would prefer a marketing “package”, for lack of a better term or individual marketing products, I had to call several marketing managers of several big companies before I managed to speak to the senior communications officer of John Lewis, because most small to medium sized businesses only opt for one or two methods of advertising at any one time, John Lewis’ senior communications officer informed me that they actually have large advertising packages put together by a company called Adam&EveDDB who from 2012 have managed their advertising, including the iconic Christmas adverts including this year’s featuring Buster the Dog who we all know is far more grateful for the trampoline than the children it was intended for but that’s neither here nor there. After calling Adam&EveDDB, I discovered that John Lewis, along with many other massive businesses, have been cheating their way through advertising for several years to the extent that the majority of it goes through this marketing company who also boasts a wealth of clients from insurers such as Aviva to breweries such as Fosters and even UniLever (particularly, Marmite) and banks such as Lloyds. It is quite clear that this marketing company is very large. Adam&EveDDB put together comprehensive advertising packages including both printed and digital media (including television, radio and online advertising) for businesses and from their success, it would seem that these packages would be rather popular, especially with larger businesses but the obstacle I will have personally would be a massive lack of experience, after all the likes of John Lewis would be unlikely to have any margin for error. For marketing packages to be suitable for smaller or medium sized businesses, we would have to carefully put together relevant advertising methods and take into account the duration of each individual advertising campaign within the package and then a suitable cost which should be kept below £1000 as £1000 seems to be the benchmark for the yearly marketing budget of most businesses I’ve spoken to who have been willing to divulge that information. Because Adam&EveDDB do print advertising, it is hard for me to simply write newspaper and magazine advertising off, would such an established company use such methods if they were ineffective or redundant? Or are they simply continuing to use these methods as a back-up revenue stream? Given the cost of magazine advertising in the likes of Metro and Leicester Mercury which are daily newspapers, it would seem a bit pointless to advertise for only one issue yet for magazines such as Leicester based Niche magazine whose issues are monthly, advertising in one edition of that may be very effective, especially for those who’ll pick up a magazine and reread articles several times to absorb the most information from them.
I decided to call several takeaways and restaurants along London Road in Leicester and present them with a hypothetical choice of preference between leaflet distribution, digital media and travelling billboards pulled by bicycles, the responses I received varied greatly with the most commonly used marketing method (of the three) was leaflet distribution however, most of the businesses I did call informed me that they had switched to services such as Just-Eat, Hungry Horse and Deliveroo however, none of them had used travelling billboards with the exception of More restaurant on London Road (whose advertising was pulled by a van), they believed them to be very effective, however it was a common trend that travelling billboards were the most intriguing, for lack of a better word, to business owners along the London Road, perhaps down to the central location or novelty of the idea. I also discovered from these same businesses that they did not design their adverts or leaflets themselves and mostly had them designed and printed by the same companies and sometimes even distributed by the same company in the past however, as I said, with the food industry moving towards Just-Eat and the like, distribution of menus and leaflets for these companies is in much less demand than it was say five years ago before the birth of Just-Eat. Because of such a small amount of survey respondents, I cannot gauge accurately whether or not investing in printing machines is worthwhile or whether I should simply outsource this to printing factories; one thing is for sure, however, print and distribution is not obsolete, far from it in fact. Perhaps it could be argued that it is obsolete in the food industry now but with other industries, such as house builders, legal service providers and retailers, print and distribution is still a very effective method of advertising.
The final evaluation I can make from the data I collected via my unorthodox surveying methods of conversation is that branded materials, similar to those provided by companies like Everything Branded, would be seen as quite pointless after the response of several business owners but my argument to that would be that it is free advertising for those who use the branded merchandise. Because of this argument, I am going to disregard what my respondents have told me and go ahead with outsourcing this to companies like Everything Branded, I would like to think that before I do launch my business, however, I will have a clearer picture gathered from further market research into the viability of some of the services I am looking to provide. I understand fully how my lack of respondents for my survey has impacted my ability to meet my marketing objectives but all I can do is learn from this and ensure in future, I have a better method of collecting data.
I have found that the most effective method I have found so far of gathering my market research is to simply have a conversation with business owners, the problem with that is, however, there is no uniform set of questions I can ask and given that every business is different, I thought perhaps some questions would be more relevant to some businesses than others.
I was unable to gather any responses in regards to direct sales, but I feel I may have not have communicated the role of a direct salesperson well enough to some of the business owners I approached, I believe they misunderstood what I was explaining to be a self-employed shop assistant when this is not the case at all so I cannot speculate on whether or not this would be a viable option until I carry out further market research.
Evaluation
It is painstakingly obvious that my primary research method failed, this I believe is as a result of me not accurately predicting when my target market will be available to complete my survey, this coupled with the length of the survey ultimately resulted in such a poor response. I have found my target market were simply too busy running their businesses to complete my market research; what I should have done instead was anticipate this from the beginning and book appointments to visit my potential customers at a time which better suited them. It was naïve of me to think business owners would be readily available to give up their time at my request to sit down for up to thirty minutes to complete my survey.
With that being said, I do believe I’ve achieved at least 50% of my marketing objective, these are:
It is unfortunate I was unable to achieve the final four objectives to my own satisfaction, the consequence of this is simply that I will have to complete my market research again at a later date which will cost time and resources; I have however benefited from this experience in that I have learned that business owners are very time-poor, quite understandably so too.
In conclusion, I have decided that leaflet distribution is definitely worth continuing which was the most important objective given it is provides the majority of work for my current business, there is still a demand and it’s also still very effective as I mentioned previously. Alongside this, I feel that business owners were quite enthusiastic in regards to things such as travelling and digital billboards but I was unable to gather how much my target market would expect to pay for the former of the two due to the failure of the survey. I was also unable to make an educated decision in regards to whether or not purchasing printing equipment would be worthwhile but as mentioned, I would outsource this where appropriate or otherwise refer customers to reputable printers. Overall, however, with the exception of the survey, I believe my market research to be a relative success. In regards to the survey, my final critique would be that some of the questions seemed rather invasive which could explain the poor online performance of the survey, in particularly where I am asking about budgets, these were non-obligatory questions which respondents did not need to answer however, perhaps I could have done a better job in presenting the question as optional. I also used too many open questions whereas, for business owners especially, I should have used multiple choice questions for their convenience.
I feel I have evaluated my research methods effectively and even though my primary research method wasn’t a success, I was able to learn from the mistakes I made and realised that perhaps a survey was the wrong way to go in regards to gathering data from my target market. I had a better response from business owners when I put the survey away and just discussed various topics with them, of course this meant it became very difficult to compare one set of data to another due to a non-uniform method of research. Surveys are effective when use appropriately because of the way they obtain data to a uniform set of questions which do not differ from one respondent to the next but for time-poor business owners who do not have the time to sit down and discuss a large amount of questions with very little incentive, it is fair to say that there were several oversights in the planning phase which had a severe knock on effect to everything beyond the planning phase of this assignment.
Log:
5th November – 7th November: Planning took place over the first two days, on the 7th November, I compiled a Google Forms survey which I published for one week and shared on social media and in business forums.
12th November – 13th November: Approached businesses for them to fill in my survey to no avail.
14th November: I am concerned that my survey has only received a few responses.
15th November: I offered a £50 prize draw as an incentive to complete the survey. Not sure how I will choose a winner.
17th November: Approached more businesses for them to fill in my survey, again to no avail. Realised I should have booked appointments by calling them first.
18th November: I made the survey easier to read and removed some less relevant questions.
19th November: Wrote the survey off as a failure after attempting to gain responses from business owners again. I decided to change tactic, I headed into town and spoke to several independent shops but quickly realised many of these shops rely mostly on passing footfall instead of traditional advertising methods so I decided I need to get a bus to go further afield. I headed up London Road and Evington Road and spoke to several business owners around Highfields and Spinney Hill. I also called several large companies including John Lewis Group, Tesco, Lloyds, Iceland and several smaller businesses I have worked with in the past along Melton Road. I took the executive decision to scrap the survey and cut my losses, I have referred briefly to the three responses I did get for the survey within this assignment but for the most part, it’s safe to say my primary research method was a failure, from this I have learned that if ever I decided to provide Market Research as a service, I would almost definitely outsource it. I also begun my secondary research and made a start on the report and evaluation of data. On the Brightside, I didn’t get any responses since offering the £50 prize draw so, there is that.
20th November: Went over my market research to identify shortfalls, mistakes and otherwise where I could improve my market research techniques. Completed evaluation.
Sources/Reference:
http://www.independentshops.co.uk/leicester/
http://www.simplybusiness.co.uk/knowledge/articles/2015/02/the-rise-of-independent-retailers/
http://www.hubspot.com/marketing-statistics
https://freely.net/marketing-statistics-2016/
https://dma.org.uk/article/what-is-the-response-rate-from-leaflet-distribution
http://www.directletterboxmarketing.co.uk/leaflet-marketing-the-good-the-facts-the-stats/
http://blogs.pitneybowes.co.uk/pbtalksbiz/2014/04/29/5-mind-blowing-stats-prove-leaflets-arent-dead/
https://marketinginsidergroup.com/content-marketing/160-amazing-marketing-stats-you-need-to-know/