Whats in the market place?

The market environment consists of three main elements and each of these will be researched. While the microenvironment is the controllable environment as you make the decisions as to which bank to use or where to locate the business or what equipment to use, the market environment is somewhat different as you will not be able to control the three elements BUT you will have influence over them. Thus, this environment can be influenced.

The three main elements are:

·       Competitors

·       Suppliers

·       Customers

Each of these elements will require your research.

Here are some of the questions that you will need to answer relating to these three topics:

Competitors

·       Where are my competitors?

·       What are they offering?

·       What makes them different?

·       What do they sell?

·       How do they sell it?

·       Are they successful?

·       What are they telling their customers?

·       Are they delivering on their promises?

What you need to establish is how other companies in this type of business (industry) make money. What process do they follow? What you are looking for is a business model, a method in which the business is done on a daily basis. Once you understand how businesses in the industry make money then you can develop your own business model for taking your product or service to market. Research of this element will enable you to identify where a gap exists in satisfying the customer’s needs and you can fill that gap. This will be your differential advantage.

Suppliers

Suppliers are an important ingredient in the business mix as you will need to rely on them to get your raw material or supplies. A point to remember, if you do not have a good supplier and you are let down by their inability to meet your needs, you in turn could let your customers down and that could be fatal for your business.

·       Suppliers are an important ingredient in the mix for delivering your product or service to your customer on time and fresh.

·       If your supplier lets you down – you in turn let your customer down.

·       Being able to negotiate delivery, quality, terms of payment etc, gives you the strength to commit to your customer.

·       Suppliers are partners in your success – make sure you have the right one’s

Customers

While all the components of your market research are important this is probably one of the most important.

Without customers we have no business!!!!

BUT – FIRSTLY WE NEED TO KNOW IF OUR CUSTOMERS ARE INDIVIDUALS OR BUSINESSES.

There are distinct differences between the approaches to a business target audience and that of individuals. Both of these target audiences have personalities, and you have to understand what make them tick and who in the business are you going to communicate with and how.

When your target audience are individuals ask yourself the following types of questions:

Demographics -

·       Where are they?

·       Where do they live?

·       What age are they?

·       What gender are they?

·       What income do they have?

·       What education levels do they have?

·       How much would they spend on my goods or services?

·       Where do they work?

·       What nationality are they?

·       What language do they speak?

·       What religion are they?

BEHAVIOURISTICS

·       Where do they shop?

·       Why do they shop there?

·       How do they dress?

·       What do they drive?

·       What are their hobbies?

·       What TV programs do they watch?

When your target audience are businesses ask yourself the following questions:

·       Where are they located?

·       Is there a Head Office?

·       What are the distribution Channels?

·       How many years have they been in business?

·       Buying Patterns (Bids or straight purchase)?

·       Who is the responsible person in the company (who will do the buying) and is this the only decision maker?

·       What kind of technology is used in the company?

·       Is it important to sell to them or through them?

By answering these questions, you will be closer to understanding how your target audience is to be approached. The better you understand your customer the better you can serve them, the better you can communicate with them. As this is such an important aspect of business, we will discuss the identifying the target audience in more detail when we look at a process that will help the individuals whom we have discussed earlier.

Another element that stems from the Market Environment will be access to human resources and while you are undertaking the research on the three elements above, I would recommend to look at what skills are available in the local (this being local to your business) market to feed into you business. This may be critical depending on what business you are starting.

Human Resources

Surrounding your business and located in the market environment will be those skills necessary to make your business successful. These are the skills of potential employees. At this early stage you should be evaluating the businesses requirements for human resources.

Your understanding of what will be required from the people you hire will be determined by the job functions and job descriptions that you develop for the positions you need to fill in the business. Typically, the entrepreneur will employ a person and then write the job description and job function. Don’t feel alone if this is typically how you operate right now – you are not alone, but what if the person you have just hired is not suitable for the job position after you have completed the job function and job responsibilities – now there’s a challenge.

You need to ensure that any person employed by your company fully understands what it is you are expecting of them and how they will be rewarded for their efforts. And you need to know that you can reward them. The fundamentals are setting out the functions or roles that you need people for. Carefully detail what it is that you want them to do. There may be daily function, weekly functions etc. Make sure that you have this available when conducting the interview as this will help you through the process of determining if the person can do the job.

Some questions that you will need to answer will include:

·       What job functions do I see that will require to be filled in the short term?

·       What job functions do I see that will require to be filled in the long term?

·       Where will I find these skills and services?

·       Will I use the services of an employment agency and how much will this cost?

·       What are the typical wages of job position I need to fill?

·       Can I justify the expense?