Unemployment: if more people are jobless and currently unemployment they cannot effort and will not spend. As a result sales will decrease and will get less order from buyers. Interest rates: if interest rates goes up and Susan and Peter will borrow money from bank and they will use overdraft their payment will increase. May be supplier increase their product price? As a result Susan and Peter need to increase their price if they increase their price may be people will not buy this product.
Taxation: if government increase tax Susan and Peter have to pay more tax if their sale does not increase it will hard for them to pay more tax. But if they increase their product price their sales may goes down. Supply and demand: Susan and Peter need to know about supply and demand. Supply and demand is backbone of market economy. Supply represents how much the market can offer. Demand refers the quantity of product consumers want to buy at a certain price. Inflation: Everyday living costs increasing all over the world. But income is not increasing like costs e. g.
in 2003 petrol price was 75p per litre now i?? 1. 07 per litre. But in 2003 national minimum wage was i?? 4. 20 now i?? 5. 52. Increased in 6 years only i?? 1. 32. But cost of petrol price increased by an average of 32p per litre. That means our wages only increased by i?? 1. 32-32=i?? 1. 00 in 6 years. And if we include all other living costs it will show we are expending more than we are paid. Susan and peter will need to know about inflation because it there any changes place on near future and if they increase their product price it will affect their business.
New budget 2008/2009: Budget announce this year and lots of change has made. Like plastic bag, rise in tax. Susan and Peter need all up to date information to success their business. Requirement 2 (30%) Suggest market research methods and source of information that Peter and Susan will need to consider to obtain specific market knowledge (include your own source of information & give examples of what you have learnt about the water market). Explain why where may be a decrease in orders per month, despite initial orders of 2000 bottles per month.
Market research method: Susan and Peter need to research the market in two ways Primary research and secondary research. Primary research: There are number of ways Susan and Peter can carry out primary research. These are direct interviewing, telephone survey, postal survey, online/computer survey. Direct interview: Susan and Peter can direct interview to people live in poormouth area by asking whether the bottled of water people want to launch as a new product? What percentage of people wants to launch this product and are they really keen on this product?
The disadvantage of this survey they have to employ a professional interviewer. Will Susan and Peter afford this cost as we know they have very limited capital? Telephone survey: Susan and Peter can contact people in Portsmouth area by telephone by asking related questions about their product. Susan and Peter opening very small company and this survey will cost more to carry out. Postal / mail survey: Susan and Peter can contact people by sending questionnaire by post. The disadvantage of this survey people does not take part of this survey because it is long and people feel bored to fill all these questions.
Very small amount of proportion take part and Susan & Peter won’t be satisfied. Online / computer survey: It is same as postal survey. The advantage of this survey it cost less than other survey and easy to carry out. But result will be same as postal or may be more according to reply. Secondary research: Secondary research is also known as desk research. This research carries out on the data already collect by another or third party or distributer of primary research. Susan and Peter can collect these data from internet, books, journals and trade newspaper.
According to B.B. C news/ Europe on the 03/05/01 bottled water is waste of money wrote by Claire doole in Geneva. It’s not healthier or safer drink than tap water. Panorama website on the B. B. C 15/02/08 consumers spend2billion. A litre of one of the UK’s most popular French mineral water generates up to 600 times more co2 equivalent than a litre of Thames tap water. In my opinion there is an advantage and disadvantages of primary and secondary research. Conclusion: To the end I want to say Susan and Peter have small capital which will create problem to start their business.
Also they are ambitious that they will get order of 2000 bottles every month without any professional research and previous sales experience of selling bottled water. But if they get this order how their fixed cost will remain same as we know cost will increase if sales increase like employee and other costs? If they do not give credit to customer may be they will not get more order as they are expecting. Also if they give credit to customer will they get credit from suppliers? In my opinion they need more capital to start their business and make it potential.